JUDGMENT
Archana Wadhwa, Member (J)
1. After hearing Shri M.N. Saiyed, learned Consultant appearing for the appellants and Dr. Manoj Kumar Rajak, learned SDR for the Revenue, we find that the appellant was engaged in the manufacture of MMF (P) falling under Chapter 54 of Central Excise Tariff Act, 1985. Their factory was visited by the Central Excise Officers on 12.8.98, who conducted various checks and verifications. The officers found 83 grey challans, which when tallied with the relevant lot register, were not found to be entered therein. On being queried, Shri Jayeshbhai Ramchandra Gandhi, Director of the appellant, in his statement admitted that the said grey fabrics were processed by them without entering in any record and the finished goods were sold in the open market without central excise invoice and without payment of duty.
2. In view of the above, the proceedings were initiated against the appellants by way of issuance of show cause notice dated 7.2.2002 proposing confirmation of a demand of duty of Rs. 12,57,889/-. The said show cause notice culminated into an order passed by the Additional Commissioner confirming duty, as proposed and imposing personal penalty of identical amount on the manufacturing unit and penalty of Rs. 3 lakhs on the Director. On appeal against the above order, the Commissioner (Appeals) upheld the same. Hence the present appeals.
3. Admittedly, 83 grey challans recovered during the courses of visit of the officers do not stand entered in the statutory records. There is no explanation coming forth from the appellant in respect of the said grey challans. On the contrary, the Director in his various statements recorded during the course of investigation has admitted that the grey fabrics recovered under the said challans were received by them, processed and cleared without payment of duty and without making any entries in the statutory records. Inasmuch as the goods were sold in the open market against cash, the Department cannot be expected to collect further corroborative evidence, as pleaded by the learned Consultant. There is sufficient material on record to reflect upon the appellant’s activities of clandestine nature. As such, we find that the duty confirmation against the appellant is sustainable and penalty imposable. We accordingly, confirm the duty of Rs. 12,57,889/-.
4. However, keeping in view the facts of the case, penalty is reduced to Rs. 8 lakhs on M/s Suryanarayan Silk Mills Pvt. Ltd. and Rs. 50,000/- on the Director, Shri Jayeshbhai Ramchandra Gandhi. But for the above modification in the quantum of penalties as indicated above, the appeals are otherwise rejected.
(Pronounced in the open Court on 11.1.2008)