Customs, Excise and Gold Tribunal - Bangalore
Deccan Industrial Products Pvt. Ltd. vs Commr. Of C. Ex. on 2 August, 2002
Equivalent citations: 2002(83)ECC803, 2003(157)ELT86(TRI-BANG)
ORDER S.S. Sekhon, Member (T)
1. These appeals are taken for disposal by this Common order, as they emanate from an order passed by the Adjudicator. Consequent to enquiry made, a show cause notice dated 18-10-95 was issued to M/s. Deccan Industrial Products (P) Ltd. (hereinafter referred to as DIPL), asking them to show cause why :
(a) 12,200 Kgs of Rubber Compound Sheets valued at Rs. 5,11,394/-should not be confiscated under Rules 173Q and 226 of the Central Excise Rules, 1944;
(b) Raw materials valued at Rs. 1,21,260/- should not be confiscated under Rule 226 ibid;
(c) 68,345 numbers of Rubber Rings valued at Rs. 12,00,000/- should not be confiscated under Rules 173Q and 209 ibid;
(d) Penalty should not be imposed under Rules 173Q, 209 and 226 ibid, for contravention of the rules mentioned in para 20 of the Notice; and
(e) They were required to produce the provisionally released goods before the adjudicating authority failing which they were asked to show cause as to why :-
(i) the Bond executed should not be enforced; (ii) the Bank Guarantee should not be appropriated to the Government of India.
The Notice was also issued to M/s. Deccan Enterprises (hereinafter referred to as DE), Plot No. B/58 and 60, APIE, Balanagar, Hyderabad asking them to show cause why :-
(a) the differential Central Excise Duty of Rs. 10,34,619/- alleged to have been short-paid should not be paid by them under Rule 9(2) ibid read with proviso to Sub-section (1) of Section 11A of the Central Excises and Salt Act, 1944; and
(b) a penalty under Rules 9(2) and 173Q ibid should not be imposed on them.
2. DIPPL contended :-
(a) The Unit was established in 1989 and got registered with the Central Excise Department in 1992 and they never crossed the basic exemption limit of Rs. 20/30 lakhs.
(b) Regarding the non-accountal of 12,200 Kgs. of Rubber Compound Sheets in RG 1 register, they did not commit any offence as they being a declarant unit and also that the product had not reached the RG 1 stage as packing was yet to be completed. While taking the registration Certificate, they clearly indicated in their flow chart that they would make the entries in RG 1 after packing was done and it was accepted by the Department. The subject goods were assessable at Nil rate of duty and also that the goods were meant for export and also exported.
(c) In respect of raw materials found in excess valued at Rs. 1,21,260/-the materials viz., Synthetic Rubber and Natural Rubber though were issued for production, the quantity was not utilized and some quantity was still lying on the shop floor. Stearic Acid was purchased on 17-5-95 and the same was not entered in the Stock Register as the entries in the register were yet to be made.
(d) In respect of 68,345 No. of Rubber Rings, they have not committed any offence under Rule 173Q and Rule 209. Being a declarant unit, they maintained their private records and the quantity was available at the time of officer's visit and was properly entered in RG 1 register during February/March, 1995 itself.
(e) The said Rubber Rings were not manufactured in the factory. As few dies were not in usable condition and in fact, there were more than one die for almost each type of ring. Out of five samples drawn, the rings tallied with the moulds and two did not tally with the engravings because those were of bigger size and manufactured by joining two smaller rings and hence, markings on Rubber rings above 1200 mm dia cannot tally with the engravings of the moulds. Such rings were duly stamped with new size before despatch and it was already explained by the Production Engineer. The engraver instead of DIPPL by mistake marked DEPL and rectification involves substantial expenses, additional work 'Deccan' was made on the die and hence, the rings contained the marking of both DEPL and Deccan. Regarding the marking of 'IHP' and 'ISI' on the rings, they explained that it was marked after ISI mark was awarded and after receipt of positive enquiries from 'IHP'. Regarding other markings they explained that it was the practice of all the manufacturers to engrave with the markings of all the potential customers and hence, it could not be concluded that the rings were not manufactured by Deccan Products. They gave the example of Charminar brand which awarded only to a specific product to a manufacturer. Regarding yellow paint markings they explained that they revised the date as per the requirement of the Customers.
