MINOO BISCUITS PVT. LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner manufactures Biscuits. The petitioner is claiming to be a registered Small Scale Industries Unit and a Small Scale Industry within the meaning of the provisions of the Industries (Development and Regulation) Act, 1951. According to the petitioner, its liability to pay Central Excise Duty in respect of the biscuits manufactured by it is at the concessional rate of 5% ad valorem.

(2.) ON 30th January 1987 there was a search and seizure at the petitioner's factory by the Central Excise Officer. Various documents and other materials were seized. Two statements were recorded under Section 14 of the Central Excises and Salt Act, 1944 (hereinafter referred to as the said Act). The first was a confessional statement by one Sunil Agarwalla, one of the directors of the petitioner to the effect that goods valued at Rs. 10 lakhs had been manufactured and cleared during the period August 1986 to 12th January 1987 without keeping any accounts in respect thereof. It was also stated that such clandestine clearance was made only on the basis of challans for delivery of the goods and that the said challans had been destroyed once accounts had been settled.

(3.) ON 1st July 1987 a notice was issued by the respondents to the petitioner to show cause why '(1) (a) 248 kgs. of different varieties biscuits falling under sub -head No. 1905.11 of the Schedule to the Central Excise Tariff Act, 1985 seized on 13 -1 -1987, shall not be confiscated under Rules 9(2), 173 -O and 226 of the Central Excise Rules, 1944. (b) duty of Rs. 6,829.55 on 6869.81 Kg. of biscuits, manufactured and removed in January 1987 without payment of duty should not be demanded from them under Rule 9(2) of the Central Excise Rules, 1944 read with the proviso to Section 11A(1) of the Central Excises & Salt Act, 1944. (c) Duty of Rs. 32,869.28 on 34,459.32 Kgs. of biscuits manufactured without disclosing the fact of such manufacture and removed during the period Nov. 1986 to 12 -1 -1987, should not be demanded from them under Section 11A(1) (Proviso) of the Central Excises & Salt Act, 1944. (d) duty of Rs. 26,464.03 on 20,600.88 Kgs. of biscuits, manufactured and removed during the period from October 1986 to 12 -1 -1987, as indicated in the annexures E to G, should not be demanded from them under Section 11A of the Central Excises & Salt Act, 1944. (e) duty of Rs. 33,738.16 on biscuits, manufactured and removed during the period August 1985 to January 1987, as indicated in annexure 'B' should not be demanded from them under Section 11A of the Central Excises & Salt Act, 1944 and (ii) A penalty should not be imposed on them for contravention of the provisions of Rule 9(1), 52A, 53, 173F, 173G(1), 173G(4) and 226 of the Central Excise Rules, 1944 under Rules 9(2), 52A, 173Q and 226 ibid.'