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Central Excise - Case Laws
Showing 161 to 180 of 196 Records
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2014 (6) TMI 201 - CESTAT KOLKATA
Determination of assessable value - method of Valuation - body-built motor vehicles, namely Dumpers & Tippers - Job Work - Clearance of goods by the Appellants to the Depot of TML pursuant to the chassis supplied to them free of cost, by TML - Determination under Rule 10A or Rule 6 of the Valuation Rules read with Section 4(1)(a) of the Central Excise Act, 1944 - Held that:- According to Chapter Note: V of Chapter 87 of the Central Excise Tariff, building of body or fitting of a structure or equipment on the chassis falling under Heading 8706, amounts to manufacture of motor vehicles. We find that there is no sale of motor vehicles by the appellants either to TML or to any other customers. These vehicles were for the first time sold by TML from their depots and therefore, the clarification that the appellants sold the body, is of no help to them. We find that the chassis were supplied to the appellants free of cost. On fabrication of components of the body, it results into emerging a final product namely, motor vehicle which is distinct from the chassis. Since the said motor vehicles were not sold by the appellants and sold for the first time by TML, the value was to be determined in this case under Rule 10A of the Central Excise Valuation Rules, which provided for determination of value of the final products manufactured on behalf of the principal manufacturer - Following decision of Audi Automobiles & Others [2009 (5) TMI 426 - CESTAT, NEW DELHI] and M/s. Hyva (India) Pvt. Ltd. (2013 (8) TMI 770 - CESTAT MUMBAI) - Matter remanded back - Decided in favour of Revenue.
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2014 (6) TMI 200 - PUNJAB & HARYANA HIGH COURT
Condonation of delay - whether there was sufficient cause for condonation of delay of about one and a half year in filing the appeal before the Tribunal - Held that:- no ground for condonation of colossal delay of about one and a half year in filing the appeal before the Tribunal has been made out. Even the Tribunal while dismissing the application for condonation of delay filed along with the appeal against the order dated 9.8.2010 (Annexure P-3) passed by the Commissioner (Appeals), noticed that the application was blank as number of days of delay in filing the appeal had not been mentioned therein and also the verification date was blank. It was one Bindu Gupta, DE (Legal) Office of GMT, Patiala who had verified such application by an affidavit - In the absence of definite averments and substantive proof with material to substantiate the reasons for condonation of delay, no justification for condonation of exorbitant delay of about one and a half year in filing the appeal before the Tribunal arises - Decided against the assessee.
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2014 (6) TMI 198 - PUNJAB AND HARYANA HIGH COURT
Constitutional validity of mandatory penalty even in the absence of mens rea - Whether the Tribunal was correct in holding that penalty of an equal amount is mandatory under Rule 96ZO(3) and discretion for lesser penalty is not available under the said Rule - Held that:- provision for minimum mandatory penalty equal to the amount of duty even for slightest bonafide delay without any element of discretion is beyond the purpose of legislation. The object of the rule is to safeguard the revenue against loss, if any. The penalty has been provided in addition to interest. Mere fact that without mens rea, an can be punished or a penalty could be imposed is not a blanket power without providing for any justification. In the Indian Constitutional scheme, power of legislature is circumscribed by fundamental rights. Judicial review of legislation is permissible on the ground of excessive restriction as against reasonable restriction which is also described as proportionality test.
When Section 37, which is the rule making power, is clear that penalty can be imposed only when the assessee is guilty of intending to evade the payment of duty, the penalty cannot be imposed without such intention. Furthermore, even when intention may be there, the penalty must be reasonable and cannot, in all cases, be fixed at 100% of the excise leviable. Each case must be decided on its own facts and circumstances. There may be cases where the delay is only of a day or two and the authorities must be given the discretion to impose the penalty which they feel is reasonable in the facts and circumstances of the case - Decided in favour of assessee.
