9911796707
TMI Blog1984 (9) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... a number of things which the officers thought were evidence of illegal-operations. Among other, things, he admitted that the 13 consignment notes covering the 5807 kgs. of tread rubber related to clearance of tread rubber from the factory without proper account. He admitted also that a quantity of 2000 kgs of carbon black and 1000 kgs of raw rubber has been received without any bill and that these were used for the production of tread rubber which were then cleared without accounting. He wrote in his statement that his factory would make a profit only if it stood within the exemption limit. Hence they committed the offences to show the annual turnover of the factory within the exemption limit. This statement was written by the Office Manager Mr. K. Appukkuttan Nair as his own (Gopinathan's) handwriting was not legible. Furthermore, this statement, was read by another partner by the name of Sasikumar who vouched for its truth and correctness. 2. One thing led to another and eventually the factory was charged with having manufactured up to 326,126.26 kgs. of tread rubber without taking out any Central Excise licence during 1980-81 and 1981-82 upto 30th September, 1981; removing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inutes in one batch. In one shift of 8 hours, 14 batches can be mixed to produce 25.75 kgs. x 14 = 360.50 kgs. This mixed extrude would be extruded in the next batch to produce 360 kgs. of tread rubber, allowing for a wastage of 0.5.kg. Even if it is assumed that the factory works continuously for 300 days in a yeas, the total output of the unit works out to 360 x 300 = 108,000 kgs. tread rubberannum. This, however, was not taken into account; things do not go according to calculations and there would be various disturbances that would upset the programme, such as labour troubles, electricity failure, machinery failure etc etc. to say nothing of raw materials constraints and short supply. The quaritiiy of 249,891.360 kgs. computed by the Central Excise is unrealistic and is impossible to achieve. Furthermore, they have to manufacture cushion gum and allowance must be made for the time taken for this. A quantity of 108,000 kgs. of tread rubber requires about 6480 kgs. of cushion gum. This manufacture will require time and power and will thus cut into the manufacture of tread rubber. 5. The learned counsel for the Triveni Rubber & Plastics referred to the list of days in the Collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E. as amended by Notification No. 2/81-C.E. It is indeed true that the Collector went largely by the power consumed by the factory to arrive at his figures. It is, therefore, a question of whether in doing so, there has been a failure on his part to exercise his powers properly or whether there has been any capriciousness in such exercise. 9. The explanation given by M/s Triveni Rubber & Plastics was that their electricity meter was unreliable and had to be replaced in May, 1980 and that this was a proven fact. However, they also say that the readings of the meter between October, 1979 and May, 1980 were totally incorrect and the units said to be consumed in 1979-80 were below the actual consumption, and that, therefore, the average production of 2927 kgs per unit calculated on the basis of consumption of 12000 units was vitiated by this error and could not be relied upon. What they seem to miss by this argument is that it would mean that they had actually consumed more power than was shown in the meter reading, and that, therefore, there were good reasons for Collector to hold that the figures of actual production of goods were much more than would be warranted by the figures of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that they are supposed to produce cannot serve the purpose of answering this charge. 11. On the Other hand, January, February and March are crucial months. A factory can legitimately order its production and clearances so as not to exceed the limits laid down by the exemption notification. Some may not stop at this but carry on the production clearances but will fail to record them, thereby showing adherence to the limits, on paper. This appears to have been what M/s. Triveni Rubber & Plastics did. The learned counsel for the appellants says that the statement was given by managing partner Mr. Gopinathan when he was under great nervous tension and fear. This statement should not be relied upon because he also made certain incorrect statements like saying that the factory purchased tread rubber when the factory would never pur chase the commodity, being a manufacturer of tread rubber itself. We can find no statement to this effect in the statement given by the managing partner on 30-9-1981. Instead, he talks of purchase of raw rubber and carbon black for production of tread rubber. It has to be remembered furthermore, that the statement was written not by the managing partner hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kgs. per shift that the factory claims it was capable of with its single mixing mill and extruder. It cannot escape anybody's notice that the daily figures listed by the Collector sometimes exceed 4 times the claimed rated capacity of the unit of 360 kgs. per day. On most other days listed, the production was more than twice. That the days are not consecutive is not an answer to the charge that the unit can produce, when it sets up to do so, a quantity of 600 kgs. to 1000 kgs. of tread rubber in a shift of 8 hours. If anything, the fact the days are not consecu tive would point to the very high possibility that on the other days production was not accounted fully and was suppressed. 13. There have been too many untruths. We have seen how 13 consignments covering 5807 kgs of tread rubber were cleared without proper accounting in the factory records. We have seen the factory had been buying raw materials like raw rubber, carbon black etc. without proper bills and accounts. The factory owners stood to gain very substantially from doing what they were charged with doing and their conduct lent credence to these charges. It is not easy to dismiss the Collector's conclusions as being su ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
