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TMI Blog1995 (6) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1987, the respondents manufactured and cleared excisable goods namely tread rubber without payment of excise duty under the provisions of Central Excises and Salt Act, 1944, the Act for short, resulting in duty evasion of Rs. 57,41,330.80 and the respondents were also called upon to show cause against further allegation such as without obtaining licence from the Central Excise they manufactured the goods, non-accounting of the manufactured goods in the prescribed Central Excise stock register namely RG 1 and also other charges. For the purpose of convenience we are extracting the charges aforesaid in the show cause notice, which are as under : Whereas it appears that Shri G. Rajappan, Proprietor, M/s. Devi Rubber Products, Mahadevikad, Karthikapally, Alleppey District has contravened the provisions of Section 6 of Central Excises and Salt Act, 1944, Rules 173B, 173C, 173F, 173G(1), Rule 174 read with Rule 9(1), Rule 173G(2) read with Rule 52A, Rule 173G(4) read with Rules 53 and 226 of the Central Excise Rules, 1944 inasmuch as they have prima facie manufactured and cleared tread rubber as shown in Annexure B to this show cause notice falling under sub-heading 4006.10 of Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that evidence certainly indicate that there has been unaccounted production and clearance and the actual quantum as worked out in para 28 of the Annexure-B. Shri Murugandi further referred to the findings in the order portion of the impugned order wherein the Collector has stated that there had been substantial quantity of unaccounted production and clearance . 5. Shri C. Chidambaram, the learned Consultant for the respondents submitted that as against the levy of penalty, the respondents have filed an independent appeal and even assuming that the findings of the Collector in the impugned order are prima facie inconsistent, it would still be open to the respondents to analyse the evidence in detail especially in respect of the statements and other evidences available on record to argue that the ultimate conclusion of the Collector that the respondent is liable to pay no duty is sustainable and therefore consequently the respondent would not be liable to pay penalty also. Shri Chindambaram further submitted that no penalty is leviable on the respondent because to levy any penalty there must be precise evidence of manufacture of excisable goods and particularly in the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of which any contravention has been committed, when the value has not been ascertained, the imposition of penalty is bad in law. (e) The Collector should have taken all the facts mentioned above into consideration and confirmed the demand in full and impose penalty. The Board, therefore, under the provisions of Section 35E(1) of the Act directs the Collector to supply to the Customs, Excise Gold (Control) Appellate Tribunal (hereinafter referred to as `the Tribunal ) for the correct determination of the following points arising out of the said order: (a) whether, after taking into consideration the facts stated above the said order of the Collector is a legally correct and proper order; and (b) whether by an order passed under Section 35C of the Act the Tribunal should set aside the order and confirm the demand in full and impose penalty or pass such other order as may be deemed fit.". 7. It is only on the basis of the statutory directions of the reviewing authority in exercise of the powers conferred under Section 35E(1) of the Central Excises Salt Act, 1944, the appeal came to be filed before the Tribunal. 8. On going through the orders of the Collector we find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajappan stated that he was the owner of Janatha Tyre Retreading Co., Thiruvannamalai; that he was purchasing tread rubber required for his Unit from Devi Rubber Products without any accompanying duty paying documents. (vi) Shri T.M. John, who was running a tyre retreading company called Prakash Tyres at Mavelikara stated that he was purchasing about 500 kgs. of tread rubber in a month from Devi Rubber Products while according to the factory records only an average quantity of 133.5 kgs. was being shown as sold in a month to the above company. (vii) Similarly, Shri G. Gopinathan Pillai stated that he was running a Retreading firm in the name of Gopan Tyres; that he used to purchase at the rate of 500 kgs. per month from Devi Rubber Products whereas a monthly average of only about 287 kgs. were shown by Devi Rubber Products as having been sold to the above firm. (viii) Shri S. Dilip, in his statement dated 25-8-1987, admitted that he was working as Accountant in the tyre retreading firm of Devi Tyres, Haripad and that he used to buy an average of 1000 kgs. of tread rubber per month from Devi Rubber Products. However, a monthly average of only about 730 kgs. were shown as bein ..... X X X X Extracts X X X X X X X X Extracts X X X X
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