TMI Blog2002 (11) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... 209 read with Rules 9(2) and 226 of the Central Excise Rules, 1944. He has also confiscated goods valued at Rs. 14,32,924/- under Rule 209 of the Central Excise Rules, 1944 with an option to redeem them on payment of a fine of Rs. 1,50,000/-. 2.(a) The appellants are a registered 100% EOU engaged in the manufacture of Polished granite slabs falling under Chapter sub-heading 6807 of the Central Excise Tariff Act, 1985. Substantial part of the goods manufactured are exported by the appellants. The appellants are also permitted to sell 5% of their production as rejects in the D.T.A. on payment of appropriate duty. (b) The officers of the Central Excise Department visited the premises of the appellants on 7-11-1992 and undertook a verifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the levy of Central Excise duty under first proviso to the Central Excise Act, 1944 in case of an EOU Section 3 is sui generis, it cannot be equated with the concept of levy as on other goods produced or manufactured in another unit. It was submitted in the case of Siv Industries - 2000 (117) E.L.T. 281 S.C., it has been held after recording the say of UOI that proviso to Section 3(1) would apply only when goods are allowed to be sold in India. The Circular Nos. 618/9/2002-C.E., dated 13-2-2002 issued by the Central Board of Excise and Customs has also settled the position that in a situation where goods have been cleared without getting the permission from the Development Commissioner i.e. not allowed to be sold, duty in that case, be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge 88 of the paper book, that when sale of defective granite polish slabs is effected the 'salvageable area' is only reckoned and charged. Only such 'net area' is considered for accounting purposes. We find that the internal documents showing the gross area, will not necessarily indicate or confirm that excess goods have been cleared without payment of duty. That differential quantity has also been sold to the same customer, cannot be concluded in absence of any evidence brought on record, by department regarding payment of or excess receipts, of such additional amounts. We find there is force in the assertion of the appellants, that the total monetary realisation made by them from the customer for the net quantity even though gross area de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial or case of concluding clandestine removal of extra quantity of area in this case. (d) As regards the demand of Rs. 6,41,417/-, this demand according to the Department, is based on the documents representing a date-wise, customer-wise and variety-wise statement of despatches of the goods. The Department alleges that the different quantity has been sent to the customers as indicated in Annexure-VIII while duty has been discharged on lesser quantity. The appellants submit that, the differential quantity only represents the gross area of the same slab, that had been supplied to the customer. In view of the accepted fact that the differential quantity has also been supplied to the same customer and in the absence of any evidence th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 (82) E.L.T. 347 (3) International Cylinders Private Ltd. v. CCE, Chandigarh - 1999 (112) E.L.T. 584 (4) CCE, Bangalore v. Jindal Aluminium Ltd. - 1998 (29) RLT 183 (5) Kothari Products Ltd. Ors. v. CCE, Kanpur and CCE, Kanpur v. Kothari Products Ltd. - 1999 (31) RLT 67 (6) Raj Sandeep Co. Gian Singh v. CCE Customs, Chandigarh - 1999 (31) RLT 324 (7) Birla Tyres Ors. v. CCE, Bhubaneswar - 2000 (126) E.L.T. 1079 (Tri.) = 1999 (33) RLT 52 (8) Arti Steel Ltd. v. CCE, Chandigarh - 1999 (114) E.L.T. 537 (T) = 1999 (35) RLT 162 (9) Amba Cement and Chemicals v. CCE, Allahabad - 2000 (115) E.L.T. 502 (10) Suvarna Polymers Pvt. Ltd. v. CCE, Hyderabad - 2000 (120) E.L.T. 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to maintain a RG 1 register. Therefore, the RG 1 being maintained in this case cannot be a document prescribed by law to indicate any shortage whatsoever. It cannot be used for purposes of any comparisons. No penalty can be imposed under Rule 226. Since provisions of Chapter VIIA under which Rule 173Q falls are not applicable to EOUs covered under Chapter VA of the Central Excise Rules, 1944. When excess/shortages as arrived at based on RG 1 as in this case cannot be upheld, the question of the confiscation under Rule 209 does not arise. As far as shortage is concerned, the alleged quantity represents 5.14% of the total production of the appellants and since for an 100% EOU there is no presumption of an illegal removal in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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