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2014 (6) TMI 197 - PUNJAB AND HARYANA HIGH COURT
Constitutional validity of mandatory penalty even in the absence of mens rea - Whether merely demanding interest and imposing penalty from/on the assessee in case of violation of certain Sections/Rules, the provisions in Rules 96(ZO), (ZP) and (ZQ) permitting minimum penalty for delay in payment, without any discretion and without having regard to extent and circumstances for delay can be held to be ultra vires of the Act and the Constitution - Held that:- provision for minimum mandatory penalty equal to the amount of duty even for slightest bonafide delay without any element of discretion is beyond the purpose of legislation. The object of the rule is to safeguard the revenue against loss, if any. The penalty has been provided in addition to interest. Mere fact that without mens rea, one can be punished or a penalty could be imposed is not a blanket power without providing for any justification. In the Indian Constitutional scheme, power of legislature is circumscribed by fundamental rights. Judicial review of legislation is permissible on the ground of excessive restriction as against reasonable restriction which is also described as proportionality test.
When Section 37, which is the rule making power, is clear that penalty can be imposed only when the assessee is guilty of intending to evade the payment of duty, the penalty cannot be imposed without such intention. Furthermore, even when intention may be there, the penalty must be reasonable and cannot, in all cases, be fixed at 100% of the excise leviable. Each case must be decided on its own facts and circumstances. There may be cases where the delay is only of a day or two and the authorities must be given the discretion to impose the penalty which they feel is reasonable in the facts and circumstances of the case - Decided against of Revenue.
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2014 (6) TMI 196 - CESTAT MUMBAI
Waiver of pre depsit - Duty paid on MRP Basis - Held that:- As the duty has been paid on MRP basis and the Revenue is not denying, therefore the abatement cannot be denied. In view of this, pre-deposit is waived for hearing of the appeal - Stay granted.
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2014 (6) TMI 195 - CESTAT MUMBAI
Determination of rate of duty - Held that:- Matter relates to clearance of excisable goods without payment of duty under EPCG license. Therefore, the matter has to be decided by a Division Bench of this Tribunal as per the provisions of Section 35D(3) of the Central Excise Act, 1944. Accordingly, I direct the registry to place the matter before the Division Bench of this Tribunal for consideration and disposal of this appeal.
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2014 (6) TMI 164 - CESTAT AHMEDABAD
Duty demand - Revenue contends that consumption of input/ raw material (Arjocast paper) was much more than the production of goods falling under Chapter 48 of the CETA recorded in the appellant’s RG 1 Register - Daily Stock Account Register - Held that:- Entire allegations against the appellant are that there is a shortfall in the production meaning thereby that they have produced less number of bottles than the standard input output norms. We are afraid that the above, cannot be made the basis for confirmation of demand of duty. If there is shortfall in production, Revenue cannot confirm demand of duty in respect of goods not produced by the assessee. There is no other evidence on record showing that the appellants have cleared the said goods clandestinely. The entire case of the Revenue is based only on inferences involving unwarranted assumptions and cannot be upheld. - Decided in favour of assessee.
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2014 (6) TMI 163 - CESTAT NEW DELHI
Refund of amount deposited under protest - allegation of clandestine removal - Incorrect entry in Central excise records - Held that:- The appellant’s during the course of adjudication has explained the discrepancies and have contended that there was no actual shortages and submitted that in the absence of any other evidences as regards the procurement of the raw material, manufacture of the final product and removal of the goods from the appellant’s premises, the findings of clandestine removal are not sustainable - The entire case of the Revenue is based upon the audit objection, which is based on the comparison of entries made in the statutory records vis-a-vis the balance sheet. The appellants have explained such differences by referring to the numbers of their final product as entered in ER-I returns as also on balance sheets. Apart from that I find that there is virtually no other evidence on record to indicate and establish the clandestine manufacture and removal of the goods. It is well settled law that the onus to prove clandestine activities is upon the Revenue and is required to be discharged by production of positive evidences. The demand on the basis of clandestine removal cannot be confirmed on assumptions and presumptions. There being no evidence in the present case to establish any such clandestine activity, I find no reasons to uphold the impugned orders - refund allowed - Decided in favour of assessee.
