KAJALWALA PROCESS Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) The appellants manufacture man -made fabrics falling under Chapter Heading Nos. 54 and 55. A team of preventive officers of Central Excise Commissionerate, Ahmedabad visited their factory premises on 24 -2 -98 and examined their statutory Central Excise records in the presence of Shri Farooqbhai Iqbalbhai Surti, partner of the said firm. On scrutiny of their statutory records and verification of stocks, it was found that processed man -made fabrics bearing lot Nos. 117, 119, 121 and 125 totally measuring 45,064 L. Mtrs. valued at Rs. 6,77,467/ - and involving a central excise duty of Rs. 1,35,494/ - were found short as against the balance reflected in their RG 1 Register. A statement was recorded from Shri Farooqbhai Iqbalbhai Surti, partner of the firm who in his statement of even date admitted that the said fabrics were removed clandestinely without accounting them in their RG 1 Register and without paying duty of excise. Consequently, they debited the aforesaid amount of duty without protest in their PLA on 24 -2 -98 and 27 -2 -98. A further statement was recorded from Shri Farooqbhai Iqbalbhai Surti on 17 -3 -98 wherein he confirmed the facts mentioned in the Panchnama and the manner of the stock verification etc. In his statement he admitted the removal of the aforementioned processed fabrics found short bearing lots of 117, 119, 121 and 125 without accounting for in their Central Excise records and without paying the duty of excise. He deposed that such clearance without payment of duty was done under his direction; that he had sold the processed fabrics on cash payment to some buyers not known to him through a commission agent/dalal. Consequently, a show cause notice dated 14 -7 -98 was issued to the appellants in which after stating the above facts it was alleged that the appellants deliberately and knowingly removed the man -made fabrics manufactured by them surruptiously from their factory without accounting them in their Central Excise records, without issuing the Central Excise invoice and without discharging their excise duty liability on such fabrics. It was further alleged that Shri Farooqbhai Iqbalbhai Surti, partner of the firm was having full knowledge of manufacture of such M.M. fabrics and its clandestine removal without proper accountal in their Central Excise records and without payment of central excise duty. Consequently, the appellant firm and Shri Farooqbhai Iqbalbhai Surti, partner were called upon to show cause why the central excise duty amounting to Rs. 1,35,494/ - on the above said M.M. fabrics should not be recovered from them under Rule 9(2) of the Central Excise Rules, 1944 and since they had already debited the said amount in their PLA, why the same should not be confirmed. The appellant firm was called upon to show cause why a penalty should not be imposed under Rule 173Q of the Central Excise Rules, 1944 and under Section 11AC of the Central Excise Act, 1944. Shri Farooqbhai Iqbalbhai Surti, partner was called upon to show cause why a penalty should not be imposed on him under Rule 209A.

(2.) After considering the reply of the party, the Addl. Commissioner of Central Excise, Ahmedabad -I vide his Order dated 24 -11 -98 confirmed the amount of Rs. 1,35,494/ - as duty under Section 11A(2) of the Central Excise Act, 1944. Since the appellants had already debited the said amount in their PLA, the adjudicating authority ordered for the adjustment of the same towards the aforesaid confirmed demand. The Addl. Commissioner further imposed a penalty of equal amount on the appellants under Section 11AC He also imposed a penalty of Rs. 10,000/ - on Shri Farooqbhai Iqbalbhai Surti, partner of the appellants under Rule 209A.

(3.) M/s. Kajalwala Process and Shri Farooqbhai Iqbalbhai Surti filed appeals but the same are rejected by the Commissioner (Appeals), Ahmedabad vide his Order dated 31 -8 -2001.