SPAN INTERMEDIATES PVT. LIMITED. Vs. COMMISSIONER OF CENTRAL EXCISE & S.T.
LAWS(CE)-2015-7-23
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on July 30,2015

Span Intermediates Pvt. Limited. Appellant
VERSUS
Commissioner of Central Excise And S.T. Respondents


Referred Judgements :-

D.S. SCREEN V. COLLECTOR [REFERRED TO]


JUDGEMENT

H.K.THAKUR - (1.)THESE appeals have been filed by the appellants against OIA No. DA/06 -07/DMN/VAPI -I/2011 -12 dated 21.04.2011 passed by Commissioner (Appeals), Vapi; as first appellate authority; under which OIO No. Vapi -I/OA/35/2007 -08 dated 31.12.2007 decided by the Adjudicating authority has been upheld. Under OIO dated 31.12.2007, Adjudicating authority confirmed a demand of Rs. 1,55,368/ - against the main appellant M/s. Span Intermediates Pvt. Limited, Vapi, along with section 11AB interest and also imposed equivalent penalty upon the main appellant under Section 11AC of the Central Excise Act, 1944, read with Rule 173Q (1) of the erstwhile Central Excise Rules, 1944.
(2.)A penalty of Rs. 10,000/ - was imposed upon Shri Krishnadev S. Choubey, Technical Director -cum -Authorised Signatory of the main appellant, under Rule 209A of the Central Excise Rules, 1944. Shri K.I. Vyas, (Advocate) appearing on behalf of the appellants argued that the main appellant is the manufacturer of Synthetic Organic Dyes (S.O. Dyes) as per the specifications of the customers. That during a visit of the Central Excise officers to the factory premises of the main appellant on 20.3.1999, physical stock verification was done and it was observed by drawal of a Panchnama that there was excess stock of finished S.O. Dyes in the factory than what was recorded in the RG -1 register maintained by the main appellant. That the officers also noticed 6263 Kgs. of S.O. Dyes, valued at Rs. 9,71,047/ - involving Central Excise duty of Rs. 1,55,368/ -, which appeared to have been manufactured and cleared without payment of duty by the main appellant. Revenue issued two show cause notices with respect to excess seized goods and alleged clandestine removal of goods demanding duty of Rs. 1,55,368/ -. That the seizure portion of the case was decided against the main appellant but on appeal the same was set -aside by Commissioner (Appeals) and that order has been accepted by the Revenue. That the second show cause notice for Rs. 1,55,368/ - was decided under OIO dated 31.12.2007 and confirmed under OIA dated 21.4.2011 against which the present appeals are filed by the appellants.
2.1 It was the case of the appellant that lower authorities mainly relied upon the blender register/notebook which reflects the semi -finished goods and can not be the basis for entering the same in RG -1 register. Moreover, the said notebook was exclusively meant for production of the goods that has varied grades of S.O. Dyes as per their customer's specification and the figures reflected in the said notebook can not be compared with the figures entered in RG -1 register and can not be taken as a basis for allegation of illicit removal. Appellants also contended that weightage can not be given to the depositions made by their Technical Director in his statement. He further contended that blender notebook is their internal record for movement of semi -finished goods for other processes and the same can not be considered as the base for entries in RG -1 register. Appellants also argued that no cross -examination of the investigating authority was permitted to prove their side. They contended that demand can not be confirmed and penalty can not be imposed on the basis of recorded statements where cross -examination of persons have been denied. Learned Advocate relied upon the case law of Abir Chemicals Limited vs. CCE, Surat [ : 1998 (102) ELT 406 (Tribunal)] and argued that the RG -1 stage for the S.O. Dyes is fully packed goods in containers as per customers specifications when those are packed in the containers ready for dispatch. That if the batch manufactured is not taken delivery by the customers for any reason, the same is kept in polythene bags and used in the manufacture of S.O. Dyes of other customers. That such batches prepared and recorded in the blender register are not required to be reflected in the RG -1 register. Learned Advocate made the Bench go through Para -4 of the CESTAT order in the case of Abir Chemicals Limited vs. CCE, Surat (supra) to argue that there was no clandestine clearance as the goods recorded in the Blender register and not entered in the RG -1 register did not reach RG -1 stage. That statements of Shri Krishnadev S. Choubey, Technical Director -cum -Authorised Signatory has not admitted anywhere that goods entered in Blender Register were ever cleared clandestinely.

(3.)SHRI Lalatendu Patra (AR) appearing on behalf of the Revenue defended the order passed by the first appellate authority. Learned AR made the Bench go through Para 4.3 of the OIA dated 24.4.2011 to argue that case law relied upon by the appellant is not in their favour as CESTAT in that case has also observed that Dye intermediates can not be considered as semi -finished goods and were required to be entered in the RG -1 register.
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