9911796707
TMI Blog1998 (11) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... s is engaged in the manufacture of Hydro-chloric Acid falling under Chapter 29 of the CETA, 1985 and availing of the credit of duty paid on inputs under Rule 57-A and Rule 57-G of the Central Excise Rules. In the course of their visit to the factory premises by the (Preventive) Officers to the Central Excise of Ahmedabad Collectorate noticed shortage of 29,070 kgs. of Caustic Soda flakes and 18,621 kgs. of Hydro-chloric Acid. The respondents had taken Modvat credit on these inputs, the respondents immediately debited Rs. 42,966/- the credit taken on such inputs. The officers examined the purity registers maintained by the respondents which contained details of Batch No., weight in kgs., purity percentage etc. One of the registers shown that the respondents had despatched 15 bags of Hydro-chloric Acid to M/s. Aditya Chemical Industries on 29-8-1989 and 9 bags to M/s. Vivek Dyechem Industries. While comparing these despatches with the gate passes, it was revealed that they had paid duty on the 9 bags cleared to M/s. Aditya Chemicals and six bags were cleared without payment of duty of Rs. 4,725/-. It was immediately debited from their PLA vide Entry No. 43, dated 19-9-1989. Purity Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty has to be imposed. 3. Shri K.M. Mondal the Ld. Consultant for the respondent has argued that as per page 10 and para-9 (a) the question of confiscation does not arise as no goods are seized, and there is no ground in show cause notice. No excess goods are found, but there was only a shortages. In the clause (b) modification is considered. Para-8 in page 10 of the show cause notice, there is no seized goods and proposal for confiscation. Remand Order is a clear non application of mind. Page-9 para-20 deals with the cross examination of Superintendent Raval. In page 117 the raw material is in liquid form and Caustic Soda Flakes shortage is only an eye estimate. The Board has ignored it in review. The reply in the cross examination are evasive. There is no positive evidence both for clandestine removal and shortage and it is not proved by the department. Purity register entry is not a stock register. Para 23 in page 131, the cross examination of K.V. Parmar, Superintendent is most important. He has not made any inquiry with the purchasers. The clandestine removal without payment of duty is not made out and the department has not discharged its burden. Para 24 in the order is im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 990, and the duty evasion comes to Rs. 1,75,612.50. They had also manufactured and cleared 139 bags containing 5,560 kgs. Hydrochloric Acid. Similarly, as detected from the voucher of the payment of cartage of Hydrochloric Acid which is confirmed by his Cashier Haresh R. Shah of the appellant. The Director of the Company has also confirmed the same and as accept the statements of his employees in the evasion of duty to the tune of Rs. 1,09,462.50. In all they have evaded the duty of Rs. 3,57,178.69, out of which they have paid Rs. 47,691.19p. Contravention of Rule 9(1) read with Rule 173-F and Rule 52-A read with Rule 57-G(2) and Rule 57-F I and Rule -53 read with Rule 226 are alleged against the constituting an offence of a nature under Rule 173-Q(1) and Sub-clause (a), (b), (d) and (bb). The demand is for the penalty under Rule 173-Q (1) and duty under Rule 9(2) read with Section 11-A and Rule 57-I of the Central Excise Act, and rules by invoking 5 years period of limitation and for a penalty under Rule 209A on the Director and employees on the appellant company, on the ground that they have acquired possession of and were concerned in removing keeping and selling the said good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the so called despatches shown in the purity register are not the details the manufacture of the final products. On 29-8-1989, 24 bags are produced in normal wet cake condition which are processed into final product of 21 bags only and accordingly issued the gate pass No. 180, 181 and 182. There is no removal of goods without payment of duty. Each bag contain 40 kgs. in 21 bags due to loss in process so no duty is recoverable as demanded. In para 7, the appellants had reply regarding Annexure C to show cause notice demanding the duty of Rs. 24,412.50 p, as per page 15 in the purity register No.12, showing clearance to M/s. Ankur Sulabh and Lalit Textiles. According to them, duty cannot be demanded at the semi-finished stage of the material on the basis of the entry in the purity register. No enquiries have been made with M/s. Ankur, Sulabh and Lalit Textiles to ascertain whether they had received the said material from the appellants. In the absence of it the allegation of illicit removal of goods and consequential demand of duty thereon is based only on assumptions and presumptions. The purity register is only to ascertain purity of the product at semi-finished stage. So duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Excise. Shri Vinodbhai K. Patel on 17-9-1991 and the cross examination of Naresh Rajnikant Shah, Cashier cum Accountant of the appellant company and Mukeshbhai, the Excise Clerk and the cross examination of the A.J. Raval, Superintendent excise on 6-8-1991, and has dealt with in detail itemwise and has come to just and proper conclusion. The commissions pointed out in the impugned order and the contention of the respondents regarding the investigation of the case about the cross verification of the entries in the registers by inquiry of the customers, whether they have received the goods or not is an important material to substantiate the case of the department against the appellant. Panchanama does not contain the details of stock taking. The cross examination throws light in that regard that it was not done physically. So under these circumstances the contention of the appellant that the Director of the appellant company has admitted the physical verification as per the panchanama does not hold good. Shri A.J. Raval author of the Panchanama has made clear admission that details are not recorded in the Panchanama regarding the inputs contained in material particulars a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice, the demand is based on certain vouchers for payment of cartages. Admittedly, only 3 vouchers pertain to Hydrochloric Acid, for slips attached to them show the despatch of the same. The statement of the cashier regarding these vouchers shows that the payment might have been made on the voucher on the same day or day after 3 to 3 days or that payment might have been made by consolidatory despatching the same for more than 1 day if the transport remains the same. In the cross examination of K.V. Parmar Superintendent, who investigate the case has admitted that he had not made any inquiry to co-relate the quantity mentioned in these voucher to ascertain whether they are covered by any duty paying gate pass. So there is no clear evidence for illicit removal. 9. The assessment of shortage by eye estimate, as admitted, by the Superintendent is ignored the review order. No positive evidence for shortage and clandestine removal is produced by the department. So under these circumstances the contention of the Department to impose higher penalty and to confirm the demand as per show cause notice cannot be upheld. The impugned order is quite exhaustive and considered all the availab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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