V. MADHU Vs. CCE

JUDGEMENT

(1.) These appeals are against an order of the Commissioner of Central Excise, the operative part of which is as under: -

(2.) The facts of the case, briefly stated, are as follows:

(3.) From the investigative results, it appeared to the Department that there were five Electricity Board service connections, in different names, used for the manufacture of cotton yarn on cones in KGT; that there were 24 spinning frames which were in working condition; that a total payment of Rs. 1,49,24,422 was made for cotton yarn purchase for the period 1998 -99 and 1999 -2000; that there was production of 49 bags of cotton yarn on cones, of 40s count, per day. It further appeared that M/s. KGT had not accounted for their actual production but suppressed their production, that the suppressed production was removed without payment of duty to various yarn dealers by using the invoices of M/s. Sree Ganapathy Textiles and M/s. Sree Vignesh Textiles; that the sale proceeds were used only for M/s. KGT, its proprietor Shri V. Madhu and Smt. M. Premselvi; that Sree Ganapathy Textiles and Sree Vignesh Textiles were only dummy units floated by Shri V. Madhu only for the purpose of removing cotton yarn on cones manufactured in KGT without payment of duty during 1998 -99 and 1999 -2000. The Department also believed that the lease deed 1.4.1999 was made only for the purpose of suppressing the factum of manufacture of cotton yarn on cones by M/s. KGT. On the basis of the above investigative findings, the Department issued a show -cause notice to the appellants. The impugned order was passed by the Commissioner in adjudication of this show -cause notice.