Customs, Excise and Gold Tribunal - Delhi
Indian Aluminium Cables Ltd. vs Collector Of Central Excise on 22 December, 1988
Equivalent citations: 1989(20)ECR283(TRI.-DELHI)
JUDGMENT Harish Chander, Member (J)
1. M/s. Indian Aluminium Cables Ltd., 12/1, Mathura Road, Faridabad, have come in appeal being aggrieved from the order-in-original No. 32/83 dated 6th October, 1983 passed by the Collector of Customs and Central Excise, New Delhi. The facts of the case are that on 14th July, 1981 during the course of Nakabandi arranged by the central excise staff, Faridabad at the Faridabad Badarpur Sales-tax Barrier, the Central Excise officers intercepted one truck No. DLL-8007 loaded with a consignment of two drums of ACSR conductor falling under tariff item 33-B(ii). The truck driver produced one challan No. 523 dated 14th July, 1981 issued by M/s. Indian Aluminium Cables Ltd., Faridabad, showing the description of the goods as ACSR conductor code "panther" size rejected quantity of two drums with total value of Rs. 31,4999.99. The driver also produced one goods receipt No. 13718 dated 14th July, 1981 issued by M/s. Pindi Goods Transport Co., Faridabad, one form No. 38 (pertaining to sales-tax) and one proforma invoice No. 523 dated 14th July, 1981 issued by M/s. Indian Aluminium Cables Ltd., Faridabad, showing the description of the goods as two drums, weighing 4.197 metric tonnes rejected Panther conductor (greasy and whether damaged) issued in the name of M/s. Sapna Enterprises, 4935, Phatak Namak, Hauz Qazi, Delhi-6. The truck driver could not produce any central excise documents in respect of the said consignment. The truck driver, Shri Raj Kumar, son of Shri Bani Singh, in his statement stated that the goods were loaded on 14th July, 1981 from the factory premises of M/s. Indian Aluminium Cables Ltd., Faridabad, but no central excise document was given to him by the party. On being asked, the appellant failed to produce any central excise records showing the clearances and payment of duty on the said goods. Shri Ramesh Chander Aggarwal, Asstt. Manager and the authorised signatory stated that these goods were rejected goods from the various State Electricity Boards and as such no central excise duty was paid. He did not produce any D-3 intimation and form V register or any other documents required for the rejected goods. The goods were seized under Section 110 of the Customs Act, 1962 as made applicable to like matter vide notification No. 65/63-CE dated 4th May, 1963 issued under Section 12 of the Central Excises and Salt Act, 1944. The appellant had contended that they had cleared similar type of goods in the past in the same manner without payment of central excise duty thereon and without issue of central excise documents. On the basis of this information and scrutiny of records of M/s. Aggarwal Metal Co., Delhi, M/s. Satakashi Metal Industries, Jagadhri and M/s. Sapna Enterprises, Delhi, it was revealed that they were selling the non-duty paid ACSR conductor (Panther) received from M/s. Indian Aluminium Cables Ltd., Faridabad, not as rejected/scrap goods but as good conductors. It was also noticed that the prices of these goods charged in their invoices by M/s. Indian Aluminium Cables Ltd. were very low i.e. Rs. 7200/- to Rs. 10,000 against wholesale price of Rs. 17,000/- per metric tonne. M/s. Indian Aluminium Cables Ltd. manufactured and cleared ACSR conductor (panther) under challan No. 516 dated 13.6.1981 and challan No. 520 dated 7.7.1981 which were found lying in the premises of the following parties and which were accordingly seized on 20th July, 1981 on the reasonable belief that no central excise duty had been discharged by M/s. Indian Aluminium Cables Ltd. and the same were liable to confiscation.
S.No. Name & Date of Qt. seized Name of party.
Challan No. of M.T.
M/s. IAC Ltd.
_____ _____________ _______________ ___________________________
1. 516 dt. 13.6.81 6.450 rolled M/s. Chopra Bros New Delhi
on 3 drums and M/s. Omco Metal, Delhi.
