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TMI Blog1996 (5) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... goods was added, the assessee would not be entitled to an exemption during the following calendar year. The checking of the recorded stocks also indicated excess goods valued at Rs. 415. The officers also found that in the factory premises there was one firm operating under the name and style of Bright Pharmaceuticals Distributors. The seized documents also contained certain records of this firm. After completing investigation Show Cause Notice dated 22-3-1988 was issued to both Bright Pharmaceuticals Industries (hereinafter called as BPI) and Bright Pharmaceuticals Distributors (hereinafter called as BPD), asking them to show cause as to why demand amounting to Rs. 1,73,637.80 on the goods surreptitiously removed should not be confirmed, why the goods in excess of the records in the stock should not be seized and why penalty should not be imposed upon BPI. 3. The jurisdictional Collector adjudicated the case. The order was set aside by the CEGAT. De novo adjudication was ordered. In this order the Collector confiscated the excess goods valued at Rs. 415 but permitted the redumption on payment of a fine of Rs. 200/-. He confirmed the duty amounting to Rs. 1,59,134.47 and imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the charts annexed to the Show Cause Notice had shown certain mistakes. He did not however, take corrective action for these mistakes thereby writing a wrong order. 8. Claiming once again that there was no surreptitious removal and also claiming the bar of the demand by limitation the ld. Advocate further submitted that the factory was under Production Base Control. Under this scheme a number of officers had paid many visits to the factory and have not found any evidence as to surreptitious removal. 9. Learned JDR Shri J.M. Sharma arguing for the Department claimed that Shri Jagmohan did not cooperate with the Department. Whenever his mala fides came to light, he blamed somebody else or claimed typographical errors. Attacking the plea that medicines sold by BPD were rejected materials earlier lawfully cleared by BPI, he stated that the large volume and value of such goods belies the claim that these were rejected goods. He further stated that rejected pharmaceuticals could not be sold but had to be destroyed. Referring to the adjudication order he claimed that the learned Collector had established the voluntary nature of Shri Jore s statement. He said that it was not correct th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milar entries occur throughout the diary and are indicative not of planning but of actual production. The entries on 9-7-1981 and 10-7-1981 are headed by the word working . On several other days similar entries occur, the duration of each process is also shown in the diary. Thus, on 15-7-1981 Cough Lozenges punching went on for 7 hours. On 9-2-1982, the en try reads Night power off - 2.30 A.M. to 5 PM. 13. Learned Advocate has attempted to substantiate that the entries relate only to planning by referring to the entry dated 10-2-1982 when a direction is made to one Mr. Sharma to record in the RG 1 the actual production. Mr. Sharma seems not to have followed this direction because out of the 124 cases of Maxiplex Forte 12 Syrup manufactured by M/s. BPI on that day, only 14 cases were recorded in the RG 1. 14. An attempt has been made to discredit the writer of the diary namely Mr. Jore. As per his statement a clear admission has been made that the diary contained entries of actual production. He asked the workers about production as also the chemist before making such entries. According to him he is a skilled worker, knows how to write the names of the medicines and the quant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in Annexure A to be show cause notice were goods initially cleared which were rejected and which were resold by the distributors of the assessee namely BPD. Return of certain medicines by dealers is not an unusual phenomenon. However, as the ld. JDR pointed out during the hearing, the value of such re turned goods cannot be as substantial as has been claimed by the appellants. Annexure A to show cause notice referred to above specifies the batch numbers and shows exact correlation between the production in the factory and the sale by M/s. Bright Pharmaceuticals Distributors. Thus, the production on 12-3-1982, 13-3-1982 and 17-3-1982 was sold by BPD during the period 13-3-1982 to 18-3-1982. It would be illogical to claim that the goods sold by BPI during this short period had been transported to the buyers, had been rejected by them, had been transported back to the premises of the BPD and had been again sold by them. On perusal of the chart which has not been attacked by learned Counsel during his submissions at all, the lack of substances in the claim that what the BPD sold were only rejected goods, is established. 18. The relationship between BPI and BPD also bears closer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ptance letter by the bank Shri Agarwal claimed that the same mistake as it existed in the delivery letter of pledge letter was committed by the bank in receiving the consignment also. This argument has no force. The Bank which lends money on collatoral does not commit an error of accepting empty cartons when the value shown is of finished goods. In the case of one of the three consignments the batch No. is also evident. Such batch number is given only after the manufacture and packing of medicines. A batch number by itself cannot exist on an empty carton. 20. The despatch of the pledged medicines to the bank godown without cover of gate passes, the exact matching of the relevant details of the invoices shown in Annexure A to the show cause notice when compared with the difference of production apparent on perusal of the private records conclusively establishes that the goods produced but not recorded in the statutory register were cleared without payment of duty. 21. As regards the plea of the Advocate that even after accepting that certain errors had been committed, the ld. Collector had not taken corrective action; we observe that as has been urged before us, the demand con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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