RAKESH KUMAR,J. -
(2.)THE appellants are manufacturers of inductors, transformers, degaussing coil, etc. chargeable to central excise duty under Chapter 85 of the Central Excise Tariff. On 31 -3 -2003, their factory located at B -86, Okhla Industrial Area, Phase -I, New Delhi and also the residence of Shri Pawan Sharma, Director of the appellant company, was searched. In course of search of the factory, a diary/writing pad was found, which contained certain figures regarding sale. After examining diary entries and inquiry with the Directors of the appellant company, a show cause notice dated 19 -1 -2004 was issued to the appellant for demand of differential duty amounting to Rs. 88,25,182/ - by denying the SSI exemption during the period from 1999 to January 2002 along with interest thereon under Section 11AB and also for imposition of penalty on the appellant company under Section 11AC and imposition of penalty under Rule 26 of the Central Excise Rules, 2002 on its Directors. The show cause notice was issued by alleging that entries in the diary recovered from the factory represented clandestine removals made without payment of duty and if the value of those clearances is included, the appellant during the period 1999 -2000 and 2000 -2001 would not be eligible for SSI exemption. The show cause notice was adjudicated by the Commissioner vide order -in -original dated 31 -5 -2005 by which the Commissioner dropped the duty demand of Rs. 70,65,182/ - in respect of the allegation and clandestine removals based on the entries in the diary seized from the factory. He, however, confirmed the duty demand of Rs. 8,70,402/ - against the appellant on the basis of denial of SSI exemption along with interest thereon under Section 11AB and besides this, imposed penalty of equal amount on the appellant company under Section 11AC and also penalty of Rs. 1,00,000/ - each under Rule 209A of the Central Excise Rules, 1944 read with Rule 26 of the Central Excise Rules, 2001/2002 on the Directors of the appellant company, Shri Pawan Sharma, and Shri Harpreet Oberoi. Against this order of the Commissioner, these three appeals have been filed.
Heard both the sides.
(3.)MS . Tuhina Sinha, Advocate, ld. Counsel for the appellant, pleaded that the Commissioner has dropped the duty demand of Rs. 70,65,182/ - based on the allegation of clandestine removal which, in turn, is based on the entries in the diary recovered from the factory, referred to as "private records" in the impugned order, that once the entries in the diary recovered from the factory are ignored, there would not be any justification for denying the SSI exemption, as, if figures in the diary are not considered, the clearances of the goods by the appellant during each financial year would be within the threshold limit for the eligibility for the SSI exemption, that as is clear from the calculation at page -43 of the impugned order, the Commissioner has compared the total value of the clearances of the branded/unbranded goods as declared in RT -12 Returns during each year plus duty paid with the higher of the sales figures as declared by the appellant company during that period in the sales tax returns and the sales figures as per the diary entries during that period, and the duty had been demanded on the difference, that once the duty demand based on the diary entries has been dropped, the figures in the diary entries cannot be adopted, that as regards the slight difference between the value of the clearances in the RT -12 Returns and the value as declared in the sales tax returns the appellant had given explanation for the same, that in some cases, the difference is on account of counting of the value of the returned goods twice or also counting the export sales but these pleas have not been considered by the Commissioner and that in view of this, the impugned order is not correct.