These goods were jointly
owned by these parties and
were lying in the godown of
M/s. Chopra Bros., New Delhi
2. 520 dt. 7.7.81 4.195 rolled M/s. Shree Gopal Elect-
on 2 drums ric Stores, Delhi.
2. Thereafter, Shri Ramesh Chandra Aggarwal, Asstt. Manager retracted his earlier statement dated 14th July, 1981 and stated that the goods under seizure were cleared from the premises of M/s. Promain Ltd., Faridabad and the said goods had been received from the Ghaziabad factory on payment of duty and stored in the godown of M/s. Promain Ltd., Faridabad. The assessee also submitted the details of such goods showing serial number of drums, gross/nett weight and company of manufacture, etc. which could be tallied with the details given in their letter dated 30th July, 1981. The two drums cleared under challan No. 523 dated 14th July, 1981 weighing 4.197 metric tonnes did not tally with any of the weights shown in the details given by the party in their letter dated 30th July, 1981. Further the identification marks and the quantity of drums seized on 14th July, 1981 and 20th July, 1981 did not tally with those mentioned in the details given by the party in their letter dated 30th July, 1981. The assessec's plea taken in their letter dated 30th July, 1981 was, therefore, not tenable. Even the godown of M/s. Promain Ltd. was situated within the four-walls of M/s. Indian Cables Ltd. having a common exit and under the exclusive control of M/s. Indian Aluminium Cables Ltd., Faridabad and no D-3 intimation for the receipt of the goods in their factory was given to the department and no statutory records were maintained. Thus M/s. Indian Aluminium Cables Ltd. unauthorisedly manufactured and deliberately cleared with intent to evade payment of duty on a quantity of ACSR conductor (Panther) 52.772 metric tonnes valued at Rs. 8,97,124.00 involving central excise duty of Rs. 89,712.40 and basic excise duty of Rs. 4,485.62 as special excise duty in the guise of scrap without making entries in the statutory record and without payment of duty leviable thereon and whereas out of the above quantity of ACSR conductor (Panther), a quantity of 14.842 metric tonnes was seized on 14th July, 1981 and 20th July, 1981 as mentioned hereinbefore for the contravention of the central excise rules. The goods seized on 14th July and 20th July, 1981 were provisionally released to M/s. Indian Aluminium Cables Ltd. on 20th November, 1981 on execution of a bond of Rs. 2,00,000/- along with a cash security of Rs. 50,000/- and the truck was released provisionally after the execution of a bond of Rs. 40,000/-. A show cause notice was issued to the appellant along with others as to why the seized goods should not be confiscated under Rule 173-Q of the Central Excise Rules, 1944 for the contravention of the Central Excise Rules 9(1), 47, 49, 51, 51-A, 52-A, 53 and 173-F, 173-G and 226 of the said rules and as to why penalty should not be imposed upon them under Rule 173-Q read with Rules 210 and 9(2) of the Central Excise Rules and as to why the central excise duty not paid should not be demanded from them under Rule 9(2) of the Central Excise Rules, 1944 for the contravention of Rule 9(1) of the said rules. On 4.11.1981 the factory was again visited and it was observed that the assessee had manufactured and stored 55.265 metric tonnes of ACSR Panther conductor rolled on 26 drums falling under tariff item 33-B which they had not accounted for in the central excise RG-1 register and the same were accordingly seized on 12th November, 1981 under Section 110 of the Customs Act, 1962, On being asked, the Manager of the factory stated that the goods were part of the goods received back by them from their sister concern at Ghaziabad as had already been intimated in their letter dated 30th July, 1981. The contention of the assessee was not acceptable on the following grounds:
(i) No permission under Rule 51-A to bring duty-paid goods was ever accorded to them,
(ii) No account under form V was maintained by the party as required under Rules 173-H and 173-L of the Central Excise Rules, 1944.
