VEEKAY GENERAL INDUSTRIES Vs. CCE, DELHI

JUDGEMENT

(1.) THESE two appeals have been filed against the common order in original dated 30.11.99 passed by the Commissioner of Central Excise, by the appellants vide which he ordered seizure of goods involving duty of 2,27,286/ - with option to get the same redeem on payment of Rs.4,00,000/ - ; and imposed penalty of Rs.1,00,000/ - under Rule 173 -Q of the Central Excise Rules on appellant No.(1) and also imposed penalty of Rs.25,000/ - on appellant No (2) under Rule 209A of the Rules.

(2.) THE facts giving rise to this appeal may briefly be stated as under:

(3.) THE appellants were engaged in the manufacture of copper wire bars/ingots, strips copper wire of refined copper etc.They had been availing modvat facility under Rule 57 -A for the Rules. On 8.12.96 surprise raid was conducted on their factory premises by the Central Excise Officers(Preventive) and Shri R.C. Prasad (appellant No.2), authorised signatory of the firm of appellant No. (1) was present at that time in the factory. After scrutiny of the record and physical stock checking of the finished goods as well as the raw materials lying in the factory premies, 108 coils of copper strips weighing 12.420 MT valued at Rs.15,15,240/ - were found in excess of the recorded balance in the r.g.1 Register. Shri R.C. Prasad, appellant No. (2) could not offer any reasonable explanation for this excess quantity of the strips. Similarly 120 MT of copper cathodes were found in excess of the recorded balance in Form IV Register. The excess quantity of these goods, was seized on the reasonable belief that the same were kept unaccounted for clandestine removal without payment of duty and were handed over to Shri M.M.Mittal, partner of the appellant No.(1). Therefore, show cause notice was issued for confiscation of the goods found in excess of the recorded balance in the record and penalty was also proposed to be imposed.The appellants contested the correctness of that show cause notice and alleged that 108 coils of strips were in semifinished condition and did not reach the RG.1 stage and as such could not be entered in the record. Regarding the excess recovery of copper catodes, they avered that there was entry in the Forim IV Register and they imported 102 MT of copper cathodes vide Bill of Entry dated 29.11.96 and were cleared from ICD Thuglakabad.They further avered that out of the total quantity of 201.596 MT as per Bill of Entry a quantity of 81.59 MT was sent directly to ICD Thughlakabad to M/s.Hyvolt Electricales for getting the job work under Rule 57 -F(3) of the Rules. No credit was taken by them in respect of these goods even if these were assumed to be not accompanied by duty paying documents.