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2014 (6) TMI 162 - CESTAT MUMBAI
Demand of differential duty - Interest - valuation of cars sold to dealers - Indica cars are smaller compared to Indigo cars and at the relevant time, they carried lower a rate of duty, compared to Indigo cars and utility vehicles - reduction in the assessable value of Indigo cars (except Indigo CS Model) in the guise of 'Special discount' - Whether the so called 'special discount' claimed to have been passed on by the appellant to its dealers can be treated as a permissible trade discount or not - Held that:- article preceding the expression "goods" and "price" in the said section 4 is the definite article "the" and not an indefinite article. The use of the definite article implies that section 4 envisages determination of value in respect of the goods under removal for each removal of the goods. Therefore, if the valuation has to be done in respect of Indica cars which are removed and on which discounts are being offered on sale, the benefit of such reduction has to be made by reducing the price of Indica cars and determination of value has to be made for each removal of Indica cars. It is an admitted fact in the case before us that this has not been done. The price reduction has been effected not on the goods to which it applies but by reducing the price of some other goods (other models of cars) which were cleared at a subsequent point of time.
Thus the provisions of section 4 have not been adhered to or complies with on the transactions with which we are concerned with in this appeal. If for some reason, the appellant was not able to determine the value at the time of removal of goods, the appellant could have and should have opted for provisional assessment of the goods under removal as it provided for in Rule 7 of the Central Excise Rules, 2002. Thus the appellant did not choose to comply with the provisions mandated by law but chose to adopt a practice which was not provided for in the law - benefit provided under the law cannot be claimed when the conditions prescribed are not complied with or adhered to. It is a well-settled statutory principle that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and no other.
It can be seen that the Car Target Schemes do not specify or spell out in what form and in what manner the incentive amounts will be given to the dealers. It is on record that each dealer has a running account maintained with M/s. TML. Therefore, as a matter of accounting, in the normal course, the incentive amounts should have been credited to the dealer's running account maintained with M/s. TML. However, instead of doing so, M/s. TML chose to pass on the incentive amounts to the dealers in the guise of 'Special Discount' by reducing the transaction value of only the Indigo Cars purchased by the dealers during the subsequent months. These incentive amounts earned by the dealers by achieving the targets fixed by M/s. TML cannot be termed as a 'Special Discount' for the following reasons.
The so-called 'Special Discount' has no relation to the goods under assessment and has not been passed on by reducing the price of the goods under assessment. Further, it has not been shown by M/s. TML that this is the normal prevalent trade practice. M/s. TML is not the only assessee engaged in the business of manufacture and sale of Passenger Cars. There are many other manufacturers of Passenger Cars in the country. It has not been shown that similar practice is being followed by other manufacturers as well.
The amount paid to the dealers are by way of incentives to achieve the target. The incentives given were TML's contribution to warranty services, insurance services and so on. In spite of the dealers maintaining a running account with TML through which payments to and from were adjusted, as regards the "special discount', the same was passed on not by adjusting the running account but by reducing the price of Indigo cars cleared during the subsequent month. While the Chief Financial Officer (CFO) thought that this policy was authorized by the President (Marketing) of the Passenger Car Business Unit, the latter has completely denied the same and has admitted that there was no such formal policy for grant of incentives/discounts.
So-called "special discount" offered by the appellant does not conform to any of the requirements of the trade discount. That is, it is not known at or prior to the removal of the goods; it is not in accordance with any established trade practice; it is not in accordance with any established trade practice; it is uniform within the same class of buyers; it is purely arbitrary; it is a compensation for the services rendered by the dealers on behalf of the manufacturer, masqueraded as a discount; it is not passed on to the end customers; and it is not passed on as a price reduction of the goods to which it pertains to. Thus the so called special discount claimed to have been passed on by the appellant to the dealers is not a trade discount at all so as to be eligible for exclusion from the assessable value of the goods removed as per the provisions of section 4 of the Central Excise Act. Therefore, denial of abatement of the said discount from the assessable value of the goods sold is clearly sustainable in law and accordingly, we uphold the demand for differential duty confirmed in the impugned order, Arguments to the contrary made by the appellant in this regard merits total rejection - Decided against assessee.