(f) Reliance on the word 'Deccan' found on the gunny bags as circumstantial evidence is not called for as due to shortage of HDPE bags a few second-hand gunny bags were brought from the market. It was the practice of their company to purchase duly branded bags and the supplier might have wrongly branded as 'Deccan Enterprises' and hence, the word 'Enterprises' was blackened by them and such bags might be 15-20 in number.
3. DE made, inter alia, the following submissions :-
(a) There was no suppression as the goods were sold and removed under proper excise gate pass, Delivery Challans and Invoices. Also that the returns were duly submitted to the department and assessments were also completed. As such, no duty could be demanded.
(b) Their Company had stopped manufacture of those products during 1986 itself and thereafter started manufacturing Grooved Rubber Sole Plates.
(c) The Company was having the rubber rings manufactured to individual drawings and specifications which can be used by those buyers only. If those rings were not bought by the same buyer, it would not be useful to others and result in total loss. Also that the rubber products cannot be recycled. Hence, the value of such groovers were negligible. Further, that they loose their properties in long storage @ 10 to 15% every year of storage. Those rings could not be dumped outside as the environmental and municipal rules did not permit the same and hence remained unsold for over a long period and were outdated also. Hence, when Shri Md. Abrar approached them, they sold the same to him. However, as the products were entered in the RG 1 register as rings, they could not be sold as scrap but as rings only.
(d) It was wrong to say that the rubber rings sold by them were exported by Deccan Products. However, those goods were not liable for duty because they were exported.
4. The Commissioner found :-
(a) The issues for consideration are :-
(i) Whether the impugned goods (2,84,264 numbers of various types of Rings and 9,062 numbers of Rail Pads) of Deccan Enterprises claimed to have been sold to a person, namely, Shri Abrar Ahmed, alleged to be a fictitious person, and cleared the same on a lower assessable value by means of suppression of fact thereby resulting in evasion of duty to the tune of Rs. 10,34,619/- and whether the same can be recovered under Rule 9(2) of the Central Excise Rules, 1944 read with proviso to Sub-section (1) of Section HA of the Central Excises and Salt Act, 1944;
(ii) Whether the goods referred to at (a) above were accounted in the RG 1 of Deccan Products with an intent to claim as their own production in order to export the same under the DEEC Scheme and get duty free imports;
(iii) Whether 68,345 numbers of Rubber Rings valued Rs. 12,00,000/- out of the quantity referred to at (a) above which were placed under seizure, are liable to confiscation under Rules 173Q and 209 of the Central Excise Rules, 1944;
(iv) Whether 12,200 Kgs. of Rubber Compound sheets valued Rs. 5,11,394/- placed under seizure should not be confiscated under Rules 173Q and 226 of the Central Excise Rules, 1944;
(v) Whether 1,900 Kgs of raw materials valued Rs. 1,21,260/- placed under seizure should not be confiscated under Rule 226 of the Central Excise Rules, 1944; and
(vi) Whether penalties can be imposed individually on Deccan Products, Deccan Enterprises, S/Shri Ramakrishna, Venkateswarulu, Misra and Jalan under the relevant Rules for the contraventions specified in Paras 24 to 29 of the said Show Cause Notice.
