ORDER
K.D. Mankar, Member (T)
1. The instant appeals are directed against the order-in-original passed by the Commissioner of Central Excise. M/s Darshan Processors, the appellants No. (1) are the processors of fabrics while Shri Balwantbhai K. Mashruwala, appellant No. 2 is the partner of the appellant No. (1) and Shri Haresh Kumar Kapadia appellant No. (3) is the excise clerk.
2. Heard both sides.
3. Brief facts are under:-
It had been alleged that the appellant No. (1), who is a processing unit, had indulged in the activities of clandestine removal of certain processed fabrics, without their accountal in the statutory records, without payment of duty due thereon and manipulating the grey fabric accounts, thereby clearing clandestinely the stock of processed fabrics and in the place of original grey fabrics, a fresh lot of grey fabrics was substantiated.
3.1 On the basis of a detailed stock taking undertaken by the visiting team of the Central Excise Officers and scrutiny of records in the factory as well as on the basis of investigation conducted in the godown, certain quantities of fabrics, including the fabrics in the semi finished stage were seized.
3.2 The semi-finished fabrics seized were later on permitted to be released against B11 bond, for processing and the same was processed thereafter and cleared on payment of duty.
3.3 So far as the stock of fully processed fabrics seized from the godown is concerned, it is alleged that, the said stock was admittedly received from the factory of appellant No. 1. The duty has been paid after seizure, though the owner did not approach for seeking provisional release.
3.4 Besides the stock of fully finished goods was also seized from the factory premises, on the ground that, the stock was not recorded in the statutory records. This was provisionally released and the duty was paid before effecting their clearances.
3.5 On detailed scrutiny of the grey register, it was alleged that, there had been a clandestine removal of fabrics made from the grey fabrics, recorded in the grey register, since the semi finished fabrics present in the factory could not be correlated with the fabrics recorded in the grey register. Further on going through the Kaccha Delivery Challans, it was revealed that, though certain quantities were shown as delivered, the same were not accounted anywhere in the statutory registers. Therefore allegation of evasion of duty on the quantities unaccounted for in the statutory record was made.
3.6 Lastly it was alleged that, though certain invoices were issued, no duty was debited in the statutory records. (PLA)
4 The Commissioner examined the detailed submission made by the appellants and passed the impugned order against the appellants and confirmed duty, redemption fine, and imposed penalty. In the instant appeals the order of the Commissioner is under challenge.
5 I have gone through the records and considered the rival submissions. The duties demanded on shortages is disputed on the ground that there is no corroborative evidence. This defence is hardly convincing since the conclusions of shortages are drawn on the basis of documents maintained by the appellants in their factory. No worth while defence is on record to counter the fact that the records contained any error and therefore had to be discarded.
6. So far as challenge to seizure of the goods in the factory is concerned, I note that, since the finished goods were not accounted for in the statutory register, these were correctly held liable to confiscation under Rule 173Q. It is not necessary to prove that the appellants were in the process of clandestine removal or had made any preparatory arrangements in that direction. It has also come on record that, the appellants had effected the clandestine clearance of finished goods made from the grey fabrics, figuring in the grey register, as entirely different lots of semi finished fabrics were found in the factory, which could not be correlated with any grey stock figuring in the Grey register.
7 In the circumstances, I find no infirmity in the impugned order and accordingly, the same is affirmed and the appeals are rejected.
(Pronounced in Open Court on 31/3/04)