9911796707
TMI Blog1994 (2) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... to 14th September 1990 and conducted stock verification of the goods in the Bonded Store Room. The capacity of the Bonded Store Room was approximately 75,000 cartons while about 2 lakhs cartons were stored therein. The excess and shortage of the goods was verified and found to be as under : Excess StockI. Cartons No. of Value Duty Wall Tilesa. 3415 5,08,282/- 2,54,141/- Basic 12,707/- Spl. Floor Tilesb. 1067 82,212.55 41,107/- Basic 2,055/- Spl. Shortage ofII. Wall Tilesa. 27826 41,51,129.00 20,75,565/- Basic 1,03,778/- Spl. Floor Tilesb. 2685 2,97,094.50 1,48,548.00/- Basic 7,427/- Spl. The officers seized the excess 3415 cartons of wall tiles and 1067 cartons of floor tiles under Panchnama dated 14-9-1990 and 12-9-1990 respectively. A difference of 11373 cartons in the Glost Selection Production Report and of 5298 cartons in combined Dipping and Selection Report was also worked out by the Department. A show cause notice dated 1-1-1991 was issued to the appellants proposing confiscation of seized goods, levy of duty of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been clearly explained. Lastly in support of his contention that the charge of clandestine removal falls to the ground for want of sufficient direct or circumstantial evidence, he cites a host of judgments of various High Courts and orders of the Tribunal to that effect that sub-rule (2) to Rule 9 of the Central Excise Rules, 1944 is attracted only for contravention of sub-rule (1), and in this case, Rule 9(2) is not applicable as goods have not been proved to have been removed clandestinely, escaping assessment. He, therefore, prays that the duty and penalty be set aside. 5. Learned DR, Shri Bhartiya, invites our attention to the panchnama dated 11-9-1990 and the stock verification set out thereunder revealing excess and shortage and to the panchnama of 14-9-1990 and submits that it is not open to the appellants to challenge the correctness of the contents of the panchnamas in the face of acceptance by the appellants by signature of its officers, Mr. Ekande and Mr. B.S. Shah, Excise Officer. He reiterates the findings contained in paras 4.4.2 and draws our attention to para 4.4 wherein the adjudicating authority has adjusted the quantity of 4997 cartons of wall tiles against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, has rightly been discarded by the adjudicating authority as an afterthought. The impugned order does not suffer from any infirmity for rejection of the request contained in the above letter for reverification of the stock by grant of sanction to the appellants for temporary open BSR to enable stock kept in the BSR to be taken outside for the purpose of itemwise and sizewise verification. The letter of 22-3-1991 submitted after the personal hearing is also only a repetition of the letter dated 15-9-1990 and we do not accept the contention of the learned Counsel that the adjudicating authority was bound to act upon this letter, in the admitted position of unexplained excess and shortage of stock detected during the course of proper physical stock-taking. 7. The case law cited by the learned Counsel for the appellants is distinguishable on facts. In the case of N.B. Sanjana v. The Elphinstone Spinning Weaving Mills Co. Ltd. - 1978 (2) E.L.T. (J 399) (SC) it was not the case of the Department that the assessees had not complied with the provisions of sub-rule 1 of Rule 9 and it is in that context that the Supreme Court held that contravention of Rule 9(1) precedes the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same satisfactorily till date. 8. It has been held by the Tribunal in the case of Goodyear India Ltd. v. Collector of Central Excise - 1990 (48) E.L.T. 394 that the plea of human error in counting of stocks is not acceptable when the verification sheet is signed by officials of the company and penalty is justified as shortage is due to clandestine removal of goods and excess is due to non-accountal of goods. The Tribunal relied upon the judgment of the Hon ble High Court in the case of Nizam Sugar Factory Ltd. v. Collector - 1987 (27) E.L.T. 40 for holding that the goods removed in contravention of the provisions of the Act or Rules are liable to confiscation and the manufacturer liable to penalty. 9. In the light of the above discussion we see no reason to interfere with the finding of the adjudicating authority and accordingly we uphold the impugned order and reject the appeal. Dt. : 20-8-1993 (Jyothi Balasundaram) Member (J) 10. [Partial dissent per : S.K. Bhatnagar, Vice President]. - With due respect to Hon ble Member (Judicial) my views and arguments in this matter are as follows :- 11. I broadly agree with the observations and findings of the Ld. Member (Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellants submitted that the learned Member (Judicial) has failed to take into account the fact that the appellants had not accepted the results of the stock-taking carried out by the Central Excise officers between 8-9-1990 and 14-9-1990 since immediately after the completion of the stock-taking the appellants had addressed the letter dated 15-9-1990 pointing out that on account of slow movement of goods during rainy season there was accumulation about over 1,75,000 cartons in the B.S.R. He added that in their letter the appellants had clearly stated that the determined shortage of nearly 29000 cartons and estimate of 4,997 cartons in broken condition, on the basis of eye-estimate was not acceptable to them and they had requested that the stocks may be reverified after properly arranging the cartons in the existing B.S.R. and another temporary open B.S.R. He stated that the adjudicating authority had also failed to take into account the appellants letter dated 22-3-1991 wherein they had stated that the actual damaged stock was 6877 boxes of wall tiles whereas on a rough estimate the officers had estimated such stocks at only 5000 cartons. He submitted that along with this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Member (Judicial) and contended that all the points raised by the appellants had been dealt with therein and pleaded that the order recorded by her may be confirmed. 15. I have considered the submissions made on behalf of both sides. It is an admitted fact that there was a huge accumulation of stock in the appellants bonded store-room at the time when the stock-taking was carried out by the departmental officers. While there could be no justification for acceding to the appellants request made in their letter dated 15-9-1990 for a complete re-verification of the stock, their claim that the number of cartons of damaged tiles was 6,877 and not only 5,000 cartons as determined during the stock-taking merited consideration by the adjudication authority. Since stock verification was carried out over a number of days and excess and shortages were arrived at in the presence of the representative of the appellants who had also signed the relevant record of the stock-taking I am inclined to agree with the learned Member (Judicial) that shortages and excesses determined as a result of stock-taking have to be deemed as having been established and the protest letters filed by the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