(b) The Commissioner after considering the explanation of DE as regards the demand of duty of Rs. 10,34,619 slapped on DIPL on certain rubber rings and pads alleged to have been cleared by sale to one Shri Abrar Ahmed of Patancheru at ridiculously lower prices. The Commissioner considered the plea of sale on scrap and thereafter getting the verifications done from the Range and the RG 1 registers and verifying the entries with certain invoices concluded that the sales to Shri Abrar Ahmed were from the old stock and there is every possibility of the sale to be made as scrap and not of rings and pads. He conceded that the RT 12 returns of DE were assessed without raising objections. He observed "It is ordinarily expected of a prudent Central Excise Officer to probe into the case where the values declared in the Invoices and the assessment documents are ridiculously low", And thereafter, concluded that in absence of any question of RT-12s filed and absence of any efforts made by the investigating officers to trace Shri Abrar Ahmed alleged to be fictitious when the Delivery Challans and other documents which were indicating the transport vehicle numbers, we found the investigations to be slipshod as no enquiries were made as regards these transport vehicles and concluded that the benefit of doubt was to be granted to DE in that regard. Thereafter considering whether the disputed goods could be manufactured in DIPL he observed that the evidence on record is in favour of the appellants and not the department as he found there was no evidence on record to show that the goods were actually manufactured at DE and thereafter transported to DIPL as no oral or documentary evidence of such movement were on record. He found that the Department has not gathered evidence from the Invoices, Delivery Challans, Lorry numbers, etc., mentioned therein that the goods have reached DIPL and relying on the statement of the deponents on record and in absence of the transportation, he concluded that the circumstantial evidence adduced by the Department was an exercise in futility. His words are "it raises dust but gathers no storm. It may raise doubts but does not clinch the issue". Thereafter taking cognisance of the facts on the record before him, concluded that there was some bickerings family squabble and a ware of attrition between Shri R.N. Jalan and Shri O.P. Jalan, leading up to the issues contravening in the Company petitions. He concluded that this was a case wherein department had been used as a means to persecute one of the parties involved in a family feud. After concluding the depositions in various affidavits filed before him by the two appellants, he concluded that the payment of CED in this case did not arise for the reason that the goods in dispute had been actually exported and therefore he did not find that there was a case for recovery of CED on 68,345 numbers of Rubber rings and other disputed goods found and they were not liable for confiscation.
(c) As regards the issue of 12,200 Kgs of Rubber compound sheets under seizure and their liability for not having entered it in the records, he rejected the plea of not maintaining a RG-1 register, etc, since the DIPL had obtained a Registration Certificate No. 35/92 from the Department and had been maintaining RG-1. They found that declarant rings were not required to maintain RG-1, they were required to maintain a simple daily account register as per Hyderabad Collectorate Trade Notices. He also rejected the alternate arguments that the said rubber sheets did not reach the RG-1 stage inasmuch as the same were yet to be packed since RG-1 registers has a column for goods packed and in loose conditions and the RG-1 stage not been reached in as much as the goods could not be marketed without packing. It is not a valid argument since undoubtedly the goods were in a finished form not a loose condition and should have been accounted in the appropriate column of the Proforma prescribed by the Trade Notices of the Hyderabad Collectorate. Since they have failed to do so, the goods were liable for confiscation under Rule 173Q(1)(a). However, finding that no specific sub-clause mentioned in this Show Cause Notice, the contravention in this case would be of provision of Rules 53 and 226 of the Central Excise Rules and therefore the said rubber sheets would be liable for confiscation not only under Clause (b) of Sub-rule (1) of Rule 173Q but also under Rule 226 and since they were provisionally released and not produced before him the Bank Guarantee could be enforced.
(d) As regards the proposal for confiscation of 1,900 Kgs of raw material under Rule 226 he found that the said raw material was issued 2-8 months prior to the visit of the officers and in absence of any investigation and corroborative evidence he accepted the explanations offered and held the raw material not to be liable for confiscation, however as far as 100 Kgs of stearic acid another raw material, he did not accept the explanation offered by DIPL that the said goods were purchased on 17-5-95 vide bill dated 15-4-95 and the same was not entered in the register maintained up to 31-3-95 and that the said bill was shown he considered the explanation to be not convincing as nothing on record disclosed that the said bill was tendered for perusal of the officers. In view of the same, the stearic acid was held to be liable for confiscation under Rule 226.
(e) Examining the complicity of each of the noticee as regards penalty, he found :-
(i) there was no warrant to impose penalty on DE;
(ii) as regards DIPL, in view of the liability of penalty under Rules 173Q (1) (b) and 226 in respect of non-accountal of rubber sheets and 100 Kgs of stearic acid, he held them liable for penalty;
(iii) he dropped the proceedings against Shri S.K. Misra, Commercial Manager and O.P. Jalan, Assistant Administrator, both of DE under Rule 209A.
