9911796707
TMI Blog1989 (10) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... duced and cleared and another demand of Rs. 1,02,922.60 on 88,661 kgs of cotton yarn alleged to have been suppressed and not accounted in the R.G.-I register. The Addl. Collector in the impugned order has also demanded central excise duty on a quantity of 110 kgs. of cotton yarn of 40 counts not accounted for by the appellants. The appellants were also imposed with a penalty of Rs. 25,000/- under Rule 9(2) read with Rule 173Q of the Central Excise Rules. 2. The brief facts for the purpose of disposal of this appeal can be stated as below: The appellants Spinning mills were visited by the Headquarters Preventive Officers of Aurangabad Collectorate on 27-6-1987. On scrutiny of the private records known as Ring Frame Wrapping Registers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on amounting to Rs. 192.50, they contested the other 3 allegations. The Addl. Collector finally confirmed the allegation with regard to the mis-declaratioa-of-counts and also suppression of production but dropped the allegation with regard to the non-recording of the correct description of the cotton yarn of 20s. The present appeal is against the order of the Addl. Collector, demanding the duty and imposing the penalty. 3. Shri Shah, the learned advocate, on behalf of the appellants, contended that the demand is beyond the period of six months. Though the show cause notice has been issued by the Collector himself alleging suppression and clandestine removal, the Adjudication has been done only by the Addl. Collector, who is an officer sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On the question of suppression of production, Shri Shah contended that the allegation of suppression of production to the extent of 88,661 kgs of yarn, is totally without any basis. For producing this large quantity of yarn, at least a quantity of one lakh kgs of cotton is needed as raw material and for procuring this cotton, minimum outlay of Rs. 20 lakhs is needed at the relevant date. The raw material account does not show any variation with regard to receipt of excess raw cotton for producing the alleged suppressed quantity. The department have also not brought any private record to show that this large quantity of cotton has been purchased and utilised without accounting for in the raw material register. No evidence of removal of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, it is not for them to question the jurisdiction of the adjudicating authority, after participating in the adjudication proceedings. He also pointed out that for purpose of alleging suppression of production, it is not as though the quantity recorded in the daily production register is taken for comparison. The figure as shown in the Annexure to the show cause notice is the production figure as per the private record minus the quantity of waste yarn, which has been taken as the basis for comparison of the figure recorded in the RT-12 returns. He, therefore, justified that the difference is only on account of non-accountal of the production. As regards the mis-declaration of the counts, he contended that Ring Frame Register was the record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sample drawn from the goods packed, we are unable to appreciate the view taken by the Addl. Collr. that based on the counts noticed in the ring frame register, the allegation of mis-declaration of counts, could be sustained. In this context, it has been pleaded that the appellants had applied corrective factors to bring the production to the declared counts. In view of this plea, the benefit of doubt is to be extended and one cannot jump to the conclusion that the variation in counts noticed in the wrapping register would amount to mis-declaration, especially, when, at the finished stage, the department has not found anything wrong with the declared counts on testing the sample of finished product. We, therefore, discharge the appellants f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the allegation of excess production and their clandestine removal. Merely, because of the entries in the daily production register, especially when that is not the basis for recording production in the RG-I register, no firm conclusion can be arrived at without any, if not all, of the above said type of corroborative evidences. In view of this, we hold that the charge of suppression of production and clandestine removal has not been established beyond reasonable doubt. We, therefore, discharge the appellants from this charge as well and drop the demand for Rs. 1,02,922.60/- confirmed on this ground by the Addl. Collector. 9. In the result, the case does not justify imposition of penalty and the order imposing the penalty is also required ..... X X X X Extracts X X X X X X X X Extracts X X X X
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