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2019 (6) TMI 263 - CESTAT HYDERABADSSI Exemption - clubbing of clearances - Cable Filling Compound - Cable Cleaning Compound - fictitious firm - whether CFC falls under chapter heading 34.03 or not? - HELD THAT:- The classification has to be decided by a Chartered Engineer. A Chartered Engineer can give his expert opinion regarding the nature of the material but the classification is to be done by the officers or the adjudicating authority or the appellate authorities. We do not find that the adjudicating authority has in any way disputed the Chartered Engineer’s certificate. Drawing from the Chartered Engineer’s certificate he concluded that the product in question is not classifiable as lubricating preparation but as a miscellaneous chemical under Chapter heading 3823. A plain reading of Chartered Engineer’s certificate also does not convince us that CFC is in the nature of a lubricant. Therefore, we find no force in the argument of the appellant and we find that the adjudicating authority was correct in classifying the product under Chapter heading 3823. Therefore, the question of exemption under notification 287/1986-CE does not apply in this case. Scope of SCN - HELD THAT:- The classification was not an issue in the show cause notice and the appellant has also not made out a case to reclassify the goods and claim benefit. Clearances without payment of duty amount to ₹ 1,21,892/- - HELD THAT:- The relevant period for this is 01.04.1991 to 31.03.1992. Learned counsel submits that this demand will not be sustainable if the department hold that VIPI is a dummy unit and VIPPL is the only correct unit as alleged in the first show cause notice. We have considered this argument and find that as far as the allegation regarding VIPI being dummy unit is concerned, we have not accepted it and therefore, set aside partly the demand with respect to the first show cause notice. Therefore, the demand to this extent under this show cause notice sustains - It is based on the clearances made in the name of VIPI and clearances in the name of AEI operating from the same premises with no separate manufacturing facilities and no separate stocks of raw materials or finished products. Clearances after obtaining Central Excise registration between November, 1992 to March, 1993 - HELD THAT:- Learned counsel submits that this demand has been made by adding turnover of AEI to their turnover for which there is no corroborative evidence. Since there was no separate manufacturing facility and AEI was operating from the same premises with no separate stock of raw materials or finished products, it can only be called a dummy unit and the department was justified in clubbing these clearances with that of VIPI. Difference between Private Register No. 106 and RT-12 returns value - HELD THAT:- There was a difference between the two but there is no sufficient corroborative evidence to show that the difference represents the clandestine removal. The demand on this account, therefore, needs to be dropped. Allegation of under valuation - HELD THAT:- This demand was arrived at for clearances made to 33 parties on the ground that clearances were shown to have been made @ ₹ 42/- per Kg while in case of others, the price adopted was ₹ 126/- per Kg. The statement of one of the recipients was recorded which he retracted during cross examination - there are no sufficient evidence to substantiate a demand on this ground. There is ground to confirm the demand to the extent of clubbing the clearances by AEI with VIPI but there is insufficient evidence to substantiate the demands on other grounds - there is no sufficient ground to substantiate the confiscation, fine and imposition of penalties on VIPI. The demand in this show cause notice was only on account of the fact that there was a difference between the value of sales shown in Central Excise and the sales income shown in the IT Returns. Such a difference can be a cause for suspicion and investigation but by itself cannot be conclusive evidence that goods were clandestinely removed and sold - Demand set aside. The matter is remitted to the original authority for the limited purpose of calculation of differential duty - appeal allowed by way of remand.
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