(f) Since the non-accountal of the rubber sheets and raw materials have rendered them liable for confiscation, however, as he found that there was no evidence to show remotely that DIPL intended to evade payment of duty by means of such non-accountal, he did not hold penalty under Rule 209A to be levied on Shri Ramakrishna and Venkateswarulu.
(g) Thereafter under Rule 173Q and Rule 226, he ordered confiscation of 12,200 Kgs of rubber compound sheets, but the same have been provisionally released. Therefore, he ordered that the amount of Rs. 50,000/- which he would have realised as redemption fine should be realised by enforcing the terms of the said Bond and Bank Guarantee and under Rule 226, he ordered confiscation of 100 Kgs of Stearic acid and since the goods were not available for confiscation, he ordered realisation of Rs. 500/- from the bond and under Rule 173Q(1)(b), he imposed a penally of Rs. 50,000/- on DIPL and under Rule 226 a penalty of Rs. 2,000/- on DIPL and dropped the proceedings against them.
5. The present appeals are filed by M/s. DIPPL and the Revenue against this order :-
(a) DIPPL have taken the grounds (Appeal No. E/317/97)
(i) Being a declarant SSI Unit they were not obliged to keep statutory records, they are therefore not liable for penalty under Rule 226 read with Rule 173Q.
(ii) No offence was established as regards 12,200 Kgs of Rubber sheets by not entering them in RGs, since these goods did not reach that stage, as Quality Control Checks and Packing was required. They were meant for export and have been eventually exported.
(iii) As regards Stearic acid purchased vide Bill dated 15-4-95, was not entered in Stock Register which was updated to 30-3-95 only and this bill shown was not considered. In any case, non-entry in their private record does not call for penalty.
(b) Revenue has taken the grounds (Appeal Nos. E/1908/97 and E/840/01) :- (I) M/s. Deccan Industrial Products Pvt Ltd :
On examination of charges dropped by ld. Commissioner, it appears that the Commissioner had failed to appreciate and evaluate the material evidences on record to prove that the 68,345 No. of rubber rings were not manufactured at the factory of DIPPL, A few of them are as follows :-
(i) It was contended by M/s. DIPPL, that they stopped manufacture of Rubber Rings since 1986 onwards, and the old stock of it was sold as 'scrap' to one Mr. Abrar Ahmed. If that was true, it is not known as to what prevented the assessee from disposing 68,345 Nos. of Rubber Rings, if it were true that the Rubber Rings turned out to be non-commercial by virtue of their long storage. There is nothing on record to show that the goods were quite old visibly, and lost their properties. Contrary to the above claim, the department adduced evidence that the goods were packed in HDPE bags, and in gunny bags bearing the name "Deccan" and the word "Enterprises" blackened. Non-commercial goods (alleged 'scrap') do not require such type of sound packing and even if it was there, it will get torn due to storage. Hence, the ld. Commissioner ought not to have accepted the claim of the assessee.
(ii) There were no infrastructural facilities in the factory of M/s. DIPPL to produce the impugned goods. A few unusable dies, which do not contain the marks akin to those found on impugned on goods, were found. But it was proved on verification that the markings on dies/moulds and rubber rings are not one and the same and added to it one die with the marking of "DE" was found. From the above fact, it can be reasonably said that the impugned goods were not manufactured by M/s. DIPPL and due to identical products and inscriptions on the gunny bags and due to inter-relation of the units i.e., M/s. DIPPL and DE, they appear to have been manufactured by M/s. D.E. The ld. Commissioner ought to have appreciated the evidence on record.
(iii) The production of M/s. DE was stated to be 45% lower than the production ef M/s. DIPPL during Feb/March '95 by the assessee. It is not the case of department that the production of M/s. DE for Feb/March '95 was only transferred to M/s. DIPPL, if clearances of M/s. DE and production entries of RG 1 of M/s. DIPPL are scrutinized for the relevant period, it almost tallies. Hence, the ld. Commissioner ought to have not admitted this claim of the assessee.