(iii) No D-3 intimation of these 26 drums was submitted to the department,
(iv) In the face of their own admission in their letter dated 8.11.1977 purported to have been addressed to the Range Officer the said 26 drums of ACSR (Panther) conductor were completely deteriorated and not fit for despatch and for which they had sought permission for rewinding. They could not produce any conclusive evidence to that effect,
(v) The markings given on the drums were of new origin and to give them old look foreign material like grease and dust was thrown on the painted marks,
(vi) Serial numbers given on the drums and weight mentioned thereon did not tally with the particulars given on the original gate passes produced by the party in support of the pica that these had already been paid duty,
(vii) The said quantity of 26 drums was never shown in the annual stock taking report as signed by the party and duly verified by the deparmental officers in the balance-sheets of the party and there was nothing forthcoming to believe as to why the said goods were lying in the store for the last 7 to 8 years and as such it appeared that the goods were removed clandestinely.
3. On seizure of 14,197 metric tonnes (2 drums) of ACSR conductors on 14.7.1981 and subsequent seizures of ACSR conductors on 20.7.1981 it was revealed that the assessee had been clearing and selling ACSR conductors in the fully manufactured form in the garb of aluminium scrap and which were sold in the market as good as ACSR conductors and further on examination of the samples of the seized goods on 14th July, 1981 and 20th July, 1981 it was found that these were not mere scrap but good ACSR condustros and from further examination of the records and the balance-sheets for the years 1973-74 to 1980-1981, it was observed that a large quantity of excisable goods had been sold by the party under the description of aluminium scrap and it was found that the goods were excisable falling under tariff item 33-B of the Central Excise Tariff and not aluminium scrap as declared by the assessee. The assessee had also failed to produce any evidence to the effect that the permission/supervision of the central excise officers was ever taken for the conversion of ACSR conductors into pieces of less than 12" and converting them into jumbled form so as to make them as scrap and unfit for sale/use as ACSR conductors. It appeared that the goods weighing 299.722 metric tonnes valued at Rs. 29,81,516.01 were ACSR conductors falling under tariff item 33-B and the basic excise duty worked out at Rs. 2,98,151.50 and the special excise duty at Rs. 14,907.58. Accordingly, another show cause notice dated 11th May, 1982 was issued as to why central excise duty on goods valued at Rs. 29,81,516.01 involving central excise duty of Rs. 2,98,151.50 basic excise duty plus Rs. 14,907.58 special excise duty should not be demanded under Rule 9(5) of the Central Excise Rules, 1944 for the contravention of Rules 9(1), 47, 51, 52-A, 53, 173-F and 173-G and why penalty should not be imposed on them.
4. In reply to the show cause notice the assessee vide their letter dated 6th March, 1982 contended that the management had changed hands in April, 1973 and the present management took over another company, M/s. Promain Ltd., situated adjacent to the factory premises of M/s. Indian Aluminium Cables Ltd. at Faridabad having common address. Prior to the takeover, M/s. Indian Aluminium Cables Ltd. had a central warehouse at the premises of M/s. Davis and While (India) Pvt. Ltd. at 15/3, Mathura Road for storage of duty-paid conductors. When the new management took over the management of the company, 58 drums of ACSR conductors (Panther) which were manufactured at Ghaziabad in the year 1972-73 were lying in its duty-paid godown at M/s. Davis and White and M/s. Promain Ltd. These had been manufactured for the supply to various Slate Electricity Boards but had not been supplied by the previous management and were lying in the duty-paid godowns. They had to shift these duty-paid drums to the premises of M/s. Promain Ltd., as the management of M/s. Davis and White desired their clients to vacate their premises and in this connection, the appellant had relied on the correspondence which the appellant had with the central excise authorities and in particular a letter dated 8th November, 1977 whereunder they had sought permission of the excise authorities to bring those goods to their factory for reconditioning in accordance with the provisions of Rule 173-H. No action was taken by the excise authorities. With the passage of time the said conductors deteriorated and it was no longer commercially feasible to recondition them and the goods had to be removed, and as such there was no need to file D-3 intimation as the goods were not brought back to the factory premises.
