Customs, Excise and Gold Tribunal - Tamil Nadu
Macneill And Magor Ltd. And Ors. vs Collector Of Central Excise on 26 June, 1992
Equivalent citations: 1992(43)ECR661(TRI.-CHENNAI)
ORDER
S. Kalyanam, Member
1. Since the above applications arise out of a common impugned order of the Collector of Central Excise, Madras dated 28.6.1991, they are disposed of by a single order.
2. Petitioner M/s. Macneill and Magor Ltd. under the impugned order has been directed to pay a duty of Rs. 10,44,855.52 besides a penalty of Rs. 75,000/- on the allegation that excisable goods were removed without payment of duty clandestinely for the period 23.3.1988 to 30.3.1988. Petitioner M/s. Kilburn Electricals Ltd. is directed to pay a duty of Rs. 7,10,208.91 besides a penalty of Rs. 70.000/- and a further penalty of Rs. 15,000/- on the Managing Director Shri S. Srinivasan under the impugned order.
3. Shri V.S. Venugopalan, Id. counsel appearing for the petitioner M/s. Macneill and Magor Ltd. contended that the main allegation of the Department against his client is that the company manipulated accounts to show that the goods which had been removed without payment of duty had been captively consumed and that the goods had been removed from the bonded store-room without the knowledge of the Department and without conforming to the procedural formalities under the Excise law and that no classification or price list was filed in respect of the goods that were used for captive consumption. Shri Venugopalan, Id. counsel submitted that removal of goods from the bonded store-room had been going on with the knowledge of the Department without separately filing a classification list for a long time since 1975 and the petitioners were entitled to the benefit of Central Excise Notification No. 118/75 initially and thereafter to the benefit of notification 217/86 in respect of the goods removed for captive consumption in their factory and therefore, even if there is any procedural infraction that would not ipso facto give rise to any tax liability particularly when the petitioner-company had been filing R.T. 12 returns regularly and nil-duty Gate passes. It was urged that the adjudicating authority had not considered the various documentary evidence available with the petitioner-company for giving a finding that the goods meant for captive consumption were not removed for captive consumption. The Id. counsel also during the course of elaborate submission for a considerable length of time referred to the bin wards and other clearance documents which admittedly had neither been produced before Collector nor pleaded and which according to him are also not available with him nor and urged that with reference to these documents though not available now it would be possible for him to substantiate that the goods were actually consumed captively and not removed without payment of duty as alleged. The Id. counsel also during the course of submission stated that the financial position of the petitioner is quite comfortable.
4. Shri R. Raghavan, Id. counsel appearing for the petitioners M/s. Kilburn Electricals Ltd. and Shri S. Srinivasan urged that duty has been levied for the period 1.4.1988 to July 1989 in respect of the transfer of excisable goods from the petitioner's factory at Ambattur to Ayanavaram and also T.N.E.B. Shri Raghavan submitted that the goods were only removed for captive consumption namely conductors and circuit breakers etc. were removed from their Ambattur factory to Ayanavaram factory only for captive consumption and even though the goods could have been cleared by availing Modvat credit particularly when credit was available in their R.G. 23 Pt. A account at the Ambattur Factory, the goods were removed without availing the Modvat credit at the instance of one Ramani Sundaram, Ramamoorthy and Ashok Kumar. It was submitted that these three employees were actually planted in their factory by M/s. Macneill Magor Ltd. as employees and they have gone now to Macneill Magor Ltd. and they have deliberately planned such removal only to put his client petitioner Kilburn Electricals Ltd. and the Managing Director to financial loss. Regarding the financial position, Shri Raghavan submitted that the Company is not working for the past five months and the liquidity position is not very satisfactory and his client is also not able to realise the money from Macneill Magor Ltd.
5. Shri J.P. Gregory, Ld. S.D.R. submitted that the facts in both the cases clearly establish removal of the goods without payment of duty and adopted the reasonings of the learned adjudicating authority in the impugned order.
6. We have carefully considered the submissions made before us, gone through the records and heard the learned Counsels in extenso for a considerable length of time on the various aspects of the issue. So far as petitioner Macneill Magor Ltd. is concerned we find that in para 11.1. of the impugned order the specific charges against them are:
i) "that accounts were manipulated to show as if the said goods were intended for captive consumption but not consumed captively" and
ii) "the statutory account books maintained and the returns filed with the department by them did not reflect the true nature of the clearances of the said goods.
To a specific query from the Bench to Id. counsel Shri Venugopalan as to whether there is any documentary evidence on record in support of the Ld. counsel's plea that the goods removed from the bonded store-room were actually consumed captively, the Id. counsel only wanted time to produce certain documents such as bin cards and the clearance documents which were not available with him and since we have heard the learned Counsel for nearly a hour we were not inclined to grant further time more particularly when the Id. counsel was not able to specifically state or enlighten us as to the nature of the documents with reference to which he proposed to substantiate his plea and also as to why those documents were neither produced before the adjudicating authority nor a plea taken in that regard in their reply to the show cause notice as well. We did not also accede to the request for a further postponement as we were only dealing with an interlocutory petition which has been adjourned on more than one occasion at the instance of petitioners. Therefore, prima facie, in the absence of any evidence to probabilise the contention for the petitioner Macneill Magor Ltd. and for the reasons given in the impugned order dealing with the various aspects with which we agree on prima facie grounds, we hold that prima facie, there is evidence to show that the goods had been removed without payment of duty and there is prima facie no evidence in support of the plea that the goods were only consumed within the factory. No plea of financial hardship was also pleaded before us. However, in the facts and circumstances of the case we direct petitioner Mis. Macneill Magor Ltd. to pre-deposit a sum of Rs. 5,00,000/- (Rs. five lakhs) on or before 28th August 1992 and report compliance subject to which pre-deposit of the balance of duty and the entire penalty would stand dispensed with pending appeal.
7. So far as the case relating to petitioner M/s. Kilburn Electricals Ltd. is concerned, it is not disputed before us that the excisable goods were removed for the period in question as alleged in the impugned order and without payment of duty and in fact the tax liability is not disputed in law. The Id. counsel was only at pains to plead that two of their employees proved unfaithful to them at the instance of M/s. Macneill Magor Ltd. and were instrumental for such removal even though the petitioner could comfortably clear the goods on payment of duty. Be that as it may, since admittedly excisable goods were removed without payment of duty and the persons who, according to the petitioner, were instrumental for such removals were also employees at the relevant time, we direct the petitioner Mis. Kilburn Electricals Ltd. to make a pre-deposit of a sum of Rs. 3,50,000/- (Rupees three lakhs and fifty thousand) on or before 28.8.1992 and report compliance subject to which pre-deposit of the balance of duty and the entire penalty on the company and the Managing Director would stand dispensed with pending appeals. We also would like to mention that we have gone through the balance sheet of the petitioner M/s. Kilburn Electricals Ltd. for the year ending 31st March 1990 which also indicates more than Rs. 23.38 lakhs is due to the petitioner-company besides a cash and bank balance of more than Rs. 2 lakhs. The matter will be called on 28.8.1992 for reporting compliance.
(Pronounced in the open Court).