ORDER
V.K. Jain, Member (T)
1. The instant appeal is directed against the Order No. 330/JSR/C.EX/APPEAL/2003 dated 14.11.2003 passed by the Commissioner (Appeals), Customs and Central Excise, Patna. The brief facts of the case are as follows:-
The appellant company is engaged in the manufacture and clearance of welding Electrodes falling under Chapter 8311.00 of the Central Excise Tariff, 1985. During the course of transit checking on road, the Preventive Officers of Central Excise Division-I, intercepted a truck in the night of 3.6.2000/4.6.2000 and found that 398 cases of Electrodes valued at Rs. 6,95,912.16 (Rupees six lakh ninety-five thousand nine hundred and twelve and paise sixteen), were transported under the cover of extra copy of Invoice Nos. 139 & 140 dated 3.6.2000. The driver of the truck could not produce duplicate copy of the aforesaid invoices and therefore, the Preventive Officers visited the appellants’ factory and conducted investigation which revealed that the RG-I Register was written upto 30.5.2000 only and figures for production and clearances for 31.5.2000 to 3.6.2000 were not written therein. It was alleged that the duplicate copy of the invoices was not given to the driver for transportation of the goods in question. However, the same were handed over to the driver during the course of investigation. No entry regarding removal of excisable goods was made in the RG-I register. The Central Excise Officers seized the goods and the truck in question after observing necessary seizure formalities. After investigation of the goods, the show cause notice was issued to the appellant company and the lower authority confiscated the seized goods valued at Rs. 6,95,912.16 (Rupees six lakh ninety-five thousand nine hundred and twelve and paise sixteen) and imposed a redemption fine of Rs. 5,99,924.29 (Rupees five lakh ninety-nine thousand nine hundred and twenty-four and paise twenty-nine) equal to the value of the goods minus duty paid in lieu of confiscation. However, since the truck and the goods in question had already been provisionally released as per procedure, he has imposed a Redemption Fine of Rs. 1.00 lakh (Rupees one lakh) against confiscation of the truck in question. He has also imposed a penalty of Rs. 1.00 lakh (Rupees one lakh) on the appellant company. The Commissioner (Appeals) rejected the appeal of the appellants herein against the Order passed by the lower authority. Hence this appeal filed by the appellant company before this Tribunal.
2. Heard Shri B.N. Chattopadhyay, learned Consultant on the appeal filed by the appellant company. He submits that the consignment of Electrodes covered by two Central Excise Invoices bearing Nos. 139 & 140 dated 3.6.2000, were sent to M/s. Punj Lloyd Ltd., Daval Power Project, Phase-I, Taluka Guhagar. Ratnagiri. He submits that the truck, in which these consignments were loaded, was detained and taken to the Divisional Office of Central Excise. Thereafter, the Central Excise Officers visited the factory in the early hours of 4.6.2000. The duplicate copy of the invoices was not found in the factory of the officers. The Night Shift Plant Supervisor in his statement dated 4.6.2000 before the Central Excise Officers, stated that he had handed over two envelopes to the driver of the lorry. The Managing Director of the appellant company met the Officers in the factory. He had suggested for joint inspection of the lorry to find out whether the envelopes as stated by the Supervisor, were available in the lorry or not. The said envelopes contained duplicate copy of the invoices. He also submits that the Officers had taken stock of the finished goods lying in the factory and they were found to be in order. The Production Report and clearance of the goods were also considered while determining the stock of the factory inasmuch as RG-I was not written on and from 31.5.2000. He also submits that the duplicate copy of the invoices was found in the driver’s cabin of the lorry by the Central Excise Officers themselves. He submits that the lorry was taken to the Office of the Central Excise Officers and the lorry was under their custody and control and the envelopes were brought from the owner of the lorry and those were kept in the cabin of the lorry. This matter was also not verified with the owner of the lorry. He, further, submits that as per C.B.E.C.’s Manual and Supplementary Instructions in Chapter 4 on Invoice System, it has been stated that the assessee may make more than three copies for his other requirements. But such copies shall be prominently marked “NOT FOR CENVAT PURPOSES”. He submits that the duplicate copies and the extra copies, which are found by the Officers, are exactly similar to each other. He also submits that the Order passed by the Commissioner (Appeals) be set aside and their appeal be allowed.