5. In respect of the low price being charged by them for the goods, the appellant had stated that since the goods were sold as rejected scrap due to their deteriorated condition, the goods could not have been sold at the normal price. In a subsequent letter dated 17th July, 1982 in response to the show cause notice dated 11th May, 1982, the appellant stated the circumstances of the sale of the rejected goods and the appellant had duly apprised the excise authorities regarding the storage of 26 drums being balance out of 58 drums which were still stored by them at the premises of M/s. Promain Ltd. and this information which was voluntarily given was ignored and the seizure was effected on 12.11.1981. The assessee had denied the allegations levelled against them, and submitted as under:
(i) The provisions of Rule 51-A were not applicable in their case as the goods were of duty paid nature and were stored in the premises of M/s. Promain Ltd. which are adjoining the premises of their factory and having a separate entrance and exit.
(ii) For this very reason they were not required to maintain any account in form V or to give any intimation in form D-3.
(iii) Their letter dated 8.11.1977 itself is a sufficient proof of their bonafide that their client had brought to the knowledge of the excise authorities that the said duty paid 58 drums of rejected conductors were lying in their possession which had deteriorated to such an extent that they were forced to remove part of the said goods as rejected conductors/scrap.
(iv) Their correspondence exchanged with the concerned Central Excise Authorities would show that the drums in question were lying with them since 1972-73, thus charge of markings on drums to give an old look is denied.
(v) They are maintaining separate register in respect of rejected lot of drums and this stock is otherwise reflecting in their balance-sheet and in the circumstances denied the allegation of its removal clandestinely; rather there is overwhelming evidence to show that they acted in a bonafide manner and well within the knowledge of the concerned excise authorities.
(vi) The allegation is denied regarding removal of ACSR conductor in garb of aluminium scrap as their client had always been only Electricity Board and various other Govt. undertakings and only goods tested according to ISI specification are sold and others which do not confirm the standard are rendered unfit for use as conductor and thus become mere scrap,
(vii) Only scrap which has arisen at various stages of the process of manufacture had been removed from time to time after due intimation to the concerned Excise Officer and this fact can be ascertained by referring to the RT-5 returns being filed by them. Scrap cannot be termed as "manufactured" nor the same can be termed as goods and in this respect they placed reliance on the decision of the Bombay High Court in the case of Indian Aluminium Co. v. A. C. Bandhopadaya 1980 Cen-Cus 178-D and also to the orders of the Central Board of Excise and Customs in Re: M/s. Wire Cond. Products Pvt. Ltd. (1980 ELT 789)-1980 Cen-Cus 681D.
6. At the time of personal hearing before the adjudicating authority, the contentions were again reiterated.
7. The learned adjudicating authority did not accept the contentions of the appellant. He had fully gone through the correspondence with the Electricity Boards stationed at Agra, Nainital and Haldwani. The goods purported to be in the form of scrap were in small lengths, whereas the goods seized on 14th July, 1981 and subsequently were in running length of more than 1 KM. The learned Collector was of the view that the goods mentioned in the correspondence with the Electricity Boards and the goods seized did not tally and he was of the view that the ACSR conductors rolled on 26 drums which were seized on 12th November, 1981 in the factory premises were apparently given new markings with the aim of linking them up with the excise gate passes issued about 8 years earlier and in order to give an old look, a foreign material like grease and dust etc. were applied with an object of concealing the markings and the serial numbers given on some of the drums and the weight given thereon did not tally with the relied upon gate passes and also no permission for storage of duty-paid goods within the factory premises was taken. He had observed that the premises of M/s. Promain Ltd. were situated in the boundary wall of M/s. Indian Aluminium Cables Ltd. having a common entrance and exit and he was of the view that the goods were stored in violation of the central excise procedure and rules. On the point of valuation, he was of the view that the price of Rs. 17,000/- per metric tonne was appropriate and the fresh production was being clandestinely removed under the garb of scrap/rejected material. The learned Collector