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TMI Blog1998 (8) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... gister on 9-10-1996 but on physical verification no stock was found in the factory. The RG 1 Register was found to have been maintained upto 28-9-1996 showing no closing stock on that day. Statement of Shri P.V. Veeraraghavan, the authorised signatory of the appellants was recorded wherein he inter alia deposed that as per the calculation out of 3,075 kgs. of chemicals, 12,000 metres of processed fabrics could be manufactured. The officers co-related the quantity of the chemical used for the processing of the fabrics and cross-checked the chemical colour note book and found that 13,280 kgs., of dyes and chemicals had been utilised and worked out that 51,824 LMTs of processed fabrics should have been manufactured whereas as per RG 1 register ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice was based on the raw material account maintained by the appellants and no evidence had been produced by the Department about the clandestine removal of the goods. They had calculated the differential quantity of the fabrics on the basis of consumption of dyes and chemicals. The dyes and chemicals mix might become waste due to some fault and therefore, the ratio adopted for calculating the quantity of production in terms of fixed ratio was not correct. It could not always be possible to use the raw materials especially chemicals for dyeing purposes with clinical precision. There was no mention about wastages and raw materials could not be used in the manufacture of final product without any wastage. In this connection they relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the case of Pawan Tyres Pvt. Ltd. [1997 (93) E.L.T. 635]. Similarly with regard to the imposition of mandatory penalty they submitted that penalty imposed was not justified as Section 11AC came into force only from 28-9-1996 and the offence related to the period July, 1996 to September, 1996. 3. I have gone through carefully the facts of the case, the grounds of appeal and the submissions made by the appellants during the course of personal hearing. In the present case no independent evidence have been collected by the Department regarding the clandestine removal of 19,200 Mts of the processed fabrics. The said quantity had been worked out on the basis of consumption of dyes and chemicals. By adopting the ratio that out of 3,075 kgs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... selves admitted the clearance of fabrics without payment of duty, the same may be taken as the quantity cleared without payment of duty and not the quantity of 19,200 metres as was calculated on average basis by adopting the dyes and chemicals ratio. As regards shortage of 11,353.90 linear metres, the appellants have already accounted for the said quantity by showing that 7,600 linear metres of fabrics was cleared without payment of duty and 3,694 metres cleared on payment of duty and thus there was no shortage of the unprocessed fabrics as alleged. 4. The appellants have also contended that if the duty was to be demanded, value should be treated as cum-duty price and the excise duty should be deducted from the said value. This argument i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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