COMMISSIONER OF C. EXCISE, BANGALORE Vs. MICO LTD.

JUDGEMENT

(1.) THIS appeal has been filed by the Revenue against the order of Collector of Central Excise, Bangalore wherein after considering the submissions he came to the following findings - I have carefully considered their above said arguments. I further find that there is considerable force in their argument also. The day to day transactions are heavy and voluminous and almost more than 2 lakhs numbers are cleared from their factory daily. The goods are counted manually and hence errors do occur. The unit is working under Self Removal Procedure and they cannot escape from the responsibility of proper accounting of excisable goods. However, as per their own admissions, it is established that there is irregular maintenance of accounts at their factory. In respect of stock difference on the three days, they have stated that the goods have been taken for over checking from the production or from the finished stores and they have not removed from the RG 1 register. However, the plea put forth by them are not convinced. The difference in i.e., excess/shortage on the day of verification of stock on 23 -8 -1994 is more and they have also argued that they had not adjusted the stock as per their stock report on the early three occasions and hence, there is a difference in stock and also/to manual counting errors and mischief of labourers, etc. However, the investigating authority has not brought out any evidence to prove the clandestine removal but alleged only of assumptions and presumptions. No corroborative evidences such excess purchase and usage of raw materials, power consumption additional consideration received in excess of the invoice are forthcoming to prove the alleged clandestine removal. In case of Shreenath Cement Industries v. CCE, Jaipur - 1994 (73) E.L.T. 142 (T), the Department has proved the clandestine clearance by way of private raw material account showing much higher quantity than that in the statutory raw material register, excess gunny bags, shortage of accounted for cement, double set of transport documents issued by transport company for non -duty paid cement transporters statement that they were issued on assessees directions and the statement of dealers to the effect that they have received cement without the cover of Central Excise documents. The burden of proof to establish the clandestine removal lies on the Department. The Honble Supreme Court has held that demand of duty cannot be fatened merely on presumption and assumption - 1978 (2) E.L.T. J 172 (S.C.). The Honble Tribunal has held that in fact clandestine removal is a deliberate and positive act for removal of goods contravention of Excise laws with the object of evading excise duty, therefore, it cannot be presumed but has to be proved and established by the Department with support of evidence rather direct physical evidence or by sufficient circumstantial/ evidence of 1984 (15) E.L.T. 451 (T) and 1986 (26) E.L.T. 333 (T).

(2.) THE Show Cause Notice was issued consequent to visit of the officers on 23 -8 -1994, on the result of stock taking conducted and based on perusal of the record of M/s. MICO Ltd., when it was noticed that RG. 1 was written up to 17 -8 -1994 only and there was a vast difference between the physical stock and that shown in the RG. 1. The Excess quantities were found of Glow Equipment, Spark Plugs and Components valued at Rs. 7,29,980/ - while shortage of Starters and EQPT valued at Rs. 1,46,812/ - were found. The excess goods were siezed. On verification of records it was noticed that the Respondent had undertaken verification of finished goods in their file No NU/ALP - 6/6 marked as Stock Verification on 5 -5 -1993, 1 -8 -1993 and 2 -5 -1994 when certain shortages and excess were noticed. The results of all such verification is as follows -

(3.) REVENUE has filed the present appeal on the findings and order of the Collector on the following grounds -