Full Judgment
2. The brief facts of the case are that the respondents are engaged in the manufacture of electric fans and cooler kits. On 28.5.98, the officers of the Revenue department visited the factory premises of the respondents and it was found that their statutory records such as RG-1 and RG-23A Part-I were maintained up to 20.5.98 and no entry was made thereafter. Show cause notice was issued to the appellants for confiscation of the goods found in excess of the statutory records. The demand was also raised on the finished goods and parts removed by the respondents as free replacement. The Adjudicating Authority confiscated the excess goods and ordered release of the same on payment of redemption fine. Duty in respect of the inputs found short was also confirmed. The inputs which were not entered in the statutory record were also confiscated and ordered to be released on payment of redemption fine. The modvat credit in respect of input which was found short was also denied. Demand was also confirmed in respect of the goods which were removed as free replacement. Personal penalty on the firm as well as Director and Manager was imposed. Appellants filed appeal and the Commissioner (Appeals) after taking into consideration the production and clearance during the period 20.5.98 to 27.5.98, set aside the confiscation of the finished goods found excess in their statutory record and also reduced shortage of number of fans.
3. The Commissioner (Appeals) in the impugned order, however, upheld the demand in respect of goods cleared as free replacement and also upheld the denial of credit in respect of inputs found short.
5. The contention of the Revenue is that the Commissioner (Appeals) wrongly allowed the adjustment in respect of the production and clearance during the period 20.5.98 to 27.5.98. The contention of the Revenue is that this contention of the respondents in respect of the production and clearance during these days is only as after-thought.
7. The contention of the respondents is that the respondents made a specific request to the Adjudicating authority for cross-examination of the Revenue officers and also submitted detail of their production and clearance during the period 20.5.98 to 27.5.98. In response to the request of the respondents for cross-examination, the Superintendent of Central Excise vide letter dated 9.6.2000 informed the respondents that it has been clarified by the Headquarters Preventive that the adjustment of production & clearance during 20.5.98 to 27.5.98 was not made at the time of stock verification and the same merits consideration. Superintendent further informed the respondents that in view of this clarification, whether respondents still want cross-examination of the officers. The contention of the respondents is that when this adjustment is granted then there is no shortage or excess and therefore, the Commissioner (Appeals) rightly considered the production and clearances during the abovementioned period.
8. We find that it is an admitted case of the Revenue that on 28.5.98 the statutory record was only having entries up to 20.5.98. It is also not disputed by the Revenue that during the period 20.5.98 to 27.5.98 the factory was running. On the request for cross-examination of the Revenue officers by the respondents, Superintendent of Central Excise informed the respondents that their contention for adjustment of production and clearance during the above mentioned period merits consideration. The relevant portion of the letter as noted by the Commissioner (Appeals) is reproduced below: "Please refer to your letter Rcf. No. JMPL/Excise/Show Cause Notice-1454/II-58/dated 17.5.2000 on the aforesaid subject. Also please refer to your interim defence reply dated 20.4,99 wherein certain objections have been raised as to the manner of stock verification by the officer. In this context, I have been directed to intimate you that it has been clarified by the Hdqrs, Preventive that the adjustment of production & clearance during 20.5.98 to 27.5.98 was not made at the time of stock verification and the same merits consideration.
In view of above clarification, you are requested to inform this office whether a cross-examination of the officer is still required, and if so reason & relevance for such requirement may be intimated." 9. From the above letter, it is clear that the Revenue was of the opinion that the respondents are entitled for adjustment of production and clearance during the above-mentioned period. Therefore, now the Revenue cannot plead that the adjustment was wrongly allowed by the Commissioner (Appeals). In these circumstances, we find no merits in the appeal and the same is dismissed.