Customs, Excise and Gold Tribunal - Tamil Nadu
M.T.K. Gurusamy vs Commissioner Of Central Excise on 31 October, 2000
Equivalent citations: 2001(130)ELT344(TRI-CHENNAI)
ORDER S.L. Peeran, Member (J)
1. Both these appeals arise from Order-in-Original No. 33/93, dated 26-5-1993 passed by Commissioner of Central Excise, Madurai confirming duty demand of Rs. 33,350/- from M/s. Rajkumar Match Industries being the differential duty payable at the rate mentioned in the order for the alleged clandestine removal during the period from 1-4-93 to 21-1-84 in terms of the provisions of Section 11A(2) of Central Excise Act. There is a confirmation of further amount of Rs. 21,649.50 from Rajkumar Match Industries being the duty payable in terms of the calculations shown in the impugned order for clandestine removal during the period from 14-1-83 to 29-12-83 under Section 11A(2) of the Central Excise Act.
2. The case made out against the appellants are that they are engaged in the manufacture of matches falling under item 38 of the erstwhile Central Excise Tariff and were availing concessional rate of duty under Notification No. 22/82, dated 22-2-82. The officers visited the factory on 30-12-1983 and searched the premises in the presence of one K. Chelliah, a worker in the factory and scrutinised the RG-1 Register for 83-84. They recovered one private register maintained by the unit, which had certain entries. One Shri V. Ram Subbu, a private employee working for five units was examined who deposed that the private register was maintained by him and the entries were made by him. The officers scrutinised the said register and tallied the same with the RG-1 Register and found that there was discrepancy and hence show cause notice was issued raising demands on the basis of the private book maintained by Ram Subbu. Further, the show cause notice was amended by another notice issued by Assistant Commissioner on 8-1-1985 invoking larger period.
3. The appellants contested the case on the plea that the private documents seized from the unit and the unaccounted matches cannot be relied for confirming demands as there was no corroborative evidence. The statement of Ram Subbu, a private employee is not a dependable piece of evidence for confirming the demands. They also challenged the issue of notice by extending larger period. All the pleas were negatived and on the basis of the statement of Ram Subbu, a part time employee and the entries made in private register, the Commissioner confirmed the demands. He also rejected the plea of time bar.
4. Appellants have been served notice of hearing in this matter on several occasions. They have not appeared. Therefore, the appeal was taken up for consideration on merits. In the grounds of appeal, the appellants have urged that private notebook maintained by a part time employee with corrections cannot be considered as a reliable piece of evidence for confirming the demand. They relied on the judgment rendered in the case of Kashmir Vanaspati Pvt. Ltd. v. CCE 1989 (39) E.L.T. 655 wherein the Tribunal held in para 4 as follows :-
"4. I have gone through the records of the case and the arguments advanced before me. The only evidence on the basis of which duty has been demanded and penalty has been imposed in this case is a private note book seized from Shri Desh Raj, Contractor. This note book was maintained by the labourers engaged by Shri Desh Raj. I have seen the entries made in the note book on 21-1-1986, 22-1-1986,5-2-1986, and 11-7-1986.1 find that on 21-1-1986 there is an entry of loading 1275 tins and packing 1600 tins. Whereas figure of loading is authenticated by initial, there is no authentication of the figure of packing. On 22-1-1986 entries indicate that 1600 tins were packed and 3930 tins were loaded. The figure 1600 tins against packing is initialled, but 3930 tins in respect of loading is not authenticated by any signature. This is one of the entries in dispute. On 5-2-1986 there is an entry of packing 2000 tins which is not authenticated by any initial. There is an entry of loading 6234 tins which is authenticated by initial. The digit "6" in the above figure of 6234 is overwritten. On the same date, there is figure 3331 tins against unloading. There is correction in this figure. On 11-7-1986, the entry is in Gurumukhi. However, Shri Jain has explained that on that date there is an entry of Ghee loading 2276 tins. This figure bears overwriting and is also not authenticated by any initial. Looking to the various entries in the other pages of the note book, I find that there are innumerable entries which are not authenticated by any signature and there are overwritings in many cases. Shri B.R. Sharma, an employee of the appellants, has also stated in his written statement that he made some of the entries in the note book on account of the work done by the labourers in the factory premises and that labourers used to come to him for getting the entries made in respect of the work done. In view of the fact that many of the entries are not authenticated by the signature of anybody, there is overwriting in the entries without proper attestation and note book was maintained by the labourers and not by Shri Desh Raj, contractor, personally, I am of the view that this is not a dependable record to establish clandestine removal of vegetable products manufactured by the appellants unless the same is supported by other evidence, such as, raw material consumed, goods actually manufactured and packed etc. There is no such evidence on record. There is also no co-relation between the consumption of raw materials, vegetable product manufactured, packed and cleared. In the circumstances, it cannot be held that 956 tins of vegetable products were actually manufactured by the appellants and clandestinely removed from the factory without payment of duty.
