Customs, Excise and Gold Tribunal - Calcutta
Seal Narrow Tapes Pvt. Ltd. vs Commissioner Of Central Excise on 1 February, 2002
Equivalent citations: 2002(84)ECC133, 2002(146)ELT586(TRI-KOLKATA)
ORDER Archana Wadhwa, Member (J)
1. The appellant is engaged in the manufacture of HDPE tapes, HDPE fabrics and HDPE sacks. The appellants' factory was visited by the, central excise officers on 30-6-98, who conducted various checks and verifications. As a result of stock-taking, 80.9 kgs. of HDPE fabric and 671 kgs. of tape was found short and 56.6 kgs. of scrap was in excess than the recorded balance. The duty involved on the short found fabric was to the tune of Rs. 6,865.22 (rupees six thousand eight hundred sixty five and twenty two paisa).
2. The officers also recorded the statement of the appellants' representative who deposed that the input output ratio of the raw material and the final product i.e. HDPE granules and HDPE fabric together with HDPE scrap generated in the course of manufacture is 1:1. Based upon the above statement and the examination of the seized records and documents the department entertained a view that during the period 1994-95 and 1995-96, the appellant manufactured and cleared HDPE fabrics without payment of duty to the extent of 7943 kgs. and 2445 kgs. respectively. Accordingly they were issued a show cause notice proposing to confirm demand of duty of Rs. 1,03,259/- (rupees one lakh three thousand two hundred fifty nine) and of Rs. 34,719/- (rupees thirty four thousand seven hundred ninteen) in respect of HDPE fabrics removed surreptitiously during the period 1994-95 and 1995-96. The notice also proposes to confirm the demand of duty on the short found goods.
3. After considering the reply filed by the appellant. The Additional Commissioner of Central Excise, Bolpur confirmed the total of duty of Rs. 1,44,852.89 (rupees one lakh forty four thousand eight hundred fifty two and eighty nine paisa) with an equivalent amount of personal penalty under the provisions of Section 11AC of the Act. On an appeal against the above order of the Additional Commissioner did not succeed before Commissioner (Appeals). Hence the present appeal.
4. I have heard Shri S.N.S. Mohapatra, ld. Adv. appearing for the appellant. He submits that the Revenue has picked up two financial years and on the basis of the input output ratio of the said two years has concluded clandestine removal of fabric on the part of the appellant. He submits that during the adjudication proceedings they had submitted a statement showing reconciliation of the input and output for the entire period from 1994-95 to 1998-99 till the visit of the officers according to which there was an insignificant difference of only 486 kgs. over a period of five years. He submits that there was no justification for the Revenue to pick up two financial years in between and raise the demand based upon the input output ratio inasmuch as manufacturing activity is a continuing process in their factory and the inputs brought in one financial year are invariably used in another financial year. As such the Revenue should have taken into account the entire period of five years. In any case he submits that there is no evidence of any clandestine removal and the entire demand has been based upon the strict application of input : output ratio of 1:1.
5. I have also heard Shri A.K. Mondal, ld. JDR for the Revenue.
6. After going through the impugned orders, I agree with the submissions made by the ld. Adv. Apart from applying the input:output ratio of 1:1 to the two financial years 1994-95 and 1995-96 there is no other evidence on record to reflect upon the clandestine activities of the appellant. It is also not clear as to why only two financial years have been chosen by the Revenue for applying the said ratio and why the entire period of five years have been ignored by them. It is well settled principle of law that charge of clan destine removal is required to be proved by the Revenue by production of tangible and positive evidence. There being none in the present case. I find no justification for confirmation of demand against the appellant. The impugned order is accordingly set aside and appeal allowed with consequential relief to the appellants.