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TMI Blog2009 (11) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... tted by the appellants to the Rubber Board, the Rubber Board Register, store register, despatch advices, mixing formulation register and certain loose slips. (b) Separate proceedings were initiated by show cause notice dated 18-7-88. in respect of goods seized on the date of visit of the officers and the case was adjudicated confirming the offending nature of the goods and the said order was upheld by the Tribunal. (c) The appellant was procuring and using natural rubber, RMA and they were periodically submitting report to the Rubber Board. As per the report to the Rubber Board, during the year 1986-87, they have consumed 4,10,000 kgs of rubber and for the year 1987-88, they have consumed 3,36,200 kgs of rubber. However, the excise records indicated consumption of only 3,53,416 kgs during the year 86-87 and 2,86,453 kgs during the year 87-88. Thus, it appeared that they have consumed more quantity of principal raw material than what has been accounted in the raw material account maintained for excise purposes. It also appeared that the appellant have procured sulphur yellow powder and other ingredients without bills as the use of such materials were confirmed from the loose sheet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubber and Plastic Research Institute, New Delhi during the years 79-80. The said register also contained details on various subjects, many of them not related to the activities in the appellant company. For example, it contained notes relating to belt manufacture, white side wall, bead composition, details of turn over of the Good Years as Rs. 92 crores which were not related to company' activities. (c) The turnover of Good Year recorded in the mixing formulation register was for the year 82-83; further the front page of the mixing formulation register indicated the year as 82-83 and last page had the dated 22-1-84. Therefore, this register can not belong to the period in dispute. (d) The rubber-carbon black mixture is known as master batch; the master batches are in various combination; they can be reformulated to suit any particular requirement by subsequent reprocessing; that the title such as capital ADV, 400-8, 13 no, airbags, etc. do not refer to the final batch and therefore, do not indicate the type of the tyres actually manufactured. The batch registers refer to mixing of rubber and carbon black on the Banbury. The entries made in the batch register refers to the compoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directions: "(1) The Collector had not given adequate consideration to the appellant's contention that 'Nulkees' shown in the store register, could also go into the production of ADV Tyres & Air bags apart from use in the production of tubes. (2) The Collector had not examined the claim of the appellants that Kaccha challans were supported by corresponding gate passes. (3) All removals had been entered in their regular books at Ghaziabad Depot and all removals from there were against invoices and other documents. (4) The appellants had given supporting documents Annexure 62 & 68 to reply to SCN and these appeared to not have given due consideration. (5) The demand appeared to have been calculated on assumption basis." 6.2 It is to be noted that the matter was remanded to the original authority granting opportunity to the appellants to present the case and to enable the original authority to consider all the relevant issues afresh. We find that the appellant has sought for adjournment in the remand proceedings before the Commissioner on 6 occasions, i.e. on 10-9-2002, 9-10-2002, 13-2-2003, 3-4-2003, 17-4-2003, and 10-6-2003 and appeared on 5-12-2003 and again sought for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Rule 9 (f) quantity delivered from the factory without payment of duty for export or other purposes, and (g) the rate of duty and the amount of such duty. They are also required to file returns of other goods manufactured in terms of Rule 54. They are also required to maintain accounts relating to receipt and disposal of principal raw materials and submit returns as prescribed under Rule 55 of the Central Excise Rules. Such return has to truly state the quantity of raw materials used in the manufacture of excisable goods and the quantity of each description of finished goods produced. Such accounts and returns have to be in the prescribed format. The appellant was working under the Self Removal Procedure (SRP). In the case of assessees working under SRP, the private records, maintained by them for the above purpose can be accepted in lieu of statutory records provided they contained the relevant particulars. However, they are required to disclose their own records maintained for the said purpose in terms of Rule 173(G). The purpose is to ensure that the entire production of excisable goods are properly accounted and duty due thereon is paid. The Commissioner has held that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, it is not denied that only one "Nulky" is required for manufacture of one "Tube". The records indicate use of 12, 350 nulkies during the period when only 4350 tubes were shown to have been manufactured. 7.3 The Mixing formulation register was admittedly recovered from the custody of Shri Bhopal Singh who was the chief chemist of the appellant company. It was claimed to be verbatim copy of personal notes prepared by him during the period 79-80 as a student of diploma course in rubber technology. It is not disputed that the said register carried the name of the appellant company and carried the title as Mixing formulation register and that Shri Bhopal Singh was the chief chemist of the appellant company. It was recorded by the Commissioner that the entries in the said register were found to tally with entries in the loose papers maintained by Shri Chawla. This fact is not being disputed. Further, the register contains the entries relating to turn over of the Company Good Year for the year 82-83; further the front page of the mixing formulation register indicated the year as 82-83 and last page had the date 22-1-84. Shri Bhopal Singh from whose custody the mixing formulation re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son that formulation meant for production of major variety was not done directly but reformulated from formulation meant for other varieties. Further, the claim that they reformulated the compound has not been substantiated by any documentary evidence. It is not conceivable that they have prepared giving certain title to the compound which was to be reformulated but have not maintained any records of such reformulated compound with details such as description and quantity so produced. Thus, there was no evidence produced that the master batches were reformulated as per requirements for further manufacture of tyres or other products. Therefore, it is not convincing that the title such as ADV, 400-8, 13 no, airbags, etc. do not refer to the final batch and therefore, do not indicate the type of the tyres actually manufactured. There is also a claim that the batch register was relating to compound only and not to the tyres sought to be manufactured. It is common knowledge that the batch identification is aimed also at keeping a watch on possible complaints from the ultimate customers. When the final products are tyres, the claim that no batch register is maintained for such final prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to refute the excess use of principal raw material namely, rubber. They are also not able to refute the contents of the loose papers recovered which indicated use of other chemicals required for manufacture of tyres/tubes. The documents like typed list, loose slips recovered and Mixing Formulation Register maintained by them indicated only activities of their unit, contrary to the claims made by them. It is also found by the Commissioner that RMA consumption shown in the kachcha slip showing the RMA consumption tally with those mentioned in the mixing formulation register. 7.7 It was claimed that the appellant had about 8 to 10 open mixing mills installed in the factory and to keep the open mixing mills fully occupied all other compounds are mixed through open mixing mills. The batch registers refer to mixing of rubber and carbon black on the Banbury. The batch register refers to certain compounds. They have not produced any registers to show the mixing of compounds through those mixing mills. They also claim to have done job work for others by using the said mixing mills. No records have been produced by them in support of this claim. The mixing of compounds without bringing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own as accounted in the statutory records and have also received payments. The conclusion is inescapable that the appellants have indulged in unaccounted production of such varieties of tyres. The loose sheets indicating clearances of goods which were not correlated with duty paying documents are also evidences clandestine removals. 9. From the above, the following emerge: (a) On the date of visit by the officers, there was unaccounted stock of finished goods. (b) The quantity of rubber accounted as consumed as per Central Excise records is about 16% lower than the quantity of rubber consumed as per the records and returns to the Rubber Board. (c) When only one "Nulky" is required for manufacture of one "Tube", the records indicate use of 12,350 nulkies during the period when only 4350 tubes were shown to have been manufactured. (d) The entries in the abrasion note book on the testing relating to various varieties for the period 20-10-86 to 3-12-87 do not match with varieties accounted in the RG-1 register. (e) The appellant has not been able to correlate the entries in the loose slips with the entries in the statutory records like RG-1 register and gate passes evidenci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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