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2019 (6) TMI 1350 - AT - Central ExciseValuation - undervaluation of goods - demand based on consumption of fuel, increase in price of goods after initiation of investigation etc - demand of ₹ 3,28,68,656/- has been made on the ground that the Appellant had undervalued the goods on the basis of statements of buyers - HELD THAT:- We find that except the statements of some buyers no evidence has been put on record. The evidence in the form of details of cash receipts from buyers, any document proving cash transaction on account of undervaluation has not been brought on record. We also find from the statement of buyers that the statements were inconsistent as initially they stated that the cash amount was given to Appellant through Angadias or their Tiles dealers. However in subsequent statements they stated that the amount was handed over to Shri Hiteshbhai, employee of Appellant Unit. During investigation no evidence of any unaccounted money having been received by the appellant from any of the tile manufacturers was found. The main plank of investigation was that the excess amount was routed through shroffs, angadias and dealers of tile manufacturers. However, no instance of any money having been received through these agencies have been cited in the show cause notice. Admittedly no evidence of the appellant having received the huge amount in unaccounted manner from more than 26 customers to whom frit was sold from February 2005 to February 2010 was found. Even the cross examination of persons whose statements has been relied upon to allege undervaluation was not provided. Not a single insistence of cash receipt at Appellant’s end is on record. In such case when the allegation is based upon the statements of buyers which is not supported by even a single evidence and in the light of the fact that no cross examination of such persons whose statements were relied upon was allowed, thus the demand does not sustain. Also the Appellant has adequately justified the increase in prices in subsequent years due to increase in prices of raw material and change in machinery. We find that no adverse reasoning has been given against such contention of Appellant. Even otherwise the allegation of undervaluation of goods is based merely upon statements and not any evidence. We are thus of the view that the demands on account of undervaluation which is based merely upon the statement of some buyers are not sustainable. Demand of ₹ 2,95,33,205/- has been made against the Appellant on the basis of gas consumption - alleged excess consumption of gas - HELD THAT:- Except alleging excess consumption of gas no evidence in the form of procurement or excess consumption of raw materials has been brought on record. Frit is manufactured from eight raw materials and none of the said raw materials has been shown to have been procured in illicit manner or consumed in excess. In such case the demands has no legs to stand - the demands based upon consumption of natural gas is not sustainable as the same is not supported by procurement of any raw material, its processing or transportation and identification of any buyer. Demands of ₹ 81,784/- has been made against the Appellant on the ground that they have cleared goods on parallel invoices - HELD THAT:- In case of one of the invoices though the alleged consignee M/s Swagat Ceramics has accepted the receipt of goods, no evidence of such removal has been found from the Appellant’s end. Even the format of such alleged parallel invoice is different from the invoice format of the Appellant and there is no corroborative evidence of transportation of goods - In case of other 5 parallel invoices, the buyers of the goods have refused receipt of any goods. The officers had recorded the statement of Shri Samir Parekh, the proprietor of the Appellant concern who also has refused supply of goods and issue of parallel invoice. In such case we do not find any reason to uphold the demand against the Appellant. SSI Exemption - Demand of ₹ 62,67,000/- has been made against the Appellant on the ground that after addition of the value of undervalued and clandestine removal, the sale value of the Appellant crosses the SSI Exemption limit and the Appellants are not entitled for SSI exemption in respective years - HELD THAT:- Since the charges of undervaluation and clandestine removal of goods are not sustainable against the Appellant, hence there is no reason to deny them the benefit of SSI Exemption - subject demand is therefore not sustainable. Appeal allowed - decided in favor of appellant.
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