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TMI Blog1992 (9) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... lant Shri N.K. Razak, the Managing Partner of the firm. He also appropriated cash security given while taking provisional release of the goods weighing 690 Kgs. which have been held to be liable to confiscation. 2. Brief facts of the case are that on a surprise check by the authorities on 27-10-1986 the authorities intercepted a mini lorry on its way from Coimbatore to Palghat. Shri N.K. Razak, the Managing Partner of the appellant firm and Shri P.M. Bavu, Foreman of the said firm, were travelling in the mini lorry. An excess quantity of tread rubber over the quantity mentioned in the GP 1 accompanying the goods was found in the lorry. Thereafter, a check was carried out at the factory premises of the appellant firm. Some quantity of tread rubber, which had not been entered in the statutory RG 1 record, was seized and some records in the factory were also seized. Documents showing the production of tread rubber in the appellant's firm and their clandestine removal were also seized. It was also found that some amounts had been received from some firms but no corresponding entries for despatch of tread rubber were found in the statutory records. Statements were recorded from Shri P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into consideration all these factors a show cause notice dated 21-4-1987 issued to the appellant and duty demanded on account of clandestine production and removal without payment of duty was indicated as Rs. 2,06,479.20 and that on account of price differential as Rs. 31,936.19. In the annexure attached to the show cause notice the consignments which were found to have been despatched in the name of the various consignees but were not reflected in the statutory records were also shown. The learned lower authority, taking into consideration the evidence on record, came to the conclusion in the order passed earlier that the correct quantity produced by the appellant would be based on the formula given by Shri P.M. Bavu that 3 kgs. raw rubber alongwith other materials yielded 15 kgs. of tread rubber. In the subsequent order, which is impugned before us, the learned lower authority, as mentioned earlier, after complying with the direction given by the Tribunal for allowing the cross-examination of Shri P.M. Bavu and others, came to the same conclusion and duty of Rs. 2/06,479.20 has been demanded from the appellants. The appellants' plea regarding valuation has been accepted and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pleaded, the penalty levied was very high and alternatively pleaded for reduction of the same. 4. The learned JDR for the Department referred to the earlier order passed by the Collector and he adopted the reasoning set out in the same. He pleaded that the Department had established the fact of clandestine manufacture and removal of tread rubber based on evidence found in the appellant's own factory and also on the investigation regarding the despatch of the tread rubber from the appellant's factory and also for payments received by him. 5. We have carefully gone through the facts of the case and considered the pleas made by both the sides. We observe that the basis adopted for arriving at the total production in the appellant's factory and the goods which had been clandestinely manufactured and removed is the formula which was given by Shri P.M. Bavu, who is stated to be the foreman of the factory. The appellant's plea is that this formula could not form the basis as the same Shri P.M. Bavu gave a different formula, according to which 6 kgs. of raw rubber alongwith some reclaimed rubber and other chemicals were required to produce 15 kgs. of tread rubber. According to the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inely. The next question that arises is as to how much quantity can be taken to have been removed so by them. We observe that the learned lower authority has taken the raw rubber as reflected in the appellant's record as the basis for working out this quantum. The question is can the formula adopted by the learned lower authority be found fault with in the facts of this case. There is no denial of the fact that Shri Bavu was the Foreman of the unit and he was concerned with the issue and utilisation of raw materials. The tread rubber produced by the appellant according to the formula earlier given by him was 3 kgs. of raw rubber and 3 kgs. of reclaimed rubber thus showing chat 6 kgs. of rubber was used for producing 15 kgs. of tread rubber. The latter formula under which he stated that 6 kgs. of raw rubber alongwith 2 kgs. of reclaimed rubber alongwith the other chemicals etc. was utilised in the production of 15 kgs. of tread rubber. This formula, according to Shri Bavu himself, was given by him at the instance of Shri Razak. The latter opinion can be only taken as hearsay evidence and not something given from his own knowledge. Shri Bavu has not stated why he also gave the formul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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