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TMI Blog2012 (10) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... for clandestine activity for the period 24-6-2000 to 25-7-2000. This is based on records recovered later from the Appellants for the previous period. 4. Appellants were registered as a 100% EOU for manufacture of Needles falling under Heading 9018.32 of Central Excise Tariff, cannulae is one of the major input for manufacturing needles. One cannulae was needed for manufacturing one needle. The facts of Appeal 670/2007 and 671/2007 5. The facts of the case is that when the Central Excise officers visited the factory of the appellants on 5-1-2001 they found that the stock as per RG-1 was nil on 26-7-2000 and there was no production recorded from 26-7-2000 to 30-9-2000. After 30-9-2000 the appellants had stopped making entries in the RG-1 register. But the officers found 19,48,184 cannulae and 19,87,600 needles which were not accounted and the same were seized. Further they found private registers showing receipt and issue of cannulae. When the Managing Director and Authorized Signatory were confronted with this evidence he admitted clandestine procurement of raw materials and manufacture of unaccounted needles which were cleared without payment of duty. 6. Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; and (iv) Penalty of Rs. 4,00,000.00 on the appellant No. 2. Accordingly, the same is upheld on the above counts. (B) However, I find that on the issue of confirmation of demand of Central Excise duty amounting to Rs. 9,92,597.00 and the imposition of penalty of equal amount the Order-in-Original requires to be reconsidered in order to arrive at exact determination of the No. of needles cleared without payment of Central Excise duty "and correct assessment of the same by the original adjudicating authority. Accordingly, on this score, the same is remanded back to the Adjudicating Authority." 11. Aggrieved by the order the Appellants have filed these appeals. Facts of Appeal No. 672/2007 and 673/2007 12. In these appeals facts are similar. The case is made based on records recovered from the Appellants for period prior to the period for which the officers got record at the time of search. For this a separate SCN was issued. On adjudication an amount of Rs. 2,62,799/- is demanded as excise duty on needles along with interest. Penalty of Rs. 2,62,799 is imposed under Rule 173Q/209 of Central Excise Rules. Customs Duty of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cers they found raw material and manufactured goods. Their private records showed receipt and issue of main raw material namely, cannulae. So it is very clearly a case where the appellants were clandestinely manufacturing and clearing the goods. The cannulae seized were imported in nature. The appellants are not willing to disclose the source from which the goods were purchased. Since they are hiding the source of cannulae it is very obvious that they had imported it clandestinely. The argument that they had no reason to evade Customs duty is not correct because for availing exemption under 16/2000-Cus., dated 1-3-2000 at S. No. 320, they had to account the goods which being imported in which case they could not have evaded customs duty on final product needles. Further the AR also argues that since the appellant is a Hundred Percent EOU, they have executed a bond for accounting all raw materials procured and finished goods manufactured and therefore the demands cannot be considered as time barred. 19. We have considered the arguments on both sides. We find that the decision of Nizam Sugar Mills (supra) is not applicable to the facts of the case. In that case the second deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were purchased and to whom the goods were sold. The whole matter is a mystery and a matter of argument only but not supported by any documents. Here the appreciation of the facts leads to the conclusion that the appellants had manufactured the needles as alleged. As a Hundred Percent EOU they were supposed to maintain account of raw materials and finished goods. They preferred to show these items to be nil and to continue manufacturing activity. The argument that revenue has not able to lead evidence regarding procurement of other raw materials is week argument because the appellants have no records for such goods even in the case of needles physically seized. So it is very obvious that they have been successful in their clandestine operations to some extent. But that is not a reason to give benefit of doubt to the appellants in this matter. So we are of the view that the finding regarding clandestine manufacture of excisable goods given in the impugned order is maintainable. 22. In the circumstances we uphold the impugned order in the matter of excise duty liability in the two impugned orders. The argument that Rule 173Q is not applicable to a Hundred Percent EOU is not of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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