9911796707
TMI Blog1991 (2) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture Aluminium Sections falling under Tariff Item 27, out of Aluminium Ingots and Scraps. They purchase Aluminium Ingots from outside and take credit of duty paid on such ingots under Rule 56A of the Central Excise Rules, 1944. The billets are manufactured in their furnace at billet casting section of the factory and the billets are used as raw materials in the manufacture of Aluminium Sections. On receipt of information that the appellants had received one truck load of Aluminium Ingots without any documents through M/s. Bharat Transport Agency, the Central Excise Officers headed by the Assistant Collector, Central Excise, Jamshedpur paid a surprise visit to the factory premises on 17-8-1983. On scrutiny of R.G. 23 Part I it was found that stock of aluminium ingots as on 12-8-1983 was nil. Further from 12-8-1983 no further entry was made in the register. Again on checking the Form IV register of M/s. Bihar Extrusion Co., the appellants, the stock of billets was nil as on 12-8-1983. But on physical verification it was found that 4,800 kgs. of aluminium ingots and 8462.800 kgs. of billets were found in the factory store. The Director and the Chief Executive and other personne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MT and 11.130 MT received on 15-8-1983 and 16-8-1983 respectively were accounted for in any Central Excise records nor any intimation was filed before the proper Central Excise Officer. Out of 23.586 MT, a total of 15.370 MT valued at Rs. 2,35,174.77 of Aluminium ingots, billets and scraps as detailed below were seized on 17-8-83 and 18-8-83. Sl. Description No. of pieces Weight 1. Aluminium billets 18" 21 pcs. 669.600 kgs. 2. Aluminium billets 15" 73 pcs. 1314.000 kgs. 3. Aluminium billets 12" 93 pcs. 1339.000 kgs. 4. Aluminium logs 68 pcs. 5140.00 kgs. 5. Aluminium ingots 245 pcs. 4900.000 kgs. 6. Aluminium scraps Loose 1640.000 kgs 7. Aluminium ingots under processing Loose 368.100 kgs. 15370.900 Kgs. or 15.3709 MT The remaining 8.2151 M.T. appeared to have been rolled into sections and surreptitiously removed without payment of duty without any record including covering gate passes. A show cause notice was issued by the Assistant Coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proforma credit in respect of duty paid ingots. Therefore, it was not necessary to make entry in R.G. 23 Part I and Part II. He also contended that there is no provision of law warranting the entry of such material on their receipts forthwith. It was, therefore, contended that if the duty paid raw materials received on 16-8-1983 and 17-8-1983 could not be entered on 17-8-1983 in the Raw Material Account this does not lead to contravention of any provision of law. He also contended that the seizure and confiscation of 15.370 MT of Aluminium Ingots, Billets and Scraps were invalid on the ground that out of this quantity 13.286 MT of ingots were received on 16-8-1983 and 17-8-1983 and out of which 8.386 MT of ingots were charged for production on 16-8-1983 and 17-8-1983 and the rest quantity was scrap i.e. recycling material arising out of raw material under Rule 56A. In support of his contention he relied on the following decisions : (i) 1986 (26) E.L.T. 451 (Tribunal) (ii) 1987 (32) E.L.T. 430 (Tribunal) (iii) 1988 (38) E.L.T. 636 (Tribunal) (iv) 1988 (33) E.L.T. 580 (Tribunal) (v) 1987 (28) E.L.T. 315 (Tribunal) (vi) 1988 (38) E.L.T. 264 (Tribunal) 3. The learned J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unted for in the Central Excise records and there is a missing quantity of 8.215 MT which have been cleared without payment of Central Excise duty to the tune of Rs. 85,847.80. It was, therefore, contended that in view of the clandestine operation made by the appellants and on the facts and circumstances of the case the impugned order is justifiable. He also drew our attention to several findings of the Additional Collector and justified the order. 4. In view of the rival contentions the following issues arise for our determination : (i) Whether the imposition of penalty of Rs. 45,000.00 on the Director, Shri Chandulal Shah is justifiable? (ii) Whether the demand of duty to the extent of Rs. 85,847.80 is in accordance with law? and (iii) Whether the confiscation of the seized materials and the appropriation of the security amount of Rs. 45,000.00 as Redemption Fine is in accordance with law? 5. As far as the first point is concerned the learned Advocate, Shri K. P. Chowdhury contended before us that the licence was issued in the name of the appellants Company - M/s. Bihar Extrusion Company Private Ltd. It was his contention that the show cause notice was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lector requiring the appellants Company to pay the duty to the extent of Rs. 85,847.80 is in accordance with law. The conclusions in the show cause notice are to the effect that the appellants Company had removed 8215.100 kgs. of aluminium ingots without payment of Central Excise duty to the tune of Rs. 85,847.80. The learned Advocate, Shri K. P. Chowdhury contended that in all such cases there must be a definite evidence to show that the appellants had removed such quantity of aluminium materials without payment of duty in this regard. In this connection, he relied on a decision reported in 1986 (26) E.L.T. 451 in the case of B. S. Jewellers v. Additional Collector of Central Excise Customs, Jaipur. He also stated that in the case of Global Enterprises v. Collector of Central Excise, Chandigarh, reported in 1987 (32) E.L.T. 430 (Tribunal) a decision reported in 1978 (2) E.L.T. J.172 in the case of Oudh Sugar Mills had been cited, wherein it had been observed by the Hon ble Supreme Court as follows :- In the circumstances, therefore, we must hold that the finding that 11.606 maunds of sugar were not accounted for by the appellant has been arrived at without any tangible evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by 17-8-1983 it will not lead to a conclusive inference that entries were not made with an intent to avoid payment of duty. He also contended that there was no necessity to make entry in R.G. -23: Part I Part II. But the entries are to be made in the Raw Material Account. But there is no provision of law warranting the entry of such raw material forthwith on their being received. Therefore, it was contended that if the duty paid raw material received on 16-8-1983 and 17-8-1983 could not be entered on 17-8-1983 this will not contravene the provision of law. In this connection, he also invited our attention to the working schedule of 16-8-1983 and 17-8-1983 as reflected in Para 7.5 of the impugned order. The learned J.D.R., Shri A. Chowdhury contended that since these aluminium ingots were not entered in the Raw Material Account, the rules are contravened. Shri K. P. Chowdhury, learned Advocate for the appellants, in support of his contention relied on a decision of the Allahabad High Court reported in 1987 (29) E.L.T. 512 (All.) in the case of Durga Rolling Mills v. Union of India and Others wherein at Para 3 their Lordships of Hon ble High Court of Allahabad held as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Applying the principles laid down in that decision it is seen that the appellants should have entered the receipt of all the aluminium ingots on the 16th day of August, 1983 when they started their factory on the next day i.e. 17th. Their Lordships in the above-said decision have clearly stated that closing balance may be drawn at the end of the working hours and the entries proceed date-wise and columns 1 to 9 may be filled in before the closing balance is drawn in Column No. 10. Their Lordships only held that it was not necessary to make the entries as and when they are received. Hence, it goes to show that the receipt of ingots on the 16th August, 1983 should have been made entries in the concerned registers at the early hours of the 17th. But as the receipts of the 17th are concerned the appellants had still got the time to make the entries. In such circumstances, the confiscation of 11.130 MT of aluminium ingots received on 16-8-1983 is in accordance with law. It is, further, seen that the total quantity received on 16th August, 1983 and on 17th August, 1983 is (11.130 + 2.156) 13.286 MT. But in the factory premises when the seizure was made the Department found a quantity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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