TMI Blog2000 (2) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants had furnished bank guarantee amounting to Rs. 15,22,500/- at the time of provisional release of the goods, the same has been appropriated by granting redemption of the goods towards fine. The facts of the case are that the appellants are manufacturers of bulk drugs falling under Chapter sub-heading No. 2942.00 attracting rate of duty @ 10% ad valorem. On 27-8-94, the Superintendent of Central Excise (P I) and his Inspectors visited the appellants factory premises and verified the stock of bulk drugs with reference to the closing balance of R.G. 1 Register and found that there were 140 drums of Cipro Floxacin Hcl each containing 25 kgs. totally weighing 3500 kgs. in excess over the 'nil' closing balance. When the statement of Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey clear the goods on payment of duty. 2. Shri D. Linga Rao, Manager, Quality Control Department in his statement dated 27-8-94 admitted that he had already completed the test for 116 drums and samples taken except the batches indicated in the order impugned and also admitted that he is not the incharge of the production and also not connected with Central Excise matters. However, this statement was not accepted as all the requirements passing the quality control have already been completed on the day of seizure i.e. 27-8-94 and analyst also has signed the report. Therefore, it had been construed that even in respect of two batches, whose numbers have been given in the order impugned had also passed the quality control test and had not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity. They had also explained that the bulk drug is not a consumer product and normally they need not pay duty through PLA for the reason that they get duty credit @ 20% ad valorem and the duty liability on bulk drugs is 10% ad valorem. They had pleaded that mere non-entry in R.G. 1 register cannot be considered as violation of rules with an intention to evade payment of duty and hence the proceedings are required to be dropped. The Commissioner after due examination of all the facts and case laws cited, held that there was a clear admission with regard to 116 drums having undergone and completed the quality control tests and there was a long gap in the appellants not having entered the details in the R.G. 1 register. There was a clear admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intention to evade duty as there was still time to prepare documents. He submits that the goods were lying in the bonded room itself indicates that the appellants had not made any preparations for the purpose of removal of the goods. He submits that the goods have not been kept in bonded room and even if there was a lapse in the entry in R.G.1 register, that by itself will not give room for a conclusion that there was an attempt to remove the goods, therefore, Rule 9(1) is not attracted, as the said rule would be attracted only if the goods had been removed clandestinely. Hence, invocation of Rules 9(1) and 173Q is totally unsustainable. He, therefore, prays for full waiver in the matter and he also prays for setting aside the confiscation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the material facts and evidence, we are of the considered opinion that there was a clear admission made by the Factory Manager that they were not adopting the procedures and following the rules in entering the details in R.G. 1 register, after the quality control test had been completed. The Manager himself had admitted that the goods had reached R.G. 1 register stage as soon as they were certified by the quality control department. There is a clear admission that the goods details were entered in the R.G. 1 register only when the goods were removed. This is a clear violation of rules, as the rules clearly provided for immediate entry in the R.G. 1 register before the removal of goods to the bonded room. The fact that these goods were fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of confiscation is sustainable. The only plea raised is that there was no intention to evade duty the reason being the appellants were exporting the goods and duty was being paid through PLA and that duty on the inputs was @ 20% ad valoram as against the duty on final products is @ 10% ad valorem. This point has been well taken and the Commissioner has not recorded any findings on this aspect, despite these submissions having been recorded in para 10 of the order, nor imposed heavy penalty under Rule 173Q. In terms of the judgment of the Hon'ble Supreme Court rendered in the case of CCE v. H.M.M. Ltd. as reported in 1995 (76) E.L.T. 497 the Department has to prove that the appellants had clear intention to evade duty. Therefore, tak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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