Per V.K. Agrawal : M/s. Paras Laminates Pvt. Ltd. and Shri Ravi Bansal, Director, have filed these two appeals arising out of a common Order-in-Original, by which the Commissioner, Central Excise, has confirmed demand of Central Excise duty against the appellant Company and imposed penalties on both the Appellants.

2.1 Shri A.R. Madhav Rao, learned Advocate, mentioned that the Appellants manufacture laminated sheets in their factory at Bhiwadi (Rajasthan) and have their godown at Delhi; that they have mainly sold under DGS & D Rate Contract the laminated sheets under the brand name "Paras" to the Indian Railways; that they were supplying the laminates after manufacture at Bhiwadi factory or from the Delhi godown; that the purchased laminated sheets were stocked at Delhi, branded as "Paras" and offered for visual inspection at Delhi and samples were drawn, taken to Bhiwadi factory and tested there; that in view of such trading activity, they obtained necessary sales tax registration; that the laminated sheets have been procured against S.T.1 form and the sales tax returns have all been assessed; that S.T.1 is for re-sale under the Delhi Sales Tax Act, 1975 and there is no tax on the dealers if S.T.1 is given to them; that "D" Form is given by Railways on sale of traded goods to them for concessional rate of Central Sales Tax @ 4% instead of 10%, normal rate; that in Delhi the sales tax is levied on first point sale and "D" forms are only for Government suppliers; that "D" forms of Delhi supplies to Railways show Delhi address. He also mentioned that on acceptance of the lots offered from Delhi procured from the market, the goods were despatched directly from the Delhi godown to the respective railway destinations; that the procurement of laminated sheets are paid by cheque and transactions are duly recorded; that sometimes where the supply from Delhi slightly fell short of the lot requirement sheets, then such shortage was made good by sending the material to Delhi from factory at Bhiwadi on payment of duty; that the goods were sent to Delhi to avoid double transportation; that at other times, the goods have gone directly from Bhiwadi and Delhi to the respective destinations.

2.2 He, further, mentioned that searches were conducted of their factory and head office on 12.6.96 and various statements were recorded; that Shri Ravi Bansal, Director, in his statement dated 30.8.96, deposed clearly that samples were taken from the godown at Delhi after visual inspection to the Bhiwadi factory and tested for compliance; that there was not search, verification or recording of statements in the godown of the Appellants at Delhi; that a show cause notice dated 6.12.96 was issued to them to demand, inter alia, duty on the decorative laminated sheets procured from the dealers and supplied to Railways during 1991-92 to 1995-96 alleging that the laminated sheets supplied from Delhi godown under DGS & D rate contract could not be the traded sheets since (i) the rate contract provided for supply of laminated sheets of 3 mm thickness manufactured and tested in Appellants' factory under the brand name "Paras" and (ii) as per the statements given by the dealers and the sale invoices of the dealers, there could not have been supply of decorative laminated sheets of 3 mm thickness with "Paras" brand from the dealers to them; that in other words the laminated sheets supplied from Delhi godown under DGS & D rate contract were manufactured and removed clandestinely from Bhiwadi factory; that consequently, the benefit of S.S.I. exemption under Notification No. 1/93-CE, dated 28.2.93 has been denied to the goods cleared during 1993-94; that duty has also been demanded on 2109 Nos. and 198.8 kgs of laminated sheets found short on verification of physical stock with the recorded balance in R.G-I on 12.6.96; demand has also been confirmed on 2871.4 kgs. of base paper, on which MODVAT Credit had been taken, found short on verification, and duty has also be