Customs, Excise and Gold Tribunal - Mumbai
M/S Godavari Steel (P) Ltd. vs Commissioner Of Central Excise And ... on 24 July, 2001
ORDER G.N. Srinivasan, Member (J)
1. This appeal has been field by the appellants against the decision of the Commissioner of Cental Excise & Customs, Aurangabad, whereunder he has confirmed the show cause notice by demanding duty of Rs.39,17,983/- and imposed a penalty of Rs.39,17,983/- under section 11AC of the Cental Excise Act. Show cause notice dated 6.1.1998 has been issued against the assessee who was manufacturing M.S. Round Bars, on the following grounds:-
that the assessee had not maintained statutory records properly, not followed the Central Excise procedure properly, not determined the duty thereon by suppressing the production, and clandestinely removing the goods.
2. It is contended before us by the learned counsel for the appellants that the production which has been assumed by the adjudicating authority at a very high level namely nearly 200% not in a legal and proper manner. Learned counsel further states that he reliance has been placed on the hand-books prepared by the workers by the adjudicating authority in passing the impugned order which is deprecated by the Tribunal's in decisions rendered in certain cases. The learned counsel further submits that the approach of the adjudicating authority in deciding the case is not proper.
3. He also cites the following cases namely Shakti Chemical Industries vs. CCE 1995 (76) ELT 410 and Gurpreet Rubber Industries vs. CCE 1996 (82) ELT 347.
4. Learned DR, Shri Karnal Singh arguing for the department, stated that the impugned order has been correctly passed by the adjudicating authority. He emphasized the facts before us that the hand-books written by the worker has been duly signed by the Managing Director, therefore the thrust of the case propounded by the learned counsel on behalf on the appellants lacks force. He states further that the facts in the judgments cited by the learned counsel are entirely different inasmuch as in the instant case the workers hand-books has been duly signed by the Managing Director thereby accepted misdemeanors committed by the assessee. He also took us through the statements rendered by the workers and other persons. He emphasizes the fact that the RGI register has not been properly recorded in consonance with the actual production. He however emphasizes the fact that for the two assessment years the total production has been fixed at 3,000. For the years 1994-95 the excess production has been fixed at 1000. The actual production was reported to be 500 as against which the actual production has been fixed under the order at 1300 of the alleged figures.
5. We have considered the rival submissions. At the outset we can state that the thrust of the case of the assessee is that there cannot be reliance on the hand-book maintained byte worker as ti is not reflected the true state affairs. Reliance has been made strongly on the observations of the Tribunal in its judgment in the case of Gurpreet Rubber Industries vs. CCE 1996 (82) ELT 347. In that case the worker has prepared certain papers and reflected the production. On the facts before it the Tribunal has come to one particular view. But in this case the hand-book prepared byte worker has been signed by the Managing Director which has ben emphasized by the DR during his argument. This changes the complication of the entire case. This fact distinguishes the instant case from the case cited by the learned counsel. We therefore reject the arguments made by the learned counsel. During the reply stage learned counsel feebly mentioned about the assumptions and presumptions made by the lower authority which we have to reject as it is not part of the arguments made by him during the opening of the case. The order has been looked into by us carefully. In our view the order cannot be faulted inasmuch as the findings has been given on the basis f the statements recorded by persons. In fact in the statement given by Vasant Kashinath Pimpale the translation of which is produced it is mentioned as follows:-
"I have made three registers. Writing in it is mine. Register of Sr.No.19 are being made for bank and Excise. The figures are written in this registers are taken from daily production slip. Factory Supervisor Shri Shivaji Nale gives me a daily production slip and thereafter I verify this and then prepare stock that I have written in this register. Stock which I write in register. These procedure is like for example. On an one particular day 600 pieces had been made. Weight of one piece (of 6 mm) is 1.25 K as per this, that day production is No. of pieces x average weight of production 600x1.25 =750 Kgs. Considering burning loss that time of stocks are being written and do that nearly is 7% to upto 8% I want to tell about stock verification that at 5.00 p.m. to 6.00 p.m. I went to factory, there I verify the numbers of bars. Which is written on the black-board and ask to supervisor and do verify the numbers are written on black-board are whether correct or not. In general there is no mistake in it. It may be less or high. After this verification, discussed with our owner Shri Babulal and tell him that today so sos production has been manufactured. As per that, I do production-slip and thereafter makes RGI registers."
6.This reveals that before entering the RGI, discussion takes place with the Managing Director and only after his concurrence some figure is entered. That may not reflect the true production. The figure shown in the RGI is not correct one. The said statement, we are told, was not retracted. Therefore the thrust with which the impugned order has been made is correct according to us. After all, in a case of this type mathematical precision is very difficult to find, and only preponderance of probabilities of the case has to be looked into. We are therefore of the view that the duty confirmed in this case is correct.
7. As far as the penalty is concerned, the period in dispute is 1994-95. The provision relating to penalty imposed under section 11AC has come into statute book only on 28th September, 1996. Invocation of said power for imposition of penalty is clearly wrong in law because the instant case had taken place some time in 1994-95. We therefore set aside the penalty imposed on the appellant otherwise the order relating to confirmation of duty is confirmed. The appeal is disposed of partly allowing the same remitting penalty.
(Dictated in Court)