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TMI Blog2000 (12) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... tification No. 102/88 dated 1-3-1988. During check it was observed that M/s. Gujarat Refinery, Jawahar Nagar had given contract to manufacture drums on job work basis to M/s. Petrochem Steel Fabricators Pvt. Ltd., Jawahar Nagar, which on closure gave sub-contract to the appellant. 2. During the check of statutory records RGI, it was noticed that duty was debitted in PLA for the clearance of drums under the above GPI. RGI was not written from 7-10-88 for drums and from 1-6-88 for waste/scrap. In view of clearance of drums on 7-10-88 and 8-10-88 it was doubted clandestine removal by the appellant. As a sequel to the above carried out preliminary stock verification with reference to production reports and RGI and found that appellant had not entered production from 7-10-88. To arrive at the balance on 8-10-88 same production reports were compared with the recorded RGI, which showed variation in recorded production, in production report and production shown in RGI, to the extent of 345 drums, with opening balance in RGI on 7-10-88 - 4700 drums, Production as per production report 3000 drums, in all 7700 drums. Despatch under GPI 1947 to 1961 on 7-1-1988 - 2565 drums, Closing balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... production reports, GPI, RGI for the period 1-3-88 to 7-10-88 of appellant s factory revealed production reports show more production when compared to RGI. Work-sheet showing comparison of production as per production report and RGI were prepared. Their comparative work-sheet revealed that there was excess production of 9053 drums, which appears not accounted in RGI. Work-sheets prepared from reports of Gujarat Machinery for Nov. 87 to Feb. 88 also revealed unaccounted production of 8388 drums. Thus production worked out and comes to 9053 + 8388 = 17441 drums valued at Rs. 18,41,769.60. It appears appellant had manufactured and removed without accounting in statutory records, without payment of duty or without following Central Excise law procedures, by suppressing the facts of such production in its disposal. Correct position worked out from production reports of appellant factory for 15-11-87 to 28-2-88 and 1-3-88 to 7-10-88 and also records, and Gujarat Refinery letter giving details from 22-1-87 to 28-11-88, regarding production and clearance from M/s. Petrochem Steel Fabricators as referred above, and summary statements were confronted to M.K. Zala of appellant s Company, who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g for contravention of the provision of R53 read with 173G (4). R226 read with R9(i), R173F read with R52A of Central Excise Rules, calling upon to show cause on why above duty should not be recovered under Rule 9(2) read with proviso to Section 11A(1) of Central Excise Act for the period mentioned above, and why 211.165 M.Ts. waste/scrap seized should not be confiscated under Rule 173Q(1)(a) of Central Excise Rules, and penalty should not be imposed under the above rules, and why Plant, Building, Land and Machinery belonging to appellant should not be confiscated under Rule 173Q(1)(a) of Central Excise Rules as used to produce the offending goods seized where they were stored and removed as mentioned above, and why presumption under Section 36A of Central Excise Act should not be raised of documents seized. The matter was adjudicated on 25-3-91 by Additional Collector, against which appellant preferred appeal to Tribunal, which remanded on 18-6-92 to adjudicating authority, for readjudication, after appellant filing reply to show cause notice within 15 days from the date of communication of remand order, and hearing it. Appellant was directed to ensure his presence in personal hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice in Para 8 of order shows motive was absent. Duty is paid. There is no investigation co-relating raw materials, scraps, 800 drums. It is a verifiable issue. There was no sufficient chance to explain. Statements contain explanation. Precedent order on E/491/92 Bom. 21-1-1998 for earlier period covers the case. What is in nature of evidence required for clandestine removal is laid down in Tribunal decision. Sri. J.M. George, learned JDR for Respondent, has argued that as per Para 15 of impugned order, principle of natural justice is complied. RGI should show the column of interest as per Page 22 of order. There is shortage of 345 drums as per Page 4. Records are scrutinised in Para 9 in pages 8 9. 17441 drums are in excess (9053 + 8388). There is no explanation as per Page 23. Period is Nov. 87 to Feb. 88. As per Page 21, RGI + Production report - Tallied - reply is not recorded. There is no record for scrap from 1-6-88 to 8-10-88 duty is not paid. P16 and P19 of impugned order is relevant. In the reply it is clarified Para 7 of statement of M.K. Zala explains the difference (345). There is no shortage of drums. (Page 118 of P8). 