(iv) The ld. Commissioner's finding that no cognizance could be taken with the affidavit of R.N. Jalan and under Writ Petition No. 27 of 1987 is not correct as certain relevant facts are involved in the petition/affidavit, and it cannot be discarded on the pretext of internal bickerings.
(v) The ld. Commissioner's finding at Para 19 of Page 17 to the effect that the onus is on the department to prove that raw materials issued in the past were fully utilized appears to be bad in law as the initial burden that excess stocks over and above book balance was appropriately discharged by department and the burden shifted to the assessee, while such is the "shift of burden" to the assessee, the ld. Commissioner unwillingly confirmed the position of "shifting of burden" by accepting the Bill No. S/003/95, dated 15-4-95 in respect of "stearic acid", and by confirming the charge partially. Dropping of charge on erroneous contention of "shift of burden" needs review.
And prayed (II) M/s. Deccan Enterprises Pvt Ltd. :
On examination of the above finding of ld. Commissioner, the following facts appear to have not been considered at all by ld. Commissioner resulting in arbitrary and erroneous decision.
(i) M/s. DE, had been a Central Excise licensee for sufficiently long period and all the Central Excise statutory compliances were supposed to be in their knowledge. While clearing the goods at abnormally low prices terming the finished excisable products as nothing but scrap, they have neither intimated the fact to Range, nor described them in Gate-Pass as 'scrap'. Pre-amended Rule 173C of Central Excise Rules '44 contemplates prior permission from competent authority in such cases. When such was the position, it was not known as what prevented the assessee from at least intimating the fact to the Range, leave alone seeking permission from competent authority. From the above, under the garb of liberalized invoice procedure (abolition of price list).
(ii) The liberalized invoice procedure introduced in 1994 lays down mandatory declarations in the statutory form itself that the particulars furnished in the invoice are correct and the price charged is true and correct commercial consideration. When the goods were termed as 'scrap' by their long storage, the assessee ought to have declared them as 'scrap' only, instead of Rubber rings and Rail pads to prove their bona fides. This act of assessee appeared to be 'misdeclaration' and 'misrepresentation' ab initio inviting special circumstances envisaged under proviso to Section 11A of Act. The ld. Commissioner had not appreciated the factual position at all.
(iii) There is no need to stress that the Range Officer ought to have examined the palpably low prices declared by assessee at the time of RT 12 assessments. This statutory duty of Range Officer appears to be secondary in view of absence of approved price lists and variations in prices are limited to few transactions and there appeared to be inadequate consignee particulars on the invoice. The ld. Commissioner appears to have not examined the primary statutory obligation of assesses to declare correctly and properly. By misdeclaring the description of product, the assessee had not discharged his onus, and proving the onus by department as termed by ld. Commissioner appears to be misconceived.
(iv) Regarding proving the precedents and antecedents of Mr. Abrar Ahmed by the investigating officer, it is to be noted that at the preliminary stage of investigation only the fact of fictitiousness of name (Abrar Ahmed) came to light, as is evident from the deposition dated 8-6-95 of Shri O.P. Jalan, Asst. Administrator Shri O.P. Chamaria, Finance Manager and S.K. Mishra, Commercial Manager (dated 26-9-95) who all confirmed that the whereabouts of Mr. Abrar Ahmed was not known to them, and there had been no Commercial transactions with him except the above. Quite contrary to the above statement, the sub-ledger of sundry debtors of Deccan Enterprises Pvt. Ltd., for the month of Jan '95 shows a debit balance of Rs. 7,014.56 confirming the extending of credit facility to Mr. Abrar Ahmed as a favoured buyer, These two contradictory facts abundantly make it clear that Mr. Abrar Ahmed was non-existent entity, a frontal agency to carry out the designs of M/s. DE and DIPPL, when such were the facts, investigation even if carried out" by the investigating officers would have been a futile exercise and groping in the dark. Hence, the ld. Commissioner's finding fault on this count also appears erroneous.
