TMI Blog1999 (1) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants and found 3 trucks were parked in the compound of the appellant factory out of which two trucks contained 200 cylinders each of Oxygen Gas and the third truck was empty. Gate passes were not produced for the same. The Panchas were secured and panchanama was drawn on the same date. One lorry was already loaded at the loading platform with the gas cylinders, with the gas produced during the night time in the factory of the appellant, and then shifted to the middle of the factory compound as could be seen from the markings on the ground. It bears the No. GJ-4T-5818 bearing the name of the appellant on the body. 200 Cylinders each containing seven cubic metres of Oxygen Gas was loaded in the truck. Two other trucks were on the loading platform and the truck bearing No. GJ-4T-5594 was loaded with 88 cylinders containing six cubic metres Oxygen gas each and 112 cylinders containing 7 cubic metres of oxygen gas each. The Manager stated that the gate passes were not prepared for the gas cylinders loaded in the said two trucks. Both the trucks and the cylinders were seized under the reasonable belief that they were liable to confiscation under the provisions of Central Excise Law. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les read with proviso to sub-section (1) of Section 11A of the Central Excise Act. The Manager of the factory appellant Shri Sanjay Bhaskar was concerned in production, transportation and removal of the excisable goods which he knew or had reason to believe, were liable to confiscation under the Central Excise Act, and the rules made thereunder, and is liable for penalty under Section 209A of the Central Excise Rules. The show cause notice was issued to the appellant factory, its manager, in the above terms to show cause on 4-11-1993 and it was replied by the appellants on 4-1-1994. The personal hearing was fixed on 2-3-1994 which was attended by the Advisor Shri Surender Garg and Consultant Shri N.K. Vyas and the appellant Shri Sanjay Bhaskar. They were heard. After perusal of the material available on record the impugned order was passed confiscating the excisable goods seized with redemption fine of Rs. 20,000/- and the two trucks were also confiscated with the redemption fine of Rs. 5,000/- and the duty of Rs. 2,712/- and Rs. 75,083/- were confirmed, and the penalty of Rs. 15,000 /- imposed from the appellant factory and Rs. 5,000/- on the Manager Shri Sanjay Bhaskar. Hence thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him as to why penalty is imposed. He was called after the visit of the officers, and he is not liable for the penalty as per 1995 (78) E.L.T. 301 (2). 3. The Ld. JDR has relied on 1997 (93) E.L.T. 397 in the case of Autolite (India) Ltd. v. Collector of Central Excise at paras 5 and 6 under Rule 173-Q (1)(b) and contended that there was no proper accounting of the production and the seized goods are liable to confiscation. Collector can take the base of the electricity consumption which is a visual factor to find out the normal production as per 1994 (73) E.L.T. 7, paras 3, 4, and 6. There is no evidence of breaking of the machinery and the affidavit of the Engineer is dated 20-2-1995 is after the impugned order. In the course of the reply arguments it is urged that non-accountal of the goods produced, when the officers visited 7.00 a.m., is natural as shift ends only at 8.00 a.m., and then only entry will be made by the administrative staff. Previous days production is recorded and the reasonable explanation is given. There is no inconsistency in the accounting in this case which was present in 1997 (93) E.L.T. 397 in the case of Autolite (India) Ltd. The affidavits is filed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, if really it was so the trucks could have been taken during the night time itself. The making of entry in the R.G. 1 register about the numbers of cylinders used could have been avoided. In the absence of these things, the only conclusion that can arrived is that the department has failed to show that the appellant has clandestinely removed, the goods produced, as alleged in the show cause notice. Evidently, the goods were found in the two trucks in the factory pre- mises of the appellant which is not clandestine removal. It may be an attempt to remove or intend to removing as per the 1992 (68) E.L.T. 807 in the case of T.M. Industries v. Collector of Central Excise (paras 18 to 21). 1994 (64) E.L.T. 337 in the case of Icycold Commercial Enterprise v. Collector of Central Excise Calcutta-I. The clandestine removal is a positive act and the burden is on the department to prove it which cannot be done merely on presumption. (paras 12) 7. Now coming to the question of production of the goods on the basis of the consumption of electricity in the light of the statements and the records i.e. electric bills. The show cause notice dated 4-11-1993 is required to be considered. Accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 75083 cubic metres of oxygen gas by deducting 10,254 cubic metres from 85,328 cubic metres. So, this is the basis on which the claim is made. This claim is not a positive material to show the production and suppression and clandestine removal. The statement of the lady Director Truptiben and the conclusion arrived at varies to the large extent. It is not disputed that the factory has started producing in May 1993. The electric bills produced shows the vast development in the production of the gas from May to June 1993. The Affidavit of the engineer, though late, that is after the order-in-oringal, gives some material to show the teething problems of the appellants factory and the initial stage. The department has not totally denied this. The contention of the appellant in this regard is not rebutted in any manner by the department. In the absence of it, the explanation offered by the appellant has to be accepted. In the ruling in 1997 (90) E.L.T. 343 in the case of Padmanabh Dyeing Finishing Work v. Collector of Central Excise, Vadodara dealing with the Demand-Clandestine removal - It is held that electricity consumption to work out the probable production not by itself sufficien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... giving the assessee a reasonable opportunity of being heard. (2) The officer empowered as aforesaid may revise the norm as determined by him at any time, if after such further inquiry as he may consider necessary, he has reason to believe that any factor affecting the production of the factory, has undergone a material change : Provided that the norm as determined by the officer empowered as aforesaid shall not be revised to the disadvantage of the assessee unless such assessee has been given a reasonable opportunity of being heard. So from the above it is clear that the normal production can be determined by the officer duly empowered by the Commissioner looking to the installed capacity of the factory, raw material, utilisation, labour employed, power consumed and such other relevant factor as he may deem appropriate. He has to fix the quantum and the period of time when the production was considered normal. The normal quantum of production during a given time so determined by such officer shall form the normal production. The impugned order and the show cause notice does not any where deal with requirement of Rule 173E. On the other hand, the discussion in the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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