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CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATE TRIBUNAL, NEW DELHI
G. Sankaran, H.R. SYIEM, S.C. Jain, JJ.
Leather Chemicals & Industries Ltd. -Appellant
Versus
Collector of Central Excise, Calcutta -Respondent
Order No. C-353 of 1983, 353 of 1983
Decided On : 25-11-1983
T.C. Seth,A.K. Jain
G. Sankaran, Member (T)
1. The captioned appeal was initially filed as a Revision Application before the Central Government which, under Section 35-P of the Central Excises and Salt Act, 1944, has come as transferred proceedings to this Tribunal for disposal as if it were an appeal filed before it.
2. The facts of the case, briefly stated, are :
(a) The appellants are manufacturers of Water-pigment finishes for leather (for brevity's sake to be called hereafter as W.P. finishes). Based on scrutiny of the private records of the appellants such as challans, delivery notes, Cash memos, private gate-passes, bills and outward challan registers, the Department charged the appellant with having removed, without accountal in the statutory record, without payment of duty and in a manner otherwise than as provided in the Central Excise Rules and in contravention of Rules 9(l),'52A, 53 and 226 of the Central Excise Rules (hereinafter to be referred to as the Rules), 2,81,656.884 Kgs. of W.P. finishes during the period 1-10-1960-19-1-1968. By a show cause notice issued on 17-7-1968, the appellants were asked to show cause why :
(i) duty (basic+special) amounting to Rs. 96, of 8.28 leviable on the aforesaid quantity of W.P. finishes should not be demanded from them under Rule 9(2); and
(ii) Why the deficiency in duty amounting to Rs. 55,122.76 (basic+special) leviable and due on a quantity of 1,82,170.40 litres of W.P. finishes should not be demanded from them under Rule 10A.
(b) On conclusion of adjudication proceedings, the Collector of Central Excise-
(i) demanded from the appellants under Rule 9(2), duty amounting to Rs. 91,122.40 (basic+special) on 2,67,595.884 Kgs. of W.P. finishes produced without accountal and removed without observing excise formalities ;
(ii) demanded under Rule 10A, deficiency in duty amounting to Rs. 55,122.76 (basic+special) arising out of the non-accountal of the said quantity of W.P. finishes during the financial years 1960-61 to 1967-68 (upto 19-1-1968);
(iii) imposed a penalty of Rs. 2,000 on the appellants under Rule 9(2).
(c) The appeal against the Collector's order was rejected by the Board as time-barred by its order dated 11-2-1971. On revision, however, the Central Government directed the Board to consider the appeal on merits. The Board again rejected the appeal ;
(d) It is against the Board's order that the appellants are before us.
3. The appeal was heard on 2-11-1983. Shri T.C. Seth, the learned Consultant, for the appellants, submitted that :
(i) The appellants' factory commenced production in 1948 and came under excise control in 1955 when excise duty was first imposed on, among other things, W.P. finishes for leather.
(ii) During the entire period, relevant to the present matter, the factory worked under the system of physical excise control. Under this system, goods could be cleared only on assessment of the goods by the Central Excise Officer and after payment of duty, on gate passes countersigned by the officer. There was, therefore, no question of any clandestine removals since the factory was under continuous supervision by Central Excise Officers. The Department had not come across a single instance of clandestine removal of goods from the factory.
(iii) The figures have been wrongly worked out by the Department. There has been double-accounting of production and clearances-once from the factory records and again from the records of the appellants' depots at Dhapd, Kanpur and Madras.
(iv) The Collector has partially accepted the double-accounting. This would render the entire calculations questionable. Though it has not been possible to undertake a complete check, the mistakes pointed put to the Collector (partially admitted by the Collector) were only illustrative and not exhaustive.
(v) 1,82,170 litres, of W.P. finishes, alleged to have been removed during the financial years 1962-63, 1963-64, 1964-65, 1965-66 and 1966-67 as exempted goods without payment of duty and/or on payment of duty at conce
