9911796707
TMI Blog1999 (8) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... t Rs. 9,600/- loaded in a tempo in the factory compound without duty paying documents therefor. 2. 10 video cassettes valued at Rs. 700/- were found lying in the factory gate office without accountal in Central Excise records and without payment of duty. 3. Shortage of 500 video cassettes which was detected on verifying the finished stocks lying in the BSR and comparing it with the RG-1 register - the Assistant Sales Officer explained that this quantity had been sent to the Assembly Section for conversion, without accountal in the Central Excise records. 4. 777 cassettes and 173 video cassette housings were recovered from the Guest House of the appellants for which no duty paying documents were produced by the appellants. 5. 87 pieces of video cassettes were found in the residential premises of the Sales Representative of the appellants for which he could not produce any Central Excise documents. 2. All the items at Sl. No. 1, 2, 4 and 5 above were seized under the reasonable belief that they were liable to confiscation under the Central Excise Rules. Further investigations in the form of recording of statements took place and a show cause notice was issued to the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Superintendent dated 19-8-1988 and the statement of Shri Piyush Shah, Sales Executive wherein he had deposed that 500 Nos. of E/180 cassettes found short in the Bonded Stores Register on 5-1-1989 had been sent to the assembly section for conversion into double window from single window. We have also perused copies of the stocks statement of finished products for the period between 24-10-1988 to 6-1-1989 wherein an entry has been made that 500 E/180 cassettes have been transferred to assembly department for conversion. The Collector has erred in holding that it is reasonable to presume that these had been removed without payment of duty once they had reached the final stage of production and had been duly accounted for in the statutory daily stock account. While the movement of this quantity from the BSR to the assembly section was not separately accounted for in the statutory records, thus giving rise to penal liability, it cannot be a ground for levy of duty and hence we set aside the duty liability on 500 video cassettes found short in stock. 5. The appellants do not seriously contest the confiscation of the cassettes and video cassette housings found in the guest house a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m) Judicial Member 6. [Order per : S.K.Bhatnagar, Vice President]. - With due respect to Hon'ble Member (Judicial), my views and orders are as follows :- 7. I observe that the learned JDR has drawn attention to the Additional Collector's orders and in particular, to his reasons and findings. In so far as the Video Cassette Housings are concerned, the relevant portion reads as follows :- ".....Heading 39. 26 is a residual heading which covers articles not elsewhere specified or included with plastics or other material of Heading 39. 01 to 39. 14. The said product or similar items are not covered by the list given in Heading 39.26. As such the ground taken for classifying the product under sub-heading 3926.90 is incorrect. As per Chapter Note No. 6 of Chapter 85, the product video cassette housing without magnetic tape are correctly classifiable under Heading No. 85. 23 as it is solely and principally used for the purpose of video cassette. Thus it is a part of such cassette. Moreover, the said product cannot be treated as spools, caps, bobbins and similar supports of plastics which are excluded from the coverage of Section XVI by virtue of Note 1(c) of Section XVI read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her examined. In so far as the 10 Video Cassettes found in the factory gate-office is concerned, again the position is not very clear inasmuch as if there was entry about them in the other relevant records and the factory gate-office was within the approved premises, the matter cannot be considered so serious as to warrant confiscation and the matter is required to be examined further. 10. Regarding 500 Video Cassettes sent from Assembly Section for conversion from single window design to double window design which is accepted in view of the appellants' letters to the Superintendent as mentioned in para 3 of this Order, I agree with the observations and findings of my colleague recorded in sub-para 4 of Para 3, both in respect of cassettes which were found in the factory as well as Video Cassettes Housings found in the Guest House, except to the extent that the appellants' submission to the effect that there was no recording facility, was required to be verified and the Additional Collector should have recorded his finding in this regard. He has not done so. In so far as the 87 Video Cassettes seized from the respondents' Sales Representative is concerned, I observe that if t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been furnished to us by the ld. Counsel for the appellants at the close of the hearing of the appeals) and confirm the confiscation and duty demand on the remaining items. The penalty imposed on the company is upheld in view of contravention of the relevant provisions of Central Excise Rules; penalty on the General Manager, which has been rightly imposed under Rule 209A is reduced to Rs. 1500/- and the penalty on the sales Representative which is also warranted in view of the fact that he had kept 87 video cassettes in his residence under the directions of the General Manager with the knowledge that these goods had not borne any duty liability and were, therefore, liable to confiscation is reduced to Rs. 500/-." 13. On the above decision in para 7, the Hon'ble Vice President observed that the ld. JDR has drawn attention to the Additional Collector's orders and in particular, to his reasons and findings, and held in para 8 that "In my opinion, ld. Commissioner's reasoning and reference to the relevant provision is justified inasmuch as the appellants have not been able to controvert or show that these housings were not specially designed for cassettes and could be used for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the findings of the adjudicating authority have been reproduced. In para 8, there is no difference of opinion between the Hon'ble Vice President and the Member (J). The only difference is recorded in para 9. After careful consideration of the submissions made as also the orders proposed, I entirely agree with the observations of the Hon'ble Vice President holding that the position is not very clear inasmuch there is no finding whether the goods were finding entry in the Central Excise records i.e. RG-I register and therefore is required to be examined further. I, therefore agree with the findings and observations of the Hon'ble Vice President given in paras 7 to 9. Date of last hearing : 7-5-1999 Sd/- (G.R. Sharma) Member (T) FINAL ORDER 17. In the light of the majority view, the confiscation of video cassette housing without magnetic tape and duty demand of Rs. 726.60 thereupon is set aside, duty demand of Rs. 9,187.50 on 500 video cassettes found short in stock is set aside, penalty imposed upon the appellant company is upheld, penalty on the General Manager is reduced to Rs. 1500/-, while the issue of confiscation of plastic components, kits seized from the tempo in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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