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TMI Blog2000 (9) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... d the entries therein with those in the excise records, and found substantial difference between the quantity of the excisable goods despatched as shown in the M.O. register and the quantity shown in the excise records. This difference of quantity of the goods, for which no invoices were found to have been raised, was suspected to be a case of clandestine removal without payment of duty. The value of the cleared goods and the amount of duty leviable thereon were worked out at Rs. 1,20,78,826/- and Rs. 17,31,997/- respectively. Department, on the basis of the findings based on the records resumed from the factory and the statements of the Managing Director and the Accountant-cum-Authorised Signatory of the Company, issued show-cause notice (SCN) to the appellants proposing to recover the aforesaid amounts of duty under Rule 9(2) of the Central Excise Rules [CER] read with the proviso to Section 11A of the Central Excise Act and to levy interest on the amounts under Section 11AB of the Act. Show cause notice, further, sought to impose on the party mandatory penalty under Section 11AC of the Act for the alleged contravention of Rules 9(1), 52A, 53, 54, 173F, 173G and 226 of the CER. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declaring the samples under Rule 173B of the CER, without accountal in statutory records, without cover of any document and without payment of duty. This statement of Shri Gupta was endorsed by the Managing Director in her own statement. Both of them accepted liability to pay the duty also. The authenticity of the challans/packing slips (resumed by the officers) under which M/s. Jawa Laboratories despatched the samples during the relevant period was not disputed by either of them. These records showed total clearance of samples valued at Rs. 50,28,692/- involving Central Excise duty of Rs. 7,29,557/- as stated in Annexure-A to the show cause notice. Apart from challenging the correctness of the Department's valuation of the goods, the appellants have not disputed the material contents of the said Annexure-A. They also paid an amount of Rs. 2,71,558/- by PLA debit on 29-1-1998 towards duty on the samples cleared during 1995-96 and 1996-97 after filing Rule 173B declaration and price list based on a certificate of their Chartered Accountant. Such payment was made on the basis of the value so declared. It appears that the above payment or any part thereof has not been taken into accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... register with effect from 1-4-1996 only. Department also conducted a scrutiny of the Batch Register maintained by the appellants under the Drug Control Act and found that the appellants had shown lesser production disproportionate to the quantity of raw material consumed per unit in each batch of production. Department also found that the goods manufactured by the party were being cleared to their own depot, wherefrom it was marketed through their own marketing agency (M/s. Jawa Laboratories) at Delhi. According to Department, the appellant-company and the marketing agency were related persons inasmuch as the Managing Director of the former and the Proprietor of the latter were one and the same person. On the Department's allegation of clandestine removal, which was based on the above evidence, the appellants in their response to show-cause notice submitted that the quantity of the goods for which no invoices were raised was, in fact, quantity already removed on payment of duty from the manufacturing premises to the depot, which was situated within the factory premises itself, and subsequently removed to M/s. Jawa Laboratories at Delhi. The party further explained that, when the (d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de the demand of duty on the goods which were alleged to have been removed clandestinely. 5.3 Learned DR vehemently opposed the above submissions. He submitted that the only inference which could be drawn on the basis of the M.O. register and the admissions made by Mrs. Santosh Jawa and Shri R.G. Gupta in their respective statements was that a quantity of excisable medicines valued at Rs. 1,20,78,826/- involving Central Excise duty of Rs. 17,31,997/- was clandestinely removed without payment of duty during the relevant period. He particularly pointed out that there was no evidence of the existence of any depot in the factory premises as claimed by the appellants. The Managing Director, in her statement, categorically admitted that they transferred the goods to their depot at Delhi and that the goods were sold from the depot to their marketing division viz. Jawa Laboratories and a few other stockists. In the light of this admission, learned DR submitted, the plea of double entries in the M.O. register was not tenable. He further submitted that the M.O. register was, admittedly, a document maintained by the appellants at the factory gate with effect from 1-4-1996. The entries in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the said documents maintained by the appellants themselves. These evidences, which are corroborative of, and complementary to, each other, have left no shadow of doubt in our mind about the clandestine nature of the removal of the goods in question. The cases cited by learned Advocate (vide para 5.2) are found to be distinguishable on facts from the instant case. 5.5 We therefore hold that the allegation of clandestine removal of excisable medicines valued at Rs. 1,20,78,826/- stood proved and that the demand of duty on the goods so removed was only liable to be confirmed. 6. On the issue of interest and penalty as proposed in the show cause notice; we agree with the submission of learned Advocate that neither any interest under Section 11AB of the Act nor any mandatory penalty under Section 11AC of the Act can be charged/imposed on the appellants since these provisions of law were brought into force only after the periods of dispute. We, therefore, set aside the interest and penalty charged/imposed on the appellants. 7. On the last issue whether the extended period of limitation was invocable for the demands of duty, we observe that when the Department alleged suppressio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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