Cce and C Vs. Vegetable VitamIn Foods Co. Ltd. - Court Judgment

Excerpt:
1. the instant appeal is filed by the revenue against the impugned order-in-appeal passed by the learned commissioner (appeals).2. the charge against the respondents was that, they had failed to account for 72.569 mts of toilet soap valued at rs. 34,01,106 in their statutory records. consequently the said goods were seized and subsequently confiscated in the adjudication proceedings under rule 173q(i) of the central excise rules, 1944. the duty of rs. 6,80,221 paid at the time of provisional release was confirmed and the amount of rs. 3,50,000 was appropriated towards redemption fine from the bank guarantee, executed against b-11 bond executed at the time of getting the goods released provisionally. vide the impugned order-in-appeal, the learned commissioner (appeals) disagreed with the findings of the adjudicating authority and, therefore, set aside the aforesaid order-in-original. the revenue's appeal challenges the correctness of the order-in-appeal and seeks restoration of the order-in-original.3. heard both sides. examined the case records. it was alleged that on 17.11.1994 at the time of visit of the central excise officers to the factory the aforesaid stock of finished goods viz. 72.569 mts of soap was found unaccounted in rg1 register. the defence was that, the stock pertains to the production of 16.11.94, which the learned commissioner (appeals) accepted as correct and hence allowed the appeal of the respondents.4. however, on close scrutiny of the facts, it is apparent that the defence of the respondents who totally misplaced and had misled the commissioner (appeals). it has been clearly brought out in the order-in-original that, even if the production of 16.11.1994, as reflected in the relevant production report were to be considered as accounted for, the said production report refers production of only 1476 boxes, out of 5418 seized boxes. therefore, in the absence of any explanation regarding this balance quantity the same was liable for action it deserved as held by the adjudicating authority. during the hearing the learned counsel appearing for the respondents could not give any explanation regarding the balance quantity.5. he however, invited my attention to a document labeled as exhibit 'e' which is a xerox copy mentioned as "duplicate" captioned daily production report dt. 16.11.1994 which in quantitative terms roughly accounts for 70 mts of the products. it is not known as to whether this document was produced before the commissioner (appeals) to claim that, this was the production of 16.11.94, which remained to be accounted for in the rg 1. however, i notice that, since the respondents themselves have admitted that, the production of 16.11.1994 was only 1476 boxes, i hold that the said exhibit 'b' is a clearly fabricated document and the learned commissioner (appeals) was clearly in error in holding that the production of 16.11.1994 is equivalent to the excess found on 17.11.1994. therefore, i find that the respondents have misled the commissioner (appeals) to come to the above conclusion by filing a fabricated document at the stage of appeals, while the said document was not filed before the adjudicating authority. the respondents could not explain as to how in the face of their own admission of production of 16.11.94 being only 1476 boxes, the figure of 70 mts equivalent to 4415 boxes, could be considered.6. the entire thesis of the order-in-appeal being based on incorrect facts, the impugned order deserves to be set aside.7. accordingly, the impugned order is set aside and the appeal the revenue is allowed.

Judgment:
1. The instant appeal is filed by the revenue against the impugned Order-in-Appeal passed by the learned Commissioner (Appeals).

2. The charge against the respondents was that, they had failed to account for 72.569 MTs of toilet soap valued at Rs. 34,01,106 in their statutory records. Consequently the said goods were seized and subsequently confiscated in the adjudication proceedings under Rule 173Q(i) of the Central Excise Rules, 1944. The duty of Rs. 6,80,221 paid at the time of provisional release was confirmed and the amount of Rs. 3,50,000 was appropriated towards redemption fine from the Bank Guarantee, executed against B-11 bond executed at the time of getting the goods released provisionally. Vide the impugned Order-in-Appeal, the learned Commissioner (Appeals) disagreed with the findings of the adjudicating authority and, therefore, set aside the aforesaid Order-in-Original. The revenue's appeal challenges the correctness of the Order-in-Appeal and seeks restoration of the Order-in-Original.

3. Heard both sides. Examined the case records. It was alleged that on 17.11.1994 at the time of visit of the central excise officers to the factory the aforesaid stock of finished goods viz. 72.569 MTs of soap was found unaccounted in RG1 register. The defence was that, the stock pertains to the production of 16.11.94, which the learned Commissioner (Appeals) accepted as correct and hence allowed the appeal of the respondents.

4. However, on close scrutiny of the facts, it is apparent that the defence of the respondents who totally misplaced and had misled the Commissioner (Appeals). It has been clearly brought out in the Order-in-original that, even if the production of 16.11.1994, as reflected in the relevant production report were to be considered as accounted for, the said production report refers production of only 1476 boxes, out of 5418 seized boxes. Therefore, in the absence of any explanation regarding this balance quantity the same was liable for action it deserved as held by the adjudicating authority. During the hearing the learned counsel appearing for the respondents could not give any explanation regarding the balance quantity.

5. He however, invited my attention to a document labeled as Exhibit 'E' which is a Xerox copy mentioned as "Duplicate" Captioned Daily Production Report dt. 16.11.1994 which in quantitative terms roughly accounts for 70 MTs of the products. It is not known as to whether this document was produced before the Commissioner (Appeals) to claim that, this was the production of 16.11.94, which remained to be accounted for in the RG 1. However, I notice that, since the respondents themselves have admitted that, the production of 16.11.1994 was only 1476 boxes, I hold that the said exhibit 'B' is a clearly fabricated document and the learned Commissioner (Appeals) was clearly in error in holding that the production of 16.11.1994 is equivalent to the excess found on 17.11.1994. Therefore, I find that the respondents have misled the Commissioner (Appeals) to come to the above conclusion by filing a fabricated document at the stage of appeals, while the said document was not filed before the adjudicating authority. The respondents could not explain as to how in the face of their own admission of production of 16.11.94 being only 1476 boxes, the figure of 70 MTs equivalent to 4415 boxes, could be considered.

6. The entire thesis of the Order-in-Appeal being based on incorrect facts, the impugned order deserves to be set aside.

7. Accordingly, the impugned order is set aside and the appeal the revenue is allowed.