3. Heard Shri A. Hore, learned J.D.R. for the Revenue, who reiterates the findings of the Commissioner (Appeals). He also submits that the Commissioner (Appeals) has observed in his Order that non-production of duplicate copy of the impugned invoices and non-making of entries regarding production and clearance in the RG-I register for a considerable period of time, are enough materials on record to show that the appellant company herein has removed the goods without following the statutory provisions and in a clandestine manner with intent to evade payment of duty and when mens rea is proved in the said activity of the appellant company herein, penalty is also imposable, apart from confiscation of goods under Rule 173Q of the Central Excise Rules, 1944. Shri Hore, therefore, submits that the Order of the Commissioner (Appeals) be sustained and the appeal filed by the appellant company be rejected.
4. I have heard both sides. 1 find that/a manufacturer can prepare extra invoices as provided in the Central Excise Manual and Supplementary Instructions. I find that the duplicate copies and the extra copies are exactly identical. The appellant company has submitted that the stock-taking was done by the Central Excise Officers. But the Officers could not detect any discrepancy as regards the production and clearance after physical verfication, though the RG-I was not written. This is not contested by the Revenue at any stage. Further, the theory that the duplicate copies were put up by the owner of the lorry in the driver’s cabin appears to be illogical, particularly when the lorry was in the custody and control of the Central Excise Officers in the Divisional Office. The only evidence on which the Departmental case is based is that the duplicate copy of the invoices was found with the driver. However, I find that these invoices were found in the driver’s cabin by the Central Excise Officers themselves. This itself is not sufficient to prove that there was any clandestine removal of the goods with intent to evade payment of duty. The Night-Shift Plant Supervisor in his statement had stated before the Central Excise Officers to the effect that he had handed over two envelopes to the driver of the lorry in question. However, this fact has not been contested at any stage by the Officers. When the Central Excise Officers had visited the factory, it was also their duty to see whether the duplicate copy of the invoices was available with the appellant company or not. Nowhere it has been stated that the duplicate copies were available with the appellant company. The two envelopes had been found in the driver’s cabin of the Central Excise Officers themselves. I find it difficult to agree with the findings of the Commissioner (Appeals) that the packet containing duplicate copy of the impugned invoices was handed over to the driver, when the matter was briefed by him to the owner of the truck, particularly when the truck was under the control and custody of the Central Excise Officers in the Divisional Office. I find that in the Order-in-Original, no penalty has been imposed on the truck-owner. Had this been the case, penalty should have been imposed on the truck-owner should have been imposed the penalty. I do not find any evidence brought by the Department to show that the appellant company had removed the goods in a clandestine manner with intent to evade payment of duty. This obligation is cast on the Revenue and the Revenue has not discharged it. When the Departmental Officers had conducted the stock-taking of the goods immediately after interception of the truck in question, they had not found any excess or shortage. In view of this, I am unable to agree with the conclusion reached by the Commissioner (Appeals) that there was any clandestine removal made by the appellant company with intent to evade payment of duty. I find that the lower authority has confiscated the goods valued at Rs. 6,95,912.16 (Rupees six lakh ninety-five thousand nine hundred and twelve and paise sixteen), and since the goods in question were provisionally released, he has imposed a redemption fine of Rs. 5,99,924.29 (Rupees five lakh ninety-nine thousand nine hundred and twenty-four and paise twenty-nine) equal to the value of the goods minus duty paid in lieu of confiscation. The truck in question was also confiscated. Since the said truck was released along with the goods as per the procedure, he has also imposed a Redemption Fine of Rs. 1.00 lakh (Rupees one lakh) in lieu of confiscation. This Order has been confirmed by the Commissioner (Appeals). When the goods and the truck are not available for confiscation, the imposition of redemption fine is not correct. In view of my findings above I set aside the Order passed by the Commissioner (Appeals) and allow the appeal filed by the appellant company.