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TMI Blog2003 (11) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... sorting to suppression of production, misdeclaration and clandestine removal of excisable goods, the Central Excise Officers searched their premises on 29-1-1988 and seized unaccounted stock of processed and finished man made fabrics valued at Rs. 2,17,908/-. They also seized packed fabrics valued at Rs. 1,41,173/- lying in the godown of M/s. Prabhat Textile. The Collector, under the impugned Order, has confirmed the demand of duty, amounting to Rs. 37,32,052/- as against Rs. 1,07,34,391/- demanded in the Show Cause Notice dated 24-5-1989; confiscated the seized goods and imposed penalty of Rs. 5 lakhs on the Company and Rs. 1 lakh on the Director. 3. Shri L.P. Asthana, learned Advocate, mentioned that the Collector has confirmed part of the demand mentioned in Annexures D-I, D-II , D-VI and entire demand mentioned in D-VII and has set aside the remaining demands in Annexures D-I, D-II, D-III, D-IV, D-V and D-VIII; that no appeal has been filed by the Revenue against setting aside the demand in Annexure D-V and D-VIII that the appeals have been filed against the demand of duty/setting aside the demand as under- (i) By Ajanta Synthetics in respect of Annexures - D-I, D-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ok it is Toplar Tex x Tex; that similarly in Annexure D-II at Serial No. 28 (Lot No. 389) the description in Grey Receipt Challan is Polyster Dyed whereas in DRB it is H.T. ; that neither Polyester Dyed nor H.T. indicates quality of the fabrics; Polyester Dyed means that only the polyester portion in the fabric is to be dyed; H.T. means High Twist; that similarly at Serial No. 73 (Lot No. 661) in Annexure Q-II the description is Fancy and Tex Tex respectively; that Fancy also does not indicate quality but means that it is a fancy fabric of any blend of fibre. The learned Counsel, therefore, emphasized that it is patently erroneous to hold that the two records - Grey Receipt Challan and the Dyeing Receipt Books - corroborate one another; that further four representative samples drawn on 29-1-1988 itself by the Central Excise Officers from different packages having different lot Nos. were found to be P.C. as shown in the Authenticated Lot Register and the entries however in DRBs were found to be wrong. He also pointed out that the assessee being job worker could realize the duty from the principals who had sent the fabrics for processing and as such there was no incentive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abrics measuring 8823.30 L. metres, it is submitted that these goods were duty paid goods, rejected by the upcountry buyers and returned by them. 6. Countering the arguments, Shri Jagdish Singh, learned D.R., submitted that in a case of clandestine removal it is not easy to trace the weaver/trader so as to ascertain the actual quality of the products cleared by the Appellants; that Shri R.L. Dhumal, Grey Clerk of the Appellant Co., in his statement dated 4-4-1989 has clearly deposed that he had maintained the Authenticated Lot Register by mis-declaring the composition/quality of the grey fabrics on the instructions of Shri Sanjay Modi, Director; that Shri Lalit Kumar Mehta, Dyeing Master, in his statement dated 31-3-1989 stated that the composition/quality, etc. entered in the dyeing receipt book are correct and that the entries in the books mainly Stenter Books, Cigger Books, Jet Beam Book, Costing Book in respect of lot Nos. name of the party, composition/quality of the fabrics, quantity in L. Metres are being recorded correctly. The learned D.R. also referred to the statement of Shri Anand Thakre, Excise In-charge, who had deposed in his statement that it was their practice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee; that they had not produced any evidence to prove that these were grey returns; that in the absence of such evidence the Adjudicating Authority ought not have accepted their contention of grey returns and dropped the demand; that the Collector ought to have taken into consideration the statement of the Dyeing Master who had confirmed all the entries made in the Dyeing Receipt Books were correct. 7.2. He also mentioned that the Collector had wrongly dropped the demand in respect of Annexure D-IV on the ground that the allegation had not been justified by corroborative evidence; that the statement of Dyeing Master is a corroborative evidence who had confirmed the authenticity of the DRBs. The Learned D.R. also contended that the testing of samples does not justify whatever had been admitted by the assessees in their statements; that a piece of fabric was sent with the Price-List for the purpose of valuation and the same had nothing to do with the classification. He relied upon the decision in Rajasthan Explosives Chemicals Ltd. v. CCE, Jaipur, [2003 (159) E.L.T. 289 (T) = 2003 (85) E.C.C. 85 (T)] wherein the Tribunal has held that if there are documents for the cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of duty. The Adjudicating Authority has not found Grey Receipt/Challan as reliable as the same have been issued by the weavers who are illiterate or semi-literate and often do not contain any particular regarding variety. He has observed that Dyeing Receipt Book (DRB) has been written in a very perfunctory manner and did not contain any sequence of dates regarding actual commencement and/or completion of dyeing process or co-relation with the completion of other processes of a particular lot. He has given other reasons also for not completely relying on Grey Receipt and DRB. We find ourselves unable to agree with this finding of the Adjudicating Authority. The factory premises were visited by the Officers on 29-11-1988. The statement of Shri R.K. Dhumal was recorded on 4-4-1989 in which he had clearly admitted that in many instances, as per instructions of Shri Sanjay Modi, Director, he had mis-declared the composition/quality of grey fabrics in the Authenticated Lot Register even though he was aware of the true and correct nature of the fabrics which was also mentioned in the Grey Delivery Challans. It is not the case of the Assessee that the statement was retracted immediately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in respect of Annexure D-III is concerned, we find that the Revenue has not succeeded in rebutting the finding in the impugned Order as they have merely mentioned in Grounds of Appeal filed by it that the assessee could not produced any evidence to prove that these were grey returns. We, therefore, reject the appeal of the Revenue in respect of Annexure D-III. 10.2 Demand of duty in Annexure IV was on the ground that M/s. Ajanta Synthetics had processed fabrics twice by allotting the same lot numbers. The Adjudicating Authority has dropped the said demand as the Department had not specified the particular Dyeing Receipt Book in which lot numbers appeared twice and further the Assessee had shown in respect of one lot number that duty had been paid twice as the lot number was 888 and not 889. No specific averments have been made by the Revenue to controvert the findings contained in the impugned Order in relation to Annexure D-IV and accordingly Revenue s appeal is rejected in respect of the said Annexure. 11. The Adjudicating Authority has confirmed the demand of duty in respect of Annexure D-VI and D-VII which are in respect of processed fabrics which were not accounted for i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een processed. According to the Assessee the same were not entered in statutory records as they were defective. The nature of defect has not been indicated. Once the goods have been processed these are required to be entered in RG-1 Register. Therefore, we uphold the confiscation. Similarly the goods found in the godown of P.T. and seized subsequently, the Adjudicating Authority has not accepted the explanation offered by the Assessee to the effect that these goods had been cleared earlier on payment of duty and were received back as the buyers had rejected them being defective and were repacked in October-November, 1988. The Collector has given his findings that M/s. NETP had not furnished documents under which the said goods were returned by the buyers nor copies of letters under which the Central Excise Department was informed about such return. We, therefore, uphold the confiscation of these goods also. The redemption fine of Rs. 50,000/- is also not on the higher side at all and is, therefore, upheld. The Penalties imposed by the Collector are reasonable and no change is warranted and as such are upheld. All the appeals are disposed of in above terms. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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