TMI Blog1999 (5) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 209A. A penalty of Rs. 10 lakhs was imposed on Shri Alok Tiwari, proprietor of M/s. West Roadways under Rule 209A. All the above appellants are in appeal before us. 2. Shri Kamajit Singh, ld. Advocate appeared for all the appellants and Shri Satnam Singh, SDR represented the Revenue. 3. By SCN dated 8-1-1996, the Revenue alleged that on a visit by the Central Excise Officers to the factory of the appellant firm, M/s. Quality Export and Chemical on 12-7-1995, (QEC for short) it was found that the said factory had 10 deep freezers having capacity 1000/800 litre and two centrifugals were installed. However, there was no fractional distillation plant in the area marked as working hall. In rear wall of the working hall there was a big open gate. Within the walled boundary of the factory premises there were certain constructions which were not reflected in the ground plan submitted to the department. In all there were 8 rooms outside the working hall. 8 fraction distillation columns were also found to have been installed and found to be working at the time of visit of the Officers on 12-7-1995. The authorised signaory of M/s. QEC informed the Officers that mentha oil was be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were engaged in the manufacture of items like terepene as claimed by them. In the said premises, the SCN alleged suppression of production of excisable goods and non-accountal of raw materials like mentha oil, basil oil, lamonine oil, russian pipperatta oil etc., for which no raw material register was maintained. The Department, therefore alleged that there was excess stock of finished goods as there was no record of stock of raw materials duly accounted. During investigation, the statement of Shri Mukul Kumar, Acting Partner of M/s. QEC was recorded in which he admitted that M/s. QEC had common premises and common entry gates with the two trading units working from the same premises. As regards the excess stock of goods found in the QEC factory against the recorded balance in RG 1 register as on 12-7-1995, he stated that his employee Shri Sunil Kumar had arrived late on that date and, therefore he could not enter the production in RG 1 register. In reply to a question as to how M/s. QEC produces Menthol, Terpene, Peppermint Oil etc. in the absence of any fraction distillation plant in the working hall, he stated that their distillation plant had been sent for repairs at Naraina In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trial users. Ld. Counsel submits that the 3 units namely, M/s. QEC, M/s. Quality Flavour and M/s. Quality Export were independent units having independent financial arrangements, independent stock of raw materials, finished goods etc. There was no flow back of funds nor any common stock of raw material or finished goods nor any common employees. There was also no transactions inter se between the 3 units. There was therefore, no basis for Commisssioner coming to the conclusion that the two trading units were dummy units. Further, the allegation of the Department accepted by the Commissioner that the 3 units were functioning from the same premises was incorrect. He submits that the ground plan filed by M/s. QEC did not include premises of M/s. Quality Flavour and Quality Export. There was therefore no contravention of Rule 51A. Since there was no requirement under the law for an assessee to declare the premises of its neighbour, it was also wrong on the part of the Commissioner to hold that the two trading units were dealing in the same products which were manufactured by QEC. At the material time M/s. QEC was engaged in the manufacture of Menthol and DM0 though at the time of its i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mming up his arguments, ld. Counsel submits that the entire case of the Department had been built on surmises and without adequate evidence to substantiate the allegations contained in the SCN. He pleads for setting aside the entire order. 5. Shri Satnam Singh, ld. SDR submits that the Commissioner had given clear findings on each of the allegations made in the SCN on the basis of relevant material. As regards location of the 3 units, the appellants themselves contended that two trading units were located in the adjacent premises of M/s. QEC. It was also not denied that the 3 units were owned by the members of the same family. It was also not been denied by the appellants that the ground plan filed by M/s. QEC had not mentioned the existence of two trading units in the same piece of land owned by closely related members of the same family. He further drew attention to the fact that M/s. QEC had not informed the Department about the stoppage of production in their unit or about their distillation plant being sent for repairs. He also refers to the findings of the Commissioner in which he had clearly observed that there were additional construction and alteration made to the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearance. In these circumstances, he defends the impugned order of confiscation of the seized goods, the duty demand and penalties imposed on them. 6. After considering the submissions made and on perusal of the records, we find that the appeals filed by the present appellants lack merit. We find that the manufacturing firm namely, QEC was established in 1990 and they were engaged in the production of menthol and DMO. It consists of three partners. M/s. QEC has claimed that at the time of visit of the officers on 12-7-1995 their unit was not functioning but in the adjacent premises, the distillation plants were operating on trial basis and excisable goods found in the premises were either stocks or production of M/s. QEC before its closure or goods purchased by the two trading units in the course of their business. The appellants have not denied the fact that all the 3 units namely, one manufacturing unit and two trading units operating from the same premises within common boundary wall and common gate were owned by the members of the same family. The defence taken by QEC for the presence of unaccounted quantity of mentha oil and essential oil was that their production relating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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