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2014 (6) TMI 161 - CESTAT MUMBAI
Classification of goods - Whether the boiler ash is an excisable goods or by-product which comes into existence during the manufacture of sugarcane - Held that:- in the case of Union of India v. Ahmedabad Electricity Co. Ltd. - [2003 (10) TMI 47 - SUPREME COURT OF INDIA] wherein the Hon’ble Supreme Court held that Cinder is unburnt or partly burnt coal which is left out in the boiler is not excisable goods hence, is not liable to duty. The ratio of the above decision is applicable to the present case also - Decided in favour of assessee.
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2014 (6) TMI 160 - CESTAT BANGALORE
Stay application filed by the revenue to stay the operation of order allowing cenvat credit - Held that:- Cenvat credit of Special Additional Duty (SAD-Section 3(5) of the Customs Tariff Act, 1975) paid by the importer by making use of TPS (Target Plus Scheme) scrips, has been allowed by the lower appellate authority. The impugned order shows that the appellate authority relied on the Board’s Circular No. 18/2006-Cus., dated 15-6-2006 wherein it was clarified that an importer paying SAD by making use of DEPB/TPS scrips was entitled to claim Cenvat credit thereof or, alternatively, drawback - no stay - decided against the revenue.
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2014 (6) TMI 131 - CESTAT CHENNAI (LB)
Classification of Toys and Games as CSH 9504.90 as games as contended by the Revenue or by CSH 9503.00 as toy/puzzle - educational toys - toys and games of children - 1. Beeline 2. Disney Telespin 3. Disney Sorry 4. Disney Chip N Dale 5. Game of Games 6. Duck Tales 7. Monopoly Junior 8. Pay Day 9. Hotel 10. City Games (Paris) 11. City Games (London) 12. Games of States (USA) 13. Games of States (India) 14. Travel Ludo 15. Travel Snakes & Ladders 16. Travel Chinese Checkers 17. Dragster 18. Stratego 19. Fox & Geese 20. Travel Chess & Draughts 21. Leverage 22. Mould and Paint - Majority order.
It is settled law that when a heading in the Central Excise Tariff is based on and is identical to a heading, the explanatory notes to that heading in the HSN have persuasive value for determining the scope of the same heading in the Central Excise Tariff, unless a different intention is indicated on the Tariff itself.
Classification of the game ‘Fox & Geese’ - held that:- This game is more like the game of chess and involves skill and its outcome depends mainly upon the skill of the player. There is also an element of competitiveness. - this game has to be classified as a game under sub-heading 9504.90 of the Tariff.
Other three games – ‘Chip N Dale’, ‘Duck Tale Disney’, and ‘Rally’, all these games are ‘board games’ i.e. are the games which involve movement of pieces on a premarked surface called ‘Board’ according to a set of rules and usually have a goal which a player aims to achieve.
The contention of the appellant is that since in ‘Chip N Dale’, ‘Duck Tale Disney’ and ‘Rally’, there is no element of skill and outcome of these games is dependent only on chance, these games are purely for amusement of children and hence the same have to be treated as ‘toys’ covered by Heading 95.03. - this plea of the appellant is not correct.
In terms of the criteria for ‘Games’, as prescribed by the Apex Court in its judgment in the case of Pleasantime Products Vs. CCE Mumbai-I (2009 (11) TMI 5 - SUPREME COURT), this game, which is a board game, has to be classified as a game under sub-heading 9504.90 of the Tariff.
In view of majority order, the following items are classifiable as Toys under Heading 9503 of CETA, 1985:- 1. City of Games (Paris), 2. City of Games (London), 3. Games of States (USA), 4. Games of States (India), 5. Match & Move Memory, 6. Mould & Paints, 7. Game of Games and 8. Go To The Heads of Class.
The other items, except as mentioned above, would be considered as ‘Games’ classifiable under Heading 9504 of CETA, 1985 and the demand of duty along with interest is upheld and the penalties are set aside. The Hon’ble Supreme Court directed that the demand of duty should be restricted for the normal period of limitation under Section 11A of the Central Excise Act, 1944 - personal penalty imposed on Shri S.K. Pathi set aside - Decided partly in favour of assessee.
