LAWS(CE)-2004-3-302

VAN TEX LTD. Vs. CCE

Decided On March 26, 2004
Van Tex Ltd. Appellant
V/S
CCE Respondents

JUDGEMENT

(1.) This appeal is directed is directed against the order in Appeal No. 2/2003 (CBE) (ADK) Dated : 13.1.2003 passed by the Commissioner of Central Excise (Appeals), Trichy, whereby the Commissioner has upheld the order passed by the original authority by which he has demanded duty of Rs. 1,53,120/ - from the appellants under Section 11A of the CE Act, 1944 besides imposition of mandatory penalty of the like amount in terms of Section 11AC and Rule 173Q of the CE Rules, 1944. The original authority had also ordered for interest in terms of Section 11AB of the Act.

(2.) Brief facts of the case are that the appellants are engaged in the manufacture -of cotton yarn falling under Chapter 52 of the CETA, 1985. The officers of the HPU on verification of the records found that the appellants have suppressed the production of cotton yarn. It was also found that they have not accounted for the issue of cotton for manufacture of yarn. Sixty six bales of cotton were found in excess without accounting for in the statutory register and the same were hence seized under a mahazar. The same were released to them conditionally with direction to take the stock to the Form IV account and clear the yarn manufactured out of the goods on payment of appropriate duty. The officers also seized statutory registers such as Form IV, Cotton purchase file, private production abstract file, copies of RT 12 return and sales invoices under the same mahazar for further investigation. As a follow up action statements were recorded from one T Ashok Personnel Officer on 25.03.2000. It was in these circumstances that show cause notice was issued to the appellants alleging clandestine manufacture and clearance of 90,035 Kgs of various counts and demanding duty of Rs. 1,53,120 - being the duty payable on the same, apart from proposing to confiscate the 66 bales of cotton and also imposing penalty and the show cause notice culminated in the order of adjudication passed by the original authority whereby the original authority had has held that confiscation of the 66 bales of cotton was not warranted and he has confirmed the duty demand of Rs. 1,53,120/ - under the provisions of Section 11A of the Act apart from imposing penalty of and ordering interest as noted above.

(3.) Shri S Kandasamy, learned Consultant for the appellants invited my attention to the grounds of appeal and submitted that the reasons for variations in the figures between RG 1 Register and daily production abstract are that (i) the opening and closing stock of yarn on cone winding machine at the beginning and end of the day might vary (ii) defective cone produced by the winder might be rewound and hence the chance of accounting for second time (iii) full cones which have full weight and were of good quality only were recorded in the RG 1 register (iv) some times due to rewinding or any other quality control problem the same cone weight might have been shown in private records for the second time. He has also submitted that the officers at the time of visit have verified the stock and RG1 and found the same to be correct. The alleged shortage was found by comparing the entries made by the appellants in the private records which was maintained for the convenience of the appellants for the purpose of checking the defective goods and also wages to be paid to the workers. He has further submitted that the alleged difference in weight of Kgs 9,035 of various counts has been worked out for the period from January 2000 to March 2000. He has also invited my attention to the order of the Tribunal in the case of Metal Fitting (P) Ltd. vs. CCE, New Delhi reported in 1997 (93) ELT 747, Sharma Chemicals vs. CE, reported in 2001 (1320) ELT 271, CCE, Chennai vs. Dhanavilas (Madras) Snuff Co. reported in 2003 (1530 ELT 437. He has submitted in all these cases, in similar circumstances, the Tribunal set aside the demand of duty and imposition of penalty and he prayed for similar orders.