TMI Blog1998 (7) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... es Corporation. The Adjudicating authority has also confiscated tyres from various depots with options to redeem the same with varying fines. 2 We have heard Shri V. Sridharan, learned Counsel for the appellants and Shri A.K. Agarwal, learned DR for the Revenue and our findings are recorded as under :- On 22-6-1988, the Central Excise Staff of Ludhiana, visited the factory premises of M/s Poddar Tyres Pvt Ltd, who are engaged in the manufacture of tyres of different sizes and specifications bearing the trade mark Bedrock . During the period May to June 1988, they had manufactured and cleared 16,000 tyres marked as BMX cycle tyres in the following two sizes : 1. 20 x 2.125 2. 24 x 2.125 Since the tyre did not appear to be an ordinary cycle tyre and since the price was higher than that of cycle tyre and almost equal to Moped tyre, the Central Excise Inspector required the appellants to demonstrate by fitting a tyre to a cycle and this demonstration was carried out. Apart from this, tyres of same sizes were being marketed as BMX by other local manufacturers namely Ralson Cycles and Pawan Tyres Ltd. Clearances of these tyres on nil rate of duty as applicable to cycl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellants that the tyres in question are cycle tyres. Shri Chudgar, Partner of Vishal Enterprises, has deposed that BMX cycle tyres sizes 20 x 2.125 and 24 x 2.125 had been received from the appellants from May 1988 till September 1988 and that to the best of his knowledge, the two types of tyres are used for cycles and he has no knowledge whether these tyres could be fitted to moped because he has not come across such incidence. Shri V.K. Pareek has deposed that he has received only cycle tyres which are used only for Atlas, Hero and Samrat bi-cycles. Shri O.P. Gupta has deposed that BMX tubes received from the appellants were sold for fitment in cycles and Shri More has deposed that tyres of sizes 20 x 2.125 and 24 x 2.125 BMX are bi-cycle tyres only. These statements which have been recorded by the department support the appellants' case of manufacture of tyres of a kind used on cycles but the statements have not been relied upon in the show cause notice. The appellants have also issued circulars to all their dealers clearly indicating that the said tyres are suitable only for BMX cycles. In this background, what would be relevant for clinching the issue as to whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the products of the appellants (claimed by them to be cycle tyres for BMX cycles) and similarly between weight of their tyres and those of normal bicycle tyres and that a number of persons had stated that they could be and are being used on mopeds of the type of Luna and Hero Majestic, the initial burden on the Department stood duly discharged and the onus shifted on to the appellants. Even otherwise, as the appellants had claimed the benefit of the exemption notification, the burden was on them as claimants to show that the conditions of the notification were duly satisfied. 8. It is significant in this connection that both the sides accept that there was no dispute with regard to markings, shape, design and price of the tyres. 9. Further, since technically the rim size for certain brands of mopeds and some BMX cycles was the same and admittedly, the particular tyre size said to be designed for use on bicycle could fit in to a moped, the criteria of useability and use increase in significance. 10. In this regard, the fact that well-known manufacturers of BMX cycles namely, Ralson Cycles and Pawan Tyres themselves were selling the BMX bicycle tyres at prices ranging between R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in question also does not refer to ISI standards. Therefore, this plea does not advance the cause of the appellants in any way. 13. It is also interesting to note that although the price is higher than that of normal cycle tyres, it is slightly lower than the price of their own or other moped tyres which were undisputably manufactured for and declared to be moped tyres and cleared as such; And, prima facie, it appears that the differential acting as an incentive may be the reason for persons willing to buy the products in question for mopeds in preference to those which were officially declared to be meant for mopeds and marked as such. The fact that there are people using the products in question on their mopeds is itself indicating of the fact that they can withstand the rigours of a ride on a moped (irrespective of whether they were of ISI standard or not). This only shows that the proof of pudding is in its eating. And, merely marking (or not marking) does not make much of a difference in actual practice. 14. In actual life, many people buy and use various types of non-ISI marked goods. So, the difference if any, from ISI standard does not advance the cause of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons. Therefore, the evidentiary value of their statements depends, inter-alia, upon corroboration from other sources and it is open to the investigating agency to weigh from its point of view and for the appellants to show the extent of their reliability and value from their point of view and therefore, the non-utilisation by the department, by itself, does not go necessarily against it. Actually, what is important from the point of view of finding out the truth is to see whether the statements recorded from independent persons or dealers and others who were not alleged to be a party to the game were of an incriminating nature and whether the department has been able to show that they support its contentions. 