STEELCO GUJARAT LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE applicant prays that a statement of the case be drawn up and the question of law be referred to the High Court under Section (1) of Section 35G of Central Excise Act, 1944. This application itself was filed in 1999 but is now being taken up because of several developments that took place between 1999 -2005 with which we are not presently concerned.

(2.) THE applicant wants the following question of law be drawn in the statement of reference to High Court.

(3.) AT this stage we advert to the order of the Tribunal dated CI -4292 -4293 dated 11 -11 -98 in which the Tribunal inter alia held "regarding the demand of duty of Rs. 1,47,00,127/ - and penalty of Rs. 1,50,00,000/ - the demand is upheld but the penalty is reduced to Rs. 75,00,000/ - (Rupees Seventy -five Lakhs only)". The Tribunal while coming to this conclusion discussed the evidence and the findings of the lower authority. In para 12 of its order the Tribunal observed as follows. We quote, This brings us to the next demand of duty of Rs. 1,47,00,127/ - and of penalty of Rs. 1.5 crores. This demand is on the ground that the scrutiny of balance sheet for the year 1993 -94 was showing the complete details of production/packing and dispatches in the plant performance report prepared by the Appellant and on a comparison thereof with the entries in the statutory Central Excise records indicated that the Appellants had suppressed production of 5297.343 MTs of finished goods. It was noticed that the production for July, 1993 shown in their RG1 register tallied with the performance report for the month. It was similarly found that dispatch/clearance particulars shown in RG1 register for the month of August, 1993 May, 1994 and September, 1994. Tallied with RG1 register and the performance report's figures were also comparable. The department alleged that production recorded in RG1 is much lower than the quantity shown in the plant performance report. The department relied upon statements of Shri More, Typist and Mapare Engineer (Dispatches) who confirmed that the figures mentioned in the reports are correct/ The Appellants have argued that there are various stages in the manufacture of CR, coils out of HR coils. The department has relied upon the figures of production in the mill mentioned in the Plant Performance report. But in the manufacturing process production in the mill constitutes the first step and the product has to undergo further processes like electrolytic cleaning, beil annealing, skin passing, inspection, trimming, slitting, cutting to length and packing. The RG1 stage is after all these operations are done. It has been further argued that the department has relied upon the quantity packed in the reports for the period May, 1994 - March, 1995. We find, in examining these contentions that the demand is based on Appellant's own document maintained by them and the correctness of the figures have been confirmed by the steno -typist More and the, Engineer (Dispatches), Mapare. There were also statements of the Production in -charge officer of the Appellant, Shri Ramachandran and Mitra for the correctness of the figures from which the Plant Performance report was prepared so as to take these figures as representing the actual dispatch for a particular day and actual production on that particular day. These officers statement also was to the effect that the particulars regarding packing and dispatch did not tally with the entries regarding production made in their Central Excise records RG1, because the packing and dispatch figures mentioned in the plant performance report were not reflected in any column of RG1 register. The Commissioner has also in his order painted out that the figures reported by the Appellants in their reply were misleading as they have included the figures of waste and scrap also in their reported figures, whereas the show -cause notice is with reference to the production of CR coils only. Therefore, we find that so far as this demand is concerned the Commissioner's conclusion is based upon satisfactory evidence and therefore this duty demand has to be upheld. However, the penalty on this count is, in the facts and circumstances of this case, reduced from Rs. 1.50 crores to Rs. 75 lakhs. The Tribunal while coming to the conclusion that the Commissioner's findings are based on satisfactory evidence kept the following factors in mind.