ESSAR STEELS LTD. Vs. CCE, CHANDIGARH

JUDGEMENT

(1.) THE matter involves seizure of goods. Briefly stated, the facts of the case are that M/s. Essar Steels Ltd., Giaspura Road, Dhandari Kalan, Ludhiana (for short Noticee No. 1) are registered dealers having Central Excise Registration No. 4/R -XII/Ldh/D/96, dated 7 -11 -1996 under Rule 174 read with Rule 57GG of the Central Excise Rules, 1944 for trading in excisable goods including HR coils falling under sub -heading No. 7208.39 of the First Schedule to the Central Excise Tariff Act, 1985 and are working as a sales depot of M/s. Essar Steels Ltd., Hazira, District Surat, Gujarat which is the manufacturing unit. On 11 -1 -1999, during the course of nakabandi, Preventive staff of Central Excise Division I, Ludhiana intercepted one truck bearing Registration No. PJV -3271 loaded with 19.315 MTs of HR coils in transit at GT Road, Ludhiana, with invoice No. 1568, dated 30 -12 -1998 issued by the noticee No. 1 in favour of M/s. Hero Cycles Ltd., CR Division, Ludhiana (for short noticee No. 2). On enquiry, Shri Piara Singh, driver of the truck informed that though he had loaded the goods from the godown -cum -depot premises of M/s. Essar Steels Ltd. on 11 -1 -1999 itself, he was given the said invoice dated 30 -12 -1998 for the consignment. These facts have been admitted by the said Sh. Piara Singh in his written statement dated 11 -1 -1999 recorded on the spot. Thereafter, the Sales Depot premises of the noticee No. 1 was visited immediately to confirm the above position. Shri J.S. Parmar, Branch Manager of noticee No. 1 confirmed to have despatched the intercepted goods and also disclosed that they had not issued any invoice on 11 -1 -99 for the said consignment, but had covered it with an earlier invoice dated 30 -12 -1998. He also visited the place of interception and identified the goods as well as the truck to be same as despatched by them. As the goods were not covered under proper documents, these along with the truck valued at Rs. 4,63,289/ - were seized under Section 110 of the Customs Act, 1962 as made applicable to Central Excise matters vide Notification No. 68/63, dated 4 -5 -1963 on the reasonable belief that these were liable to confiscation under the provisions of Central Excise law. In the follow -up action, verification of HR coils lying at the Sales Depot of noticee No. 1, were also conducted. As a result thereof, the Central Excise staff found excess stock of 60 HR coils weighing 1323.920 MTs over and above the recorded balance in their RG 23D register. On enquiry, the noticee No. 1 could not give any plausible explanation for the excess stock. Therefore, these 60 coils valued at Rs. 1,85,07,786/ - having been in excess of the recorded balance in RG 23D register were also seized under Section 110 (SIC)id at the depot premises vide separate seizure memo dated 11 -1 -1999 prepared on the spot on the reasonable belief that these were also liable for confiscation under the provisions of Central Excise law. In their defence, the noticee No. 1 submitted that they had sold all the 61 HR coils to M/s. Hero Cycles Ltd. on 30 -12 -1998 and 31 -12 -1998 under various invoices, but the materials were not actually sent for want of storage capacity with M/s. Hero Cycles Ltd., but both the original and duplicate copies of all the 61 invoices were delivered to the noticee No. 2 for their records on the date of their issue. It was further stated that on 11 -1 -1999, noticee No. 2 sent truck No. PJV/3271 and instructed them to deliver the coil which was seized in transit. It was also stated that to cover the goods in transit, the noticee No. 2 also sent them the original and duplicate copies of the invoice No. 1568, dated 30 -12 -1998. Contrary to this, M/s. Hero Cycles Ltd. have strongly rejected this plea as being hypothetical and baseless. They have emphatically denied of having purchased the material under seizure from them or that for want of space in the godown of the noticee No. 2, the goods were retained by noticee No. 1.

(2.) THE learned SDR appearing on behalf of the Revenue has submitted that since M/s. Hero Cycles Ltd. have flatly denied to have placed any purchase order with regard to the goods in question, the whole case built up by the noticee No. 1 in their defence is demolished on this ground alone and no further proof is required to establish that the goods in question have been removed under invalid documents. The admission on the part of the noticee No. 1 to the effect that the goods despatched and those lying with them are covered under the same invoices dated 30 -12 -1998 and 31 -12 -1998 itself is sufficient to have contravened the relevant provisions of the Central Excise Rules. Since the goods were not covered by the proper documents, the Commissioner has rightly confiscated the same and imposed the redemption fine and penalty therefore. He has relied upon the decision in the case of Balmer Lawrie & Co. Ltd. reported in of the Larger Bench in support his contention. We find substance in the submissions made by the learned SDR that the explanation given by the appellant has been completely denied by M/s. Hero Cycles and as such no explanation is forthcoming from the appellants as to how the excisable goods were removed on 11 -1 -1999 under the cover of invoices dated 30 -12 -1998. As such the goods in question were not cleared under valid invoices. We, therefore, find no infirmity in the impugned order as far as confiscation of the impugned goods is concerned. However, we find that the redemption fine and penalty imposed is on the higher side. We are of the view that the interest of justice will satisfy if the appellants are directed to pay redemption fine of Rs. 10 lakhs and penalty amounting to Rs. 5 lakhs. The appeal is disposed of in these terms.