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TMI Blog1991 (1) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... e was issued alleging that the applicant had stored in the B.S.R. of their factory excisable goods without making any entry in the Central Excise records, failed to maintain properly and correctly the stock account in respect of excisable goods produced manufactured, stored and delivered by them, suppressed the production of excisable goods from its accounting correctly and properly and wilfully gave false and misleading information in this regard to the officers duly appointed in this behalf and failed to stock the excisable goods in the place of storage in the factory premises in an orderly manner. 5. The applicants in defence produced computerised daily production registers for 31-07-1985 and 01-08-1985, stating that the 603 scooters were under the process of quality control tests and were not ripe for accounting in RG-1, and were shown as W.I.P. (work-in-progress). But, however, these 603 scooters were found with O.K. stickers in token of having undergone the requisite quality control tests. The Collector who is the adjudicating authority has held that even if the finished stage is after quality test, there appears to be no reason for not making entry of the scooters in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the Tribunal, it was specifically mentioned that the Collector s approach with regard to RG-1 stage was wrong, and reliance was placed on the RG-1 stage which was published in page 808, Central Excise Law Guide by R.K. Jain, 5th Edition, wherein it has been stated that in respect of motor-vehicles the RG-1 stage is as soon as it is rolled off the assembly line and the assessee was right in not having entered the scooters in RG-1, as they were awaiting quality control tests. This submission was neither recorded nor any finding given in the order. (vi) The Tribunal in its order has stated that the manufacture of scooters requires precise and proper accountal at each stage of production, which is neither practicable nor contemplated and this order is contradictory to the Appellate order at page 6 to the effect that the RG-1 stage is reached as soon as the motor-vehicle is rolled off the assembly line and not at each stage of production of the scooter. (vii) In view of the above submissions, the applicants have requested that appropriate orders for rectification should be passed. 8. During his oral submissions, Shri R. Santhanam, General Manager (Legal) reiterated the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t daily record of production department-wise is maintained through computerised statements by each department of the scooter unit. There was no mention in the show cause notice that scooters were not shown in the column In the Finishing Room . Therefore, it was not open to the Collector to make the adjudication in respect of any matter not alleged in the show cause notice. (ii) The RG-1 stage mentioned in page 808 of R.K. Jain s book of Central Excise Law Guide, was not taken note of by the Tribunal which was submitted during the oral submissions. (iii) The Tribunal has erroneously taken the view that manufacture of scooters requires precise and proper accountal at each stage of production, whereas this is neither practicable nor contemplated by the statutory requirement. (iv) It was submitted that the O.K. stickers affixed did-not bear any signature or initial of the quality control staff and they were awaiting the quality control tests, this point was not taken note of in the Tribunal s order. (v) The Tribunal has upheld the order of the Collector in ignoring the documentary evidence of the computerised daily production statement of 31st July, 1985 and 1st August, 1985, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation on considering the RG-1 state of excisable goods which in respect of Motor Vehicle is as soon as it is rolled off the assembly line. In this regard the party has also no where refuted the contention of the Departmental Officers, framed on the basis of factory s Flow Chart , dated 2-3-1985 according to which, immediately after testing of the vehicle is over, the same is treated finished goods and lodged in the B.S.R. for dispatch to dealers. But instead of depositing the Vehicle in the B.S.R. immediately after such testing the factory had been found to have detained a sizeable quantity of fully manufactured/finished scooters as being under WIP in between without keeping any record thereof and also without mentioning this fact in any of the statutory Central Excise records as has been done in this case. It is, thus, established that the party has failed to keep and maintain the stock accounts in form RG-1 and other related records properly and correctly in respect of the scooters produced, manufactured, stored and delivered by them in pursuance of various provisions of the Central Excise Rules, 1944. The learned Counsel of the party, while arguing the case at the time of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of Rule 173G(4) of the Central Excise Rules. 15. The next point at (iii) supra that the Tribunal has erroneously taken the view that manufacture of scooters requires precise and proper accountal at each of production is wrong and not statutorily required, it is to mention that in para 7 of the order, it , taken note of that the appellant who manufactures scooters, which require precise ad proper accountal at each stage of production, have failed to satisfy the department in the proper accountal of their fully manufactured and tested scooters in the statutory prescribed registers. This observation was made in the context of the applicants own reason in their reply to the show cause notice, dated 02-09-1986 to the Collector which is reproduced: As for the accounting of the production, disposal and stocks of scooters in our factory, we are maintaining accounts at each stage of their production in different departments. The accounting at successive stage of production is computerised and a single consolidated report in the form of daily production report is prepared in our factory containing the complete particulars of production, removal and the stock in balance at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Report had also not been disclosed by the party at the lime of ascertaining the accountal procedure on 2-8-1985 from the factory s authorised representatives. Had there been no intention to suppress the production, there was no reason for the party to have not produced the same on the spot when demanded. Thus, the party is found to have suppressed the production of scooters bearing O.K. tested stickers of 31-7-1985 from its accounting correctly and properly and wilfully giving false and mis-leading information in this regard to the Central Excise Officers, thereby contravened the provisions of Rule 198 of the Central Excise Rules, 1944. 19. In the light of the above facts, which have not been controverted at the adjudication stage, any document which has been produced belatedly in evidence, cannot be accepted and there appears to be no legal issue involved and is a factual position. 20. The point raised at (vi) about the scooter not being an item capable of removal clandestinely, the Collector has alleged contraventions of Rule 47 read with Rule 226, Rule 53 read with Rule 173G(4) among other rules mentioned, the purpose of prescribing the accounting system is to see that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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