CPG TEXTILES Vs. CCE

JUDGEMENT

(1.) By this appeal, the appellants challenge the Order -in -Original No. 82/95 dated 27,7.95 passed by the Commissioner of Central Excise, Coimbatore, by which the Commissioner has demanded a total duty of Rs. 1,02,804/ - from the appellants under Rule 9(2) read with proviso to Section 11A(1) of the CE Act, 1944, He has also imposed penalty of Rs. 20,000/ - on the appellants under Rule 173Q and 226 of the CE Rules, 1944 apart from appropriating a sum of Rs. 20,000/ -towards the provisional release of the seized goods valued at Rs. 3,58,000/ -. The other persons involved in the case and on whom penalties have been imposed are not in appeal and in the present appeal, I am concerned with only the appeal of M/s CPG Textiles.

(2.) Brief facts of the case are that the officers of Central Excise Erode Division while conducting road patrol on 28.12.1993, intercepted a Tempo van bearing Registration No. TAN 6579 which was found carrying 1275 kgs. of 42s Cotton hosiery yarn on cones in 25 bags with the markings of M/s CPG Textiles, the appellants herein. The trip sheet was maintained only upto 23.11.1993. As the said yarn was being transported without any valid document, the officers effected seizure of the same on a reasonable belief that the same were cleared clandestinely without payment of duty. As a follow up action, statements were obtained from the driver of the tempo Van and also from one A Srikanth, yarn broker, accompanying the goods, who admitted that the yarn was loaded at the premises of one M/s Murugan Textiles situated near the appellants' premises and that the goods were being transported without any GPs. The officers further visited the premises of the appellants and found discrepancies in the RG1 stock and the physical stock to the tune of 4284 (85 bags) of various counts. The officers also visited various other units such as M/s Premier Textiles, Somanur, wherein the partner of the said Mills had stated that, in respect of certain consignments, they had not received any bills. Officers also visited M/s Kumaravel Textiles who vide their letter dated 31.12.1993 informed the department, that they are not in possession of any Bills or documents for the 10 bags of cones of 32s purchased from the appellants. The officers also visited various other Textile Mills such as M/s BRT Sizing Mills, M/s Thangamman Textiles, M/s Cheran Textiles, M/s Sivasakthi Sizing Mills and obtained statement from the concerned persons wherein they have stated that they have received cotton yarn without proper duty paying documents from the appellants. It was in these circumstances, that show cause notice was issued to the appellants which culminated in the order of adjudication passed by the adjudicating authority whereby he has demanded a total duty of Rs. 1,02,804/ - as detailed in the Order -in -Original and imposed penalty and appropriated the amount of Rs. 20,000 as noted above.

(3.) Shri S. Kandaswamy, learned Consultant accompanied by Shri R. Balagopal, Consultant appeared for the appellants. The learned Consultants reiterated the grounds of appeal and submitted that, so far as the alleged removal of 1275 kgs. of cotton yarn cones in 25 bags without documents is concerned, the Clerk in the factory debited duty in the personal ledger account under serial numbers 236 dated 23.12.93 but due to some urgent work he had to go out and thus could not prepare the GP -1 immediately. However, on his return, he prepared the GP.l and indicated the vehicle No. viz. TAN 6579 and this fact has been noted in by adjudicating authority in para 18 of the Order -in -original. However, duty on this account has been demanded on the ground that duty had not been paid at the time of removal of the goods from the factory. Therefore, the demand of duty of Rs. 3,959 is not correct because duty on the goods had already been paid. They, therefore, sought for setting aside this demand.