P V VARGHESE Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THE applicants herein have pleaded for dispensation of pre-deposit of the duly demanded in terms of the impugned order and penalty levied thereunder. the brief facis of the case are that applicant P.V. Varghese, Proprietor of M/s. Pokkath Industries, manufactures tread rubber in their unit and some quantity of tread rubber was found to have been removed without payment of duty and without cover of any Central Excise documents. THE follow-up investigation according to the lower authority, revealed that the applicant had received more quantity of carbon black than what was brought in their record and out of this quantity of carbon black, the applicants had manufactured tread rubber and cleared the same without payment of duty. THE Collector in his adjudication order demanded a duty of Rs. 11,94,807/56 ps and also levied a penalty of Rs. 20,000/- on P.V. Varghese and also on other persons who are appellants herein.

(2.) The learned advocate for the applicants pointed out that the whole case is based on the ground of receipt of excess carbon black without any corroborative evidence being there In this connection his attention was drawn to paragraphs 7 and 8 of the Order-in-Original and it was pointed to him that P.V. Varghese had also admitted, according to the Collector, in his statement dated 25.61987 that he was purchasing carbon black under fictitious names and used the same for manufacture of tread rubber. He drew our attention to the English translation of the Malayalam statements recorded from appellant to show that in fact there was no such admission. He further pointed out that this Tribunal in a similar case in Order No. 821/88 in the case of 'Simplex Rubber Industries v. Collector of Central Excise, Cochin,' has held that the alleged non-accountal of a single raw material cannot be the basis for arriving at unaccounted production. So far as the seizure of tread rubber in the present case is concerned, the learned advocate pleaded that the goods were removed from the depot and not from the factory.

(3.) THE learned advocate in reply, pleaded that the production capacity of tread rubber in the applicant's unit was not much being a small scale unit, and there is no warrant for computing the total production of tread rubber based on the alleged carbon black received by the applicant. Me pleaded that the unit of the applicant is not equipped for production of any large quantity of tread rubber. He pleaded that the appellant cannot afford to pay the huge duty demand and has no resources to meet this demand. In this connection be drew our attention to the letters from the bank to show that the applicant unit was not functioning for some time and the applicant also did not have any worthwhile assets. He also pleaded that other applicants were not liable to penalty and could not make the payment.