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TMI Blog2001 (2) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... allied and allowed to be cleared under Gate Pass No. 285/12-4-91. It was measuring 18210.75 L. Mtrs. The processed fabrics in pieces lying in the finishing room were checked and found that 270 pieces were not accounted in RG 1 register. Only the above mentioned fabrics were cleared under gate pass No. 285/12-4-1991 was accounted in the RG 1 register on the same day. The detail checking and verification was conducted after securing the panchas with the lot numbers, quantity of fabrics piece-wise metres and found 270 pieces of dyed polyester measuring 23,240 LM valued at Rs. 5,15,360 in ready for despatch condition found in the finishing room were not accounted in the daily production register RG 1. It was seized under the panchnama as being a offending excisable goods liable for confiscation, under the Certral Excise Act and Rules and it was handed over to the appellant for safe custody under the supratnama dated 12-4-91. The premises of the mills were searched and some slips (duplicate copies) showing the production/ clearance with the processed fabrics along with the name of merchant manufacturer and the lot numbers allotted to them prepared on the plain paper in the manner otherw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he period from 2-3-1991 to 28-3-1991, giving the details of the shift no., jet/jigger no., variety of fabrics, lot no. and pieces of fabrics, name of the merchant manufacturer and process carried out. The details of the pagewise/lotwise were worked out and noticed that particular lot no. was mentioned on various pages with the variety of the fabrics no. of pieces thereof and the process carried out thereon. 185 lot entries were shown in various page numbers in the said book. Considering the number of pieces of lot ertry and comparing with the lot register and the respective grey challans, quantity in terms of pieces was more than that shown in the lot register and grey challans. Only in respect of 56 lot entries the pieces were found tallied in terms of quantity. The detail of 185 lot ertries were prepared as annexure B containing the page wise lot wise quantity of fabrics in terms of pieces of L. Mtrs, taking into consideration 100 L. Mtrs per piece as per general practice in the textile trade. Average normal shrinkage of 5% of the quantity shown in terms of piece and meters in the lot register and the difference thereof are mentioned. Margin of 5% was allowed due to shrinkage. De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of provisional release, and also demand Central Excise duty of Rs. 7,01,966.03 on 431834.25 LMs of the processed fabrics worth Rs. 94,90,610.51 removed clandestinely by them under Rule 9(2) of the Central Excise Rules read with Section 11A of the Central Excise Act, and why penalty should not be imposed on the mills under Rule 173Q(1) and on the directors and merchant manufacturers under 209A of the Central Excise Rules, and why the land, building, plant, machinery of the appellant should not be confiscated under Rule 173Q(2) of the Central Excise Rules and further why the principle as to presumption of documents under Section 36A of the Act in relation to the seized documents from the custody of the appellant in applying to them. The appellant and directors filed replies on 28-11-91, 7-12-92, and 6-12-91. The merchant manufacturer have not filed any reply in respect of service notice by RPAD on Sr. Nos. 9, 21, 22, 26. Sr. Nos. 21 and 22 could not be served due to change in their business premises and non-availability of new address. Merchant manufacturers at serial Nos. 2 to 8, 10 to 20, 23 to 25 and 27 to 30 field common reply on 29-1-91. The personal hearing was held o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initials are identified with challan. 56 entries have tallied in the dyeing note book and the statutory register and the material available on record probabalise the case of the department. In the reply, it is urged that all the goods are not covered. 3. Perused the show cause notice, reply, statements recorded and documents available on record, Impugned order appeal memorandum. Arguments of both sides are taken of. Also perused 2000 (36) RLT 211 (T) in the case of Kirtibhai Maganbhai Patel v. CCE, Nagpur, regarding clandestine removal R. 9(2) of Central Excise Rules. Biris - evidence - appellants private Register seized from premises of appellant s brother-in-law, gave details of Tendu leaves used for rolling Biris and tobacco sold - rollers of Biris retracted their statements during cross-examination - private register not sufficient to prove clandestine removal (para 4). According to this ruling clandestine removal must be established by sufficient evidence. Degree of evidence laid down for this purpose must be fulfilled by the entries in the register. In the light of the above principles, it has to been seen whether in the instant case it is established. 4. The defense of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions or directions. Dyeing master Sri Shailesh Jariwalla s statement disowns knowledge about them. Asstt. Dyeing master Suresh Patil s confirmation, about maintaining them was not obtained. No enquiry was made as to why entries were made for the limited period of 2nd to 28th March, 1991 only. 56 lot entries tallied with grey challans. Non tallying of remaining 129 lots by itself is not sufficient to conclude clandestine removal. There is no corresponding corroborative material. Statement of dyeing master clearly gives the picture that after the goods were finished processing, they are being sent to folding department for folding, packing, standardisation and despatch. Goods were found in finishing room, was not in marketable condition, as per the above material. (d) Statements of Merchant manufacturer shows none of them have owned up their signatures on impugned slips or any knowledge about the dyeing programme book. They have admitted receipt of processed fabrics against grey, once they had supplied. No corroborative material such as grey challan, delivery challans, money transaction, purchase of grey, sales of finished goods, receipts from those firms were secured. