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TMI Blog1996 (5) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... das shoes, 10 Adidas empty cartons and 370 pairs of Adidas insoles and 21 pairs of Adidas socks. The driver of the vehicle produced the following documents when demanded by the Officers : (i) Central Excise gate pass 1 No. 107, dated 30-9-1992 for 996 pairs of shoes. (ii) M/s. Star Shoes (I) Pvt. Ltd., factory gate pass No. 394, dated 30-9-1992 for 6 pairs of Adidas Shoes. (iii) Despatch Notes No. 47, dated 30-9-1992 in duplicate for 83 cartons (996) pairs. (iv) K.S.T. Form No. 39, dated 30-9-1992. (v) M/s. Star Shoes (I) Pvt. Ltd., factory gate pass Nos. 392 and 393, dated 30-9-1992 for 10 empty Adidas Cartons, 370 pairs of Adidas Insoles and 21 pairs of rejected Adidas Socks (insole). 2. No Central Excise gate pass for 6 pairs of Adidas Shoes was produced. Further on immediate verification of the factory records revealed that no duty had been debited in respect of the goods covered by GP 1 No. 107, dated 30-9-1992. The entire consignment alongwith the transport vehicle bearing No. CAW 229 was therefore seized under a Mahazar dated 30-9-1992 and was taken to the custody of the Department. Further, at the factory premises, the Officers noticed that the assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufactured and cleared by them between 19-9-1992 to 30-9-1992. Verification also revealed that Inner soles/socks are not leviable to duty in view of the exemption provided under Notification No. 49/86, dated 10-2-1986 as amended. 4. From the foregoing it appeared that M/s. Star Shoes have removed excisable goods viz., 996 pairs of shoes valued at Rs. 4,05,262.80 without accounting and without payment of Central Excise duty of Rs. 81,053/- BED and Rs. 12,158/- SED and further removed 6 pairs of shoes totally valued at Rs. 2,277.96, without accounting, without raising a gate pass, without payment of duty of Rs. 455.00 BED and 68.35 SED, in contravention of the provisions of Rules 9(1), 52A, 53 read with 226, 173F and 173G of Central Excise Rules,1944 for which reason the abovesaid goods were seized alongwith the vehicle bearing Registration No. CAW 229 valued at Rs. 52,000/-. lt further appeared that M/s. Star Shoes (India) Pvt. Ltd., Bangalore, have clandestinely removed 501 pairs of Ultimo (Power) Shoes and 1067 pairs of Match-II (Adidas) shoes valued Rs. 4,05,097.22 which were found short, in contravention of the provisions of Rules 9 (1), 52A, 173F and 173G of Central Excise Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... `Adidas shoes without raising Central Excise Gate passes, it was pointed out that in the statement of Shri S.B. Desai dated 1-10-1992 he has clearly pointed out that the physical stock has been verified with the books of account and there might be some arithmatic mistake which required to be reconciled. Finally, after the personal hearing, the impugned order was passed wherein 1002 pairs of shows valued at Rs. 4,07,540.76 were confiscated and it was allowed to be redeemed on payment of redemption fine of Rs. 2,00,000/- and Central Excise duty of Rs. 2,33,351.15 was also demanded. A penalty of Rs. 2,00,000/- was imposed on M/s. Star Shoes (India) Ltd., the appellant. 9. The learned Advocate Shri Chandrakumar appearing for the appellants contended that the demand of duty of Central Excise amounting to Rs. 2,33,351.15 is totally without application of mind to the facts of this case. He stated that the duty has been discharged in respect of 1002 pairs of shoes under seizure vide Sl. Nos. 52 and 53 in RG 23A Part-II which was not taken into consideration by the Collector. He also stated that the duty demanded is otherwise illegal and untenable. He drew our attention to paras 3, 4 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-10-1992 by debit entry RG 23A Part-II at Sl. Nos. 52 and 53. He therefore contended that this purely goes to prove that the appellants had contravened provisions of Rule 9(1) of the Central Excise Rules as no duty was paid at the time and place of removal of the goods on 30-9-1992. He further pointed out that Rule 9 of the Central Excises Rules, 1944 prohibits removal of excisable goods from the place of their manufacture unless the duty leviable thereon is paid. He also stated that under Rule 173G it is mandatory on the part of the assessee to determine the duty liability for each consignment and discharge the same by way of debit entry in the account current or current account as the case may be. In this case the duty was paid only when the goods were provisionally released. Therefore, he stated that since duty was not paid on 30-9-1992 when the goods were removed, they are liable for confiscation and the appellant is liable to be penalised under Rule 173Q(1) of the Central Excise Rules. With respect to the other contentions, he reiterated the reasonings in the impugned order. 11. We have considered the submissions of both the sides. The first point which arises for our deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable for confiscation. Therefore, the confiscability of the goods in question cannot be disputed merely on the ground that necessary transport documents have been given to the possession of the Driver. However, this is a circumstance which can be taken into consideration for the quantum of redemption fine. It is further seen that on this account, the appellant is liable to be penalised under Rule 173Q(1) of the Central Excise Rules, 1944. Under Rule 173Q(1), if the appellant has contravened any rules, they are liable for penalty and it is not necessary for the Department to separately prove that they had any intention to evade the payment of duty. The very contravention of the rule itself is sufficient to impose penalty on the appellant. 12. In view of the above fact we are of the view that the confiscation of the abovesaid goods is proper. However, in view of the circumstances as narrated above, we reduce the redemption fine to a sum of Rs. 1,00,000/- (one lakh). But for this modification the appeal on this ground is otherwise rejected. 13. The next point for our determination is whether the demand of duty of excise to the extent of Rs. 2,33,351.15 is in accordance with law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vely pointed out that the physical stock verified with books of accounts was erroneous and that there might be arithmatic mistake - accounting mistake or the production in RG 1 might have been recorded in excess due to which the stock shown in RG 1 appear to be more than the physical stock. It was also stated in the statement, that stock has to be reconciled. Accordingly, the noticee company prepared a reconciliation of the stock available as on 1-4-1992 in accordance with the registers and also the stock available on 30-9-1992 taking into account the total number of uppers supplied to the factory and the total number of shoes cleared from the factory. On reconciliation of the stock, it has revealed that the noticee company has taken the stock twice with regard to 501 pairs of Ultimo and 1067 pairs of shoes of Match - II Adidas. The statement of uppers received during the period and also the statement of opening stock as on 1-4-1992, the number of uppers used during the period 1-4-1992 to 30-9-1992 is produced herewith to demonstrate as to how the entries have been taken in RG Register twice. The main reason for entering the entries twice is clear from the letter dated 29-2-1988 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g. He should give his supporting reasons so that the Tribunal, in appeal could assess as to whether the reconciliation statement would be accepted or not. In order to assess the same, there should be speaking order in this regard by the adjudicating authority stating the reasons why and how the reconciliation statements could not be accepted. In this view of the matter we hold that as far as the second issue is concerned, the demand of duty is not in accordance with law. But the matter requires to be remanded for this purpose for giving an opportunity to the appellants to submit the appellant s case with respect to the reconciliation and thereafter the adjudicating authority could consider the arguments of the appellant and then can pass a speaking order in this behalf by mentioning as to how the reconciliation statement is not acceptable and in doing so, the adjudicating authority should take into consideration the reasons furnished by the appellant after discussing the same. 16. As far as the third point is concerned, we have to find out whether penalty is imposable on the appellant. We have already held that penalty is imposable under [Rule] 173Q(ii) but penalty on the grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X
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