TMI Blog2000 (9) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... ts related thereto. (ii) M/s. UPL have removed excisable goods by not recording the production in their excise records and cleared the same without payment of Central Excise Duty, thus have contravened the provisions of Rules 9(1), 52A, 53, 173G(4), 173F and 226 of the Central Excise Rules and rendered themselves liable for penal action under Rules 9(2), 52A, 173Q and 226 of the said Rules. (iii) M/s. UPL have also rendered themselves liable to penal action under Section 11AC and to the payment of penal interest as the duty amount held recoverable from them as per (i) above. (iv) I also hold that Shri Dinesh Rustagi, MD of M/s. UPL has concerned himself in manufacturing, selling and dealing in the excisable goods with the conscious knowledge that those were liable for confiscation under the Central Excise Law and hence has rendered himself liable to penal action under Rule 209A. ORDER I, accordingly, order as under : (i) I demand Central Excise duty of Rs. 23,73,934/- (Rs. Twenty three lakhs seventy three thousand nine hundred thirty four only) under Rule 9(2) read with Section 11A(1) of the Act which should be paid/recovered within 30 days of receipt of this order. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicated that the appellant had manufactured and cleared goods clandestinely without payment of Excise Duty and without cover of invoices from its factory. It was alleged that the appellant had received raw material (plastic dana) with cover of invoices which they did not account for in their records and used the same in the clandestine manufacture of Lay Flat Tubing and Multilayer Film which was also not recorded in the statutory records and were clandestinely removed without payment of Excise Duty. Accordingly, a SCN was issued to the appellant asking them to explain as to why they did not record 2,95,472 kgs. of plastic granules received in their raw material account during the period from 1-11-93 to 11-1-97; why did they not make correct entries of the goods manufactured in their statutory records; why did they clandestinely removed 2,65,395 kgs. of finished goods and 29,486 kgs. of waste and scrap without determining the duty due thereon and without following the proper procedure; why duty amounting to Rs. 48,11,943 on 2,65,395 kgs. of finished goods and Rs. 76,946.00 on 29,486 kgs. of waste goods should not be demanded from them and why penalty should not be imposed. In repl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Dec '90 and was closed in March '94 but the SCN indicates sale of plastic granules to the appellants by M/s. SRP as per their Ledger/Slip Note Books even after its closure. Ld. Counsel submitted that on cross examination on 10-5-99 Shri Sanjay Gupta stated that M/s. SRP and M/s. R.K. Traders had no godown in Ghaziabad; that they were lifting the materials from the various places in Delhi and supplying it directly to the customers; that the goods receipt recovered from M/s. Ajanta Goods Carriers Ghaziabad showed movement of goods from Ghaziabad to Polygraphics and Sanex India; that thus there is contradiction; that in view of this contradiction, Sanjay Gupta statement need not be relied upon. Ld. Counsel submitted that there was no corroboration of the statement of Shri Sanjay Gupta. 5. Regarding the statement of Shri Subodh Arya Ld. Counsel submitted that though a statement of Shri Subodh Arya was recorded on 16-1-97 yet this statement was not listed in their relied upon documents of the SCN; that the entries found in the Ledgers and documents of M/s. SRP/R.K. Traders in the name of Shri Subodh Arya cannot be accepted as Shri Subodh Arya was not confronted with the entries; th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted goods to the premises of the appellant. It was also contended by him that though the allegation of clandestine receipt was for the period 1-11-93 to 1-11-97, the goods receipts pertained to the period Oct '96 to Feb '97. Ld. Counsel submits that Shri Parveen Rustagi of M/s. Polygraphics in his cross examination stated that the goods consigned to Polygraphics as per Goods Receipt/Invoices were infact received by M/s. Polygraphics. 8. Ld. Counsel in his written submissions submitted that for procurement of raw-material over and above that recorded by the appellant, no documentary proof has been produced; that no entries in their registers were found to be doubtful; that the entire evidence relied upon by the Department is from the suppliers, who in cross examination clearly admitted in favour of the assessee. Ld. Counsel submits that the statements in cross examination cannot be ignored and that they cannot be just termed as afterthought. 9. Ld. Counsel submits that in so far as manufacture in the factory is concerned, the Department has relied upon slips pertaining to the period 6-11-96 to 27-11-96; that these production slips do not uniformly show lower production recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E 2. 1996 (85) E.L.T. 260 (paras 3 4) - Rhino Rubbers Pvt. Ltd. v. CCE 3. 1999 (110) E.L.T. 919 (Tribunal) = 1999 (33) RLT 15 (Paras 2, 9 to 12 and 14) - CCE v. Moon Beverages Ltd. 4. 1999 (82) ECR 33 - Kothari Prducts Ltd. v. CCE 5. 2000 (123) E.L.T. 703 (Tribunal) = 1999 (31) RLT 863 (paras 3, 4, 5) - Premier Glass Industries v. CCE 6. 1996 (82) E.L.T. 347 7. AIR 1977 SC 1712 (para 16) - Sita Ram Babu Patil v. Ram Chandra Nago 8. (1994) 3 SCC 569 (Para 278) - Kartar Singh v. State of Punjab 9. 2000 (124) E.L.T. 444 (Tribunal) = 2000 (88) ECR 628 (Para 11) - Moder Steel Industries v. CCE Ld. Counsel, therefore, prayed that in view of the above submissions the appeal may be allowed 11. Shri Mewa Singh, Ld. DR submitted that the case of the Department is based not only on the statement of raw material suppliers and finished goods dealers but also on the accounts maintained by them. He submits that the statement of various persons including the employees of the appellant factory showed that the appellants were procuring huge quantity of raw-material. They were not recording it in their records, manufacturing finish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of one day when the statement was recorded. Statements were recorded on a number of days. In no statement did the appellants state that the statements were recorded in duress as they stated in their cross examination. Since the statements were recorded over a period of time and since during that period the persons whose statements were recorded did not complain of any threat or duress, therefore, claiming duress and threat is an afterthought. The affidavits were sworn in much earlier but were produced in reply to the SCN which was after a lapse of time. Looking to the above facts and the submissions made before us as also the evidence on record, we hold that raw material was received in the premises of the appellant which was used by them in manufacture of co-extruded multi-layer films and Lay Flat Tubings. 14. On the question of conversion of this unaccounted raw material (plastic dana), we note that there were production slips for about 15 days. In these production slips it was generally found that the production on particular dates was much higher than the production recorded in R.G.I Register. The contention of the appellant was that on certain occasions; the quantit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se was conducted that would have led nowhere. 17. Regarding the affidavit of Shri Subodh Arya that he was doing on his own account as Commission Agent, the contention does not appear to be correct. Shri Subodh Arya was an employee of the appellant's firm and therefore, would not normally do the same business as Commission Agent and thus his contention that he was doing business on his own account is not convincing. 18. In so far as imposition of penalty is concerned, we note that the appellant firm was not keeping correct record of the raw material received, used for manufacture and was removing the goods without payment of duty. We, therefore, hold that the imposition of penalty is warranted. However, looking to the facts of the case, we reduce the penalty to Rs. 5 lakhs on M/s. Ureka Polymers. 19. We find that Shri Dinesh Rustagi during the material period was the Managing Director of the appellant firm. He was concerned with manufacturing, selling, dealing in excisable goods. We, therefore, hold that penalty was imposable. However, looking to all the facts and circumstances of the case, we reduce the penalty on Shri Dinesh Rustagi to Rs. one lakh. 20. The appeals are dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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