had come to the conclusion that 2 drums of ACSR conductor weighing 4.197 metric tonnes valued at Rs. 30,288.45 seized on 14th July, 1981 and five drums weighing 10.645 metric tonnes valued at Rs. 2,22,025.55 seized on 20.7.1981 at the premises of M/s. Chopra Bros., New Delhi (3 drums - 6.450 metric tonnes) and Shri Gopal Electric Stores, Delhi (2 drums weighing 4.195 metric tonnes) were deliberately removed from the factory premises of M/s. Indian Aluminium Cables Ltd. without payment of central excise duty and the assessee had failed to account for the manufacture, storage and clearance in the central excise records maintained by them with an intent to evade payment of central excise duty in contravention of Rules 9(1), 173-G read with Rules 52-A, 53 and 226 of the Central Excise Rules, 1944. He had confiscated the goods, but, however, he had given option to redeem the same after payment of redemption fine of Rs. 50,000/-. He had ordered the release of the truck No. DLL-8007 valued at Rs. 70,000/- and had confiscated the truck. He had further ordered the demand of central excise duty amounting to Rs. 89,712.40 as basic excise duty plus Rs. 4,485.62 as special excise duty on 52.772 metric tonnes ACSR conductor (Panther) valued at Rs. 8,97,124/- (which also includes the seized and confiscated quantity of 4.197 metric tonnes + 10.645 metric tonnes) which had been manufactured and deliberately cleared with the intent to evade central excise duty in the guise of scrap. M/s. Indian Aluminium Cables Ltd. had also manufactured and stored 26 drums of ACSR conductor (Panther) weighing 55.265 metric tonnes valued at Rs. 9,39,505/- involving central excise duty of Rs. 98,648.13 which they had not accounted for in the central excise statutory accounts and seized on 12.11.1981 in contravention of the central excise rules. He had ordered the confiscation of the said goods but had ordered the release on payment of redemption fine of Rs. 2,00,000/- within one month from the date of receipt of the order. He had also mentioned that in the second show cause notice the assessee had cleared ACSR conductors valued at Rs. 29,81.516.01 in the garb of aluminium scrap during the period 1977-78 onward till 1980-81. He had ordered the demand of duty of Rs. 2,98,151.50 as basic excise duty and Rs. 14,907.58 as special excise duty. He had imposed a personal penalty of Rs. 3,00,000/-.
8. Being aggrieved from the aforesaid order, the appellant has come in appeal before the Tribunal.
9. Shri N. Khaitan, Advocate with Shri Kamal Budhiraja, Advocate have appeared on behalf of the appellant. Shri N. Khaitan, the learned advocate has reiterated the facts and the contentions made before the adjudicating authority. Shri Khaitan has raised the following points:
(i) The charge of clandestine removal without payment of duty is incorrect.
(ii) The appellant had duly paid the duty in accordance with law. Alternatively the goods were defective and no duty was payable,
(iii) Evidence has been misappreciated and important evidence has been ignored.
The order has been passed on the basis of surmises and conjectures.
10. In support of his arguments, he has referred to the statement of facts of the appeal memo, show cause notice and the reply to the show cause notice. He has referred to the copies of the gate passes and the challans and has laid special emphasis on the letter dated 31st July, 1979 written by the Superintending Engineer to the appellant and has stated that the seized material was the defective material received back from the Electricity Boards. He has argued that stock statements duly certified by the auditors were submitted year after year and no adverse inference should be drawn. In support of his arguments, he has referred to the judgment of the Hon'ble Supreme Court in the case of M/s. Mehta Parikh & Co. v. The Commissioner of Income-tax, Bombay , wherein the Hon'ble Supreme Court had held that the decision of the Tribunal must rest not on suspicion but on legal testimony. The Hon'ble Supreme Court further held that whether the accounts are genuine or not is a pure question of fact, and a finding on a question of fact is as much binding on the revenue as on the subject. He has referred to page 187 of the judgment reported in 1956(30) ITR 181. He had argued that the finding of the Collector that the sales of the goods to M/s. Aggarwal Metal Company is not based on any evidence and the adoption of the value of a single stray sale was not justified to M/s. Shri Gopal Electric Stores at the rate of Rs. 17,000/- per metric tonne. He has argued that the same appears on page 150 of the paper book. Shri Khaitan has argued that there was no justification for the levy of the excise duty, the fine in lieu of confiscation and penalty. In the alternative, he has pleaded that the same were on the excessive side.
