(1.) THIS appeal is directed against the order in original dated 1.4.1993 passed by the Collector, Central Excise, Jaipur confirming demand of Rs. 2,87,537.68 and imposing penalty of Rs. 25,000/ - on the appellant. Appellant engaged in the manufacture of Surgical Blades did not pay any Central Excise duty on the goods manufactured and cleared during the several years in the period from 19.3.1988 to 31.7.1992. Central Excise Officers visited the factory premises on 31.7.1992 and 1.8.1992 and scrutinised the Central Excise records and the private records maintained by the appellant. It was found that a part of the blades manufactured had been exported (in which case Central Excise Duty was not payable) and the remaining part of production had been cleared from the factory on internal gate passes purportedly as samples and no entries regarding production and clearances of these goods were made in Central Excise records and no duty had been paid. The General Manager of the appellant admitted that Rs. 4 to 5 lakhs units of blades were being manufactured every year and claimed that they were sent as free samples to prospective buyers abroad. He was able to produce copies of only nine invoices showing export of 13680 Surgical Blades as samples. It was found that 1434850 pieces had been removed clandestinely and purportedly as samples. The goods so cleared were not accounted in the Central Excise records and no price list had been filed during the period.
(2.) ACCORDINGLY show cause notice dated 4.11.1992 was issued to the appellant referring to the above facts leading to the tentative conclusion of clandestine clearance of the aforesaid number of blades for home consumption, proposing demand of duty on the same and alleging suppression of facts with intent to evade duty and invoking the larger period of limitation under the proviso to Section 11A(1) of the Central Excise Act, 1944. Though appellant resisted the notice on merits and on the ground on limitation, the Collector, overruling appellant's contention confirmed the demand and imposed penalty.
(3.) LEARNED Counsel for the appellant took us through copies of balance sheet for 1991 -92 produced before us. It refers to the export sale earnings for 1991 -92 and 1990 -91. Appellant has not case that the export earnings shown for the two years would include the price referable to 14.34 lakhs blades. Appellant can not have such a case in view of the contention of export of these blades as free sample. Therefore the balance sheet does not help the appellants to prove export of the subject goods. In these circumstances the Collector was justified in holding that the subject goods had not been exported but had been clandestinely cleared for home consumption, without the payment of Central Excise duty.