TMI Blog1985 (2) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... cise officers also visited the Branch Office of M/s. Technis Industries in Raniganj, Secunderabad on 21-5-1980 who were allegedly dealing in Hacksaw Blades manufactured by the appellants, M/s. Indo-Hacks Ltd. In these premises, they found 4,331 pieces of Hacksaw Blades which according to the statement of one Shri C.K. Murthy, representative of the Branch Office were actually supplied by M/s. Indo-Hacks Ltd. without any documents showing the payment of Central Excise duty; (g) as per the invoices, delivery cnallans and lorry receipts, the total value of clearances, of M/s. Indo-Hacks Ltd. during year 78-79 worked out to Rs. 5,36,648.39. The appellants failed to pay Central Excise duty on clearances above Rs. 5 lakhs as required; (h) during the year 1979-80, the appellants were found to have removed goods for a value of Rs. 36,44,676.60 without accounting for the production and clearances and without payment of duty; (i) during the year 1980-81, the appellants cleared goods of the value of Rs. 2,68,869.10 without payment of duty, claiming the benefit of exemption under notfn. No. 71/78-CE dated 1-3-1978 to which they were not entitled, as the clearances of the specified goods f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact non-excisable and therefore were not required to be covered by Gate Pass, certain other entries were against regular gate passes, while certain entries were fictitious for which an ex-employee of the Company was responsible. It was pointed out that in so far as category D goods were concerned, some of the entries in the Gate passes could be tallied in all respects although the value did not agree. It was stated that the basis on which the values were shown in annexure had not been disclosed. (c) 1980-81 : Shri Narasimhan reiterated the contentions contained in the Appellant s reply to the show-cause notice, claiming that the appellants were eligible for clearance at nil rate of duty upto the first Rs. 5 lakhs in value and thereafter at 75% of the Tariff Rates on the next slab of Rs. 10 lakhs, and that they were entitled to benefit of concessions visualised in Notification No. 80/80, dated 19th June 1980. 3. Shri Narasimhan has submitted before us that all the irregularities which were actually found, could be attributed to Shri R. Ramachandra Rao, former Administrative Officer of the Company. His performance not being satisfactory, he was admonished by the management and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fer on account of lack of investigation. According to the Appellants, the balance amount should really be around Rs. 1.71 lakhs. It is further stated that the tabular statements have been prepared by the department haphazardly and they are full of discrepancies. 6. It is also stated by the appellants that, as stated by them while dealing with some of the entries in the statements accompanying the show cause notice, the fictitious entries were created with a view to creating necessary evidence for obtaining larger finances from the Banking Institutions. 7. On behalf of the respondent Shri N.I. Ramanathan states that M/s. Indo Hacks Ltd. have not been able to establish that the relevant entries in their records regarding the production and despatch of excisable goods were fictitious. The department was able to seize not only accounts of such goods but also delivery challans and other documents including lorry receipts, apart from invoices. The Collector had rightly rejected the contention that the invoiced sales were non-existent. It is also not possible for the department now to accept that the value of the total goods despatched by Indo Hacks was not Rs. 5,36,648.39 but only Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipts, delivery challans and invoices. In regard to the despatches valued at Rs. 2,10,676/- to M/s. C.K. Murthy Co. Secunderabad, despatches were effected on inter-office communication memos or on letter-heads of the company. Despatches to Technis Industries valued at Rs. 58,166 are similarly proved by not only documents like invoices, communication memos etc. but also actual seizure of hacksaw blades at Technis Industries. 9. 92,587 hacksaw blades were actually seized in the factory and as the Collector has pointed out, it is indisputable that they were not accounted for in the factory s RG-1, which was also admitted by Indo Hacks. An attempt has been made by the factory to explain that the goods relate to two gate-passes bearing Nos. 51 and 52 both dated 17-5-1980 and it is explained that these goods could not be transported due to break-down of the truck. On the other hand the department has been able to collect evidence of the packing of goods two days before the visit of the Central Excise officers to the factory i.e. on 21st May, 1980. It is on this ground that the Collector has held that the goods were produced and packed after 17-5-1980. 10. As regards supplies al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise duties, but to create evidence to enable them to get additional funds from financial institutions. In their own words taken from their letter to the Excise Authorities, shown to have been received by them on 28th May, 1980 - we have created invoices showing despatch of hacksaw blades, despatched ballast material by lorry transport, consigned always to our indenting agents at Madras and Bombay. Such agents who are not actual dealers in our case, used to honour the invoiced amounts through Banks and through Hundis. We used to draw advances against the Hundi amounts so as to keep our financial standing with the Banks at a high credit. Within the period of the grace ofthe Hundi we used to adjust the amount of advance drawn through the Hundis through our account payee cheques. By this method, though it may appear that we have manufactured and despatched the blades, we state that really no such manufacture or despatch has ever taken place. 13. On a specific query from us as to the reasons for the strange conduct of their employee and the explanation for his malicious intent and nefarious purpose as alleged, all that was said was that since he had been given notice of terminati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. have continued the suppression of production in the statutory record of RG.1 and cleared the goods without issuing Central Excise Gate Passes. Read with the earlier para, a clear charge is made here that right from the beginning, the Appellants have been guilty of suppression of production and other irregularities. Accordingly, the demand for duty is made under rules 9(2) and 173Q of the Central Excise Rules, 1944. 17. In the circumstances we hold that the demand of duty for the period 1978-1979 is not barred by limitation. 18. Coming now to the year 1979-80, we take note of the letter of the Director General of Supplies Disposals, Hyderabad, dated 1-7-1980 and, in the absence of other evidence to the contrary, take the view that there was no despatch of goods from the factory of the Appellants in respect of the alleged supplies to which the reply of the D.G.S. D. relates. 19. As regards part I of Annexure B to the show-cause notice, we do not think that the Appellants can be given any benefit even if it were accepted that the show cause notice is haphazardly prepared. Nor can we accept that in the circumstances of the case, the onus of proving clandestine removal w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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