TaxTMI 
TaxTMI 
1996 (2) TMI 289
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.... allowed redemption of the same on payment of a redemption fine of Rs 10,000/-. The cases are as follows : 2. It has been alleged that appellants having its factory-cum-office at 35, Canal East Road, Calcutta-700011, a manufacturer of biscuits falling under sub-heading No. 1905.11 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) had contravened the provisions of the Section 6 of the Central Excises and Salt Act, 1944 (herein after referred as the said Act) read with Rule 174 of the Central Excise Rules, 1944 (herein after referred as the said Rules) and also the provision of Rules 9(1), 173B, 173C, 173F, 173G(1), 173G(2) read with 52A and 173G(4) read with Rules 53 and 226 and also the provisions of Government of India's Notification No. 85/85-C.E., dated 17-3-1985, as amended and 175/86-C.E., dated 1-3-1986 as amended, inasmuch as they: (a) manufactured with the aid of power and stored 233 cartons of biscuits of assorted variety valued at Rs. 10,864.00 involving Central Excise duty amounting to Rs. 1,140.72 at their factory at above address (b) manufactured with the aid of power and removed from its factory 790 cartons of the said goods va....
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....sp;On coming to know that the said firm had been manufacturing and removing the said excisable biscuits without having any Central Excise licence and without payment of Central Excise duty by suppressing the facts of production and clearance since long, batch of said officers paid a surprise visit to the office-cum-factory premises of the said firm on 8-3-1989 and searched the said premises on the strength of search authorisation issued by the competent authority. On prima facie examination of records and documents recovered on search it was found that the said firm had maintained two sets of accounts; one set for submission to the Government Department e.g. Sales Tax, Income Tax and Central Excise and another set for unauthorised manufacture and removal of the said goods. It was also seen that (l) the turn over of the said firm upto the date of search had exceeded the permissible limits of exemption as stipulated under Notification No. 175/86-C.E., dated 1-3-1986 as amended (2) that the factory did not obtain any proper Central Excise licence and had been removing the said goods manufactured by it without maintaining any Central Excise records and without payment of Central Excise....
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....eipts of payments had been maintained. (d) Their factory was registered as a small scale unit under the Government of West Bengal. (e) They removed goods under separate sets of challans which were not accounted for and amounts so received towards such sales were not declared to the Central Excise Department and that the said challans and records of receipts of payments had been destroyed. (f) Turn over of their firm during the years 1985-86, 1986-87, 1987-88 and 1988-89 (upto 8-3-1989) were Rs. 21 lakhs, 22 lakhs, 23 lakhs and 25 lakhs respectively which were inclusive of accounted and unaccounted sales. (g) They did not pay Central Excise duty leviable on their goods for those years and that most of their unaccounted for manufacture and sales would be available with the records seized by the officers. (h) The Central Excise officers visited their factory on 8-3-1989 and recovered some records viz., challans, bills, etc. which were not accounted for in the declaration submitted to the Department. (i) They loaded biscuits manufactured at their factory in the van No. WMV 2818 on 8-5-1989 and kept the loaded van in front of their factory....
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....p; Examination of the records and documents held under seizure revealed the following : (a) The said firm maintained double sets of accounts, one set for the purposes of Income Taxes, Sale Tax and for declaration to the Central Excise Department and another set of accounts for suppressed production and clandestine removals. (b) The sales accounts books held under seizure list Sl.No. 1/RFP/89 to 3/RFP/89 and challans, packing register etc., held under seizure list Sl. No. 10/RFP/89 were the records maintained by the said firm for suppressed production and clandestine removals. Those sales account books had been maintained for the years 1986-87, 1987-88 and 1988-89 showing therein the names of the customers, date of sales, quantity, rate, value of the goods so removed and the amounts received towards sale of the goods. The particulars of removals as shown in the challan maintained for clandestine removals were co-related entries made in the sales accounts books and were found to agree but all the entries made in the sales register could not be co-related with the corresponding challans maintained for clandestine removals of such goods as because those were not availab....
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....alued at Rs. 71 ,07,783.98, Rs. 78,02,107.15 and Rs. 1,00,56,642.66 respectively as per the records held under seizure list Sl. Nos. 1/RFP/89 to 3/RFP/89, challans, etc.; whereas the scrutiny of their regular challans, invoices, etc. maintained by them for accounting purposes for various Government Departments showed that they had manufactured and removed the said goods during the years 1986-87, 1987-88 and 1988-89 (upto 7-3-1989) valued at Rs. 8,21,599/-, Rs. 7,30,190.00, and Rs. 7,01,037.00 respectively. Thus, the total value of clearance of the said firm during the year 1986-87, 1987-88 and 1988-89 (upto 7-3-1989) came to Rs. 79,29,382.98, Rs. 85,32,297.15 and Rs. 1,07,56,679.66 involving Central Excise duty amounting to Rs. 3,11,762.09, Rs. 3,69,688.44 and Rs. 5,94,621.14 respectively. For the purpose of computation of the assessable value of the said goods during the aforesaid periods, the prices realised by the said firm had been taken as cum duty value from which Central Excise duty element has been deducted after allowing abatement as allowed in terms of Notification No. 175/86-C.E., dated 1-3-1986 as amended, but no other taxes had been taken into account since no evidence....
