S. Kalyanam, Member (J)

1. This appeal is directed against the order of the Collector of Customs and Central Excise, Cochin, dated 19.6.1986 imposing a duty of Rs. 17,47,091.53 and a penalty of Rs. 5 lakhs on M/s. Vitco Rubber Industries Ltd. which is the proprietary concern of the appellant, under Rules 9(2), 52 A, 173Q and 226, a fine of Rs. 50,000/- in lieu of confiscation of the land, building, plant, machinery etc. under Rule 173Q and a further fine of Rs. 5,000/- under Rule 173Q in lieu of confiscation of tread rubber under seizure and a penalty of Rs. 2,000/- on Shri V.K. Thampi, the appellant herein, under Rule 226 of the Central Excise Rules, 1944 (hereinafter referred to as "the Rules").

2. On the basis of intelligence the Central Excise Officers of Ernakulam Division searched the business premises of one Shri Narayanan-kutty, a dealer in tread rubber on 2.8.1985 at about 6.30 p.m. Scrutiny of the accounts relating to the business of the said Narayanankutty and the statement recorded from him revealed that a substantial quantity of tread rubber, manufactured in the appellant's factory, had been clandestinely removed without payment of any Excise duty,. The authorities