(v) The contention of ld. Commissioner that "there was no evidence to prove that it was not a scrap" appears to be bad in law, as such an evidence is not required to be proved by department in view of the fact there had been abundant availability of positive evidence that the goods are finished goods accounted for in statutory accounts. Mere long storage of goods does not turn them into non-commercial goods, eventually terming them as "scrap". Even if admitted for argument sake, the burden of proof squarely rests with the person claiming as such. There had been nothing on record to show that such burden of proof was discharged by M/s. DE. Hence, the ld. Commissioner appears to have misinterpreted the burden of proof and given an erroneous finding.
6. We have heard the ld. Consultant for DIPPL and have perused the affidavit filed by Shri O.P. Jalan, Managing Director of M/s. DE confirming the oral submissions made by him and have heard the ld. DR for Revenue. After considering the submissions, we take up :-
(a) Appeal No. E/317/97 and find :-
(i) DIPPL is a declarant unit since 1994 enjoying the benefit of SSI exemption under Notification No. 1/93, dated 28-2-93. They are not under the excise purview, and are not required to maintain any statutory records prescribed under Central Excise Rules. In respect of 12,200 Kgs of Rubber compound sheets valued at Rs. 5,11,394/-being a declarant unit, no offence can be committed, under Rule 226 of the Central Excise Rules, 1944, even if the same were not entered into RG 1 register, That the material had not reached the stage of entry into the RG 1 register and it is only after completion of Quality Control Checks approval and packing that the same would he entered has not been controverted. In any event, there could not have been any question of any intention to remove the goods in contravention of the Central Excise Rules inasmuch as the subject goods, viz., Rubber Compound Sheets are assessable to NIL rate of duty under Tariff Item No. 4005.00. The subject goods were manufactured by the Company solely for the purpose of export and were never intended for clearance for home consumption and in fact, they have been exported. In view of these facts, the liability for confiscation under Rule 173Q read with 226 of the Rules, regarding failure to account for 12,200 Kgs. of Rubber Compound Sheets in RG-1 register with intend to remove the same unaccounted is devoid of any merits, the order of confiscation and penalty consequently is set aside. In view of the above, we do not go into the plea of no liability of confiscation of provisional released goods.
(ii) Similarly, in respect of Stearic Acid a new material, it is on record that it was purchased on 17-5-95 vide Bill No. 003/95 dated 15-4-95 of M/s. Bajaj Brothers and was not entered in the Stock Register, as the Stock Register was updated up to 31-3-95. Since the unit is a declarant unit there was no need to maintain records in the prescribed new material proforma, etc., under Rule 226, therefore liability arrived at under Rule 226, violation, is not upheld and is set aside. In view of the same, liability under Rules 173Q and 226 not being upheld, the fines and penalties imposed are set aside and appeal is to be allowed.
(b) Appeal Nos. E/840/01 and E/1908/97 filed by Revenue. We find :-
(i) The Department filed an appeal with the Tribunal on 20-8-97 against the aforesaid order mentioned above viz., O-in-O No. 62/96, dated 6-11-96. In the said appeal the Department prayed as mentioned below :-
"In view of the foregoing, the Hon'ble Tribunal is prayed for the correct determination of the following points arising out of the said order :-
(a) Whether, after taking into consideration the facts stated above read with facts given in the show cause notice, the said order of the Commissioner is legally correct and proper order :-
(b) Whether by an order passed under Section 35C of the Act, the Tribunal should set aside the order passed by the Commissioner and should confirm the demand of the Central Excise Duty in full as mentioned in the show cause notice and impose an appropriate amount of penalty taking into consideration the gravity of the offence and duty evaded by the assessee or pass such other orders as may be deemed fit."
Subsequently, the Department, in terms of Section 35B(1) of the Central Excise Act, 1944, filed another Appeal to the Appellate Tribunal on 17-8-2001 and prayed that :
"In view of the foregoing, the Hon'ble Tribunal is prayed for the correct determination of the following points arising out of the said order -
(a) Whether, after taking into consideration the facts stated above read with facts given in the Show Cause Notice the said order of the Commissioner is legally correct and proper order.
