P.C. Jain, Member (T)

1. Brief facts of the case are as follows :

1.1 On 30-6-1984 the Preventive Staff paid a surprise visit to the appellants' factory and found them engaged what the department calls in the manufacture of cold rolled steel strips falling under T.I. 25 of the CET without obtaining L-4 licence and without following Central Excise formalities. On an enquiry, partner of the appellant firm informed that they were purchasing hot rolled strips of 10 gauge from the market and subjecting it to rolling in rolling machines after washing and pickling with sulphuric acid. In this process the thickness of the strips was reduced to 13 guage. The cold rolled strips so produced by the appellants were cleared to other units for the manufacture of cycle parts.

1.2 The preventive officers found that such strips of 13 guage weighing 1990 Kgs. valued at Rs. 11,000/- were available in the factory. They were seized by the officers since they were believed to be liable to confiscation.

1.3 The appellants vide their letters 4-12-1984 and 5-12-1984 furnished information showing clearance of such strips from February 1983 to January 1984 as 3,34,647.00 kg. valued at Rs. 18,40,913.12p.

1.4 I