Customs, Excise and Gold Tribunal - Calcutta
A.K. Engg. Co. vs Commissioner Of Central Excise, ... on 14 January, 2002
Equivalent citations: 2002(141)ELT449(TRI-KOLKATA)
ORDER Archana Wadhwa, Member (J)
1. After hearing both the sides duly represented by Dr. Samir Chakraborty, ld. Adv. and Shri T.K. Kar, ld. SDR, the demand of duty of Rs. 26,73,583/- (rupees twenty six lakhs seventy three thousand five hundred eighty three) and of Rs. 20,590/- (rupees twenty thousands five hundred ninety) confirmed by the impugned order of the Commissioner was upheld. The penalty amount of Rs. 26,73,583/- (rupees twenty six lakhs seventy three thousand five hundred eighty three) was however reduced to Rs. 10,00,000/- (rupees ten lakhs) and the redemption fine in respect of the seized and confiscated goods was also reduced to Rs. 10,000/-. The interest confirmed under the provisions of Section 11AB was set aside. The above order was pronounced in the open court. Now we proceed to record the reasons for the above order.
2. The appellants are engaged in the manufacture of electric fans and during the period relevant for the present appeal, were availing the benefit of Notification No. 1/93-C.E., dt. 28-2-93 on the ground that the total clearance from their factory in a financial year was duly Rs. 30,00,000/- (rupees thirty lakhs). As such they were also not regd. with the central excise department and no statutory records/documents were being maintained by them. However, the appellants were filing annual declarations with their ju-risdictional Central Excise Asstt. Commissioner as per the provisions of Notification No. 13/92-C.E. (N.T.).
3. The central excise officers, on 14-2-98 intercepted one vehicle No. WBV-6801 transporting 192 numbers of electric fans under the challans and invoices issued by the appellant unit. Inasmuch as the goods were not covered by duty paying documents, the [officers] brought the goods to the factory premises of the appellant for further verification. 182 numbers of electric fans lying in the appellants' factory and ready for dispatch, without payment of duty were seized by the officers along with 192 electric fans intercepted during transit on the reasonable belief that the appellants had crossed the exemption limit of rupees thirty lakhs and were required to pay duty. Thereafter the appellants' factory premises were searched and a note book containing details of the clearance of the fans to various units was recovered from the appellants' factory premises. It was also noticed by the visiting officers that some of the fans manufactured by the appellant carried the brand name of the other persons and as such the small scale exemption was not available to them.
4. During post-seizure investigations the statements of various persons including the proprietor of the appellant company as also the Manager were recorded. In the said statement Shri S.P. Jaiswal, proprietor of the company admitted that no records for production, sale, removal, purchase of raw material in respect of the electric fans manufactured by them were being maintained. He also admitted that electric fans were being manufactured in the name of 'Zenson', 'Arun', 'Nikkon' and Total' and out of the said brand name, 'Nikkon' and 'Total' belonged to other persons. Recording the note book seized from his premises he stated that the same contained records of removal of finished electric fans from the appellants' factory during the period 14-12-95 to 31-8-96. It was also deposed that the said records were being maintained by Shri Birbal Roy under his instruction. The statement of Shri Birbal Roy corroborated the statement of Shri Jaiswal.
5. Scrutiny of the note book revealed that the same contained the date of removal, number of boxes (each containing 4 fans), number of fans and the vehicle number. In most of the cases vehicle number used for transportation of the said goods as reflected in the note book was found to be WBV-6801 i.e. the same vehicle which was intercepted by the officers during transit.
6. On the above basis show cause notices were issued to the appellants proposing confiscation of the seized electric fans and also demanded duty, after extending the benefit of Notification No. 1/93 to the appellants. In reply to the above show cause notice the appellant took a stand that the note book in question belonged to the Manager Shri Birbal Roy and the Transaction reflected therein were relatable to a separate business being carried by the said person. Shri Birbal Roy was also cross-examined by the appellant company during the course of adjudication. The appellant also took a stand that there is nothing in the said note book to reflect upon the fact that the same represented removal of complete electric fans and relied upon one of the answers given by Shri Birbal Roy that the entries are relatable to cover, rotor, stator and other items of fans, that he admitted that inasmuch as it was many months ago, his memory is not helping him.
