TaxTMI 
TaxTMI 
2015 (8) TMI 60
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....erent locations and were owned and controlled by Shri Amrit Lal Gupta and his two sons namely, Shri Rajesh Gupta and Shri Chandan Gupta as partners. 3.1 As per the impugned order an intelligence was received in the office of Director General of Central Excise Intelligence (hereinafter referred to as DGCEI) indicated that the aforesaid units were evading payment of appropriate Central Excise Duty by way of clandestine production and clandestine removal of their finished products viz laundry soap. It had also been gathered by DGCEI that they were showing consumption of Cenvatable fatty materials i.e. palm fatty acid oil in their records, but in fact non-Cenvatable fatty acid such as rice, bran fatty acids and castor oil were also being consumed by them by procuring the same from the local market without bills, and that the excess quantity of laundry soaps manufactured out of those unaccounted for oils was being cleared in a clandestine manner and without payment of duty leviable thereon. 3.2 Thereafter, searches were conducted at the factory premises of M/s. ASC and M/s. ASC-II on 24.3.2009 by the DGCEI and documents /records deemed relevant for further investigation were seize....
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....F.No. IV(6)LRU/07/2009 /1031-1035 dated 09.09.2009,. 3.4 Further on reconciliation of the stock position physically verified with the updated RG-I register (Computer print only) submitted by M/s. ASC-II for the month of March, 2009, revealed that stocks of various finished goods valued at Rs. 3,20,.289/- involving Central Excise Duty of Rs. 26,392/- were found short vis-`-vis their recorded balance. Shri Chandan Gupta in his statement dated 24.3.09 admitted the difference but could not give any plausible explanation / reason for the same. 3.5 Scrutiny of Panchnama drawn at the time of search of the factory premises of M/s. ASC on 24.3.2009 revealed that during the course of search, physical verification of the stocks lying in the factory premises was carried out and as a result thereof 8808 Kgs. of Nirol Soap valued at Rs. 2,90,664/- involving Central Excise duty of Rs. 23,951/- was found short of the stock position as per their records. Shri Amrit Lal Gupta and Shri Chandan Gupta Partrners, who were present in the factory premises at the time of search, could not give any plausible explanation for the said shortage. Thus it appeared that the same had been cleared by them cla....
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....ts on record. There was excess of finished goods found at the time of investigation and which has been admitted by the respondents. Therefore, the impugned order is required to be set aside on this ground alone as these goods were not entered into statutory records. Further, the buyer of the goods have also admitted that they were receiving the goods from the respondent without any cover of duty paid invoices. Further, the payment of duty along with interest and 25% of the penalty paid by the respondent clearly reflects their own confession / admission of the liability of excise duty. In these terms impugned order is to be set aside. 4. On the other hand, the learned Counsel for the respondent submits that during the course of investigation, certain finished goods were alleged to be found by the Inspecting team but the goods were not in finished condition. Therefore, they were not entered in the statutory records. Therefore, the allegation that there was excess of finished goods which were sought to be removed clandestinely is not sustainable and said fact has been appreciated by the learned Commissioner (Appeals) in detail. Therefore, allegation in the show cause notice qua con....
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....at Further excess stock of finished goods seized from the factory premises of M/s. ASC II valued at Rs. 60,97,401/- involving Central Excise duty of Rs. 5,02,426/-, are liable for confiscation under rule 25 of the Rules and Noticees are liable for penal action under 25 of the Rules for the same. Further, finished goods valued at Rs. 3,20.289/- involving Central Excise duty of Rs. 26,392/- were also found short." a. The issue to be decided in the instant case is whether the goods lying in the factory premises were liable to be confiscated. The other issue to be decided is whether the penalty is imposable for the goods said to be removed clandestinely. b. The said Rules 25 of Central Excise Rules, 2002 reads as under:- (1) Subject to the provisions of section 11AC of the Act, if any producer, manufacturer, registered person of a warehouse or a registered dealer, - (a) removes any excisable goods in contravention of any of the provisions of these rules or the notifications issued under these rules; or (b) does not account for any excisable goods produced or manufactured or stored by him; or (c) engages in the manufacture, production or storage of any excisable goods ....
