2016 (8) TMI 1319 - AT - Central Excise

Misdeclaration of value of goods - cost of grey fabrics - Held that - appellant had filed price declaration as required of him as per details given by the merchant manufacturer including the job charges. There is nothing on record to show that appellant was aware of suppression of the prices of the grey fabrics - In the absence of any evidence to point out the role of appellant in suppression of the grey fabrics the duty liability cannot be fastened on appellant - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against Order-in-Appeal No. CPA/BR/161 & 162/Th-I/05 dated 12/08/2005
- Allegation of undervaluation of grey fabrics
- Duty demand, interest, and penalties imposed
- Appellant's defense based on filed price declarations
- Lower authorities' decision based on appellant's awareness of grey fabric costs
- Appellant's appeal for setting aside the order

Analysis:
The case involved an appeal against Order-in-Appeal No. CPA/BR/161 & 162/Th-I/05 dated 12/08/2005, where the revenue authorities issued a show cause notice alleging undervaluation of grey fabrics by the appellant. The lower authorities confirmed the duty demand, interest, and penalties, stating that the appellant, a processor of fabrics, should have known the correct value of the grey fabrics and discharged duty accordingly. However, the appellant contended that they had filed price declarations signed by the merchant manufacturers and were unaware of any price suppression. The Tribunal found that the lower authorities erred in holding the appellant responsible for mis-declaration, as the appellant had submitted price declarations as required, including job charges, without any evidence of awareness of price suppression. Therefore, the duty liability could not be imposed on the appellant, leading the Tribunal to set aside the impugned order and allow the appeal.

In the absence of any representation from the appellant, the Tribunal proceeded with the appeal based on the records. It was noted that the revenue authorities had issued a show cause notice alleging undervaluation of grey fabrics by the appellant. The lower authorities upheld the duty demand, interest, and penalties, citing the appellant's supposed awareness as a seasoned processor. However, the Tribunal observed that the appellant had filed price declarations as required, including details provided by the merchant manufacturer, with no indication of the appellant's involvement in price suppression. As a result, the Tribunal held that the duty liability could not be attributed to the appellant and deemed the impugned order unsustainable, leading to its setting aside and allowing the appeal.

The Tribunal emphasized that the lower authorities' decision was based on the assumption that the appellant, as an experienced processor, should have been aware of the cost of grey fabrics. However, upon reviewing the records, it was evident that the appellant had fulfilled the requirement of filing price declarations, as specified by the merchant manufacturer, without any indication of knowledge regarding price suppression. The Tribunal found no evidence linking the appellant to the alleged suppression, leading to the conclusion that the duty liability could not be imposed on the appellant. Consequently, the impugned order was deemed unsustainable, prompting the Tribunal to set it aside and allow the appeal, relieving the appellant of the duty demand, interest, and penalties imposed.