TMI Blog1998 (8) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) Imposing penalty of Rs. 3,00,000/- on the appellants under Rule 173Q (1) of C.E. Rules, 1944 and Rs. 10,000/- each on MD, GM and factory Manager of the appellants, under Rule 209A. (5) Confiscating the plant and machinery of the appellants under Rule 173Q (2) of C.E. Rules, 1944 with option to redeem the same on payment of fine of Rs. 5,00,000/- under Section 34 C.E. Act, 1944. 2. The charge against the appellants was that on gathering intelligence by the Regional unit of the Directorate of Anti Evasion that the appellants had been indulging in large scale evasion of Central Excise duty on the metal containers falling under Chapter 8312.12 and 80001.00 (earlier under TI No. 46 and TI No. 68) manufactured and marketed by them by resorting to undervaluation of their products. Based on the above information, the factory premises of the Company was searched by the officers of Anti-Evasion Bangalore on 11-7-1986. On verification of the stock and accounts, an excess stock of 43,339 numbers of tin containers valued at Rs. 1,94,855.40 in different varieties and a shortage of 1214 numbers of tin containers in some other varieties valued at Rs. 3,55,497 was noticed. The excess stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficers seized the excess number of tin containers valued at Rs. 1,94,855.40 noticed on 11-7-1986 as the same had not been accounted for in RG 1 register and other production documents. It was further found that the company had been filing price lists and they had declared in the price lists that price included the packing charges. In the contracts it had been mentioned as packed in corrugated cardboard boxes, but in practice the company was not including the cost of tin containers for the purpose of payment of duty. They had suppressed the details and misdeclared to the department as could be seen from the gate passes issued from 11-7-1981 to 11-7-1986 that an amount of Rs. 44,34,806.29 being the value of cartons utilised for packing and clearance of tin containers was not included for calculating the assessable value of tin containers. 6. It was also found that the company was also collecting the difference in value whenever there was price escalation or change in the price with retrospective effect. Such differential value had been collected by raising debit notes in letter form by the Company on M/s. HVOC to the extent of Rs. 12,47,564.15. They also raised debit notes for frei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that there were instances when the appellants company sent excess consignments than what was shown in the documents sent with the consignments and they have reminded them to rectify the lapses. Shri Sunderaraj, Factory Manager of the appellants in his statement dated 6-8-1986 admitted that tin containers had been on occasions transported without the documents like gate passes and despatch advice. Likewise Shri G.P. Srinivasan, clerk of the appellants had also stated in his statement dated 18-12-1986 some containers and components of containers have been cleared without gate passes and without payment of duty. Shri Rajagopal, General Manager of the appellants in his statement dated 20-12-1986 admitted that he verified the goods consignment notes, booking register of the transport companies and miscellaneous despatch advice of the company and found that some of the tin containers were cleared without gate passes and without payment of duty. He also confirmed the particulars furnished by Shri G.P. Srinivasan with regard to clearance of tin containers and components of tin containers without payment of duty vide his statement dated 27-12-1986. In view of this it was found that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant Store Keeper. All of them have admitted about their laches and lapses and have given detailed statements about each of the offence including undertaking to pay the amount. Shri GN Sundararaj, admitted in his statement that neither the accounts tally with the prodcution report nor in the RG 1 register. He has also admitted it as a lapse on his part. He has given reason for this lapse which was to the effect that the Assistant dealing with the Central Excise matter was on leave and the incharge was not well conversant with the matter. Details have also been recorded in the mahazar which has been signed by the said Sundararaj, Factory Manager. In view of this admission, the conclusion arrived at by the Collector that the subsequent defence raised is flimsy and cannot be accepted, is required to be accepted and confirmed. The Collector has given finding that the appellants are a long standing licensee and well conversant in trade and has knowledge about the Central Excise matters and therefore, cannot shift the blame on the dealing assistant. Therefore, he noted that it is obligatory and mandatory on their part to make alternative arrangements in the absence of dealing assistant an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and the seized documents showing the clandestine removal of the goods. It is difficult to understand the arguments raised against the clear admissions and meticulous and enormous documentary evidence found by the investigating officers. In fact the General Manager Shri A. Rajagopal in his statement dated 20-12-1986 clearly admitted that the payment of duty has not been done in respect of such clearances and he would prevail upon the management to pay the duty on this score. He also admitted about non payment of duty on the various discrepancies noticed, in his statement. Therefore, there is also evidence in support of the department by the statement given by Shri V. Srinivasan, Proprietor of M/s. Venson Transport and also that of the Factory Manager and the General Manager of the appellants who have also come out with clear admissions. In view of these clear cut admissions it is difficult to accept any other plea raised by the appellants in regard to the clandestine removals of the goods. There is also statement given by S/Shri Murty, N Prakash of M/s. ITI, Bangalore, Shri RSA Khan GM of M/s. HVOC, Madras who also admitted about this aspect of the matter. Therefore, the finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave totally suppressed from the department the transaction with the customers with regard to the packing of tin containers and confirmed duty demand of Rs. 1,96,124.50 and the value of tin containers have been worked at Rs. 44,34,806.29. The Collectors has further analysed Section 4 and has noted that price list filed in Part II is inclusive of the packing charges and the contract copy was enclosed along with the price list. It is mentioned that packings have been made in corrugated boxes. He holds that this is accepted by the officers of the company in their statements. But the debit notes for the value of the corrugated boxes, freight and forwarding charges have not been made known to the department. He has also held that goods cannot be sold unless they are packed, otherwise they are likely to be damaged. Therefore, this being a primary packing, the value of which is required to be added. 14. We have perused the pleas raised by the appellants in this regard. We note from the admissions that in some cases, the appellants have packed the goods in durable corrugated boxes. In some cases, they have taken the value of such corrugated boxes. In terms of the judgment cited, value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... astic caps and liners were not included in the price of tin containers. The learned Collector has noted that the tin containers is covered with corrugated liners and body of the tin is printed and top and the bottom components are produced in press shop. The entire tin is fabricated on a conveyor line and plastic cap is fitted on to the circular opening to prevent dust entering into the tin. He noted that these accessories a must and go along with the containers as part of the finish goods and hence cost of plastic caps and corrugated liners should form part of the assessable value. We do not find any infirmity in the reasoning of the Collector and hence we confirm the same. 18. The next point is pertaining to manufacture and clearance of Balvikas boxes falling under erstwhile Tariff Item 68 and Chapter 8001.00 of the CET 1985 to Vysa Bank Ltd., duly fitted with plastic locks, keys and legs. Detailed finding has been given by the Collector. He has noted that these have been removed by separate debit notes for the plastic components which has not been intimated to the department and thereby the party has suppressed the facts from the department and they are liable to pay duty. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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