18. The demonstration of fitting the tyre on a rim of the cycle before an Inspector with reference to a particular sample at a particular point of time was, by itself, not sufficient to discharge the onus or to absolve the party of the charges for all the goods and for all the time. In fact, even otherwise, it proves nothing insofar as the issues before us are concerned because the rim size is not in dispute and the rim size of some mopeds and some cycles are the same an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f September, 1989 regarding ADV tyres, the Budget proposals of 1992-93 or notification 19/92 are uncalled for. They have nothing to do and have no bearing whatsoever on the present case and the arguments with reference to them have no relevance. 22. Again, the fact that the tariff sub-heading 4011.20 refers to tyres of a kind used in bicycles does not help because there is a separate sub-heading for tyres of a kind used in mopeds and in any case, the words 'of a kind' cannot be so interpreted as to include moped tyres also under the category of bicycle tyes. Certainly, the tyres used on mopeds cannot be considered as bicycle tyres or that of a kind used in bicycles. 23. Apart from pricing, the mis-declaration about weightage is important and goes against the appellants. Nobody would use more material if he could manage to do with less because it will be uneconomical or less profitable but a higher weight may be required and may be useful in convincing the customer that the rim could be used safely on mopeds as well. 24. It is also noteworthy that there are various types of mopeds simple, small powered, more or less powered bicycle type of mopeds where the main difference wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tary in many respects and I see nothing wrong in invoking them together in the circumstances of the present case where there was removal from the approved premises by mis-declaration and incorrect recording and the removal was with intention to evade duty. As the appellants' explanations are unsatisfactory and the Department has been able to establish its case, I see no reason to interfere with the order passed by the Commissioner. I, therefore, confirm the same and reject the appeal. Sd/- (S.K. Bhatnagar) Vice President POINT OF DIFFERENCE 27. In view of difference of opinion between Hon'ble Member (Judicial) and the Vice President, the matter is submitted to Hon'ble President for reference to a Third Member on the following point :- Whether the tyres in question were of a kind used in mopeds and classifiable under heading 4011.30 and liable to duty as such as claimed by the Department in view of observations and findings of the Vice President or they were of a kind used on bicycles and classifiable under heading 4011.20 and chargeable to nil rate of duty as claimed by the appellants in view of observations and findings of Learned Member (Judicial) and consequentiall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir, if true, because the job of an investigating machinery is to arrive at the prima-facie truth after considering the entire evidence favourable or unfavourable and then issue or recommend issuing, a show cause notice. Withholding of evidence reflects adversely on the entire investigation. Withholding the evidence would include not only ignoring the evidence already recorded by prosecution (Revenue) but would also include evidence which could be collected but the Revenue did not. [See (1954)SCR 475 : Commentary in Ratanlal Dhirajlal, The Law of Evidence, Page 271 of 17th Edition, Reprint 1988 on S.114(g) of the Evidence Act]. 32. I note that the evidence of some dealers, stated by the appellants to have been recorded and allegedly in favour of the appellants does not appear to have been taken into consideration by the investigating authority. Such a plea was taken by the appellants before the adjudicating authority, as is apparent from para 14 of their reply to the show cause notice. But that authority appears to have ignored that plea. Now, in the written submissions and in the paper book the appellants have enclosed some statements favouring them, namely of :- (a) Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16000 tyres of the two varieties (sizes) have been cleared during two months May June 1988. The appellants in their reply to show cause notice have given break-up (in para 14 of their reply) of those clearances/sales to their agent's (Poddar Sales Corporation) depots all over India. Revenue appears to have enquired into the use of the impugned tyres in respect of four of the stations out of a total of 21 stations. As per the break-up given by the appellants, Revenue can, at best, be considered to have enquired into the use of the impugned tyres for 3525 tyres out of 16000 tyres. Revenue's investigation/enquiries does not cover all stations and total sales. It cannot, therefore, be said that the Revenue has been able to prove, on the available data, that the general or predominant use of the impugned tyres is on mopeds or two-wheeled motor vehicles. Appellants have alleged in para 14 of reply to show cause notice as follows :- My clients have information that enquiries at other places such as Ghaziabad, Jabalpur, Rajkot and Gwalior were also conducted. The persons whose statements were recorded at these stations are stated to have confirmed that the subject tyres were of bicyc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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