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Commissioner of Central Excise, Customs And Service Tax Hyderabad-I Versus Cubex Tubings Ltd. And Vica-Versa

2016 (1) TMI 12 - CESTAT BANGALORE

Clandestine manufacture and clearance of various articles of copper and copper alloys - Finished goods daily stock register (RG-1) was not complete - the officers found copper winding wire scrap lying in gunny bags as also in loose and lump condition in the factory. As the appellant could not explain the source of procurement of the said scrap, which is raw material for the appellant, the same was seized under panchnama - Held that:- The entire case of the Revenue is based upon the initial state .....

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t the same were not entered with any malafide intention to remove them clandestinely.

Regarding source of scrap - the assessee have produced invoices of two persons showing the sale of the scrap on the previous night of the visit of the officers. No enquiries stand made by the Revenue from the said two suppliers of scrap. If the scrap has been received in the factory on the previous day, late night, it cannot be expected to be entered in the records by the next day early morning.

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hey arise out of the same impugned order of Commissioner. 2. The assessee is engaged in the manufacture of various articles of copper and copper alloys such as copper tubes, copper rods, copper strips, copper flats, brass tubes, cupro nickel pipes etc. falling under Chapter 74 of the Central Excise Tariff Act 1985. Their factory was visited by the officers of the Directorate of Central Excise Intelligence on 25.03.2008 at 8.00AM in the morning. Various verifications were conducted and records we .....

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reasonable belief that the same were meant for clandestine removal, the officers seized the same. 3. During the course of post seizure investigations, the statements of various persons were recorded. Shri Bhanwar Lal Ramavat Dy General Manager (Production & Tools) in his statement dated 26.03.2008 agreed with the panchnama proceedings and submitted that he was not aware of the source of acquisition of the scrap and the finished products were manufactured in their factory about 10 days back a .....

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also recorded, wherein, she deposed that she was responsible for making entries of invoices, quantity details, CENVAT credit details etc. in the central excise related records. As she was not given any packing list in respect of the final product, no entries were made in the RG-I. 4. Subsequently vide their letter dated 02.04.08, the appellant submitted that cupro nickel and brass tubes were finally completed at the late hours on 24.03.2008 and therefore entries could not be made in RG-I records .....

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ubmitted that though ad brass tubes and cupro nickel pipes were manufactured a week back, the same were subsequently subjected to eddy current, hydrotest, surface inspection, dimensional inspection, lengths cutting etc. The said goods finally passed the tests on 24.03.2008 and were released for weighment and packing which was completed on the said date at around 22.00 hours. Inasmuch as the officers visited their factory on 25.03.2008 at 8.00 AM in the morning, the goods could not be entered in .....

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ly confiscated the ad brass pipes, totally valued at ₹ 60.59 lakhs with an option to the assessee to redeem the same on payment of redemption fine of ₹ 15 lakhs. Similarly copper nickel pipes totally valued at ₹ 8.44 lakhs were confiscated with an option to the assessee to redeem the same on payment of redemption fine of ₹ 2 lakhs. In addition. penalty of ₹ 10 lakhs was imposed upon the appellant under Rule 25 of Central Excise rules. Further, he dropped the proceed .....

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djudicating authority has dropped the proposal to confiscate the scrap. 9. I have heard Shri Y. Sreenivasa Reddy, learned advocate for the assessee and Shri S. Teli, learned A.R. for the Revenue. 10. After appreciating the submissions made by both sides, I find that the adjudicating authority has confiscated the finally manufactured products, which according to the Revenue were not entered in RG-I records. The adjudicating authority has primarily relied upon the statements made by various person .....

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, surface inspection, dimensional inspection, length cuttings etc. The goods manufactured without passing these quality control tests would have been manufactured about a week back but cannot be considered as final product for the purpose of entry in RG-I records. On going through the statements of various persons, I find that there is no reference by any person to the fact of passing the quality control tests only the previous day. No deponent has deposed that these quality control tests were a .....

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