TMI Blog2005 (5) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... of personal penalty of Rs. 1 crore and Rs. 35 lakhs under Rule 173Q(1) of Central Excise Rules, 1944. In addition, land, building, plant, machinery, etc., belonging to the said appellants has been confiscated with an option to the appellants to redeem the same on payment of redemption fine of Rs. 15 lakhs in each case. Penalty of Rs. 35 lakhs and Rs. 20 lakhs has been imposed upon Shri S. C. Agarwal, holder of power-of-attorney for the proprietor of M/s. Mira Silk Mills under the provisions of Rule 209A of the Central Excise Rules, 1944. 3. The present case has a chequered history. M/s. Mira Silk Mills is a proprietary concern of Mrs. Meera Agarwal, engaged in the processing of man-made fabrics, which is situated at Dombivli. The said factory was visited by the Central Excise Officers on 22-11-1985, who conducted various checks and verifications. From the scrutiny of the records maintained by the said unit, it was found that they were indulging in evasion of Central Excise duty by mis-declaring the processed fabrics as calendered fabrics. The appellant s records were taken into possession. Thereafter, enquiries were made from Maharashtra State Electricity Board, as regards the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, 1981, he was dealing with transport work i.e. delivery of goods from factory to the merchant-manufacturers. He further deposed that machines such as thermopack, 6 Jiggers, 1 Stenter containing 3 Chambers were in operation at the time of his joining the factory and work done in two shifts. Whenever he went to the factory, all the above machines were found to be in operation. (iv) Shri Rajan Verma, an ex-employee of M/s. Mira, in his statement dated 16-12-1985 inter alia stated that he worked for above 5 years from 1976 at the residence of Shethji i.e. Shri Suresh Chandra Agarwal. Afterwards from 1980, he worked in the factory on different machines. He had worked on Jigger, where the cloth is dyed, stentering machine on which the width of the fabrics is adjusted, beam dying on which the suiting cloth is dyed, and decatising machine which is used for making the cloth smooth. He further added that during his time factory was working in two shifts and all the machines were in operation. After working for above 4 years, in the factory, he left services in April, 1984. 6. The scrutiny of the records taken into possession by the department revealed the following facts, as recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial no. 51 of Calendering Outward Register No. 1 for period 5-1-1984 to 18-6-1984, an amount of Rs. 3,008.75 had been charged for 2407 metres of shirting which had undergone process of special felt. At serial no. 165, amount of Rs. 2,201.25 had been recovered for 1761 metres of cloth which had undergone process of Double Felt . (e) File at Sr. No. 43 of the records withdrawn by Central Excise Officers on 23-11-1985 gave the processing charges charged by M/s. Mira from the merchant-manufacturer. The page no. 17, dated 10-7-1982, gave the price list i.e. the rate at which processing charges were charged from merchant-manufacturers, depending upon the quality of suiting/shirting. At serial no. 1 to Page 17, the charges for bleaching, finishing and calendering for top dyed shirting were shown as Rs. 1.35 per metre, whereas the charges for special calendering are Rs. 1.60. At serial no. 2, the charges for dyeing and finishing of 50 x 76 polyester shirting were Rs. 1.50 whereas the charges for special double calendering were Rs. 1.75 per metre. At serial no. 14, charges for ex-whiter Double Calendering were Rs. 2.00 per metre. It is interesting to note that charges for decatising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -9-1982 to 11-11-1982 (page 157), that the goods had come for special calendering only. Therefore, prima facie it appeared that these goods were dyed and printed. From these instructions, it appeared that they were directing the parties to give the dyeing and printing programme separately just to put the same off the record. (g) Two files i.e. (1) Monthly yearly report file no. 2 for the period November, 1981 to October, 1982 and (2) Monthly statement file from November, 1982 to October, 1983 were withdrawn by Central Excise Officers on 7-4-1986. The data regarding the consumption of chemicals, on monthly basis were tabulated in Annexure A-2 to show cause notice. It was observed that during the months of July, 1982, December, 1982, March, 1983, May, 1983, the quantity of processed goods manufactured is 78638.40, 1188, 7447 and 6603 sq. metres respectively, whereas the calendered goods manufactured is 606031, 538603, 610376 and 671258 sq. metres respectively. The amount spend on chemicals for the above months is Rs. 4,71,769/-, Rs. 3,58,287/-, Rs. 4,35,203/- and Rs. 3,75,302/-, respectively. Interestingly the amount of Rs. 3,58,287/- was spent on 1188 meters (for July, 1982) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -9-1988. The said order was challenged by the appellants by way of filing a writ petition before the Hon ble High Court, on the ground that the copies of the some of the documents were not served upon the appellants. Appreciating the said plea of the appellants, the Hon ble High Court set aside the order of the Commissioner and directed the revenue to do fresh adjudication after serving the copies of the relied upon documents. 