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TMI Blog1988 (11) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... tain entries of chokes and other goods despatched by the person concerned maintaining these exercise books. 1.2 Based on the entries of despatches of chokes mentioned in these two exercise note books and on the basis of statement of Shri Vishwanath Agarwal, a partner of the appellant firm on the date of detection itself, it was alleged that the appellant firm had despatched chokes to the extent of Rs. 18,98,906/- during the period 10-7-1981 to 20-3-1982 and to the extent of Rs. 5,56,438-50 during the period 1-4-1982 to 16-8-1982. These clearances are in addition to the clearances brought on record by the appellant firm through statutory accounts during the relevant financial year 1981-82 and 1982-83 (up to 16-8-1982). In other words during the financial year 1981-82 the appellant firm were alleged to have cleared chokes to the tune of Rs. 24,77,185-50 and of Rs. 7,06,790/- during the year 1982-83 (upto 16-8-82). 1.3 The statement dated 17-2-1982 of Shri V. Agarwal relied upon by the department is a typed statement on the letter pad of the appellant firm. We shall discuss about his statement at a later stage because reliance has been placed by both the sides on this statement. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was told to them that these two Note Books do not belong to them and none of them was in their handwriting. Even if it is assumed that these belong to us even though it is not correct, it may kindly be got verified that we do not have the capacity to produce to the extent as mentioned in the Show Cause Notice. It is a verifiable fact and cannot be suppressed. (Emphasis supplied by the appellant firm) 2.1 Dealing with the above contention of the appellant herein the learned adjudication authority has stated as follows :- I have carefully gone through the records of the case and written submission made by the party in reply to the show-cause notice, including submission put forward at the time of personal hearing. M/s. S.M. Enterprises, New Delhi are engaged in the manufacture of chokes for fluorescent tubes falling T.I. No. 61 of the Central Excise Tariff. The dispute is regarding the quantity of chokes manufactured and cleared from the factory during 81 -82 and 82-83 without payment of Central Excise duty. The department has based its case on two exercise note books and some duplicate challan books which were recovered from the factory premises of the party in the presence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s an after thought. They state that they pointed out the contents of the exercise books after due inspection of those books while they were in possession of the department after their seizure by the officers concerned. They further pointed out that entries of some goods like book wire, water paper, leatheroid, lamination, paints had nothing to do with the appellant and entries of these goods alone should be sufficient to discard any theory of link between the note books and the appellant firm. They have further emphasised that it is an admitted fact that the appellant s premises consisted of a manufacturing hall and in their adjoining premises are two more units which are M/s. Anil Industries and M/s. Agarwal Industries - the latter unit is engaged in the manufacture of chokes since December, 1980. The constitution of all the three firms are separate but since all the three factories are situated at one address and due to paucity of space they agreed to open one office room where in all the three units used to handle their routine day-to-day work. The appellant, therefore, urged that in these circumstances common officer room was accessible to workers of all the units and the accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been taken subsequent to the date of adjudication. 6. The learned SDR, while placing a copy of Assistant Collector (Jud.) s letter dated 4-4-1988 to her, emphasises as mentioned in that letter that electrical coils and bobbins are not the only components required for the manufacture of chokes and the possibility exists that the party may have purchased wire-wound bobbins from outside without accountal, i.e. the existence of a capacity certificate for winding machine which goes in favour of the party is not by itself sufficient to set aside the case. Even otherwise the certified capacity of the winding machine is only for 8 hours which implies that if the factory was working continuously, the daily production of chokes would be more than 300 and as per Annexure-II to show cause notice, the entries of production on many of the dates is 300 chokes of different capacities. 7. We have carefully considered the pleas advanced on both the sides. Main question to be decided is whether the two exercise note books on which the department relies belong to the appellant firm or not. The learned adjudicating authority has given following reasons for linking the note books with the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hes of sales in the statement dated 17-8-1982 cannot be taken as voluntary in the face of apparent fact that some of the entries in the note books pertain to such goods which are not dealt with at all by the appellant company and hence there could be no reason whatsoever for mentioning them in any record pertaining to them. This fact in itself would show, according to the learned advocate, that the note books do not belong to them. This would further indicate that the statement of admission of manipulation of record is a statement made on dictation of the Central Excise officers. The learned advocate has further submitted that this statement in any case does not have any legal validity because it has been recorded before an inspector of Central Excise. It is only a statement before gazetted officer of Central Excise under Section 14 of the Central Excises Salt Act that can acquire relevance under Section 9D for the purpose of departmental proceedings. Therefore, such a statement should not be taken on record. 8.1 We have given our considerable thought to the pleas on both the sides on this important issue whether the books belong to the appellant firm or not. We find substantia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of the appellant on this limited question then it is to be necessarily held that the exercise books do not belong to the appellant. If on the other hand the finding is against the appellant, the Collector will be competent to hold that the exercise note books belong to the appellant firm and therefore, they are required to explain the contents of those entries and to show that they have paid duty on the goods (chokes) alleged to have cleared according to the entries in these books. 9. As regards the other plea of the appellant that their capacity of production was not such as to produce quantity alleged to have been produced and removed by the appellant, we find that this plea is of a secondary importance and is based on assumption that the appellant had been maintaining all his records of the working of shifts, engagement of labour, purchase of raw material, etc., accurately or on further assumption that he is not getting goods partly manufactured on his behalf from some other person by supplying necessary raw materials. On the other hand the department s case rest entirely on the two exercise note books. There is no common meeting ground - between the department s cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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