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2014 (6) TMI 128 - CESTAT AHMEDABAD
100% EOU - DTA Clearances - whether the appellant is eligible to clear into DTA 50% of their FOB value of exports of deemed exports or not - Held that:- in the case of Gandhi Fibers, this bench vide order dt. 11.06.2009 relying upon the judgment of Virlon Textile Mills Ltd. had allowed the appeal of the assessee holding that assessee is eligible to clear goods to Domestic Tariff Area by taking 50% of the deemed exports value as their eligibility. It is noticed that this judgment of the Tribunal has attained finality in the hands of Apex Court. Since the issue is covered by the judgment of Hon’ble High Court of Gujarat in the case of Gandhi Fibers [2010 (12) TMI 797 - GUJARAT HIGH COURT ] and as also in the case of NBM Industries [2011 (9) TMI 360 - GUJARAT HIGH COURT] and Amitex Silk Mills Pvt. Ltd. [2005 (10) TMI 128 - CESTAT, NEW DELHI], we find that the impugned order is incorrect - Decided in favour of assessee.
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2014 (6) TMI 127 - CESTAT NEW DELHI
Duty demand - Shortage in stock - Lack of evidence - Held that:- The Director on the spot statement accepted such shortages but did not accept that the same were on account of clandestine removal. In fact immediately on the next day, he explained that the raw material in the furnace was taken as 35 MT whereas the same was to the tune of 80 MT - there is virtually no evidence on record indicating that such short found raw material has been either cleared by the appellant in a clandestine manner or has been used in the manufacture of final product cleared without payment of duty. There are no investigations done by the department and no further evidence stands produced on record. there is no evidence on record that such alleged excess found goods were for clandestine removal, in the absence of which the confiscation of the same cannot be upheld. The same is accordingly set aside. - Decided in favour of assessee.
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2014 (6) TMI 126 - CESTAT MUMBAI
Process that amount to manufacture or not - cutting and slitting of jumbo rolls or log rolls of self adhesive rolls of Chapter 48 and 85 - Held that:- cutting and slitting of a product from jumbo rolls into smaller sizes would not amount to manufacture. In S.R. Tissues Pvt. Ltd's case [2005 (8) TMI 111 - SUPREME COURT OF INDIA], it is also held that the value addition cannot be a criterion for concluding that whether a new product has emerged or not with a distinct character, name or use.
There is a third schedule to the Central Excise Tariff Act, wherein a large number of items have been listed and in respect of these items, the activity of labeling, relabeling, packing or re-packing or adoption of any other treatment to render them marketable are deemed as ‘manufacture' under Section 2(f) of the Act. CETH 4811 and 8546 have not been specified in the said Schedule even though similar products falling under CETH 4816, 4818, 8536, 8539, etc. figure in the said Schedule. If the legislature intended the process of cutting and slitting to be amounting to manufacture, then CETH 4811 and 8546 should also have been included in the said Schedule. Further, in various Chapter Notes in the Tariff, wherever the legislature intended cutting and slitting to be amounting to ‘manufacture', specific notes were provided. In the present case, in respect of CETH 4811 and 8546, no such Chapter Note exists. All these points to the fact that the legislature did not intend to treat cutting and slitting of jumbo rolls of products falling under 4811 and 8546, to smaller sizes so as to make them useable by the user as amounting to ‘manufacture' - Decided against Revenue.
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2014 (6) TMI 93 - CESTAT CHENNAI
CENVAT Credit - Goods Transport Agency Service - Held that:- assessee manufacturing textile goods, and also deemed output service providers of GTA service, was entitled to utilize their Cenvat credit for payment of Service tax on GTA services - Following decision of Commissioner of Central Excise, Chandigarh Vs Nahar Industrial Enterprises Ltd. reported in [2007 (3) TMI 201 - CESTAT NEW DELHI] - Decided in favour of assessee.
