ORDER
Chittaranjan Satapathy, Member (T)
1. Heard both sides. The lower appellate authority has confirmed the duty demand, confiscation of the impugned goods and penalty, hence this appeal.
2. The original authority has determined duty demand of Rs. 61,315/- on 16,370 kgs. of excess Borax Penta which was found and seized from the appellants’ premises. On page 5 of the Order-in-Original it is recorded that the closing balance of Borax Penta as of 15.01.2003 was 26,130 kgs. The appellants submit that they received 42000 kgs. of impugned material under two bill of entries which were not recorded in the stock register. The learned advocate appearing for the appellants States that during 16.01.03 to 23.01.03 approximately 18520 kgs. of material was issued where as only 9260 kgs. were stated to have been issued under the impression that only one furnace was working. Taking such receipt and issue into consideration, there should have been a stock of 49,610 kgs of Borax Penta whereas only 42,500 kgs. have been found. In view of the above, the charge of the department that the appellants had excess Borax Penta than the balance recorded in the raw material stock register is not sustainable. Accordingly, I set aside the duty demand of Rs. 61,315/- and the confiscation of 16370 kgs. of Borax Penta.
3. The original authority has confirmed duty demand of Rs. 20,800/- in respect of one consignment on the ground that the Cenvat credit was taken without valid invoice. The learned advocate appearing for the appellants states that the relevant invoice was seized by the department and hence they were not able to produce the same at the time of adjudication. Hence, duty demand of Rs. 20,800/- confirmed in the impugned order is set aside and the matter is remanded to the lower appellate authority to decide the matter afresh after taking into account the relevant invoice which is stated to have been produced before him but not considered.
4. The original authority has confiscated 31,215 kgs of Ceramic Glazed Frit/Mixture finished goods on the ground that the same were not accounted for in RG 1 Stock Register. He has imposed a combined redemption fine of Rs. 1,75,000/-, in respect of the Borax Penta and these finished goods seized at the premises of the appellants, and has appropriated the amount from security as these goods were earlier released provisionally. In view of the non accountal of goods in the statutory records, I hold the confiscation to be valid. However, considering the entire facts of this case and as I have set aside confiscation of Borax Penta above, the redemption fine is reduced to Rs. 85,000/- The appellants are entitled to refund of the balance amount.
5. As regards confirmation of duty demand of Rs. 4,04,030/-, I find that this amount has been determined as duty on shortage of raw material of a quantity of 1,07,842 kgs. Regarding this issue, the advocate appearing for the appellants states that there is no evidence of clandestine removal of the material nor any documents in this regard have been found. He states that reliance has been placed in this regard on the statements of Shri Vivek Maheshwari, who merely confirmed the statement of Shri B.M. Patel. He further states that statement of Shri B.M. Patel categorically does not state anywhere that any raw material was removed from the factory. His statement merely indicates that the quantity of Borax Penta shown as issued in the raw material stock register might not have been used in the manufacture. I find that the statements are indicative of the fact that the appellants were not maintaining proper accounts for the issue of raw material. Shri B.M. Patel has also stated that he was recording the quantity of raw material issued on verbal instruction of the production supervisors and not on the basis of actual issue. The appellants are required to maintain under law proper records of goods on the basis of actual issue and production. If the appellants are not maintaining the prescribed records, they have to suffer the consequences of such non maintenance. However, I find that the lower appellate authority has not adequately dealt with this issue with reference to the statements and production apart from not taking into account excess finished goods not recorded in the RG 1 register. Hence as regards the confirmation of duty demand of Rs. 4,04,030/-, the impugned order is set aside and the matter is remanded to the lower appellate authority for fresh decision after taking into account the evidences on record and the excess finished goods found in the appellants premises. The appellants should also be given an adequate opportunity of hearing before passing a fresh order.
6. As regards the penalty amount, I find that a combined penalty of Rs. 4,86,145/- has been imposed on the appellants. Considering the fact that the main charges sustained on the appellants relate to non entry of 31,250 kgs. of finished goods and non maintenance of appropriate records for raw materials issued for production as well as shortage of the raw material, I reduce the penalty to Rs. 1,00,000/- which will meet the ends of justice.
7. Appeal is partly allowed and the matter is partly remanded to lower appellate authority for fresh decision in the above terms.
(Dictated and pronounced in Court)