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per the wordings in the section itself. The department has failed to establish the above charges. Note books maintained by any employee or third party, without the authority of the mills cannot be a sufficient and dependable evidence against the mills, without the supporting evidence of consumption of raw material, goods actually manufactured packet, sales of finished goods. Truthfulness and reliability of statement requires to be judged in the light of other dependant. Evidence, which should be direct and tangible, which is not available in this case inspite of extensive investigation of (1) factory premises, (2) merchant manufacturers as per the case laws cited for 1986 to 90 (T). Cross examination of (1) Co-noticees - merchant manufacturers, and (2) Dyeing Master, (3) Panchas, (4) Investigation officers and inspection and taking copies of Sl. Nos. 38 to 42, 45 to 49 of annexure to show cause notice, and permission to make further reply thereafter, and personal hearing are sought for. 5. 270 pieces lying in finishing room was still to be packed and finished. Seizure of it is vexatious, as accounting was to be done on the late evening of 12-4-91 or next morning in RG 1 Registe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements are considered below, in the light of the above material to decide the appeal. Page 1 to 3 of copy of Lot Register and slip particulars for the period 3-2-91 to 8-4-91 with the columns. Entry Date - Lot No. - Lot Register Party s Name - Grey Pcs. - Slip Date - Slip Lot No. - Slip Party s Name - Slip Pcs. - Slip Mtr. - Entry Slip Page No. are produced - Party s are shown Padmavathi Silk Mills, Rajshree Silk Mills, Shree Dhanalakshmi Textiles, M. Tex Fabrics, Sunil Fabrics, Dinesh Silk Mills, Prabha Textiles, Goyal Khadi Udyog, Tapadiya Fabrics Tex. Pvt. Ltd. Zerox copies of slips in 53 pages are also produced, showing total Total Rupees, Lots Nos., Total Meters, signed by Director for the Mills on the reverse, on 12-4-91, corresponding the dates mentioned in the above extract is also produced. The seizure of this material, and its availability in the appellant s Mills in the Director s office table is not in dispute. This material is to be considered in the light of statement recorded, of which English translation is produced. Accordingly, in the below paras it is considered. 8. From the statement 11-9-91 of Director Baccharaj G. Begani, it is clear that duplicate 27 slip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te records, supports the case of department, which are also not retracted by them. The only other statement is that of Dyeing master, which is an important link in this case, as per the statement of Director, and also the arguments of appellant and appeal memorandum, which is considered below. 10. Shri Shailesh Babubhai Jariwala, dyeing master in the appellant mills has stated that he is doing colour setting work as required by parties and also job of quality control, and allotting dyeing programme in the respective departments of the mill. Supervisions are looking after the work of dyeing and bleaching of fabrics on their respective departments, and he generally supervises their works. He has explained the dyeing and bleaching process. Then he speaks of contents of dyeing, in note book shown to him; and explained how entries are made in cash columns; after examination. It might have been written by different persons, as seen. He is not the author it, and he does not know who has written, and pleads ignorance about it. He does not know how the owner of the mills maintains the account of fabrics. He does not know about the procedure of excise department. So the above material, sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and total metres are not tallying, though name of party and col. Nos. tally. Statement of suppliers support this. The conclusion arrived at in pages 20 21 of impugned order about the clearance of fabrics of 8 lots, on the date shown in the respective slips and for other lots, fabrics was pending in the mills is quite logical, because of the above variations, under Annexure A-1 to A-8 to show cause notice, based on the production slips. Annexure B-1 to B-29 to show cause notice is based on Dyeing programme note book, and 29 suppliers of grey fabrics. They are considered in the light of statement of Dyeing Master. Grey challans were also shown to him. On details examination he has given the statement. The discussion and finding in the impugned order, in the light of the defense of the appellant and the entries in the said document, is supported by sound reasoning. The statement of Director Baccharaj Begani and Dyeing Master also discussed, showing contradictory stand regarding the maintenance of accounts of fabrics received by the owner of the mill, which makes out that director could not pleads ignorance, when production slips were seized from his office table. The impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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