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TMI Blog2014 (12) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... knowingly well that private Challans have been used and no records have been maintained. In absence of maintains of records in the factory, and non-intimation to the Central Excise authorities no co-relation was possible. - Decided in favor of revenue. Regarding demand of duty on clearance of castings without following job work procedure, I do not find force in revenue s appeal as they have already accepted that all goods have came back. Once revenue itself is satisfied, no question of demanding duty arises. Of course, for violation of job work procedure and non-reversal of 10% of the value, penal provisions are attracted. However I do not agree with revenue for imposition to equal penalty considering that appellants were not aware about correct procedures. No mens-rea has been imputed manifesting their intention to defraud the revenue knowingly, thus equivalent penalty is not justifiable. - From the facts as brought on record it is observed that a very casual approach has been adopted by the appellant. Accordingly, I consider that penalty has to be imposed on appellants to ensure that the legal provisions are not ignored rendering these provisions as redundant. Regarding o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) They referred to provisions of rule 57 F(6) (i) rule 57F(4), Rule 57F(6)(ii) ,57F(7), Rule 9(1), rule 53, rule 173F, rule 173G(4) indicating that goods cleared for job work have to be accompanied by proper job work challans. Goods have to be cleared for job work after debiting of amount of 10% of value of inputs/partially processed inputs. Of course, manufacturer was entitled to take credit on receipt of goods returned back to the factory. Since inputs/partially processed goods were not received, interest has also been proposed. Under the scheme of self removal, goods has to be cleared under due challans. But in the present case, goods have actually moved out of factory without the cover of proper Central Excise invoice under rule 52A. There is clear violation of substantive law. Clearance on simple papers/Private Challans cannot vest legality to such transactions. Consequently purported return under private challans does not prove that same goods have returned. 5. Besides this, while conducting a search of the party premises, unaccounted for goods were also recovered from the premises. In accordance with the provisions contained under Rule 53 of the Central Excise Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that if there was laid down procedure for movement of exempt goods, any other mode cannot regularise exemption. If this type of violation of procedure is regularised then no assessee will follow the statutory rules which are binding and regulatory in nature. 10. Further it has been admitted by the respondents that no duty was paid or reversed towards removals for job works in contravention or erstwhile rule 57 F(6) (ii). It is also admitted fact that no records were maintained in respect of good sent for job work manifesting a thin line of distinction between goods removed clandestinely and goods cleared for job work. 11. On Verification of records/goods in the factory, unaccounted goods were also found which were not entered in statutory records. 12. Following rules indicate violations. (i) Rule 57F(i) of Central Excise Rules, 1944 prescribes that the inputs in respect of which MODVAT credit has been taken may be utilized in the manufacture of final product; (ii) Rule 57F (2) prescribes that the inputs may also be removed from the factory for home consumption or for export after intimating the Assistant Commissioner in writing (now without intimating to the Assist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excisable goods shall be delivered from a factory or a warehouse except under an invoice signed by the owner of the factory or his authorized agent; (x) Rule 53 of Central Excise Rules 1944, provides that every manufacturer shall maintain a stock account in such form as the Commissioner may in particular case or class of cases allow and shall enter in such account, daily description or goods, opening balance, quantity manufactured, quantity deposited in the store room, quantity removed, payment of duty etc; (xi) Rule 57A of Central Excise Rules, 1944 provides that credit of duty paid on inputs used in or in elation to the manufacture of final product directly or indirectly may be availed subject to proper observation or Notifications issued thereunder; (xii) Whereas, Rule 57G of Central Excise Rules, 1944 provides that every manufacturer intending to take credit of duty paid on inputs shall file a declaration with the jurisdictional Assistant Commissioner. He will maintain an account current in form RG-23A Part-I/II in respect of inputs received and duty payable on final product, an account current with adequate balance to cover the duty of excise payable on the final prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding demand of duty on clearance of castings without following job work procedure, I do not find force in revenues appeal as they have already accepted that all goods have came back. Once revenue itself is satisfied, no question of demanding duty arises. Of course, for violation of job work procedure and non-reversal of 10% of the value, penal provisions are attracted. However I do not agree with revenue for imposition to equal penalty considering that appellants were not aware about correct procedures. No mens-rea has been imputed manifesting their intention to defraud the revenue knowingly, thus equivalent penalty is not justifiable. From the facts as brought on record it is observed that a very casual approach has been adopted by the appellant. Accordingly, I consider that penalty has to be imposed on appellants to ensure that the legal provisions are not ignored rendering these provisions as redundant. Ends of justice shall be met if Commissioner (Appeal) s order is modified and penalty of ₹ 2,00,000 (Rupees two lakhs only) is imposed on the appellants. 15. Regarding other issue of dropping demand and not imposing any fine and penalty on seized goods, I find that n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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