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TMI Blog2001 (5) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... h Section 11AC and sub rule 4 of Rule 57. A personal penalty of Rs. 5000/- on each of the individuals under Rule 209A of CE Rules has also been imposed. All these appeals are taken up together for decision as they arise from the same order. 2. Appellants Sunco Rubbers Pvt. Ltd. contend that officers visited their factory on 11-6-1992 and checked the accounts and stock of finished goods and other goods. They found shortage of 25 kgs. of tread rubber and they have given a chart of shortage of inputs in their appeal memo. They suspected that M/s. Jayton Polymers was created by appellants Sunco Rubbers to avail separately slab exemption under Notification 56/88, dated 1-3-1988 due to the following surmises :- (i) Shri Chandrasekhar, Chief Executive was also the proprietor of M/s. Jayton Polymers Pvt. Ltd. (ii) M/s. Jayton Polymers produced 65237.7 kgs of tread rubber by consuming 12067 units of electricity which was considered impossible. (iii) Sunco produced 29036.7 kgs in their factory but cleared under Jayton Polymers invoices, a manipulation to avail over and above slab exemption. 3. Statement of certain officers of Sunco were recorded like R. Kalyanaraman, P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants contend that the Commissioner in the impugned order has not passed a speaking order but has only confirmed the allegations made in the show cause notice. They contend that the ld. Commissioner could not state the valid reason to disbelieve job work done under Rule 57F(3) procedure as to how filing of 57F(3) challan does not help the assessee.........therefore, the assessee s defence is nothing but afterthought (para 27 of O-in-O). They further contend that the Commissioner wrongly maintained that M/s. Sunco should pay for suppressed production of 29036 kgs of tread rubber to the extent of Rs. 368902.38 and he did not mention about the duty paid by Jayton Polymers under their gate passes. They further contend that the Commissioner s disallowance of input credit of Rs. 204467.70 by Jayton Polymers on the ground that inputs were not used for manufacture is not correct. It is stated that if that be so, input credit would have been wrongly disallowed for both Sunco and Jayton Polymers and duty would be collected from both. They stated that there is no specific finding on various explanations offered by them regarding shortages and also on time bar. They contend that show c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 19-6-1992, Shri Ramankutty, an employee of M/s. Jayton Polymers, at the time of detection of alleged offence has answered to a specific question whether it is possible to produce 67,387.70 kgs of tread rubber with electric consumption of 12,067 units by stating that he is not having proper knowledge of production with reference to consumption of electricity. In his statement dated 27-6-1992 Shri T.B. Muralidharan, Plant Manager of M/s. Sunco Rubber Ltd. has deposed that only 36201 kgs of tread rubber was produced at M/s. Jayton Polymers with an approximate consumption of 12067 units of electricity. But he had not deposed whether it is possible to produce that much quantity of tread rubber with a consumption so much units of electricity. Therefore, they submit that the question as well as the answer is vague one. They stated that in his further statement dated 27-6-1992 Shri Kalyanaraman, Accountant of M/s. Sunco Rubbers Ltd. had admitted that M/s. Sunco Rubbers Ltd. had produced 29036.7 kgs of tread rubber and to avoid higher rate of duty, under Notification 56/88 as amended, he had shown that this quantity was shown as cleared from M/s. Jayton Polymers under their gate passes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... They rely on the judgment rendered in the case of S. Mohanlal v. Commissioner - 1987 (29) E.L.T. 63 (T) to support their submission that the confessional statement was not voluntary. 10. They further contended that Jayton Polymers had not contravened Rule 57(I) in so far as the 42944.2 kgs of tread rubber and 22293.5 PCTR manufactured out of 66715 kgs of compounded rubber received and job work was done as per 57F(3) challans as per the statutory records. Therefore, the demands against them and imposing penalty is totally unjustified. They rely on the judgment of the Hindustan Steel Ltd. v. State of Orissa - 1978 (2) E.L.T. J-159 (S.C.), Brakes India Ltd. v. AC - 1988 (33) E.L.T. 654-Madras High Court. 11. They also contend that there is no connivance or acts of commission or omission by the employees in non-payment of duty and hence penalty against them under Rule 209A is not imposable in terms of the said rule itself. 12. We have heard Shri V.P. Namasivayam, Counsel for the appellants and Sri Sreekumar Menon, SDR for the Revenue. Ld. Advocate strongly contended on the grounds already brought out supra and submitted that when both the units are independent, the charge of app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yton Polymers to remain within the first slab of exemption Notification No. 56/88, dated 1-3-1988. If this was the allegation, then it is difficult to understand as to how there could be electricity consumption of an enormous extent in Jayton Polymers factory. The fact that they have received inputs from Sunco Rubbers is noted in the statutory registers. The Rule 57F(3) challans have been prepared by Jayton Polymers for returning the final goods. When that is the case and there is no allegation of clubbing of the units, then it was incumbent upon the Commissioner to have first examined the statutory records and then proceed to examine the admissions or inconsistencies in statements of witnesses as appellants say that there is variance in the statements of various persons. It has been pointed out that the production manager s evidence is more reliable than other persons who have no knowledge of production. The Commissioner has not analysed the fact of entire statements taken, although faithfully the Commissioner has recorded the charge and the explanations given by the appellants, but has failed to examine and give a critical analysis of the statements in his operative finding porti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the final products have been sent back to them and it is correlatable. The best evidence is in the form of electricity consumption utilised by Jayton Polymers. When electric consumption is available, it is for the Commissioner to arrive at the conclusion as to how they could have been utilised for manufacture of final goods in M/s. Jayton Polymers. Ld. SDR vehemently argued that appellants had deposited the amounts without demur. This argument has been countered by the appellants by pointing out that it was deposited due to coercion and due to threats brought out by the investigating officers and threats to file prosecution and criminal proceedings. Appellants have relied on large number of citations to support their pleas. When there are documentary evidence to show about the independent manufacture, then a rebuttal evidence is prima facie deemed to have been produced and the appellant s say that the amount was deposited under coercion is required to be re-examined by the Commissioner to arrive at the conclusion as to whether the amounts were deposited voluntarily or under threat. So also about the statements recorded. The Consultant relied on large number of citations to pl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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