Customs, Excise and Gold Tribunal - Calcutta
S.R. Springs Pvt. Ltd. And Mohan Lal ... vs Commissioner Of Central Excise And ... on 21 November, 2001
Equivalent citations: 2002(150)ELT757(TRI-KOLKATA)
JUDGMENT
Archana Wadhwa
1. The prayer in the applications is for dispensation with the condition of predeposit of duty amount of Rs. 44,56,885.00 (rupees forty four lac fifty six thousand eight hundred eighty five) and an equivalent amount of personal penalty. We have heard Shri S.N.S. Mahapatra, learned Advocate appearing for the appellants and Shri D.K. Bhowmik, learned JDR for the Revenue.
2. After carefully considering the submissions made from both sides and after going through the impugned order of the Commissioner we find that the said demand of duty has been confirmed by the Adjudicating authority on the finding of clandestine manufacture and removal of the appellants' final product. The said findings are in turn based upon scruity of the records of the raw materials suppliers companies. Raw materials received by the appellants from these suppliers were not entered in the statutory records. This fact was further corroborated by the computer print - outs and the statement of Shri M.L. Sharma, Director of the appellants' company. It was noticed that though these raw materials, received by the appellants were entered in the private records, they were not being reflected in the statutory records. Shri S.N. Sinha Mahapatra, learned Advocate admits the above position but submits that the same has occurred on account of the appellants being under impression that they are small scale unit and after crossing the exemption limit, are entitled to the Modvat credit which will neutralise the duty liable to be paid by them. It is only that the procedures have not been followed, otherwise the duty liability would get neutralised with available modvat credit of duty paid on the said raw materials.
3. Shri D.K. Bhowmik, learned JDR appearing for the Revenue submits that the Commissioner has given a very detailed order based upon the scruity of the records, the appellants raw materials suppliers and the computer print out taken from the appellants custody. It is a clear case of clandestine removal of goods without payment of duty and the appellants contention that they were entertaining a bona fide belief on account of small scale unit that they are not required to pay duty is only an afterthought, inasmuch as the sales are much on the higher side. In any case the ignorance of law is no excuse and the appellants should be directed to deposit the entire amount of duty and penalty. He also submits that the appellants plea of availability of modvat credit cannot be considered at this stage inasmuch as they have not followed any procedures and have not satisfied the Authorities below about the availability of Modvat credit. In fact this question even was not raised before the original Adjudicating authority. He further submits that Modvat credit can be availed by the assessee after satisfying the authorities about the duty paid character of the inputs which again is based on the proper documentation that is invoices etc.
4. In rejoinder, Shri Sinha Mahapatra submits that on the last occasion of hearing, the Bench had directed to get their modvat credit verified which has been verified by their Range Authorities and report to that effect has been sent to them as also to the Departmental Authorities. He produced on record a letter dated 19th November, 2001 written by the Superintendent to the appellants. Shri Bhowmik, JDR submits that the said report has not been received by him till date.
5. We have considered the submissions made from both sides. We find that basically and primarily the duty has been confirmed against the appellants on the charge of clandestine manufacture and removals, which again are based upon the entries made in the appellants private records and the raw materials supplied by their suppliers which have not been entered in their statutory records. This factual position is admitted by them. As rightly argued by the learned JDR that appellants plea of availability of modvat credit can only be looked into at the time of final disposal of the appeals inasmuch as the availability of credit depends upon a number of factors. Suffice it to say that at this stage the appellants have not been able to make out a prima facie case in their favour. The appellants have pleased their financial hardship by referring to their balance sheet. Shri Bhowmik's objection to the said balance sheet is that as the assessees are indulging in clandestine activities, their entire income is not reflected in the statutory records and as such the true financial position of the appellants cannot be adjudged from the said balance sheet. Keeping in view the overall facts and circumstances of the case we direct the applicants/ appellants to deposit an amount of Rs. 10.0 lac (rupees ten lac) towards duty and Rs. 2.0 lac (rupees two lac) towards penalty within period of eight weeks from today. Subject to deposit of the said duty and penalty within the stipulated time, the predeposit of balance amount of duty and penalty is waived and its recovery is stayed.
6. As regards the deposit of personal penalty of Rs. 5.0 lac (rupees five lac) on the Director of the appellants' company under provisions of Rule 209A we dispense wit the condition of the same and stay recovery. Both the stay petitions are disposed of in the above terms. Matter to come up for compliance and subject to ascertaining compliance for disposal of appeals on 25th January, 2002.
(Dictated & pronounced in Court)