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....ation No.68/63-C.E., dated 4-5-1963 as amended issued under Section 12 of the said Act, and (b) A penalty shall not be imposed upon the said Sk. Asraf Hossain under Rule 209A of the said Rules for violation of the provisions of the Rules as cited supra. 10. After the show cause notice was issued the appellants filed their reply dated 13-3-1990. The appellant, Sk. Asraf Hossain, Partner of the appellant firm, M/s. Raj Food Products filed a reply stating that the maximum baking capacity of the oven installed in their factory running one shift was around 11,440.000 Kgs. in 26 working days and the consumption of power was 9,100 KWH as would be evident from the certificate issued by M/s. Effective Consultants. Hence they stated that the total yearly production came to 1,37,280.000 Kgs. of biscuits. They also stated that the raw materials and cartons required for manufacture of biscuits purchased by them were obtained on purchase from open market and they also stated that they had purchased glucose, snacks, etc. The total raw-materials purchased by them were not sufficient to manufacture so much of biscuits which were alleged to have been clandestinely removed. It was als....
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..... Ghosh, stated that the Department has not relied upon their evidence in the show cause notice. Therefore, the question of cross-examination does not arise. 13. We have considered the pleas advanced from both ends, in this regard. It is seen that the Department is basing their case on the records which were seized from the premises of the appellants' factory and the case of the Department is that these records show that clandestinely the appellants had removed certain quantities of biscuits without payment of duty. Therefore, the Department is not basing their case on the statement(s) of any of the customers. However, a perusal of these records goes to show that the names of the customers only were mentioned and not their addresses. The principles of natural justice only require that if any evidence is sought to be relied upon by the Department then that evidence should be supplied and if they want to rely on the statement of any person, the copy of such statement must be furnished and if the appellants want to cross-examine that person then an opportunity should be given to them. But in this case, the Department is not placing reliance on the statement of any of the custo....
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....were raised subsequently and payments were received in cash and records of receipts and payments were also maintained. They also removed goods under separate sets of challans which were not accounted for and amounts so received towards such sales were not declared to the Central Excise authorities and such challans and records of receipts and payments were destroyed by them. He also admitted that these records seized in this case, belonged to them. This admission made by Sk. Hossain on 8-3-1989 in his statement was retracted after a period of one year when they had replied to the show cause notice on 13-3-1990. The argument of the learned Advocate, Shri Roychowdhury is that this statement is one which was obtained under duress and threat. If actually the statement was obtained under duress and threat on 8-3-1989, the appellant, Sk. Asraf Hossain should have retracted the same within a reasonable time. But it was after one year when he had filed a reply he retracted the same. There were no circumstances in this case to hold that there was any force used by the officers to take the statement from Sk. Hossain. Therefore, the statement has been taken as a confessional statement and the....
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....-87, 1987-88 and 1988-89 these records showed several removals which were not accounted for. This was also admitted by the appellant, Sk. Asraf Hossain in his statement by stating that they had removed the goods under separate sets of challans which were not accounted for and amounts so received towards such sales were not declared to the Central Excise Department. 17. But the learned Advocate contended that a cursory look on the records will reveal that they are not maintained in the usual course of business. In order to appreciate this argument we had also directed the Department to bring some of the records with respect to challans, bills and invoices. During the course of personal hearing, we had inspected those records. On a perusal of the same in the presence of both sides, we observe that these records were maintained in the regular course of business and were written legibly date-wise. The names of the customers were also mentioned in the first page of those records and the argument that these are not regularly maintained does not stand to reason. On the contrary, they are maintained date-wise legibly by mentioning the names of the customers. Therefore, this argumen....
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....a view to bolster the appellant's case in these proceedings. The said experts, the Tribunal observed, did not also try to support their opinions with reference to any technical literature or authority on the subject. For all the above reasons, the Tribunal declined to accept their bare assertion that MFPBs can be described as `unveneered particle boards'. We cannot say that the reasons given by the Tribunal for rejecting the said affidavits are either irrelevant or unsustainable. The said affidavits, therefore, do not advance the appellant's case in any manner." 19. It is, thus, seen that this is a bald certificate given without reasoning. It also does not show that this opinion was given with reference to any technical literature or authority on the subject. In such circumstances, it is highly difficult to rely on this opinion furnished by M/s. Effective Consultants. 20. On the other hand, ld. Advocate, Shri Roychowdhury relied upon the decision reported in 1992 (62) E.L.T. 241 (MP) in the case of Panama Chemical Works v. Union of India wherein at para 35 it was held by the Honourable Madhya Pradesh High Court that if there is any expert opinion the same has to be ....
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....rs and they had put their signatures for having verified the same. But some of the other bills and invoices which were seized from the premises of the appellants were in the very same printing as M/s. Raj Products and no signatures of the Central Excise Officers were found thereon. It only strengthens the case of the Department that in many cases the appellants had as such removed the goods under several bills which were not showed to the Central Excise Officers. This clearly goes to show that the appellants had not recorded the full production in their regular records and those productions were mentioned in these records which were seized by the Department during their search of the premises of the appellants. In such circumstances, the demand of duty having been based on the strength of these records is in accordance with law and we confirm the same. 21. The next point for determination is whether the confiscation of the goods in question and the truck is in accordance with law. It is now seen that on 8-3-1989, the officers of the Central Excise Department intercepted a Van bearing Registration No. WMV 2818 on the Canal East Road, Calcutta near the factory of the appellan....