SHALIMAR RUBBER INDUSTRIES Vs. COLLECTOR OF CENTRAL EXCISE COCHIN
SUPREME COURT OF INDIA
SHALIMAR RUBBER INDUSTRIES
COLLECTOR OF CENTRAL EXCISE,COCHIN
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(1.)The appellants in the above appeal were issued with a show cause notice by the Collector of Central Excise, Cochin for having manufactured rubber products falling under sub-heading 4006.10 of Central Excise Tariff Act (the 'Act'), for having not maintained proper accounts of such manufacture, for evading payment of duty on such manufacture and certain other consequential violation of the Act and the Rules. They were called upon to show cause why proceedings should not be initiated against them for the contravention of the provisions of Section 6 of the Act as also Rules 173B, 173C, 173F, 173G(i) of the Act and Rule 174 read with Rule 9(i), Rule 173G(2) read with Rule 52A, Rule 173G(4) read with Rules 53 and 226 of the Central Excise Rules, (the Rules). The said Collector after holding the necessary adjudication proceedings came to the conclusion that the appellants have manufactured and cleared 1,61,122 kgs of tread rubber and removed the same without payment of central excise duty. He also came to the conclusion that the appellants had not maintained required stock registers thereby they contravened Section 6 of the Act as also the Rules mentioned herein above. As a consequence he imposed a penalty of Rs. 11,33,467.72 on the appellant firm and also directed the confiscation of the seized tread rubber but gave a option to the firm to redeem the same on payment of redemption fine. He further imposed on the firm a penalty of Rs. 3 lakhs and a penalty of Rs. 20,000/- on each of the partners of the firm and directed the confiscation of the land, building, plants and machinery used in the manufacture of the said tread rubber, with an option to redeem the same on payment of redemption fine.
(2.)On appeal, the Customs Excise and Gold Control Appellate Tribunal (the Tribunal) has confined the said order of the Collector. Consequently, the appellants are before us in these appeals.
(3.)On behalf of the appellants, it is urged that the basis of the case of the Department is the inquiry made by the Department with M/s. Universal Agencies, the partner of which firm allegedly told the Inspector (Preventive) Unit of the Department that the firm M/s. Universal Agencies had supplied carbon black to M/s. Shalimar Rubber Industries as per 82 invoices out of which 62 invoices were in fictitious names. It is based on this statement of the partner of M/s. Universal Agencies, namely, Shri Sunny P. Kunnath, the Department came to the conclusion that if that much quantity of carban black was used by the appellant firm the production must have been far in excess of what was shown in the books of the firm. Therefore, it is on this assumption the Department initiated the proceedings.
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