TMI Blog2000 (11) TMI 1216X X X X Extracts X X X X X X X X Extracts X X X X ..... les 1944. I demand interest on duty of excise amounting to ₹ 33,79,983.54 from the said M/s. Deena Paints Ltd. under Section 11AB of the Central Excise Act, 1944. 3. The facts of the case in brief are that the appellants are engaged in the manufacturing of paints, Varnishes. They are availing modvat credit of duty paid on inputs under Rule 57A of the Central Excise Rules, 1944. 4. On 9.10.1997 Central Excise Officers visited the factory of the appellants. On physical checking of the finished product as well as raw materials a stock of finished product involving Central Excise duty of ₹ 13,116 and raw materials involving Central Excise duty of ₹ 25,094 was found in excess and was seized. Statement of Shri Budh Ram foreman of the factory was recorded. In his statement he deposed that he had been working in the factory for the last 26 years; that he was keeping the daily account of production whatever was manufactured in a day in his diary; that he handed over the diary to the officers; that in the said notebook he had maintained the details of daily production of paints manufactured container capacity-wise, colour-wise as well as date-wise production of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire case of the department is made on a diary maintained by a labourer and the statements of labourer and the production manager of the factory. It was argued that the department has not brought on record any evidence that the appellants had procured additional raw material and manufactured the goods. It was also argued by the appellants that the department has not brought on record any evidence about clandestine removal of the goods without payment of duty. It was also submitted that there was no evidence placed on records to show that appellants received any amount of sale proceeds of the goods. It was therefore, contented by appellants that duty was not demandable in the absence of any proof or records. It was submitted that clandestine manufacture and clandestine removal of the goods without payment of duty should have been proved properly, which was not done, Ld. Commissioner after examining the various facts and the evidence on records and submissions made by the appellant held as indicated above. 8. Shri G. Shiv Das and Shri M.P. Devnath Ld. Advocates submit that the case of the department originated on a visit to the factory and physical checking of the stocks; that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The counsels submitted that imposition of penalty of an equivalent amount under Rule (sic) 11AC read with Rule 173Q is not sustainable since the period of demand in this case is from 1.4.1995 to 7.10.1997. It was submitted by them that the statute was amended for imposition of penalty equivalent to the amount of duty in September 1996 and therefore, any penalty under Section 11AC can cover the period after 28.9.1996. The counsel also submitted that penalty cannot be jointly imposed under Section 11AC read with Rule 173Q. In support of their contention, they cited and relied upon the decision of this Tribunal in its final order A-41/99-NB dated 27.5.1999. Counsel therefore, submitted that in view of above submissions and the case law cited and relied upon by them, the appeal may be allowed. Shri Mewa Singh Ld. SDR submits that the entire case is to be viewed in the facts and circumstances. He submits that on the visit of the officers un-accounted stock in excess of the recorded balance was found. Presumably it was kept for clandestine removal without payment of duty. This excess stock is to be viewed in the light of the fact that there was a notebook being written by the foreman o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er electricity consumption. There is also no evidence of receipt of extra sales proceeds of goods clandestinely manufactured or removed. We therefore, uphold the dropping of the demand of ₹ 4,72,51,048- 11. The Revenue has not, to our mind, advanced any convincing remarks to its above findings holding that the demand of ₹ 4,72,51,480/- is sustainable. 12. Ld. Counsel submitted that all the ingredients were absent in the instant case and therefore following ratio of the judgement the demand in their case should be dropped. The counsel also relied on the judgement of this Tribunal in the case of Kabra Enterprises and Others cited above. We find that in para 15 of this judgement this Tribunal held that we are of the view that categorical manufacture and categorical removal has to be proved. The counsel submitted that department has not proved any categorical manufacture and categorical removal without payment of duty in their case and therefore, department has not been able to make out the case. 13. Regarding notebook, the counsel relied upon the decision of this Tribunal of the case of Kothari Products Ltd. and others. In para 14 Tribunal in this case held that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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