P.C. Jain, Member (T)

1. Brief facts of the case as given in the impugned order are as follows :-

1.1. M/s. Raza Textiles Limited, Rampur (hereinafter referred to as the appellants) manufacturers of cotton fabrics falling under Tariff Item 19 of Central Excise Tariff and man-made fabrics falling under Tariff Item 22 of Central Excise Tariff are alleged to have contravened the provisions of Rule 53 read with Rules 173G(4), 9(1), 52A, 173G(1) and Rule 173F of Central Excise Rules, 1944 inasmuch as on 3rd April, 1984, the Deputy Collector (Prev.), Central Excise, Meerut and Assistant Collector (Prev.), Central Excise, Meerut assisted by the Central Preventive Officers, visited the premises of the appellants and on scrutiny of the stocks and accounts, the following irregularities were detected :-

(i) The production entries in R.G. 1 register were not being made daily and were being made on the 3rd day.

(ii) The appellants were obliged to maintain R.G. 1 register with separate openings with each value-slab as per Government of India's Notification No. 251/82-C.E., dated 8-11-1982, as amended. But the value-slab-wise register of processed cotton fabrics and man-made fabrics were not being maintained by the appellants. It was also detected that the quantity of processed cotton fabrics, duly measured and folded, found stored in the packing room, was not entered in R.G. 1 register. Shri Shiv Gulam Srivastava, authorised representative of the appellants and Shri S.K. Zaki, Warehouse Incharge of the appellants, present at the time of the aforesaid checking, failed to produce any account showing the quantity of fabrics received and stored after final processing, finishing, folding and measurement had been completed thereon.

(iii) On physical verification, a quantity of 2061 meters of finally processed and finished man-made fabrics duly folded and measured was found stored in the packing room/warehouse of the factory, but this quantity was found not to have been entered in the R.G. 1 register.

(iv) On physical verification of the stocks of the finally processed and finished cotton fabrics, duly folded and measured, a quantity of 3,30,214.72 meters of such fabrics was also stored in the packing room/warehouse without any accountal in the R.G. 1 register.

(v) A quantity of 2527 Kgs. of Fents of processed cotton fabrics was found lying in a separate room adjacent to the place of storage of grey cotton fabrics without any accountal in R.G. 1 register.

(vi) R.G. 1 register for Rags of processed cotton fabrics reflected nil balance, but on physical verification, a quantity of 734 Kgs. of such Rags was found I stored in the finishing room.

(vii) The appellants were maintaining a serially numbered note-book for the receipts of grey cotton fabrics from weaving section and issues thereof to the Dyeing Section and stocks positions were being reflected. On physical verification, a quantity of 25201.40 meters of grey cotton fabrics of different sorts was found unaccounted for in R.G. 1 register.

(viii) A quantity of 33849 meters (28448.13 sq. Mtrs.) of cotton fabrics and 3885.57 sq. Mtrs. of man-made fabrics of grey fabrics was also found short in the factory.

1.2. Shri Shiv Gulam Srivastava, Authorised Signatory of the appellants was present at the time of visit by the officers aforesaid, and, he admitted in writing all the above irregularities. He further admitted that no entry of processed and finished cotton fabrics and man-made fabrics was made in R.G. 1 even after it was folded and measured. He also admitted that R.G. 1 Register was not being maintained value-slab-wise. He also admitted that the following goods were found unaccounted for in the R.G. 1 register and short at the time of the visit by the officers:-

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1.3. Shri Shiv Gulam Srivastava, Authorised Signatory of the factory, admitted that proper maintenance of R.G. 1 register, was fully and properly explained to him by the Collector, Central Excise, Meerut during the course of Regional Advisory