SHREYANS SPINNING MILLS Vs. COMMR. OF C. EX.

JUDGEMENT

(1.) THE appellants are engaged in the manufacture of textile yarns. Officers of Central Excise visited their factory at 10.00 AM on 3 -12 -98 and, on scrutiny of records, found that the appellants had issued two invoices No. 835 and No. 836 on 2 -12 -98, in which Central excise duty was shown to have been debited in the PLA and RG 23A, Part -II. The invoices were found to have been issued to M/s. Ambika Traders, Ludhiana. The goods cleared under the invoices were seized from the premises of M/s. Ambika Traders. The stock of final products available in the appellants' factory was also verified, whereupon the officers found a shortage of 20351 Kgs. of cotton yarn and 6840 Kgs. of polyester yarn. A statement of Sh. S. Tiwari, authorised signatory of the appellants, was recorded, wherein he answered the queries made by the officers. On the basis of the results of the investigation, the department issued a show -cause notice to the appellants as well as to M/s. Ambika Traders. The notice was contested. The jurisdictional Assistant Commissioner passed order : -

(2.) HEARD both sides. Ld. Advocate, Sh. K.K. Anand submits that the two invoices under reference were issued at 5.20 P.M. and 5.30 P.M. on 2 -12 -98 by the concerned employee, who, immediately thereafter, left the factory to catch the staff bus which was scheduled to depart at 5.30 P.M. In that hurry, he could not make the necessary entries relating to payment of duty on the goods in PLA and RG 23 A, Part -II. Before the entries could be made on the next day, the officers visited the factory and noted the omission. Ld. JDR, on the other hand, submits that the factory had reopened at 9.30 A.M. on 3 -12 -98 and the officers visited only after half an hour. The appellants could have very well made the necessary entries in PLA and RG 23 A, Part -II before the officers turned up. Yet another argument advanced by the counsel is that the facts and circumstances of the case did not indicate any intent to evade payment of duty on the part of the appellants inasmuch as the removal of the goods was duly borne on all statutory records, in this connection, he referred to the entries made in the inward gate register, the entries made in the transport documents and those made in the octroi documents. Counsel submits that it was not justifiable on the part of the lower authorities to take penal action against the appellants in the absence of finding of mala fides. Referring to the shortages of cotton and polyester yarns, ld. counsel submits that there was only a shortage of 3110 Kgs. of cotton yarn and a shortage of 90 Kgs. of polyester yarn and that the entire duty on these quantities was duly paid by the party. Counsel submits that the shortages had resulted from mis -reporting by the labourers concerned. Ld. JDR has contested this submission of the counsel also, by submitting that it was the duty of the appellants to ensure that the physical stock tallied with the recorded balance in RG1 as the party was working under the self -removal procedure.