6. The stand of the appellant, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d drums have not been taken into account by officers. During storage period, paint gets fainted. Drums have not been taken in calculation, while verifying physical balance. There is no removal of excisable goods without payment of duty. (d) Statements, under Section 14 of Central Excise Act, of employees are recorded without issuing summons, and giving opportunities to scrutinise records, and other documents. For further reply or clarification, officers told to reply in response to show cause notice, and there is only a technical lapse and will be viewed leniently. But serious charges are levelled as evident from the adjudication order relating to evasion of duty on presumptions and assumptions. (e) Production shown in private account book/production report regarding no. of containers related to no. of totally fabricated in a day irrespective of whether they are painted or tested with or without bottom or not. Production report is meant for reporting to Indian Oil Corporation, Gujarat Refinery, total number of containers fabricated for giving the idea about the raw materials consumed. (f) Number of coils cut for fabrication of drums. On the basis of this, they and Job-workers can f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion report vs. RGI register. (h) There is also strict co-relation of waste/scrap. Scrap is also fully accountable. There is no scope for illicit and clandestine removal of either the metal containers or scrap/waste of sheets/coils. (i) There is no suppression of fact or any suppression of production of excisable goods. Appropriate amount of duty is paid at the time of removal of excisable goods from factory premises. The scrap/waste of sheets/strips arising during manufacture operation has been fully accounted for and there is no excess balance or unaccounted balance of scrap as alleged. 7. Perused the Panchanama, Statements under Section 14 of Central Excise Act, Show cause notice, Reply, Affidavits filed, Tribunal order dated 18-6-92, Order-in-Original dated 25-3-91, Correspondence between the appellant and department, Impugned Order, Appeal memorandum and Case laws and Synopsis. Tribunal order 18-6-92 has put a restriction for fresh adjudication, regarding the appellant to appear in the personal hearing without fail, and if he fails to avail the opportunity, it will be at his own risk. The appellant was directed to ensure presence. Inspite of this, appellant has failed to app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudication proceedings or during investigation to draw the attention of concerned officers. So also, extracts of registers of RGI and Pages 1 to 9 showing availment of Modvat credit on scrap/waste. Show cause notice annexure shows documents relied on are already with appellant in some items, 1 to 5, 10 11 and others are ready for inspection. Order-in-original dated 25-3-91 is already set aside for de novo adjudication by the Tribunal interim and order dated 18-6-92, and it cannot be considered at this stage as contended by appellant in 12-2-93. Permission to inspect and take copies of documents relied on in the show cause notice is given to appellant by Superintendent of Customs and Central Excise adjudication cell, received by appellant on 16-2-93. He was also asked to file reply to show cause notice. The appellant sought for time on the ground that consultant is not available, and staff members are new. Srikumar, authorised person, is the competent person to appear before adjudicational authority, as per his statement. M.K. Zala, another responsible person was also available, as per his statement. There is no reason why none of them personally attended the hearing on 16-11-92 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on utilisation of raw materials by Gujarat Refinery over the appellant is waiting in this case. It is in these circumstances, tangible proof was to be established by the department for illicit removal. So the finding in that case cannot be made applicable to the instant case on hand. 10. The facts and circumstances of the case, as evident from the Panchanama, show cause notice, and impugned order complied with the admissions in statements under Section 14 of Central Excise Act of all the concerned persons in charge in the appellant factory, and the conduct of the appellant in replying the show cause notice, and the remand order observation that prior to Ist adjudication, show cause notice was received and it was misplaced by employee, and in the IInd adjudication, appellant was directed to personally appear in the personal hearing, failing which it will be his own risk, and the fact of separate maintenance of different type of registers for duty and exempt goods manufactured, was not informed at any stage of the proceedings, and the fact that there was no retraction of statements by concerned persons, depicting the actual facts and situation, clearly supports the case of departm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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