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....en taken by a Single Bench of this Tribunal in the case or CCE, Hyderabad v. Continental Chemical [2001 (46) RLT 850]." Therefore, confiscation under Rule 25 of the Central Excise Rules, 2002, can be made where the assessee fails to explain that the goods have been dealt with according to law, and not to cases where there had been failure to make correct entries in the account books. d. It has been admitted in the impugned order that the impugned goods were lying in the factory premises of the appellant. Under Central Excise law, the entry of manufactured goods should be made in production records only after the goods are manufactured, finished and packed by the assessee; that till the process of finishing, testing or packaging are carried out on the goods, the goods cannot be said to be fully manufactured. It is not clear from the impugned order that whether the said goods were fully finished or not and, therefore, as such their entry in the records not made cannot be held to be a contravention of any kind of any provision of law. I find that the adjudication authority has not returned any finding in the impugned order on the above said position of the goods. The adjudica....
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....e directions these papers were prepared, whether these papers in loose form carried names of appellants or whether they contained the signatures of any of the partners of any of the appellants. I also find that on the basis of these papers four of the buyers were said to be identified as namely, M/s. Singla Traders, Gokul Road, Ludhiana, M/s. B R Trading Company, Gill Road, Ludhiana and M/s. Jindal Tradinbg Company, Behind ATI, Gill Road, Ludhiana and M/s. Singla Trading Co. Main Bazar, Ahmedgarh, Distt. Ludhiana. I find that statements of the concerned persons of these buyers were recorded as per Para 1.12 of the impugned order. All the statements appear to be identical and though in all the statements the concerned persons have admitted that they received laundry soap and detergent powder from the appellants on cash but none of the persons has disclosed the quantity of the laundry soap and detergent powder received in cash from the appellants, the dates on which they were received, the quantity separately in respect of M/s,. ASC and M/s. ASC and M/s. ASC II and also it is not clear at what value these items were received from the appellants. In the absence of these vital ingredie....
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....ue and alright blend thereof has to be used to obtain right hardness as being done by the Noticee before laundry soap has to be used to obtain right hardness as being done by the Noticee before laundry soap came under the purview of Central Excise duty when they using a blend of castor oil, crude palm oil, palm fatty and rice bran fatty acid oil. As per the Herbal soap and detergents Hand Book. The titre value range of oils earlier used by the Noticee is as follows: i) Palm Oil = 40.47 degree Celsius ii) Rice Bran Oil = 27.29 degree Celsius iii) Castor Oil =3-5 degree Celsius Since the Noticee in their records were claiming to manufacture laundry soap by using only Palm Fatty Acid Oil having titre value range of 40-47 degree Celsius, a representative sample of their laundry soap was got tested from the department of Chemistry, Guru Nank Dev University (GNDU), Amritsar, to ascertain the titre value of the soap manufactured by the Noticee, , GNDU, Amritsar, in their Analysis Report dated 09.11.2009 reported that the titre value of the Chhokra laundry soap was 37+1/-1 degree Celsius and the melting point of the same was 39+1/-1 degree Celsius. Thus soft oils wi....
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....r each oil by carrying out analysis on a number of oils. Sometimes GLC does not provide the entire composition e.g. isomers of oleic acid affect the quality of the soap. The determination of trans isomer of oleic acid is carried out by using on infra-red spectrophotometer. Similarly, it is important to know the hydroxyl and actostearic acid content of processed castor oil since these also affect the processing and quality of the soap. Chemical methods are available for estimating these constituents. A plain reading of the above clearly reveals that the findings of the adjudicating authority are at variance with what has been detailed in the said Hand Book. Further, the adjudicating authority has not explained in the impugned order as to why the samples were sent to Guru Nanak Dev University (GNDU), Amritsar, instead of any other designated authority under the law. It is not brought on the record whether the persons who conducted the test were qualified to conduct the test and that whether their test report was acceptable under law and by what authority of law. It is also not brought on record what tests were carried out by the said person/ persons. It is also not brought out ....