Per P.S. Bajaj : The above captioned appeals have been filed by the appellants against the common order-in-original dated 31.10.2001 vide which the Commissioner had confirmed duty and penalty against the company appellant No.1 and also imposed penalties on the other appellants, as detailed therein.

2. The company appellant No.1 is engaged in the manufacture of pan masala with and without tobacco. Their premises were raised by the central excise officers on different dates. It was noticed that 6 bags of pan masala and gutkha were being removed on two rickshaws, 17 bags of pan masala and guthka were found excess over and above the RG-1 stock. 367.984 kgs. of gutkha, 70.6 Kgs. of sada masala and 5859.9 kgs. supari, were found short. On examining the documents resumed from the premises of the appellant No. 1 company, it also came to light that 74 bags and 496 packets of Pukar gutkha, had been removed without payment of duty and the details of which were available in 16 loose slips. Another 40 bags of Pukar gutkha were also found to had been removed through M/s. Narain Transport Forwarding Agency in contravention of the central excise rules. it also revealed that Trade Tax authority intercepted 64 bags of pan masala/gutkha. In follow up action, the premises of M/s. U.P. Marketing, owned by appellant No. 2 Udey Chand Chaurasia, being proprietor and of M/s. R.P. Products, proprietorship concern of Raj Kumar Chaurasia, appellant No. 3, were also searched and certain documents were resumed. The residential premises of Pankaj Chaurasia, appellant was also searched. No stock register was found to had been maintained by M/s. R.P. Products and U.P. Marketing. The statements of proprietors of both these concerns i.e. appellant Nos. 2 and 3, were record. Both these firms were found trading in the raw materials viz., supari, katha, compounds, perfumes etc. These firms were supplying raw materials to the company appellant No. 1. On physical checking of the stock lying in the premises of both these firms and of comparing the same with the record, the stock of supari and other raw material were found short and for which no explanation was offered by the appellant Udey Chaurasia and his son Raj Kumar Chaurasia. Shri Udey Chaurasia allegedly admitted the supply of the supari found short in the stock, to the company appellant No. 1. On completion of the investigation, show cause notice to the company appellant No. 1 as well as to the appellant Nos. 2 and 3 being proprietor of M/s. U.P. Marketing and R.P. Products, respectively and appellant Pankaj Chaurasia, owner of the premises, were issued. The show cause notices were also issued to the appellant Nos. 5 and 6, authorised signatories of the company appellant No. 1 and to appellant No. 7, being accountant of that company vide which the duty demand of the disputed amount was raised from the company appellant No. 1. and penalty was also proposed to be imposed on other appellants. After getting their reply wherein they denied the allegations as contained in the show cause notices, the Commissioner passed the impugned order vide which he had confirmed the duty along with the penalty and interest on the company appellant No. 1 and imposed penalty on the other appellants under Rule 209A of the Central Excise Rules.

3. The learned Counsel has contended that there is no cogent, convincing and concrete evidence on record to prove the actual receipt of the unaccounted supari as raw materials for the manufacture of pan masala, by the appellant No. 1, from the firms named above, owned by the appellant Nos. 2 and 3 and thereafter manufacture of the final products i.e. pan masala simple and pan masala with tobacco, by the company and removal of the same without payment of duty. The statement of appellant No. 2, on the basis of which the Commissioner has confirmed the duty demand and imposed penalty, has been misread by the Commissioner, as there was no admission on his part regarding the clandestine supply