MACK SPRING PVT. LTD. Vs. CCE, MUMBAI-III

JUDGEMENT

(1.) This is the party's appeal, against the above captioned order No. 10/94 -Collr. Dated 28.2.1994 praying for setting aside the same with consequential relief.

(2.) THE brief facts of the case are that appellant manufactures springs and leaves falling under Chapter 73 of Central Excise Tariff Act, 1985. On 21.7.1987 Central Excise officers of Belapur Division visited the appellant's factory on preventive checks. On stock checking it was found 1201 springs and leaves worth Rs. 1,58,320/ - lying outside BSR in fully manufactured and marketable condition which were not accounted in RG 1 register. No balance was shown in Column No. 16. From 4.7.1987 onwards column No. 2 to 4 and 16 were kept blank. On 19.7.1987 638 goods were shown clearance. This shows appellant was not accounting total production regularly, in RG 1 in contravention of Rule 173G(4) read with Rule 53 and 226 and also surreptitiously removing goods without payment of duty. The above goods lying outside were seized under the panchnama and handed over to Director Shri Tajinder Singh of appellant for safe custody under supra nama. During the period 1.2.1987 to 21.7.1987 appellant had manufactured 38189 loose leaves and 23020 main leaves totally worth Rs. 85,48,665/ - and cleared without payment of duty at 15% adv, which comes to Rs. 12,81,000/ -. Appellant was clearing finished product under invoices instead of gate pass, statutory duty paying documents and showed it as trading activity second sale. From raw material account, it was noticed that appellant had used 610 MT of steel flats during the period 1.4.1987 to 21.7.1987. In the manufacture of springs waste retention is 7%. Central Excise statutory records have shown manufacture and clearance of finished goods weighing 220 MT was in process, which is quite unbelievable compared to raw material of 610 MT consumed. Sales register disclosed that goods manufactured in the factory were cleared under invoice to M/s. Bharat Springs Ltd. without payment of duty. Show cause notice was issued to the appellant on 18.1.1988 alleging contravention of Rules 9(1), Rules 173G(1), Rules 173F, Rules 173G(4) read with Rule 53, Rules 226 and Rule 173G(2) read with Rule 52A of Central Excise Rules asking them to show cause as to why

(3.) IN support of the appeal, the learned counsel has argued that appellant manufacture spring leaves and spring assembly, out of which spring leaves are of two types main and subsidiary. No. of leaves of assembly varies from 5 to 17 leaves. The appellant does not seriously contend about the non -accountal of 120 springs on 21.7.1987, which is a technical discrepancy and seeks lenient view. Regarding the duty demand for the period between February to July, 1987 it is based on private book taken from one of the supervisors which shows work done by workers, not daily production, nor speaks of mean leaves, subsidiary leaves or assembly. Consumption of raw materials consumed from 1.4.1987 to 21.7.1987 is based on the weight and value, and not pieces. Panchanama at serial No. 9 refers to Register of daily production as against private record, which shows 983 spring assembly as against 2965 mentioned in RG 1 Register. Difference of 1982 spring assembly consisting of main and subsidiary leaves cannot be explained by private book. The author of private book is neither questioned, nor his statement recorded. No. of discrepancies exist. Commissioner dismissed the mistake in respect of assembly by stating that the demand pertains only to loose leaves and main leaves. As the workers handles the same spring leaves more than once, repetition is not ruled out. Investigating Officer has stated in reply to question No. 17 that figures of assembly have been taken on the basis of clearance documents, and not on basis of private record. Whatever higher has been arbitrarily taken by the department.