Per Smt. Archana Wadhwa :

Vide Order-in-Original No. CPO/Collr/16/88 dated 14.12.88, Collector of Central Excise, Calcutta-I has confirmed Central Excise duty to the tune of Rs. 9,73,668.22 as differential duty of excise payable on the various goods viz. alternators, generating sets, control panels, slip ring, choke foil etc. classifiable under erstwhile Central Excise Tariff Item No. 68 of the schedule valued altogether at Rs. 1,79,18,062.70 under the provisions of rule 9 (2) of the Central Excise Rules, 1944; confiscated two generating sets seized from the appellants' carrier vehicle with an option to the appellants to redeem the same on payment of redemption fine of Rs. 2,000/-; confiscating the carrier vehicle with an option to redeem the same on payment of an amount of Rs. 600/-; confiscating one generating set found unaccounted in the appellants' records with redemption fine of Rs. 500/-; confirming duty of Rs. 1441/- on two generating sets under the provisions of rule 9 (2); imposing personal penalty of Rs. 4 lakhs on the appellant company and also confiscating the land, plant and machinery etc. with an option to the Company to redeem the same on payment of fine of Rs. 1 lakh.

2. Briefly stated, the facts of the case are as under:-

The appellants were engaged during the relevant period, in the manufacture of alternators, base frame, control panels, choke coils in their factory. The appellants were purchasing diesel engines from the other manufacturers like Kirloskar, Ashok Leyland etc. Engines were being cleared by them either as trading item or after coupling engines with the alternators along with other components of alternators in the form of gen sets.

3. A surprise visit was paid to the appellants' factory premises on 18.9.79 by the Officers of the Centralised Preventive Organisation, Calcutta who intercepted one tempo van with two complete generating sets packed in wooden cases. The said consignment was found not to be covered by any valid Central Excise gate pass. On verification of the statutory records of the appellant company, it was found by the Officers that no entry relating to production and clearance of these two generating sets is made in the records. Accordingly, the goods were seized by the Officers. The appellants' stock was also verified by the Officers and it was found that one generating set duly packed in wooden case was in excess over the balance in the RG1 register. As per the statement of the Director of the appellant company, the said generating sets were having the engine parts received from the customers/dealers for testing. Based upon the above facts the Officers entertained a reasonable belief that the appellant company was manufacturing generating sets complete but were removing the same in the guise of alternators. The Officers seized the records and documents as also the sales bills and challan book etc. from the Head Office of the said Company. Based upon these facts, a show cause notice dated 15.3.80 was issued to the appellants proposing confirmation of demand of duty on the three generating sets; to confiscate the said seized generating sets as also to impose penalty upon the appellants.

4. Another show cause notice dated 11.5.81 was issued to the appellants alleging clandestine manufacture and removal of the generating sets and proposing denial of small scale exemption notification on the ground that the clearance limit got exceeded by adding the value of the clandestinely removed generating sets. The above allegation was based upon the examination and verification of the records seized from the appellants premises and the investigations made during the post seizure period. After due adjudication of both the show cause notices referred to above, the order impugned in appeal No. E-1599/89D was passed by the adjudicating authority.

5. Appearing for the appellants before the Tribunal, Shri A.R. Madhav Rao, learned advocate submitted that there are number of minor issues involved in the