TMI Blog2009 (11) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... entered in statutory records - On the yardstick of preponderance of probability, the conclusion reached by the Commissioner that the appellant has indulged in suppression of production and clandestine removal appears legal and proper. - the demand of duty confirmed by the Commissioner based on the short accounted principal raw material, using the formula/norms as revealed from the private records resumed from them can not be faulted. The penalty imposed in also justified. - E/4672/2004-EX(BR) - 864/2009-EX(PB), - Dated:- 4-11-2009 - Justice R.M.S. Khandeparkar, President and Shri M. Veeraiyan, Member (T) Shri Balbir Singh, Advocate, for the Appellant. Shri Surender Shah, DR, for the Respondent. [Order per: M Veeraiyan, Member (T) (for the Bench) (Oral)]. - This is an appeal against the order of the Commissioner dated 18-6-2004 which itself was passed in pursuance of the remand order of the Tribunal vide Final Order No. A/232/2000-NB (DB) dated 27-3-02. 2. Heard both sides. 3. The relevant facts, in brief, as are as follows: (a) The officers visited the factory premises of the appellants on 21-1-88 and 4-2-88 and verified the stock of finished goods and commen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,76,48,219/- under Rule 9(2) of CER, 1944 read with Section 11A and imposition of penalties. (d) The show cause notice was adjudicated by the Commissioner vide order dated 30-10-92 and, on appeal by the party, the Tribunal vide Final Order No. A/232/2000-NB(DB), dated 27-3-02 remanded the matter for de novo consideration. (e) The matter was adjudicated in de nova proceedings by the Commissioner vide order dated 18-6-2004, confirming a demand of Rs. 2,76,48,219/- and imposing penalty of Rs.10 lakhs. 4. The learned advocate made the following submissions:- (a) The register showing receipt and disposal of rubber was being maintained under the provisions of The Rubber Act and the monthly reports submitted to the Rubber Board on the consumption of RMA under the said Act. The reports submitted to the Rubber Board need not correspond to the figures in the central excise records as the raw material accounted in central excise records relate to only issues for the purpose of manufacture of excisable goods and that it did not include issues for other purposes like, use in manufacture of exempted goods, and use in research. The stock taking conducted did not include materials lyi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yres of sizes 400x08 in one year. They did not even have the mould to manufacture the said item. 5. The learned DR submitted that each of issues raised by the appellant has been dealt with by the Commissioner in his order. In particular, he made the following submissions. On the date of visit there was unaccounted stock of finished goods; the quantity of rubber consumed as per Central Excise records is much lower than the quantity of rubber consumed as per the records and returns to the Rubber Board and the variation has not been explained by the appellant. The claim that Mixing formulation register recovered contained verbatim copy of personal notes prepared by Bhopal Singh when he did his diploma course in rubber technology should be not be accepted as the said register clearly mentions the name of the appellant company and carries the title as Mixing formulation register and that Shri Bhopal Singh was the chief chemist of the appellant company and the entries in the said register were, in some cases, found to tally with entries in the loose papers maintained by Shri Chawla. 6.1 We have carefully considered the submissions from both sides and perused the records. The matter i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise records is due to their not accounting rubber consumed in the non-dutiable products, not accounting rubber sent for research purposes and the Department not taking into account the raw material in process in the shop floor. The appellants also claim that they have not got any compounding work done on job work basis. It is also case of the appellants that the master batches prepared have not always been used for the purposes noted in the mixing formulation register but they were reformulated and used for other purposes. It is also the case of the appellants that the batch register maintained by them did not relate to the final products. If the above contentions of the appellants are accepted then the findings of the Commissioner that the appellants involved themselves in suppression of production and clandestine removal cannot be sustained. 7.1 Any assessee was under obligation to maintain statutory records relating to manufacture and clearance of the excisable goods under Rule 53 of Central Excise Rules 1944 applicable during the period of dispute. The said records should be maintained on a day to day basis inter alia containing details namely, (a) Description of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds as the raw material accounted in central excise records relate to only issues for the purpose of manufacture of excisable goods and it did not include issues for manufacture of exempted goods, or issues for other purposes like research activities. A claim has been made that rubber is also used for development of test batches as evident from the abrasion test register. It was also sought to be canvassed that not taking into account the material lying in the shop floor was also one of the reasons for the difference. It was also sought to be contended that the raw material utilised for manufacture of exempted goods have not been accounted as consumption in excise records. The law requires that the excisable goods and other goods manufactured should be accounted and returns submitted of production and clearances. That being the case, it is required that the entire raw materials received in the factory are accounted. Further, no evidence regarding their claim that there were issues for other purposes have been produced before the Commissioner. Further, the variation is very high being about 16% and the explanation offered is not at all convincing. No evidence has been produced that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d register was his personal note book which was kept by him in the appellant company. He also submitted that the note book did not contain any record of verification done by him of the length, width and weight of the tyres. He also submitted that the lab mill, lab extruder and lab curing pressure used in the laboratory for developing, designing of recipe and compounds for testing in the laboratory and that the test results, receipts/compounds prepared in the laboratory were also reflected in the abrasion test register. These claims in the affidavit are contrary to his claim that the said register contained only notes taken by him as a student in a Diploma course. Therefore, the claim that Mixing formulation register was copy of personal notes prepared as a student of diploma course undergone by Shri Bhopal Singh, the chief chemist of the appellant company is devoid of merits and rightly rejected by the Commissioner. 7.4 It is claimed that the rubber-carbon black mixture, known as master batch can be reformulated to suit any particular requirement by subsequent reprocessing. This might be possible. The issue is not whether it is possible or not. They have shown production of huge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of opportunity granted by the adjudicating authority. There can be no doubt or dispute about the obligation of a manufacturer to maintain proper accounts at the licensed premises for the excisable goods manufactured or cleared from the factory. It is not understood as to how the alleged maintenance of records at the depot can absolve them of their obligation to maintain the records at the factory premises. The claim of the appellants in this regard has no merits. Further, there is allegation that the Kachha challans contained code numbers for tyres which were different from code numbers used in statutory records. There is no explanation to the allegation in the show cause notice about the use of such code by the appellant which was uncovered from the despatch advices with corresponding GR numbers of despatches from the branch offices. 7.6 It was claimed that the typed list shows the RMA consumption in manufacture of each and every size of tyre and tube; that this is a generalised statement and that this cannot be considered as indicative of use of excess RMA in the manufacture of tyres. In other words it has been claimed that the typed list cannot be relied upon to come to a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the stock register/batch register indicate the name of the compound and not the ultimate tyre manufactured as could be seen by the fact that no compound has been shown to have been mixed as per the stock/batch register for several sizes of tyres and tubes which are accounted in RG-1. These claims by the appellant, when considered in the light of the fact that the appellant has failed to explain short accountal of principal raw materials, non-maintenance of records relating to mixing of compounds in the open mixing mills, inability to tally the entries relating to clearances on various dates in the loose slips with the duty paying documents, it is apparent that the same deserve to be rejected. 8. Ample opportunity was given by us to demonstrate from the records placed before us that the findings of the Commissioner on the core issues like excess use of raw materials, the relevance of mixing formulation register/batch register for determining the nature and quantum of finished products manufactured by the assessee and the finding that the appellants were not able to show that entries made in the loose slips regarding clearances have been accounted were erroneous or perverse. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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