Customs, Excise and Gold Tribunal - Delhi
Vimal Moulders (India) Ltd. vs Cce on 9 September, 2004
Equivalent citations: 2005(98)ECC470
ORDER P.S. Bajaj, Member (J)
1. This appeal has been filed by the appellants against the impugned order-in-appeal vide which the Commissioner (Appeals) has modified the order-in-original by dropping the duty demand of Rs. 4,84,567 for the period 1996-97 and 1997-98 upto 31.3.1998 and confirming the rest of the demand.
2. The learned counsel has contended that there is no tangible evidence on the record to establish the shortage of the raw material involving modvat credit of Rs. 1,94,125 and also clandestine removal of the goods involving duty of Rs. 2,52,038 and that the impugned order has been passed on assumptions and presumptions and as such deserves to be set aside. He has also relied upon the ratio of the law laid down by the Tribunal in the case of Durga Trading Co. and Ors. v. CCE, Lucknow, 2003 (59) RLT 273 (CEGAT), which had been confirmed by the Apex Court as reported in 2003 (59) RLT F-6. Regarding imposition of the redemption fine in respect of the excess goods found, the learned counsel has contended that, in fact, there was no excess unaccounted goods in the factory. The so-called unaccounted excess goods were the two days' production i.e. 27 & 28.1.1999 and those were to be entered in the statutory record on the following days of their respective productions as the factory of the appellants was working round the clock.
3. On the other hand, the learned JDR, has reiterated the correctness of the impugned order.
4. I have heard both sides and gone through the record. From the record, it is evident that the appellants are engaged in the manufacture of plastic moulded items for TV, Cooler, Washing Machine, Furniture and parts thereof. Their factory premises was visited on 28.1.1999 by the Officers who carried the physical checking of the raw material and the finished goods lying there. Certain finished goods were found excess in the factory at that time, as detailed in Annexure 'B' appended to the Panchnama prepared on 28.1.1999. The plea of the appellants is that, they were running the factory in those days round the clock and this so-called excess or unaccounted goods were the production of 27.1.1999 which were to be entered by them in their statutory record on the following day i.e. 28.1.1999. But since on that day, the Officers came in the factory premises and seized the records, the entry could not be made. The version of the appellants, in my view, does not stand falsified from any material on the record. In the Panchnama it has been nowhere mentioned that these excess or unaccounted goods found in the factory were of any prior period. Even in the annexure 'B' to the Panchnama, wherein the details of these goods have been given, no such fact had been recorded. Therefore, under these circumstances, it could not be said that these goods were intentionally, with a view to evade payment of duty, were kept unaccounted or excess in the factory by the appellants. Therefore, the seizure and confiscation of these goods could not be legally made. The redemption fine imposed in respect of these goods is set aside.
5. The details of the raw material, allegedly found short in the factory premises on 28.1.1999 - the date of the visit of the Officer, have been given in the Annexure 'C' appended to the Panchnama. The discrepancies/differences in the raw material lying as such in the stock and what was entered in the RG-23-A, Part-I, was explained by Shri Satish Batra, Director of the appellants' company, at the spot. He disclosed that the material lying at various stages of the production of the finished goods was not taken into account while carrying out the physical checking. There is nothing on the record to suggest if any attempt was made to ascertain the details of the raw material lying at different stages of the manufacture of the final products in the factory premises. Therefore, it is difficult to hold that there was any proper verification/checking of the raw material lying in the factory premises of the appellants. The plea of the appellants that if that stock was taken into account, no shortage could have been recorded in the Panchnama, deserves to be given due weight. Moreover, there is no evidence on the record to prove that the appellants in a clandestine manner removed or cleared the raw material as such in the market, as none from the market has come forward to claim purchase of raw material as such from the appellants. Therefore, the allegations of shortage of the raw material involving modvat credit of Rs. 1,94,125 attributed to the appellants, does not stand established.
6. Then comes the duty confirmation regarding the finished goods found short in the factory involving duty of Rs. 2,52,038. There is no direct or even circumstantial evidence brought on the record to prove the clandestine removal of the finished goods by the appellants. From the record it is rather evident that the duty demand of Rs. 4,84,567, raised on these very allegations against the appellants for the period 1996-97, 1997-98 up 31.3.1998 had been even dropped by the Commissioner (Appeals) on the ground that there was no tangible evidence to substantiate the charge of clandestine removal of the goods during that period by the appellants. It is also not evident/clear from the show cause notice that during which period the alleged short found finished goods were cleared by the appellants in a clandestine manner from the factory. No incriminating document showing the clearance of the goods from their factory premises. The ocular testimony of Shri Bhura Singh, Excise Clerk of the appellants, regarding the clandestine removal of the goods by the appellants, did not carry much legal value or weight for want of corroboration from any other source. As observed above, the Commissioner (Appeals) himself for want of evidence has dropped the duty demand for the substantial period, detailed above, which was raised against the appellants on these very allegations of clandestine removal of the finished goods.
7. It is well settled, as even observed by the Tribunal in the case of Durga Trading Co. and Ors. v. CCE, Lucknow, supra, that the charge of clandestine removal of the goods against the assessee has to be proved by the Department by producing the cogent, convincing and tangible evidence. The duty demand on that charge cannot be based on assumptions and presumptions. The Tribunal in that case followed the ratio of the law laid down by the Apex Court in the case of Oudh Sugar Mills Ltd. v. UOI, 1978 (2) ELT (J-172).
8. Since the charge of clandestine removal of the finished goods, does not stand substantiated against the appellants, the duty confirmed and the penalty imposed under the said charge, cannot be sustained and the same is set aside.
9. In view of the discussion made above, the impugned order of the Commissioner (Appeals) is set aside in toto and the appeal of the appellants is allowed with consequential relief, if any, permissible under the law.