10. During the course of de novo proceedings, as a result of Hon ble High Court s directions, the appellants submitted that their entire records were destroyed in fire and hence all the documents including the copy of the show cause notice be supplied to them afresh. On 16-11-1994, they were again supplied with the copies of the show cause notice along with annexures, statements, panchanama, etc. As regards the remaining records, they were directed to inspect the same. However, as recorded by the Commissioner in his impugned order a number of opportunities were afforded to the appellants to inspect the said records but they always asked for another date to do so. Ultimately, records were inspected by Shri S.C. Agarwal and his authorised representative on 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants neither asked for cross-examination nor filed any reply to the notice but contended that inasmuch as the period of two months given by the department, especially for re-adjudicating the case was over, the Commissioner was debarred from adjudicating the same. The revenue has, however, taken extension of the said period. 13. Inasmuch as the appellant was not co-operating in spite of having given an undertaking before the Tribunal, while seeking remand of the matter, the Commissioner proceeded ahead with the adjudication and passed the impugned order. 14. Shri K.K. Shroff, ld. Advocate appearing for the appellants agitated the matter only on the principles of violation of natural justice taking us through the various orders of the High Court as also of the Tribunal vide which the matters were remanded. Ld. Advocate emphasised that the Commissioner has not followed the directions of the Tribunal in supplying them the original documents and has thus again contravened the principles of natural justice. On being queried as to whether the documents, original of which have not been supplied, have been relied upon by the Commissioner or not, ld. Advocate fairly agreed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umed by M/s. Mira Silk Mills for the period June, 1981 to December, 1985 have been disclosed along with a certification by the Superintending Engineer (USK) MSEB, Kalyan which is to the effect - with reference to letter No.F.No.V/Adj/15(22I) (SCN) 354/86/B-III/15466 dated 11-12-1991 - Consumption from June, 1981 to December, 1985 as shown above, are verified from the original HT bills. The consumption for the period June, 1981 to August, 1981 corrected as per Bills. The consumption from September, 1981 to December, 1985 are correct . 18. There is no challenge to the said consumption of electricity units by the appellants in which case it has to be concluded that they have accepted the said consumption. Merely because the original month-wise bills are not available, the said consumption cannot be ignored. The units consumed during the particular months have been verified and certified by the concerned officer and, as such, in our view constitute a valid evidence. Similarly, we find that all the R form details have been disclosed to the appellants by way of a statement which was checked and verified and certified by the Additional Assessor and Collector (Octroi), Bombay/Panvel h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such high quantum of chemicals, when they were doing, according to them, only calendering. 22. Reference has also been made to the statements of various persons, which clearly corroborate the details contained in the R forms and the other registers, along with electricity consumption. As such, we are of the view that there is ample evidence on records to prove the allegations against the said appellants having already held that principles of natural justice was adhered to by the adjudicating authority as far as possible and practicable, in the facts and circumstances of the case, we hold that the appreciation of evidence on record establishes the clandestine removal of processed fabrics under the garb of calender fabrics. As such, duty has been rightly confirmed against them. We uphold the same. However, in the facts and circumstances of the case, penalty amount in the case of Mira Silk Mills is reduced from Rs. 1 crore to Rs. 35 lakhs in Appeal No. E/656/01/Mum and from Rs. 35 lakhs to Rs. 15 lakhs in Appeal No. E/658/01/Mum. Penalty on Shri S C. Agarwal is reduced from Rs. 35 lakhs to Rs. 15 lakhs in appeal No. E/656/01/Mum and Rs. 20 lakhs to Rs. 10 lakhs in Appeal No. E/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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