TaxTMI 
TaxTMI 
2015 (10) TMI 1291
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....maintained daily. Since the goods manufactured was on behalf of the principal raw material supplier we would not take the same into RG I as such we would like to point out that the difference as pointed out is due to the production of Bags as a job worker. Even though this was brought to the notice of the Audit party they did not take cognizance of the same. As such we submit that we have not removed any goods without payment of duty and we are not liable to pay any duty as mentioned in para 13 of the IAR. 2.1 Learned advocate for the appellant pleads that they had engaged a contractor who was doing stitching of the fabric converting the same into bags and once bags were made, they were entering them in the RG-I register and paying duty. It was pleaded by the learned advocate that along with their own manufacture, they were doing job work for others for which payment of duty was not their responsibility; it was the principal manufacturer's responsibility from whom they were receiving the raw material for the same. He points out that the audit was done in December-January 2003-04; they were issued show-cause notice on 13.12.2008 which was received on 03.01.2009 by them. He pleads....
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....re-under the appellant was asked to make predeposit of Rs. 10,00,000/- within eight weeks from that date. The learned A.R. mentions about the contents of the para 4 of the said Misc.(stay) order dated 19.3.2013 arguing that there has not been any production or manufacture of sacks on job work basis by the appellant, when there was no such evidence to show by the appellant. The learned A.R. is referring to para 4 of the said Miscellaneous/Stay order wherein the following has been mentioned: 4. We have considered the submissions made by both the sides. We find that the production register for job-work to which our attention was drawn does not appear to reflect number of sacks produced at all. The register shows receipt, issue and balance and receipt quantity and the issue quantity and the balance. Further in quantity column, at the total level, figures in decimals have been indicated whereas there are no decimals anywhere. The register does not have any indication of the production of sacks manufactured nor appellants have any evidence to show that sacks were manufactured by them on job work basis. As regards time limit, we find that the submission of the learned AR are corr....
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....red. In the said job work challans there has always been a mention of HDPE granules being converted into FABRICS only, and not the bags/sacks. Unless there is any credible and justifiable explanation for this 'difference in quantity' the arguments and the submissions of the appellant on this count cannot be accepted on any judicious cirterion. The learned advocate for the appellant has consistently tried to wash off the manufacturer appellant's responsibility regarding the activities and operations carried on in their premises by their contractor, who was stitching HDPE fabrics into HDPE woven bags/sacks. Thus the appellant's explanation that 'difference in the quantity' is because of production of bags as job worker can not be accepted as a judicious and justifiable explanation. 5. This case is for the period of November 2003 to January 2004. The learned advocate argues that the period of one month namely of November 2003 is certainly beyond the limitation period of five years; therefore, requires to be excluded from their liability of payment of central excise duty. Regarding this submission, the learned A.R. for the respondent also fairly agrees that this period is beyo....
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.... this case is of peculiar facts wherein department made the audit in November-December 2004 for the manufacturing operations done since November 2003 to December 2004. The activity of the Audit is done post facto operations and is not done simultaneously during the manufacturing activity for the current period. The audit is mainly based on the examination of records though the department has not taken the statement of the manufacturer of the contractor. Therefore, here it is not binding on the Department to produce some extra evidence regarding the difference in quantity of two documents namely 'private Production Register' and the RG-I Register. As the matter concerns with the past production and clearance, the Department can not always find such goods and produce before the adjudication. 7.2 Further the "Private production Register" cannot be questioned for the entries made therein when the manufacturer appellant themselves came forward to give explanation about the same through their letter dated 7.1.2005 mentioned above. The manufacturer appellant has not stated that the entries made there are faulty or erroneous. They only have tried to explain through the letter dated 7.1.....
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....lties on others. 7.3.2. I take support also from the decision of the Hon'ble High Court of Allahabad in the case of N P Agro (I) Industries Ltd Vs CCE Lucknow [2014-TIOL-2333-HC-ALL-CX] wherein it was held that if there are circumstances coupled with other materials and found sufficient to prove that there had been unaccounted production and removal of the goods in clandestine manner without payment of duty, there cannot be any reason to interfere with the orders passed by the Tribunal confirming the duty, imposing penalty under Rule 209 of the Central Excise Rules 1944. The Hon'ble High Court of Allahabad in this judgment has inter alia stated as follows:- 4....The circumstances goes long way coupled with other materials are sufficient to prove that there had been unaccounted production and removal of the goods in clandestine manner by the appellant during the period in question without payment of duty. When it is so, then we find no reason to interfere with the impugned order passed by the Tribunal. Hence, the same is hereby sustained alongwith the reasons mentioned therein. 8. Based on the above facts, discussion and the case laws quoted above, I do not have any o....