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TMI Blog2003 (8) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... allowing exemption as available to small-scale unit and treating the price of the goods as cum-duty value. Further, price for each year is required to be determined after due adjustment from the sale prices noted. Revised duty so worked out amounts to Rs. 26,23,179/- for the entire Show Cause Notice period. In view of our findings on the charge of clandestine production and clearance, we are of the opinion that the appellant is liable to pay this revised duty demand of Rs. 26,23,179/-. The case involves serious and deliberate violation of law and falsification of accounts which led to evasion of central excise duty. Clearly, fraud has been committed on the Revenue and justified invoking of the extended period permitted under provisions to Section 11A of the Central Excise Act for demanding the duty. Since the duty evasion is the result of fraud, there could be no doubt that penalty is attracted. Under the impugned order, penalty of about Rs. 1.28 crore has been imposed on M/s. Vallabh Alloys. The penalty imposed in the first adjudication was only Rs. 10 lakhs; we accept the appellant's submission that in the remand proceedings duty and penalty should not have been enhanced des ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2000, which is the subject-matter of the present appeals was passed by the Commissioner pursuant to these orders of remand. 2.In the present order, the Commissioner has confirmed a duty demand of about Rs. 1.28 crore and imposed an equal amount of penalty on M/s. Vallabh Alloys. Penalty of Rs. 5 lakhs has been imposed on Shri Padam Jain and Rs. 2 lakhs each on Shri Sandeep Jain and Shri B.K. Jain. 3.M/s. Vallabh Alloys challenge the impugned order on many grounds. The very first ground is that duty demand and penalties could not have been enhanced in a remand proceedings. It is further pointed out that the proceedings were conducted in violation of the principle of natural justice, two of the witnesses Shri Chunchun and Shri Subhash Yadav (employees of M/s. Vallabh Alloys) whose statements have been relied upon in passing the impugned order were not offered for cross-examination; and they were witnesses of Revenue. It is further pointed out that Commissioner has wrongly invoked the provisions of Section 9D of the Central Excise Act in support of introduction of their evidence. 4.On the merits of the case, the submission of the appellant is that the findings have been reached on hyp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntions and defence that there was no clandestine manufacture and production. Learned SDR also emphasized that while all the records kept by the appellant have been falsified so as to understate the number of workers, use of fuel and electricity, it is seen that even according to the falsified employees registers and wage registers the appellant is found to be employing 18 persons regularly. Learned SDR has further pointed out that the installed machinery in the appellant's unit had a capacity of production of about 1½ to 2 per M.T. per day. Further, contrary to the appellant's contention about burning of electricity meter, evidence on record shows that DESU had, on joint inspection, found that the appellant was stealing electricity and they had also raised bills running over Rs. 62 lakhs. 7.We have perused the records and have considered the submissions made by both sides. At the outset we may state that the appellant's submission that duty demand and penalties should not have been enhanced in the remand proceedings is required to be accepted. There is merit also in the appellant's submission that they should have been allowed the benefit of SSI exemption and that while computing d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 9.The appellant's own explanation on the various aspects of the case lack credibility. One contention is that during 1993-94 they did not undertake any production of sheets and during the subsequent years, production was within the exempted value limit. The return of Central Excise registration on 2-4-93 is being cited in support and it is being contended that they were getting their billets converted to sheets by other producers on job work basis. The Commissioner has rightly rejected this explanation for want of supporting particulars about the job workers engaged and the quantities got converted by each job worker. The Commissioner has further pointed out that this explanation does not carry conviction for other reasons also. The appellant has stated that the billets were got converted at Jagadhari; but as observed by the Commissioner this is not at all viable in view of the additional cost of freight. Thus, appellant's explanation on this ground is, on the look of it, most unlikely in the facts and circumstances of the case. The appellant had all the machinery required to carry out hot and cold rolling of gullies for converting them into sheets. The appellant had the labour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king and producing sheets. Their daily installed capacity was to produce 1.5 to 2 MT in 24 hours and that they were employing 34-40 workers. Of course, these statements were subsequently retracted. Still, the question remains whether the facts stated by them were correct or they were false data provided under pressure by the Central Excise authorities. The former would appear to be more likely. The facts stated by them remain confirmed by the machinery installed, and the number of workers engaged on the date of inspection according to the Panchnama. Therefore, despite the detractions, we are of the opinion that the Commissioner was right in taking these statements into account while deciding the case. 12.From the foregoing, it is clear that the evidence on record cumulatively support the finding of clandestine production and clearance of sheets. That bring us to the question as to what quantity was involved. The Commissioner has taken average production of 900 kgs. per day at 24 working days per month. The appellants have pointed out that this calculation has been relied heavily upon the statements of both Chunchun and Subhash Yadav, the two employees who have not been offered for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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