11. Shri V.M. Doiphode, the learned senior departmental representative, has relied on the orders passed by the learned Collector. He has relied on the statement of Shri R.C. Aggarwal, Asstt. Manager and further stated that he retracted his earlier statement made on 30th July, 1981 i.e. after 16 days. The learned senior departmental representative argued that when the actual weight was available, there was no point in going to the notional basis. Shri Doiphode, the learned senior departmental representative, stated that the serial numbers do not tally and as such the plea of the appellant that the goods seized were rejects by the Electricity Boards should not be accepted. He has also argued that the goods where the same were stored was a part of the factory. He has referred to the ground plan of the factory. He has also argued that die appellant did not follow any procedure prescribed under the Act/Rules. In support of his argument, he has referred to the judgment of the Hon'ble Supreme Court in the case Mis. Kedarnath Jute Manufacturing Co. Ltd. v. The Commercial Tax Officer and Ors. , where the Hon'ble Supreme Court had held that furnishing of declaration forms in prescribed manner was mandatory and not directory in order to claim exemption from sales-tax. In the matter before the Tribunal, if the appellant claims exemption, heavy burden is on him and he has to discharge the same. He has also referred to another judgment in the case of Ashish & Co. and Ors. v. Collector of Customs, Bombay where the Tribunal had held that the law is well-established that it is for the assessee who claims exemption to establish his claim, and the onus is not on the taxing authority to prove its admissibility or otherwise. Mr. Doiphode has argued that the duty demand created by the adjudicating authority should be confirmed. The fine and penalty imposed are very reasonable.
12. Shri Khaitan in reply stated that the goods are the same which were received from the State Electricity Boards. Shri Khaitan has referred to the material receipt memo on page 14 of the paper book and has stated that the appellant had received back 1.635 metric tonnes from UPSEB, Haldwani in one drum which does not include cut pieces and he has referred to Kumaon Traders Transport receipt which appears on page 13 of the paper book and in the said receipt it is mentioned:
(1) ACSR conductors in pieces 1 drum.
(2) ACSR conductors (Panther) 15 pieces which is not included in 1.635 metric tonnes.
The length is 2217 Kms. If the same is taken into account, then there is no discrepancy. Shri Khaitan has argued that there was sufficient evidence on record that the goods were the same. He has further stated that the existing 26 drums had not been examined by the Collector. Shri Khaitan has argued that the changing of the stand by Shri R. C. Aggarwal should not lead to any adverse inference as his statement dated 14th July, 1981 was without reference to records. Shri Khaitan has argued that if the procedure under Rule 173-H has not been followed, the same cannot be used for the levy of duty again and it is a case where no penalty is leviable. On valuation he states that the valuation has been adopted by the department on a very higher figure. Shri Khaitan has pleaded for the acceptance of the appeals.
13. We have heard both the sides and have gone through the facts and circumstances of the case. There are two show cause notices in the matter before us. The first show cause notice is dated 8th January, 1982 which pertains to intercepting of truck No. DLL-8007 loaded with a consignment of two drums of ACSR conductors falling under Tariff Item No. 33-B(ii). There was some subsequent seizure of the goods from the factory godown on 20th July, 1981. The appellant's main defence is that the management of the company had changed hands in April, 1973 and the present management also took over another company, namely, M/s. Promain Ltd. situated adjacent to the factory premises of M/s. Indian Aluminium Cables Ltd., the appellant before the Tribunal, and prior to the take over, M/s. Indian Aluminium Cables Ltd. had a central warehouse at the premises of M/s. Davis and While (India) Pvt. Ltd. at 15/3, Mathura Road for storage of duty-paid conductors. When the new management took over the management of the company, 58 drums of ACSR conductors (Panther) which were manufactured at Ghaziabad in 1972-73 were lying in its duty-paid godown at M/s. Davis and White and M/s. Promain Ltd. These had been manufactured for the supply to various State Electricity Boards but had not been supplied by the previous management and were lying in the duty-paid godowns and these duty-paid drums had to be shifted to the premises of M/s. Promain Ltd. as