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TMI Blog2000 (8) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 11,34,127/- against them and proposing imposition of personal penalty on the allegation that the appellants have manufactured and clandestinely removed 22,718 pieces of different types of pipes and pipe fittings totally valued at Rs. 74,10,070.28. Apart from above, the notice also proposed to confiscate 934 pieces valued at Rs. 2,20,300.00 which were not accounted for in RG-1 register on the ground that the respondents intended to remove the same clandestinely without payment of central excise duty. 1.3The allegation of clandestine removal was based upon the entries in a private register known as 'khatta'. The Revenue's contention was that the said register contained actual production figures of finished goods which were in excess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d sector. Hence there was no scope for them to sell to those buyers without proper document. For the seized goods, the said assessee stated that to minimise the cost and to keep scope for rejection they always produced extra quantity which were kept in stock, but these stock were not in marketable stage, hence not recorded, in RG 1. They stated that their system of maintaining record had not been properly gone through by the officers nor they had been given any opportunity to re-present the case. 1.4 The Commissioner in her adjudication order accepted the contention of the assessee. She opined that there was no scope on their part to remove the said product lying in the factory and seized by the central excise officer without payment of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e various arguments placed by them before the adjudicating authority. Strong reliance has also been placed upon Tribunal's decision in the case of T.M. Industries v. CCE - 1993 (68) E.L.T. 807 (Tribunal) and in the case of Birla Tyres Ors. v. CCE, Bhubaneswar - 2000 (126) E.L.T. 1079 (Tri.) = (1999 (33) RLT 52 (CEGAT). 4.We have heard the submissions made from both the sides and have gone through the impugned order passed by the Commissioner. The ld. adjudicating authority has gone by the fact that apart from the entries in the Khatta there is no other corroborative evidence on record to show that the respondents have been indulging into manufacture and clearance of their products without payment of duty. The respondents have explained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nates with the external independent 3rd party inspection agency and handles company's both the internal and external inspection and testing responsibility and formalities. The goods after sand blasting operation are directed from the production department to this department wherein complete visual, dimensional, surface inspection and testing take place. The process may lead to rejection of fittings due to various reasons like surface cracks, dimensional defects, surface defects etc., as a result of which the material may be finally termed as either rectifiable or irrepairable and unfit for the job for which it has been produced. They have argued that the process of inspection as mentioned above may lead to rejection of fittings due to var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -1 as alleged. It remains as stocks/inventory/work-in-progress. Their further narration is that sometimes as lot of many sand blasted fittings are. also kept under the purview of the inspection deptt., which may be under various stages of final finishing i.e. welding/grinding/filing etc. Also there are sand blasted fittings under purview of inspection deptt., which need re-working after inspection for various dimensional defects. These re-working operations include re-mandrill, re-machining, re-repairing, re-grinding and also re-sand blasting. Hence to assume the sand blasting operation as a barometer to determine the production and certify the goods as 'Marketable' is completely baseless and misleading assumption. The deptt. has arrived at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res on account of re-entry of the same items again and again. She has also gone by the fact that if the entire entries made in the Khatta along with the RG-1 register are taken into account it is beyond the total production capacity of the respondents to manufacture such a huge quantity with reference to installed capacity and labour employed in their factory. Another factor which has weighed with the ld. adjudicating authority is that the respondents' buyers are govt. enterprises and public sector undertakings which do not indulge into any illegal purpose. She has observed that the department could not adduce a single piece of evidence to show that there was any clandestine removal. 6.We fully agree with the above reasoning of the adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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