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2014 (6) TMI 92 - ALLAHABAD HIGH COURT
Failure to deposit the monthly duty liability in terms of rule 8(1) of the Central Excise Rules - Liability to pay the duty consignment-wise and only through the PLA since the period of default was beyond 30 days from the due date - Duty paid by availing CENVAT Credit - Held that:- Orders which had been passed by the Tribunal both on the original application as well as on the modification application are fair and proper. A prima-facie finding has been recorded that there was a breach on the part of the appellant to comply with the provisions of rule 8(1), which mandates that the duty has to be paid by the fifth day of the following month. Rule 8(3A) thereafter stipulates that if there is a default in payment of duty beyond 30 days from the due date, then notwithstanding anything contained in sub-rule (1) and sub-rule (4) of rule 3 of the Cenvat Credit Rules, 2004, the assessee has to pay duty for each consignment including interest without utilizing the Cenvat credit.
It was the Cenvat credit which was utilized by the appellant despite the default. The Tribunal has directed the appellant to deposit an amount of ₹ 5,26,305/- with a further qualification that upon this deposit, the Cenvat credit would be re-credited to the account. We have also noted above that the only submission which was raised before the Tribunal, was based on an order passed in a miscellaneous application dated 12 June 2013. The Tribunal has furnished cogent ground for holding that the order on the miscellaneous application in some other matter had no application for the simple reason that in that case the appellant had deposited much more than what was directed to be deposited by way of pre-deposit - No substantial question of law arises - decided against assessee.
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2014 (6) TMI 91 - GAUHATI HIGH COURT
Condonation of delay - Bar of limitation - whether the Tribunal was justified in dismissing the writ petitioner’s appeal on the ground of limitation - Held that:- the proper remedy of writ petitioner in this case was to file an appeal under Section 35 G of the Central Excise and Salt Act to this Court against the impugned order of the Tribunal rather than the writ petition under Article 226/227 of Constitution because the impugned order was appealable to this Court under Section 35G of the Central Excise and Salt Act - Tribunal should have condoned the delay in filing the appeal by the writ petitioner (appellant) instead of dismissing it on the ground of limitation. The delay in filing the appeal was hardly of 2 months and 19 days and keeping in view the ground stated in the present writ petition, we are inclined to hold that it constitutes sufficient cause within the meaning of Section 5 of the Limitation Act in filing the appeal beyond the statutory period prescribed for its filing - Decided in favour of assessee.
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2014 (6) TMI 90 - CESTAT MUMBAI
Duty demand - Petty amount - lower appellate authority has dismissed the demand of excise duty for an amount of Rs.462/- and a penalty of Rs.500/- Held that: - Considering the negligible amount of Revenue involved in this matter, appeals dismissed - decided against the revenue.
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2014 (6) TMI 89 - CESTAT AHMEDABAD
Clandestine removal - Recovery of note book - invoice with new serial number inserted - However, on investigation it was found that pre-authenticated invoices bearing serial number from 172 to 177 were still lying blank and unused in the records of the Respondent. During the course of physical verification of finished goods in the respondent s factory, a shortage of 15,000 Kg of Ordinary Duplex Board, involving central excise duty of Rs. 21,600/ and Cess Rs. 169/-, was detected - Held that:- there was recovery of a small note book from the factory premises of the Respondent which has been admitted by the authorized signatory as well as the Director of the respondent factory, to be including illicitly cleared goods both of them have admitted that the said note book contained particulars of illicitly removed excisable goods from the respondent’s factory, and that this note book was being maintained to monitor the receipt of payments of against the illicitly removed excisable goods. The respondent’s Director also admitted that the note book was being maintained under his directions and the parallel invoices were later destroyed.
As per provisions of Sec. 36A of the Central Excise Act, the presumption is that the note book is a genuine documents and this is further fortified by the admission of the power of attorney holder that the entries therein were made by him. The appellants have not rebutted this presumption. We, therefore, hold that the Department has discharged the onus of establishing clandestine clearances of man made processed fabrics by the appellants. Duty demand, is therefore, sustainable - Following decision of Montex Dyg. & Ptg. Works Vs. Commissioner of Central Excise & Customs [2006 (11) TMI 376 - CESTAT, AHMEDABAD] - Decided in favour of Revenue.
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