5. In view of the above discussions, the impugned order has to be set aside and the appeal allowed. I order accordingly."
They have relied on several other judgments also to state that the clearances of various other factories cannot be clubbed for the purpose of computing the total value of clearances for denying the benefit of Notification.
5. We have heard Ld. SDR Shri Sreekumar Menon who reiterates all the findings given by the Commissioner in the order. He contends that the appellants have not discharged their burden of showing that the private note book was not maintained by them and the statement of Ram Subbu was not challenged by way of cross-examination. Therefore, the reliance on both the pieces of material is sufficient for upholding the charge of clandestine removal, hence the demands confirmed should be sustained.
6. We have carefully considered the submission and have perused the grounds. We have noticed from the judgment of Kashmir Vanaspati Pvt. Ltd. extracated supra that private notebook maintained by labourer containing unauthenticated entries and over-writings has been held to be not a dependable record to establish clandestine removal unless the same supported by other evidence such as raw material consumed, goods actually manufactured and packed, etc. In the present case, the only piece of evidence is only the private note book maintained by Ram Subbu, a part time employee working for several other units. There is no other evidence in the form of seizure of clandestinely removed goods or invoice or purchase of raw materials, etc. to corroborate the entries. Therefore, the judgment cited by the appellants support their case. This citation has been applied in large number of judgments and the same has not been overruled. We have also noticed that in similar matters pertaining to Match Industries, the Tribunal examined the issue of clearances of matches and clubbing of the clearances of various match units as in the case of A. Rathinam, Prop., Michael Match Works v. CCE 1992 (60) E.L.T. 451. The Tribunal examined the issue of clubbing of 8 match industries situated in the same compound and having a common trading agent. On a detailed examination of the evidences, the Tribunal set aside the order of the Commissioner, Central Excise by applying the ratio of earlier judgment rendered in similar match work cases as in the case of Premier Matches v. CCE 1991 (51) E.L.T. 377; Vasuki Match Works v. CCE 1990 (49) E.L.T. 415; & Sekhar Match Industries v. CCE 1990 (48) E.L.T. 599. There are a number of similar cases on similar issue, which have come up for consideration and similar ratio has been followed. The finding given by the Tribunal on this point has not been upset by any other judgment. The Tribunal in the case of Calicut Rubber Works 1996 (81) E.L.T. 320 and in the case of Krishna Bottlers 1999 (32) RLT 845 has also taken a similar view and have applied the judgment rendered in the case of Kashmir Vanaspati case to set aside the allegation of clandestine removal. It has also been held in the case of Bharat Containers (Nagpur) Pvt. Ltd. v. CCE 1999 (113) E.L.T. 992 that entries made in the different material register maintained by the security staff at the factory gate is not conclusive evidence to sustain the charge of clandestine removal under Rule 9 of Central Excise Rules. In the case of Varun Processors Pvt. Ltd. v. CCE Chandigarh 1999 (30) RLT 533 it has been held that allegation based on packing slips recovered from factory and statement of their scribe is not sufficient material for holding the charge of allegation of clandestine removal. In this case the Tribunal has examined large number of judgments on clandestine removal and have discussed the same. The Apex Court in the case of Triveni Rubber and Plastics v. CCE 1994 (73) E.L.T. 7 (S.C.) has also taken a view that on a reading of Rule 173E, the Hon'ble Apex Court cannot agree that the officer empowered by the Collector or the Collector cannot determine the normal production unless all the factors mentioned in the Rule are present simultaneously. It has been held that Rule does not say so nor is it capable of being so interpreted. It has been held that in a case like the one in question, where the accounts are found fabricated and untrue, the figures of raw material utilised or the particulars of labour employed may not be available. It is not the case of the appellant that even though acceptable material with respect to these factors was available, it was not considered. On that plea, the Apex Court rejected the appeal. However, we notice that evidence had been brought by the Revenue to sustain the case. But in the present case, such evidence is not available. Therefore, we hold that a private note book is not sufficient for confirming clandestine removal. Hence, we accept the prayer of the appellant for allowing the appeal by setting aside the impugned order. Ordered accordingly.