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TMI Blog2001 (2) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants on 17-3-1988 and seized/ recovered records which inter alia include Progressive Moulding Registers, RG-1 registers, RG-23A Part I registers, Weigh Bridge Cards for Carbon Black, Receipt Tally Sheets of Carbon Block, Bin Cards of Carbon Black. From scrutiny of the seized records it revealed that the appellants were maintaining a register named as "Progressive Moulding Register" (PMR). This register was said to be a 'personal' record of Senior Supervisor, planning but elaborate details like the firm order (target of production), delivery figures at the end of week etc. The delivery figures correspond to the number of OK tyres only which have been delivered to the Base Stores (which is the non-duty paid bonded store room) which corresponds to the OK figures mentioned in the RG-1 register. However, it was noticed the differences between the figures in the PMR and RG-1 were required to be reconciled after considering scrap, seconds and test tyre figures. It was observed that the appellant company itself monitors the production figures on the basis of delivery to the Base Stores (BSR). Hence, an attempt was made to tally the figures of the moulded tyres with the RG-1 figures aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be sustained without actual evidence of clandestine removal; that the manufacture of tyres was under physical control and thus every truck leaving the factory with finished goods was checked and authenticated by the Central Excise Officer posted in the factory; that the department was not able to quote examples of actual figures in support of all the allegations which were based on conjectures and surmises. As the Commissioner was not convinced by the above submissions, he confirmed the said demand and imposed the said penalty vide the impugned order which is under challenge before us. 3. The burden of song of the appellants in the appeal petition is that the findings of the Commissioner are based on incorrect appreciation of divergence in tyre production figures recorded in their private register (PMR) and the statutory register (RG-1). From the very beginning they have been contending that the PMR which forms the basis for raising the demand is neither a statutory record nor a part of the appellant's accounting records. They point out that the depositions made by the executives of the appellants, both during and after search, being categorical to the effect that none have e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... calculation, figures of each size mentioned in Annexure-C to the Show-cause Notice as attributed to RG-1 are different. In other words, there is one set of figures arrived at in the Show-cause Notice by the Revenue Officers in another set of figures arrived at by the applicant company in respect of the same size. Both these sets of figures - one by the Revenue and another by the applicant company - are admittedly based on the same record i.e. RG-1. 3. In order to arrive even at a prima facie decision, it is necessary to reconcile the two figures. 4. Both sides point out that this reconciliation will take substantial time when the officers from the Revenue as also from the applicant's side sit together. 5. We agree with the suggestion from both sides. Therefore, we direct them to act together and reconcile the figures of production as given in the RG-1 record under seizure and in the possession of the Directorate of Anti-evasion. The reconciled figures should be presented to the Bench on 4-7-1997. 5. In pursuance of the aforementioned direction of the Tribunal, the representatives of the appellants and the officers of the Directorate of Anti-evasion, held se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates the reasoning contained in the impugned order. He clarifies that the Show-cause Notice is based on the appellant's own documents such as PMR delivery figure and weekly receipt issue statements (RIS) which is the source document for maintaining the RG-1. He sought time to file his written submissions and accordingly, he was granted 15 days time from 26-7-2000. 8. In his written submission dated 2-8-2000, the learned JDR points out that the figures which were submitted at the time of hearing before the Tribunal was subsequently re-checked/reverified by the Department and "after such reverification the quantity of finished tyres was found as 22,84,734 instead of 21,68,300 for private record figure and 22,25,552 instead of 22,92,457 for RG-1 figures respectively". In view thereof, the learned JDR submits that there is an excess quantity of 59,182 (22,84,734 - 22, 25, 552) of finished tyres as per the private records for which appropriate duty is payable during the period in question and penalty was liable to be imposed on the appellants. To the said written submission dated 2-8-2000, the learned JDR has enclosed a copy of the letter dated 1-8-2000 of the Directorate General ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e law. 9.1. Turning to the merits of the case, the learned Chartered Accountant in his written rejoinder dated 6-9-2000 submits that at every stage of proceedings (including reply to the Show-cause Notice, pleadings at the personal hearings, and in the course of hearings of the stay petition) the appellants have been emphasising that the PMR is not the prescribed statutory register as alleged but it is merely an unaudited register maintained manually by one of the junior executives in the Central Planning Section and it does not contain the correct quantification of actual production but it is only the figures of production which very often may not be correct but also programme and planning for the four weeks falling in a month. The written rejoinder also mentions that the figures of production as per the RG-1, as taken in Annexure-C to the Show-cause Notice, are incorrect. The actual production as per the RG-1 and the corresponding duty payment was much more than the production as alleged in the Annexure-C to the Show-cause Notice. Of the actual production as per the RG-1, on the basis of which the appellant had paid duty during the relevant period it would clearly transpire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the appellants the RG-1 production during the relevant period is 25,06,988 tyres and this figure is undisputable since on that basis the appellants had actually paid duty of Rs. 109.69 Crore which is more than the duty payable even on the revised PMR figure as per the report dated 1-8-2000 of the Directorate General of Anti-evasion. 9.2. The learned Chartered Accountant in his written rejoinder further states that the appellant's factory was under physical control and supervision during the relevant period and as such any malpractice, if any, would have been automatically detected by the Central Excise Officers. He, therefore, submits that in several cases the Tribunal have decided that in the absence of any corroborative evidence, specially when the appellant's factory is under physical control, there cannot by any case of clandestine removal. In this connection, he relies upon the decisions in LML Ltd. v. C.C.E.: 1991 (51) E.L.T. 434 (Tribunal), Leather Chemicals & Industries Ltd. v. C.C.E: 1984 (15) E.L.T. 451 (Tribunal); Abubakar M.Y. Shaikh v. C.C.E., Surat: 1999 (110) E.L.T. 917 (Tribunal); Sikhar Marbles (P) Ltd. v. C.C.E., Jaipur: 1999 (105) E.L.T. 195 (Tribunal); ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the above Table, it is evident that there has been no consistency in the stand of the Revenue as regards the firm figures of production. One thing is crystal clear that the figures of production which have been generated during the course of reconciliation exercise are different from those mentioned in the Show-cause Notice based on which the superstructure of the case has been raised. The new set of production figures strike at the very foundation of the structure. Adding insult to the injury, the Revenue comes out with yet another set of figures vide their additional statement submitted on 2-8-2000. These inconsistencies that have come to the fore lead one to an inevitable conclusion that the basic foundation of the Show-cause Notice is weak being not supported by any concrete evidence. In such an event, as rightly pointed out by the appellant, the Show-cause Notice cannot stand on its own legs and as such must fall to the ground. On a careful consideration of the evidence brought on record, we are convinced beyond doubt that the figures of production as reflected in the PMR and RG-1 have been drawn from incorrect sources which led to unjustifiable conclusion eventually led ..... X X X X Extracts X X X X X X X X Extracts X X X X
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