7. The adjudicating authority however, did not find favour with the above explanation of the appellant and confirmed demand of duty and imposed penalty, as detailed above. The said order is impugned before us.
8. Dr. Samir Chakraborty, ld. Adv. appearing for the appellant virtually reiterated the same grounds which were put before the Commissioner. He submitted that the entire case of the Revenue is based upon the entries made in the said note book read with the statements of Shri Jaiswal, proprietor of the company and Shri Birbal Roy, Manager. He 'further submits that during the course of adjudication, when Shri Birbal Roy was examined he accepted the note book as belonging to him and reflecting upon the transaction made by him in his personal capacity. He submits that Shri Birbal Roy was also doing his business of trading in electric fans and the entries in the note book belonged to him. The same cannot be taken as reflecting clandestine removal of electric fans from the appellants' unit. However, on being questioned as to whether there is any documentary evidence to reflect that Shri Birbal Roy was doing business and actually did business in respect of 62,920 number of electric fans, as reflected in the note book, during the relevant period. Dr. Chakraborty replied in the negative. If Shri Birbal Roy apart from being the Manager of the said company was trading in the electric fans in question, as pleaded by the appellant, there would be documents to show the sale of such a huge number of electric fans to his various customers" or any other documents to reflect upon the said activity of Shri Birbal Roy. Nothing was produced before the adjudicating authority and the appellants have conceded their inability to do so before us also. As such we are of the view that the adjudicating authority has rightly rejected the appellants' contention that the note book in question belonged to Shri Birbal Roy.
9. A reading of the statements of the proprietor and the Manager Shri Birbal Roy clearly corroborate entries made in the said note book, which have been very effectively de-coded by the central excise department. It is seen that the said entries have been made in a very legible manner, reflecting the date of removal. Against the date of removals a particular number (for example 48) has been shown. The next serial number shows another number (for example 192) and there against the vehicle number has been mentioned. It has been found that the first number i.e. 48 reflects the number of boxes, which have been found to contain four fans and when multiplied by 4, the number of fans i.e. 192 has been given. These number of boxes and number of fans tally in each entry. It is also seen that the vehicle number WBV-6801 which was intercepted by the officers is the vehicle used for transportation of the fans as reflected in the said note book. The ld. Adv. has also railed to explain as to how the same vehicle was used by the appellants company and the Manager Shri Birbal Roy, if the entries related to the trading activities of Shri Birbal Roy. The repeated use of the same vehicle, which has been caught by the officers transporting the fans without duty, corroborates the Revenue's stand of clandestine removal of the goods by the appellants. The attempt made by the ld. Adv. by referring us to one of the answers given by Shri Jaiswal in his statements that in total about 1000 fans were manufactured with the brand name of others and balance 10,000 on their behalf, does not benefit the appellant inasmuch as the above figures were given by Shri Jaiswal on estimate basis. He has however, in his statement very clearly admitted that the entries in the note book reflecting the clandestine removal of electric fans. In these circumstances we do not find any justification for set-
ting aside the impugned order. Accordingly the duty of Rs. 26,73,583/- (rupees twenty six lakhs seventy three thousand five hundred eighty three) and of Rs. 20,590/-(rupees twenty thousand five hundred ninety) is confirmed. However, in the facts and circumstances of the case penalty was reduced to Rs. 10,00,000/-(rupees ten lakhs) and redemption fine to Rs. 10,000/- (rupees ten thousand). Inasmuch as the period pertains prior to the enactment of the provisions of Section 11AB, interest is waived.
10. Appeal is disposed of in above terms.