TaxTMI 
TaxTMI 
1991 (2) TMI 244
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....he brief facts of the case are that the appellants manufacture Aluminium Sections falling under Tariff Item 27, out of Aluminium Ingots and Scraps. They purchase Aluminium Ingots from outside and take credit of duty paid on such ingots under Rule 56A of the Central Excise Rules, 1944. The billets are manufactured in their furnace at billet casting section of the factory and the billets are used as raw materials in the manufacture of Aluminium Sections. On receipt of information that the appellants had received one truck load of Aluminium Ingots without any documents through M/s. Bharat Transport Agency, the Central Excise Officers headed by the Assistant Collector, Central Excise, Jamshedpur paid a surprise visit to the factory premises on 17-8-1983. On scrutiny of R.G. 23 Part I it was found that stock of aluminium ingots as on 12-8-1983 was nil. Further from 12-8-1983 no further entry was made in the register. Again on checking the Form IV register of M/s. Bihar Extrusion Co., the appellants, the stock of billets was nil as on 12-8-1983. But on physical verification it was found that 4,800 kgs. of aluminium ingots and 8462.800 kgs. of billets were found in the factory store. The ....
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....pur on 17-8-1983, nor the two consignments of 10.3 MT and 11.130 MT received on 15-8-1983 and 16-8-1983 respectively were accounted for in any Central Excise records nor any intimation was filed before the proper Central Excise Officer. Out of 23.586 MT, a total of 15.370 MT valued at Rs. 2,35,174.77 of Aluminium ingots, billets and scraps as detailed below were seized on 17-8-83 and 18-8-83. Sl. Description No. of pieces Weight 1. Aluminium billets 18" 21 pcs. 669.600 kgs. 2. Aluminium billets 15" 73 pcs. 1314.000 kgs. 3. Aluminium billets 12" 93 pcs. 1339.000 kgs. 4. Aluminium logs 68 pcs. 5140.00 kgs. 5. Aluminium ingots 245 pcs. 4900.000 kgs. 6. Aluminium scraps Loose 1640.000 kgs 7. Aluminium ingots under processing Loose 368.100 kgs. 15370.900 Kgs. or 15.3709 MT The remaining 8.2151 M.T. appeared to have been rolled into sections and surreptitiously removed without payment of duty without any record including covering gate passes. A show cause notice was issued by the Assistant Collector, Central Excise, Jamshedpur vide C. No. V(27)(15)Seiz/1012/83/414, dated 14-2-1984 for contravention of Rule 9(1) read with Rules 173G, and 53 read with 17....
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....o provision of law warranting the entry of such material on their receipts forthwith. It was, therefore, contended that if the duty paid raw materials received on 16-8-1983 and 17-8-1983 could not be entered on 17-8-1983 in the Raw Material Account this does not lead to contravention of any provision of law. He also contended that the seizure and confiscation of 15.370 MT of Aluminium Ingots, Billets and Scraps were invalid on the ground that out of this quantity 13.286 MT of ingots were received on 16-8-1983 and 17-8-1983 and out of which 8.386 MT of ingots were charged for production on 16-8-1983 and 17-8-1983 and the rest quantity was scrap i.e. recycling material arising out of raw material under Rule 56A. In support of his contention he relied on the following decisions : (i) 1986 (26) E.L.T. 451 (Tribunal) (ii) 1987 (32) E.L.T. 430 (Tribunal) (iii) 1988 (38) E.L.T. 636 (Tribunal) (iv) 1988 (33) E.L.T. 580 (Tribunal) (v) 1987 (28) E.L.T. 315 (Tribunal) (vi) 1988 (38) E.L.T. 264 (Tribunal) 3. The learned J.D.R, Shri A. Chowdhury contended that the Director of the factory, Shri C. Shah and the Chief Executive of the factory apparently stated before the authorities that ei....
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....,847.80. It was, therefore, contended that in view of the clandestine operation made by the appellants and on the facts and circumstances of the case the impugned order is justifiable. He also drew our attention to several findings of the Additional Collector and justified the order. 4. In view of the rival contentions the following issues arise for our determination : (i) Whether the imposition of penalty of Rs. 45,000.00 on the Director, Shri Chandulal Shah is justifiable? (ii) Whether the demand of duty to the extent of Rs. 85,847.80 is in accordance with law? and (iii) Whether the confiscation of the seized materials and the appropriation of the security amount of Rs. 45,000.00 as Redemption Fine is in accordance with law? 5. As far as the first point is concerned the learned Advocate, Shri K. P. Chowdhury contended before us that the licence was issued in the name of the appellants' Company - M/s. Bihar Extrusion Company Private Ltd. It was his contention that the show cause notice was also issued in the name of the appellants' Company to show cause as to why the penalty should not be levied. Therefore, he contended that the penalty could not be levied on the Director. B....
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....ellants' Company had removed 8215.100 kgs. of aluminium ingots without payment of Central Excise duty to the tune of Rs. 85,847.80. The learned Advocate, Shri K. P. Chowdhury contended that in all such cases there must be a definite evidence to show that the appellants had removed such quantity of aluminium materials without payment of duty in this regard. In this connection, he relied on a decision reported in 1986 (26) E.L.T. 451 in the case of B. S. Jewellers v. Additional Collector of Central Excise & Customs, Jaipur. He also stated that in the case of Global Enterprises v. Collector of Central Excise, Chandigarh, reported in 1987 (32) E.L.T. 430 (Tribunal) a decision reported in 1978 (2) E.L.T. J.172 in the case of Oudh Sugar Mills had been cited, wherein it had been observed by the Hon'ble Supreme Court as follows :- "In the circumstances, therefore, we must hold that the finding that 11.606 maunds of sugar were not accounted for by the appellant has been arrived at without any tangible evidence and is based only on inferences involving unwarranted assumptions. The finding is thus vitiated by an error or law." He further relied on the decision reported in 1988 (38) E.L.T. 6....
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.....G. -23: Part I & Part II. But the entries are to be made in the Raw Material Account. But there is no provision of law warranting the entry of such raw material forthwith on their being received. Therefore, it was contended that if the duty paid raw material received on 16-8-1983 and 17-8-1983 could not be entered on 17-8-1983 this will not contravene the provision of law. In this connection, he also invited our attention to the working schedule of 16-8-1983 and 17-8-1983 as reflected in Para 7.5 of the impugned order. The learned J.D.R., Shri A. Chowdhury contended that since these aluminium ingots were not entered in the Raw Material Account, the rules are contravened. Shri K. P. Chowdhury, learned Advocate for the appellants, in support of his contention relied on a decision of the Allahabad High Court reported in 1987 (29) E.L.T. 512 (All.) in the case of Durga Rolling Mills v. Union of India and Others wherein at Para 3 their Lordships of Hon'ble High Court of Allahabad held as follows: "Contention raised by the learned counsel for the petitioners in these two petitioners briefly is that even if the averments made upon facts from the other side are acceptual, that may not be....