(b) Whether by an order passed under Section 35C of the Act, the Tribunal should set aside the order passed by the Commissioner and should confirm the demand of the Central Excise duty in full as mentioned in the Show Cause Notice and impose an appropriate amount of penalty taking into consideration, the gravity of the offence and duty evaded by the assessee or pass such orders as may be deemed fit."
It may be pointed that the earlier appeal filed on 20-8-97 was in respect of M/s. DIPPL, but in the subsequent appeal, they have included M/s. DE and demanded differential duty of Rs. 10,34,619/-. The Department, in their Appeal dated 20-8-97, did not quantify any demand, but merely and vaguely requested that the Commissioner's Order be set aside and wanted that the Central Excise duty in full, as mentioned in the Show Cause Notice, should be confirmed and appropriate penalty be imposed. The only demand of duty in the show cause notice is Rs. 10,34,619/-against M/s. DE because the other charges pertain to confiscation and imposition of penalty.
(ii) In the second appeal filed against the same order by the Department on 17-8-2001, the prayer is also vague and no quantification was shown and is in-fact a repetition of what has been stated in the first appeal. In respect of the second appeal, on the same subject, No. E/840/2001 filed on 17-8-2001, there is no Board's Order for review and the Commissioner has requested on 17-8-2001 in the form of an appeal to CEGAT for inclusion of this appeal as part of the Appeal No. E/1908/97. In Letter No. C. No.V/R/CEGAT/115/97-Trib-1, dated 17-8-2001, the Department has referred to a letter dated 17-7-2001 wherein it had requested that a modification application along with Condonation of Delay petition and affidavit was called for to include M/s. DE, in the Appeal No. E/1908/97 filed against M/s. DIPPL. However, the CEGAT, vide Misc. Order No. 59/2002 in Appeal No. E/COD/202/01, E/840/2001, dated, 7-2-2002 has stated that :-
"Shri Thomas appearing for the Revenue submitted that main appeal No. 1908/97 against the same impugned order has been filed in time. In view of this position, he requested to condone the delay in filing the supplementary appeal. Considered. Delay is condoned and matter is linked with 1908/97 and posted together on 21-2-2002. Registry is directed to issue notice."
(iii) As regards demand of duty of Rs. 10,34,619/-, it is evident from the records, the rings were admittedly manufactured for meeting the specific requirements of various customers, the major customer being M/s. Hyderabad Industries Ltd. whose Vice President, Shri R. Khemka was the estranged brother of the DE's Managing Director. The findings of the Adjudicator on this demand as extracted in Para 4(b) herein, leads us to conclude that lacunae in investigation, cannot be filled by interpretation, or arguments as is being urged in the appeal before us. The adjudicator has concluded, "it raises dust but gathers no storm if may raise doubts but not clinch the issue". We cannot upset this conclusion on the grounds taken in Revenue's appeals and conclude a duty liability being made out.
(iv) As regards the 68,345 Rubber Rings, the Revenue appeal has taken the grounds that there was no infrastructure at DIPPL to produce the goods. This is in direct conflict with Para 21 of the SCN which states :-
"21. From the foregoing it also appears that DIPPL entered a total quantity of 2,83,296 Nos. of Rubber Rings and 9,045 Nos. of Rail Pads in their RG-1 register as their own production which is said to have been cleared by DE to Mr. Abrar Ahmed....."
When we find that appeals have been filed against the proposals in the Show Cause Notice, we cannot accept the same. Moreover, why DIPPL should enter it in RG-1 register, to show as their production and then export the same? As regards the liability for non-entry in RG-1, by DIPPL, we find no reasons to attest the same. They could have exported it straight away after having shown as cleared to Mr. Abrar Ahmed or otherwise. We find no reasons therefor to upset the order of the adjudicator.
7. In view of our finding, Appeal No. E/317/97 is allowed. Appeal Nos. E/1908/97 and E/840/2001 are dismissed.