(1.) THIS appeal is filed by the Revenue against the Order -in -original No. 73/Commisioner/95 dated 29.12.95.
(2.) M /s. Rishabh Velveleen (P) Ltd. (hereinafter referred to RVPL), Hardwar are manufacturers of flocked fabrics falling under Central Excise Tariff sub -heading No. 59.06. On the basis of information that respondents are evading central excise duty, the central excise officers conducted search at their factory, branch offices and at the premises of their customers/ dealers and transporters. As a result of the search, 9095.10 metres of velveleen flock fabrics unaccounted were seized at the factory and incriminating documents were recovered from the various premises. On scrutiny of the documents recovered, statement of various concerned persons were recorded. During investigation, it was found that the respondents were maintaining a register for sale of velvet fabrics for the year 1993 -94. The register is numbered at serial No. 93 in the list of the seized documents. The register was containing month -wise and date -wise sales of flock fabrics to the customers. It was found that many bill numbers were repeated several times in respect of some of the customers. During investigation, it was found that entries in register appearing at serial No. 93 of the list of seized documents were tallying with another computer generated report maintained by the respondents which was in the form of print -out on the computer as DISP report from 1.4.93 to 31.3.94. After scrutiny of the documents, it was found that the duty of Rs. 1,08,00,122/ - as detailed in Annexure -C -I to the show cause notice for the years 1993 -94 and 1994 -95 leviable on the goods removed clandestinely was not paid by the respondents. Therefore, show cause noticed was issued to them along with directors of M/s. Rishabh Velveleen Pvt. Ltd. its Accounts Officer and its customers M/s. Girdhar and Company, M/s. Pearls Marketing Company and M/s. K.M. Enterprises. M/s. Rishabh Velveleen Pvt. Ltd. were charged for contravention of provisions of R nasmuch as they had manufactured velveleen flock fabrics without accounting for in the statutory record and cleared them without determining and paying central excise duty leviable thereon. They had deliberately suppressed and mis -declared the actual production of velveteen flock fabrics and removed fraudulently from their factory by using parallel serial number of invoices and challans. They did not produce documents before the jurisdictional central excise officer and did not reflect them in the central excise record. Shri U.C. Jain, Shri J.C. Jain, and Shri Piyush Jain, all directors of M/s. Rishabh Velveleen Pvt. Ltd. and Shri Vikas Kumar Singh, Accounts Officer of M/s. Rishabh Velveleen Pvt. Ltd. have concerned themselves with the said excisable goods removed from the factory illicitly which they knew and had reasons to believe were liable to confiscation under the provisions of Central Excise Rules and were thereby liable for penalty under Rule 209A of the Central Excise Rules, 1944. M/s. Girdhar and Co., Delhi, M/s. Pearl Marketing, Bombay and M/s. K.M. Enterprises, Delhi, all customers of RVPL have also concerned themselves in the sales and purchase of such flock fabrics which they did not account for in their books. Thus, they have knowledge and reasons to believe that such goods were liable for confiscation under the provisions of Central Excise Rules, 1944. Therefore, show cause notice was issued to them for taking penal action under Rule 209A of Central Excise Rules, 1944. The central excise duty of Rs. 1,08,00,122/ - was demanded from M/s. Rishabh Valveleen Pvt. Ltd. under Rule 9(2) of the Central Excise Rules, 1944 read with proviso to Section 11A(1) of the Central Excise Act. Penalty was also proposed on them under Rule 9(2) and 173Q(1) of the Central Excise Rules, 1944 for various contraventions. Show cause notice also proposed for confiscation of 9095.10 mtrs. of velveleen flock fabrics seized from their factory premises under Rule 173Q of the Central Excise Rules besides proposal for confiscation of land, building, plant and machinery of RVPL under Rule 173Q(2) of the Central Excise Rules.
(3.) THE case was adjudicated by the Commissioner under the impugned order and he has observed that the test of authenticity of the aforesaid private register No. 93 lies in the fact that whether there are any evidence corroborating the entries contained therein. He found that there is no corroborative evidence to support the entries contained in the said private register No. 93 inasmuch as not a single bill has been located from the said RVPL corresponding to any or some or all these listed sales or as supportive of them; no GRs/RRs corresponding to these entries have been located/seized either from the RVLPL or from the buyer mentioned in the entries or from the transport Co./Railway authorities; there has been no detection of any unaccounted sales or unaccounted goods from any of the buyers appearing in the said private register. He, therefore, came to the conclusion that private register No. 93 was nothing but a fomentation, built/fabricated for the sale purpose of giving a rosy picture to the financial institutions/banks and thus, no reliance was placed on it by him.