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TMI Blog2005 (4) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... ignature in most cases of the consignee in token of having receive the goods and also admitted by the partner in his statement. The demand of duty and confiscation of goods is therefore upheld and so is the redemption fine imposed. As regards the mandatory penalty u/s 11AC, we hold that the penalty is the maximum penalty provided and not equivalent penalty and we are inclined to reduce this penalty to Rs. 5 Lakhs only. As regards the second appeal regarding penalty on the partner since the partner was actively involved in the removal of the goods, we find no justification to interfere with the penalty imposed on him which in our view is reasonable. Both the appeals are disposed of in above terms. - S/Shri Krishna Kumar, K.K. Agarwal, JJ. REPRESENTED BY : Shri Naresh Thacker, Advocate, for the Appellant. Shri U.H. Jadhav, JDR, for the Respondent. [Order per : K.K. Agarwal, Member (T)]. The appellants are engaged in the manufacture of fireworks. Based on information received, department s preventive party on 28-12-1997 intercepted one four wheeler carrying firework totally valued at Rs. 3,51,114/- and found the same being transported without cover of proper Central Excise duty paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed penalty of equivalent amount under Section 11AC on the appellants company and a penalty of Rs. 25,000/- under Rule 173Q and also imposed a penalty of Rs. 1 Lakh on its partner. 5. The learned Advocate for the appellants submitted that in so far as the seized goods are concerned they are not seriously contesting the issue though they maintain that the goods were duty paid and duly accounted for in the income tax/sales tax return. 6. So far as demand of duty amounting to Rs. 21,17,848/- based on the packing slips recovered from the appellants premises is concerned it is their plea that no goods relating these packing slips were ever despatched as the order relating to these packing slips were subsequently cancelled and as per the practice of the appellants the packing slips are prepared in advance and sent to duty paid godown for sorting out the fireworks and that some of the packing slips were scored off by drawing a line across them and therefore demand of duty on the basis of these packing slip was totally incorrect. The department has not made any enquiry from the consignee regarding receipt of the goods nor from the transporter, regarding despatch of the goods nor made any en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidence to establish the availability of either raw material or labour to the extent of alleged manufacture and clandestine clearance of the goods. They did not have the capacity to manufacture the entire goods stated to have been clandestinely removed that their manufacture of fireworks is governed under the Explosive Act and so the production cannot be concealed and that they cannot work during night, as electricity is not used in the premises as the heat generated by electricity can cause explosion. Their average annual value of clearance works out of Rs. 1,78,65,317/- and on a average production of Rs. 1,78,65,317/- the raw material consumption would be Rs. 1,28,80,524/-. Therefore, it was not possible for them to remove clandestinely finished goods valued at Rs. 1.36 Crores from the factory premises. 10. As regards penalty it was submitted that penalty under Section 11AC is not mandatory as has been held in a number of decisions and since no clandestine clearances have been effected the penalty is not imposable at all. 11. The learned S.D.R. submits that the appellants have admitted clandestine removal in respect of the goods loaded on the truck intercepted by the preventive o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f duty and this statement also has not been retracted so far. The lorry receipts in most of the cases bear the signature of the consignee and therefore there is no doubt left that these goods were not despatched. As regards the other submissions regarding capacity of production, No. of worker etc. it was submitted that the production and capacity has been worked out on the basis of RT 12 return which will only show the recorded production and not unrecorded production and therefore no inference can be drawn from this. 14. We have considered the submissions of the both sides. We find that this is one case where the appellants have admitted clandestine removal of goods without any reservation in their statement which have not been retracted till date. The duty was paid immediately on detection without any word of protest and even though another statement was recorded in June, 1998, no protest letter was lodged. The reply to the show cause notice was submitted for fall one year and in between also the appellants never took a plea that the goods were never removed and that the orders relating to them were cancelled. Even in their reply to the show cause notice or in the ground of appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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