the management of M/s. Davis and White had desired the Indian Aluminium Cables Ltd. to vacate their premises. Shri Khaitan, the learned advocate, had placed great reliance on the correspondence with the State Electricity Boards and had also referred to the evidence. We have perused the correspondence of the appellant with the State Electricity Boards. The goods received back by the appellant are in short length, whereas the goods seized from the appellant were in the running length. In the paper book at page 144 the appellant has filed a statement of the goods received from the Uttar Pradesh State Electricity Board, Agra and Haldwani and sold to M/s. Agarwal Metal Co. The statement on page 144 is based on notional basis. In the present matter, actual weight is very well available on record, and the drums received back do not tally with each other and correlation with both of them cannot be established. Accordingly, we confirm the finding of the learned Collector that 2 drums of ACSR conductor weighing 4.197 metric tonnes valued at Rs. 30,238.45 seized on 14th July, 1981 and 5 drums weighing 10.645 metric tonnes valued at Rs. 2,22,025.55 seized on 20th July, 1981 at the premises of M/s. Chopra Bros., New Delhi, (3 drums weighing 6.450 metric tonnes) and Shri Gopal Electric Stores, Delhi (2 drums weighing 4.195 metric tonnes) were deliberately removed from the factory premises of Mis. Indian Aluminium Cables Ltd. without payment of central excise duty and without meeting the statutory requirements. The learned adjudicating authority had confiscated the goods but had given an option to redeem the same after payment of redemption fine of Rs. 50,000/-. We feel that the redemption fine of Rs. 50,000/- is on the excessive side. To meet the ends of justice, we reduce the same to Rs. 30,000/-. We confirm the excise duty demand amounting to Rs. 89,712.40 as basic excise duty plus Rs. 4,485.62 as special excise duty on 52.772 (metric) tonnes of ACSR conductor (Panther) valued at Rs. 8,97,124/- (which also includes the seized and confiscated quantity of 4.197 metric tonnes + 10.645 metric tonnes). We have also considered the valuation aspect in the matter. The valuation adopted at Rs. 17,000/-per metric tonne is correct in law and no interference is called for. The learned advocate's argument that a single sale instance should not be taken into account is hot tenable in view of the Hon'ble Supreme Court's judgment in the case of A. K. Roy and Anr. v. Voltas Ltd. reported in 1977 ELT J-177, ECR C 412 where the Hon'ble Supreme Court had held that the determination of the wholesale cash price may not depend upon the number of wholesale dealings. The quantum of goods sold by a manufacturer on wholesale basis is entirely irrelevant. The fact that such sales may be few or scanty does not alter the true position. In view of these observations, we confirm the findings of the learned adjudicating authority on valuation.
14. We now come to the show cause notice dated 11th May, 1982. We have considered the arguments of both the sides. Shri Khaitan, the learned advocate, had argued that the adjudicating authority did not examine the existing 26 drums. We have perused the evidence on record in this regard. It is not disputed that permission under Rule 51-A for bringing the duty-paid goods was not accorded to the appellant. The appellant also did not file any D-3 intimation for these 26 drums. The markings given on the drums appeared to be of new origin and to give them an old look, grease and dust had been thrown on the painting markings. Serial numbers given on the drums and weight mentioned thereon do not tally with the particulars given on the original gate passes produced by the appellant. The learned advocate's argument that these 26 drums were shown in the audit report also does not help him as the quantity of 26 drums was never shown in the actual stock taking report as signed by the appellant and duly verified by the central excise authorities. It also does not appear in the balance-sheet of the appellant and it cannot be believed that the goods were lying unsold for 7 or 8 years. Accordingly, we confirm the finding of the adjudicating authority that during the period from 1977-78 onward till 1980-81 the appellant had cleared conductors worth Rs. 29,81,516.01 involving central excise duty of Rs. 2,98,151.50 as basic excise duty and Rs. 14.907.58 as special excise duty. We also confirm that personal penalty was leviable in the case. To meet the ends of justice, we reduce the personal penalty from Rs. 3,00,000/- to Rs. 2,00,000/- and we reduce the fine in lieu of confiscation from Rs. 2,00,000/- to Rs. 1,30,000/-. Except for this modification, the appeals are otherwise rejected.