TMI Blog1990 (2) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... 986 and transfer order No. 0007 CAL dated 1-1-1986 covering the said consignment were for a total number of 606 tyres, tubes and flaps only. Accordingly, the security officer did not allow and truck to move outside the factory gate and the matter was reported to the Central Excise staff on 2-1-1986. As a consequence thereof the Central Excise staff also verified the quantity of the said goods vis-a-vis the accompanying documents and found that 613 numbers of tyres, tubes and flaps were loaded for transportation on the truck as against a total of 606 numbers of the said goods. Statements of S/Shri Iswar Singh, Driver of the said truck and O.P. Khatri, Foreman of the appellant company were recorded. Thereafter physical verification of the tyres, tubes and flaps lying in the bonded warehouse was conducted on 2-1-1986 and 3-1-1986 with the association of the representative of the appellant company and excess of tyres, tubes and flaps totally numbering 831 valued at Rs. 2,04,371.60 and shortages totally numbering 1114 valued at Rs. 2,74,234.60 were found vis-a-vis the recorded balance of the statutory records. Statements of S/Shri S.R. Srinivasan and R.K. Shabarwal of the appellant comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded that the same were removed clandestinely without payment of duty amounting to Rs. 1,00,502/-. As regards the excess of 831 tyres, tubes and flaps the Adjudicating Authority held that the same were liable for confiscation but since the same were not available being already released provisionally on bond he ordered for appropriation of an amount of Rs. 1,00,000/- out of the bond. The adjudicating authority also imposed a penalty of Rs. 2,000/- under Rule 9(2), Rs. 1,000/- under Rule 52A(5) and Rs. 2,000/- under Rule 226 of the Central Excise Rules, 1944. However, he vacated the order of seizure of Truck No. DEL-356. Hence the present appeal. 3. We have heard Shri Ravinder Narain, Sr. Advocate duly assisted by Shri P.K. Ram, Advocate on behalf of the appellants and Miss Renuka Mann, learned SDR on behalf of the respondent. 4. At the outset, Shri Ravinder Narain, learned counsel for the appellants submitted that he is not disputing the facts that on checking of the truck on 1.1-1986 it was found that tyres, tubes and flaps totally numbering 613 were loaded therein whereas the documents covering the said consignment were for a total number of 606 tyres, tubes and flaps only a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-1986, the stock position as found by the Excise Department revealed certain tyres, tubes and flaps as in excess and certain tyres, tubes and flaps in short. In this connection, we wish to bring to your notice that during that time we had unusually heavy stock of lyre, tubes and flaps because of the general recession in the market. About 67,000 tyres, tubes and flaps were lying in the bonded store room during the time of physical verification and because of the paucity of time, the lack of methodology in physically counting the tyres, tubes and flaps, human fatigue, the general confusion prevailing in the factory consequent upon the information of attempted theft of 7 tyres, the discrepancy, as shown in the stock taking report, have arisen. During the verification of stock, tyres were removed from their original place and strewn all over with the result that accounting physically for the number of tyres, tubes and flaps became almost an impossible task. In some cases instead of nylon tyre shown as shortage equal number of rayon tyres have been shown as excess. Thus, the total shortages and excesses will balance each other and, in any case, there is no question of removing any othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntil the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in these rules. Sub-rule (2) of the same Rule provides that if any excisable goods are, in contravention of sub-rule (1), deposited in, or removed from, any place specified therein, the producer or manufacturer thereof shall pay the duty leviable on such goods upon written demand made by the proper officer and shall also be liable to a penalty, and such goods shall be liable to confiscation. Rule 47 inter alia provides that a manufacturer shall provide a store-room or other place of storage at his premises for depositing goods made on the same premises without payment of duty and further that every such store-room or place shall be declared by the manufacturer and approved by the Collector and the manufacturer shall maintain an Entry Book in the proper Form in which he shall on the same day on which goods are deposited in or removed from such store-room or other place of storage, write and enter in the proper column the date of such deposit or removal etc. Sub-rule (2) of this Rule further provides that no duty paid goods and no goods other than excisable goods made in the factory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the result of the physical verification of the stock as even in this letter the variations found in stock position as a result of physical verification had not been specifically rebutted, though the letter was written as late as by 4 days from the conclusion of stock taking. As stated earlier, the company s representative has admitted during the personal hearing that the position of shortage and excess as stated in the show cause notice was accepted by the company at the end of the stock verification and no objection was raised by the company at that time. The aspect of physical verification cannot, therefore, be disputed at this stage irrespective of the fact that there was heavy stock lying in the factory. Nothing had prevented the company from deploying more staff to discharge its legal obligation to account for the production and clearances of excisable goods in such a manner that these were properly reflected in the statutory records. The alleged shortage is clearly established and not accounted for in any manner by the company. The conclusion can only be that the goods to the extent of the shortage have been removed from the factory without payment of duty and without compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s value redemption fine of the 813 tyres, tubes and flaps which would have been confiscated under Rule 226 and then allowed to be released on payment of redemption fine. I also impose penalties of Rs. 2000/- (Rupees two thousand only) under Rule 9(2), Rs. 1000/- (Rupees one thousand only) under Rule 52A (5) and Rs. 2000/- (Rupees two thousand only) under Rule 226 of the Central Excise Rules, 1944. 9. We have ourselves given the due weightage to the arguments advanced by the learned counsel for the appellants and after considering the entire evidence on record and the attending circumstances as pointed out by the learned Collector, we do not find anything on the record to take a contrary view. There is no evidence on the record to substantiate the defence of the appellant except a bald assertion that since there was recession in the market they were having unusually heavy stock and that the excess and shortages may be on account of the possible human error in counting. Had it been a fact that physical verification was not done correctly as asserted by S/Shri S.R. Srinivasan and R.K. Sabharwal of the appellant company in their statements nothing prevented them from refusing to sig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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