SHYAM SUNDER (HARYANA) Vs. CCE

JUDGEMENT

(1.) THE relevant facts of the case, in brief, are that the appellants are engaged in the manufacture of M.S. Ingots and registered with the central excise authority. From September, 1997, the central excise duty was levied on M.S. ingots under Section 3A of the Central Excise Act, 1944 under the Compounded Levy Scheme. The appellant by letter 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 34.290MT 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 activity and will be closed at 6.00 A.M. on 20.6.1998. He also stated that furnace was working since night of 15th June, 1998. Shri Vijay Kumar who was working in the factory of the appellant failed to produce any statutory record and in his statement, he stated that RG -1 registers are lying at the office of the Chartered Accountant. The central excise officers seized M.S. ingots to the quantity of 34.290 MT. The adjudicating authority confiscated the seized goods and redeemed on payment of fine of Rs. 1,00,000/ - and also imposed penalty of Rs. 25,000/ - under Rule 173Q and 226 of the erstwhile Central Excise Rules, 1944 for the contravention of the provisions of Rules 53, 96ZO, 173G and 226 of the said Rules. The Commissioner (Appeals) upheld the adjudication order.

(2.) THE learned advocate on behalf of the appellants submits that the seized goods were recorded in their RG -1 register. He drew attention of the Bench to the RT -12 return for the month of May, 1998 whereby closing balance of M.S. ingots and runner riser were shown 40.795 M.T. and 13.860 MT. respectively. He submits that the seized goods were duly accounted in the statutory record and, therefore, the confiscation and imposition of penalty are bad in law. He further submits that Vijay Kumar in his statement stated that furnace was working for trial basis and there was no manufacturing activity. He also submits that Shri Sajjan Kumar, security guard nowhere stated that furnace was working for manufacturing activity. 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) ELT 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, the said statement is not valid in the eye of law relied upon the decision of the Tribunal in the case of D.M. Gears Pvt. Ltd. v. CCE .

(3.) THE learned D.R. on behalf of the respondent submits that the appellant was working under the compounded levy scheme. By their letters dated 1.8.1997 and 10.9.1997, they declared that their factory was closed down but the central excise officers during their visit on 20.6.1998 detected manufacturing activity at their factory. This is supported by the statement of Shri Sajjan Kumar. He further submits that the appellants could not produce statutory record at the time of visit of the officers. So, the confiscation and imposition of penalty are correct. He submits that the concerned officers seized all the documents mentioned his designation as evident from superdaginama.