Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Tech Prints (I) Ltd on 15 December, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. E/680/01 (Arising out of Order-in-Original No. 001/YGP-6/2000 dated 17.1.2000 passed by Commissioner of Central Excise, Mumbai-III) For approval and signature: Mr. P.G. Chacko, Hon'ble Member (Judicial) Mr. B.S.V. Murthy, Hon'ble Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Commissioner of Central Excise, Thane-II Appellant Vs. Tech Prints (I) Ltd. Respondent Appearance: Shri H.B. Negi, Authorised Representative (SDR), for appellant None for respondent CORAM: Mr. P.G. Chacko, Hon'ble Member (Judicial) Mr. B.S.V. Murthy, Hon'ble Member (Technical) Date of Hearing: 15.12.2009 Date of Decision: 15.12.2009 ORDER NO................................. Per: P.G. Chacko, Member (J)
This appeal of the department is directed against the Commissioner's order wherein a major part of the demand of duty raised on the respondent (assessee) was dropped and only a small part of the demand of duty was confirmed against them along with corresponding penalties. We have examined the records and heard learned SDR. There is no representation for the respondent despite notice, nor any request of theirs for adjournment.
2. Officers of the department had visited the respondent's factory and conducted stock verification in the presence of Shri Kamal Makharia, director of the company and also panch-witnesses on 14.11.1998. Shortage of 3,40,879.65 L.mtrs. of processed manmade fabrics involving central excise duty of Rs.14,99,870/- was found upon such verification of stock vis-`-vis RG1 register. The findings of the investigating officers were recorded in a panchanama which was signed among others by the director of the company. Various documents recovered from the factory were mentioned in a list appended to the panchanama. A statement of one Shri G.S. Patel, accountant of the company, was recorded under Section 14 of the Central Excise Act, wherein he admitted that the aforesaid quantity of processed fabrics had been removed without accounting or payment of duty. On the basis of the investigative results, the department framed a case against the respondent of suppression of production and clandestine removal of the goods without payment of duty. The evidence gathered by the department included a statement dated 20.4.1999 of the director of the company. In a show-cause notice, the department demanded duty of Rs.14,99,870/- on 3,40,879.65 L.mtrs. of manmade fabrics found short in the factory on 14.11.1998. Grey fabrics measuring 7882 L.mtrs. seized from the factory on 14.11.1998 were proposed to be confiscated under Rule 173Q of the Central Excise Rules, 1944. Unaccounted grey fabrics measuring 73,368.85 L.mtrs. were also proposed to be confiscated likewise. Section 11AB of the Act was invoked for levy of interest on duty and Section 11AC of the Act for imposition of penalty on the respondent. A penalty was proposed on the director of the company under Rule 209A of the Central Excise Rules. All these proposals were contested by the party in their reply to the show-cause notice. After giving an opportunity of being heard, to the respondent, the learned Commissioner framed three issues for decision:-
(i) Whether central excise duty amounting to Rs.14,99,870/- is recoverable on 3,40,879.65 L.mtrs. of manmade fabrics which were allegedly found short on 14.11.1998;
(ii) Whether grey manmade fabrics measuring 7882 L.mtrs. and bearing duplicate lot numbers, seized from the factory on 14.11.1998, were liable to confiscation;
(iii) Whether grey fabrics measuring 73,368.5 L.mtrs. which were allegedly not accounted were liable to confiscation.
On the first issue, the learned Commissioner held that duty of excise was leviable on a quantity of 35,059.80 L.mtrs. of manmade fabrics only. Accordingly, the learned Commissioner confirmed demand of duty of Rs.1,54,263.12 against the respondent. The demand of duty on the rest of the manmade fabrics was dropped on the ground that the differential quantity of manmade fabrics were in fact available in the factory at various stages of manufacture prior to the dutiable finished goods stage. For recording this finding in favour of the assessee, the learned Commissioner relied on the statement dated 20.4.1999 of the director, coupled with the reconciliation statement produced by him. The said statement was prepared on the basis of the entries made in the lot registers covering various periods from 23.3.1997 to 12.11.1998. The learned Commissioner found that the explanation offered by the director of the company on 20.4.1999 was not even attempted to be discredited. The learned Commissioner found no reason why this explanation should be rejected. It was also found that the delivery challans submitted by the respondent subsequently to the department had not been verified for their genuineness. In the absence of evidence indicating that the delivery challans were not genuine, the learned Commissioner accepted them to be genuine and accordingly the allegation of clandestine removal of a major part of the manmade fabrics was rejected. In the result, demand of duty to the extent of over Rs.13 lakhs came to be dropped and, of course, the corresponding proposal for penalty was also dropped. The present appeal of the Revenue is directed against this part of the Commissioner's order.
3. Learned SDR has reiterated the grounds of this appeal. He has put these grounds in a nutshell as under:-
a) The panchnama dated 14.11.1998 which recorded the stock of finished goods (manmade fabrics) was never contested by the respondent.
b) The director along with the accountant of the company was present throughout the stock verification conducted by the departmental officers on 14.11.1998 and they could have pointed out to the officers any aspect of the stock of the materials which the director, later on, mentioned in his statement dated 20.4.1999, which could be considered only to be an afterthought.
We have also perused the grounds of this appeal and we find that, by and large, the appellant seeks to discredit the oral evidence given by the director of the company on 20.4.1999. Tacitly, such evidence, if found reliable, would support the dropping of a major part of the demand of duty raised in the show-cause notice. We have examined this aspect in detail and we find that the learned Commissioner stated cogent reasons for attaching evidentiary value to the oral evidence contained in the director's statement dated 20.4.1999. As rightly pointed out by the learned Commissioner, the officer of central excise, who recorded this statement under Section 14 of the Central Excise Act, could have queried the witness appropriately with a view to expose his afterthought, if any. This was not done in this case. The learned Commissioner found reconciliation between the statements given by the witness on 20.4.1999 and the relevant entries in the lot registers. The different stages of production were apparently identifiable with reference to lot numbers, an aspect which reflected itself in the reconciliation statement submitted by the director. This documentary evidence was perfectly corroborated by the statement of the witness. No attempt was made by the investigating officer to confront the witness with any adverse material whether contained in the panchnama or not. On the whole, we have found acceptance with the clear view taken by the Commissioner on the basis of the evidence available on record. The learned SDR has emphatically submitted that the panchnama was never contested. It is true that the panchnama was also signed by the director of the company. At the same time, we find that all the relevant lot registers, on the basis of which the director subsequently prepared his reconciliation statement, were also among the documents seized by the officers and noted in the panchnama. This aspect is quite significant in the nature of this case. The reconciliation statement based on the very lot registers seized by the officers and mentioned in the panchnama would tacitly amount to a contest to whatever adverse findings were recorded in the panchnama. In other words, the argument that the panchnama has gone uncontested, is not acceptable in toto.
4. In the result, the dropping of demand of duty based on clear evidence gathered by the investigating officers and assessed by the adjudicating authority has only to be sustained. It is also pertinent to note that there is no reference to the penal liability, if any, of the respondent in the grounds of the appeal.
5. In the result, the appeal is dismissed.
(Pronounced in Court) (B.S.V. Murthy) Member (Technical) (P.G. Chacko) Member (Judicial) tvu ??
??
??
??
1 8