2007 (3) TMI 582

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....etter dated 1-8-97 informed the Assistant Commissioner of Central Excise that they have closed down their factory with effect from 1-8-1997 till further information and therefore, the provisions of Section 3A of the Central Excise Act, 1944 are not applicable. They were filing RT-12 returns time to time showing their closing balance of the finished goods. On 20-6-1998, the Central Excise officers visited the factory premises of the appellant. During stock verification, the said officers found 34.290 MT of M.S. ingots at their factory. At the time of visit of the factory, they found the furnace was in operation. Shri Sajjan Kumar, security guard in his statement stated that furnace was started at 10.00 P.M. on 19-6-1998 for manufacturing act....

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....ty. Both the authorities below failed to appreciate the statements in a proper manner. At any event, he submits that the adjudicating authority has accepted that seized goods are not related to the alleged manufacturing activity. He submits that the adjudicating authority confiscated the seized goods and imposed penalty without mentioning the sub-rule of Rule 173Q. Therefore, it is totally invalid. He relied upon the decision of the Hon'ble Supreme Court in the case of Amrit Foods v. CCE - 2005 (190) E.L.T. 433. He also submits that panchnama does not indicate whether there was any manufacturing activity. He further submits that the designation of the officer, who recorded the statement, was not mentioned in the statement and, therefore, th....

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....ir reply to the show cause notice by letter dated 30-6-1999, they stated that the goods lying in the stock were duly accounted for in RG-1 and RT-12 returns. But they have not disputed the statement of Shri Sajjan Kumar regarding operation of the furnace. There is no dispute that the appellant is liable to pay duty under the compounded levy scheme during the material period as determined by the Annual Capacity of Production. Thus, the appellants started operation of the Induction furnace without intimating the Central Excise department in contravention of Rule 96ZO of the erstwhile Central Excise Rules. Therefore, the confiscation of the goods and imposition of penalty are justified. It is pertinent to note that the appellant declared that ....