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TMI Blog1999 (7) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... lue of the opening stocks and purchase during the year, out of which they produced laminated sheets of decorative and cut pieces to the tune of Rs. 26,94,815. After considering the value closing stock of raw materials, value of goods in process, value of raw materials sold as such, raw materials worth Rs. 36,09,742/- were found unaccounted. He attributed the shortage of raw materials to the wastages which arose due to the teething problem, in the factory such as in-experienced workers and the non proper functioning of air conditioners and driers, uneven feeding of raw materials for final product, which resulted in wastages and bad quality, could not push the products into the market for sale due to inferior quality, and being new to the trade, and the spoiling of the goods due to rains, and the failure of electricity in rural area played the vital role. 2. Based on the consumption of base papers and calculated on the basis private as well as Central Excise records their should have been production of 64,891 laminated sheets of 8 x 4 , where as only 43,955 sheets were shown and thereby suppressed 20,936 sheets, which is alleged to be cleared without accounting and payment of Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng sold. There is no averment at any stage that the appellants has recovered additional consideration with regard to the said sales. The impugned order is not sustainable. Officers visited the unit of the appellant on 4-7-1991 such started manufacture in 1989, and no case was made out for the period from March, 1990 to 4-7-1991. That period of demand is 1-5-1989 to 31-5-1990. Duty confirmed is Rs. 4,06,439/- and the penalty of Rs. 50,000/- is imposed. The licence was taken on 4-2-1990 and RG 1, form IV Register were maintained. Prior to it clearance was below the exempted limit and same kind of registers of above were maintained as private register. Initial case sought to be made out as balance sheet reflected huge loss. On the first occasion in the statement dated 8-7-1991 Managing Director clarified the reasons for the loss that is various problems. On the basis of the accounted quantity of one raw material i.e. base paper which is used in the manufacture of final products i.e. laminated sheet a case of clandestine removal was sought to be made out relying on some theoretical ratios. On both the aforesaid counts Commissioner holds in favour of the appellant. But, however, confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued to recover duty on that account. Even though show cause notice was based only on the balance sheet and the calculation of processed production on the ratio of 320 gms., which should have been quashed. The balance sheet gives only figure of sales, not production. Comparison of private register to the balance sheet and adoption of higher figure as per the private register is absolutely meaningless. The difference of balance sheet to the figure of private register which was kept in detail in RG l form is nothing but closing stock, and other such element of accounts. The appellant is enclosing a calculation certified by Chartered Accountant to meet the case of the adjudicating authority in the impugned order, reconciling the figures of the balance sheet with figures in the private register. Comparison of private records figure with the balance sheet is meaningless. The Collector has erred in re-working the valuation of accounted figures with production. It is not clear as to how the value of grade A and B sheets at Rs. 125/- and Rs. 110/- was adopted, in the absence of recovery of additional consideration over and above the build accounts by the appellant. All the invoices of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port the presumptions. On the other hand, as urged by the appellant, when the officers visited the factory on 4-7-1991 there was no deficiency or irregularity, or illegality in the management of the factory such as production of paper based of laminated sheets, maintenance of records and the available stock of goods in the factory for the immediate past period of 1991. It is very strange that for the clandestine production and removal of paper base laminated sheets without payment of duty and proper accounting even in the registers maintained by the appellant. The visit to the factory was after a long lapse of one year and no reason is forthcoming for this delay. This goes against the case of the department. 7. As urged by the appellant in the impugned order the defence set up by the appellant is upheld, on all the material particulars, such as initial production period, teething problems faced by the appellant factory, lot of wastages in production, and showing less stock of finished goods in the private register and the reasons assigned by the Managing Director in the statement, and the supporting documents produced in replacing the equipments, and in-experienced staff, and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raw materials FDI not found higher and higher consumption of another essential raw material polyurethane not even alleged. As contended by the appellant there is no sound foundations to hold that 320 gms of base paper was required to produce one standard lamination sheets of the size 8 x 4 as held in the impugned order. There is no dispute that the appellant factory was within Rs. 30.00 lakhs exemption limit for SSI unit, and duty laibility was not there, as found in the impugned order. The appellant has pointed out under Clause (H) in page 7 of the appeal memorandum that the impugned order has upheld the claim of the appellant that it was erroneous to adopt above formula. Nothing is submitted rebutting it. The charge of clandestine removal was dropped, but duty is demanded and altogether different ground as urged by the appellant, which is challenged new grounds urged in the appeal memorandum and arguments. Huge loss in the balance sheet was a starting point to show some clandestine removal of 20,930 sheets for entry in private register of 37,924 sheets, accounted like RG 1 register by the appellant. The theoretical production worked out on the basis of the accounted quantity of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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