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TMI Blog2002 (5) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... as amended). In the declarations filed on 4-4-1994 and 30-4-1995 for the year 1994-95 and 1995-96, the applicant had declared that his clearances would be below Rs. 30 lakhs (excluding the clearances made by him by availing the benefit of exemption Notification No. 202/88 for the said periods). As per the investigation carried out by the officers of Central Excise on the basis of the intelligence about suppression of production and clandestine clearance, it was noticed that the applicant was evading the payment of Central Excise duty by procuring the raw material in the names of other fictitious traders. The finished products manufactured by the applicant were removed as trading goods by using trading sales invoices of M/s. Janata Steel Traders (the applicant's own trading firm). The Show Cause Notice, inter alia, among other things asked the applicant to show cause as to why (i) C. Excise duty amounting to Rs. 39,40,861/- payable on the excisable goods (as detailed in Annexures 'A' and 'B' to SCN) unauthorisedly manufactured and illicitly cleared by him should not be demanded and recovered and (ii) C. Excise duty of Rs. 24,806/- on the excisable goods seized from M/s. Shalin Corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period 1-4-1994 to 19-11-1994 as per the private note book maintained by Shri J.I. Bafna. (iii) The charges levelled for the period 1-4-1994 to 19-11-1994 in the show cause notice were baseless and were without any evidence. (iv) Sales made by M/s. Janata Steel Traders during the period 1-4-1994 to 19-11-1994 were second sale of the goods purchased by M/s. Janata Steel Traders from different traders. During the said period M/s. Janata Steel Traders did not sell the goods manufactured by the applicant. In fact, the applicant had no raw material for excess production and clandestine removal. (v) The applicant removed the goods without payment of Central Excise duty only from 19-11-1994. The submissions of the Revenue, inter alia were as under :- (1) The amount of duty quantified in the show cause notice was correct. (2) Private note book detailing purchase of raw-materials in cash seized from the residence of Shri J. I. Bafna was the crucial evidence along with the seized sales invoices from M/s. Janata Steel Traders. 6. After hearing both, the Applicant and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notice gets reduced to Rs. 32,17,340/- after taking into consideration the calculation of duty on 'cum-duty-value' basis as provided under Section 4(4)(d)(ii). Further the applicant claims the deemed credit of Rs. 23,45,006/- as per the Central Government's order under Rule 57G(2), @ Rs. 920/- per M.T. on 2,548.920 MTs of re-rollable scrap used during the period 1-4-1994 to 31-3-1995 for production of MS round bars falling under Chapter 72 of Tariff. Thus, the applicant was liable to pay a net duty liability of Rs. 8,72,334/- only. 14. The ld. Advocate for the applicant also cited the following judgments of the Supreme Court and Tribunal in support of his arguments regarding availment of deemed credit as well as his claim for calculation of duty on 'cum duty value' basis - . 1. 1999 (106) E.L.T. 3 (S.C.) - Eicher Motors Ltd. v. U.O.I. 2. Collector of C. Excise and Customs, Cochin v. Premier Tyres Ltd. - 2001 (130) E.L.T. 417 (Ker.). 3. Collector of C. Excise Coimbatore v. Venkateswara Steel Industries -1996 (86) E.L.T. 446 (Tribunal). 4. &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. on total production plus 20% of the total production as burning loss but now they were amending their admission to the extent that they were not claiming deemed Modvat credit for 20% of burning loss, thereby restricting the claim of deemed Modvat credit only to the actual production. 21. The learned Advocate submitted a revised work-sheet accepting Rs. 13,41,335/- as the duty liability. The applicant again requested for the benefit of cum duty price under Section 4(4)(d)(ii) and deemed Modvat credit for the inputs used during 1-4-1994 to 31-3-1995. He submitted that by various decisions the Hon'ble CEGAT held that even in the cases where there was suppression of facts, wilful misstatement etc. on the part of an assessee Section 4(4)(d)(ii) was applicable. Even in the case of clandestine removal an assessee could claim benefit under Section 4(4)(d)(ii). The Commission asked him whether there was any decision of the High Court or Supreme Court in the matter. He replied that for clandestine removal there was no decision but for non duty payment cases there were certain decisions. The Commission drew his attention to Sections 11D, 12A and 12B of Central Excise Act, 1944. The L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on has gone through the case records. Submissions made by the learned Advocate of the applicants and pleadings of Revenue. The Applicant while admitting his duty liability of Rs. 39,65,667/- as mentioned in the Show Cause Notice had sought for reducing the admitted liability to Rs. 15,44,914/- in his application, thereafter to Rs. 8,72,334 and finally to Rs. 13,41,335/- While doing so, the applicant has sought abatement of admitted duty liability for the following reasons :- 1. The value realised from the clandestine sale of the product shall be deemed to be cum duty price and consequent reduction in duty thereof. 2. The Applicant has claimed benefit of deemed credit @ Rs. 920 per M.T. under the erstwhile Rule 57G(2) of the Central Excise Rules, 1944 and calculated the amount as Rs. 23,45,006. 3. The applicant had claimed a reduction in duty liability on the melting loss at 20% of the final product and consequent deemed credit thereon. 26. The contention raised by the Applicant and the Learned Advocate have been examined by the Commission. The Commission at the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrect and in conformity with the provisions of Section 4(4)(d)(ii). We take support for our view from the Apex Court's judgment in Pravara Pulp (supra). Analysis made by the Tribunal in Express Rubber (supra), relevant portion of which has already been extracted above is apt in our view. We endorse the same." 27. This decision of the Larger Bench has since been decided by the Supreme Court of India in Civil Appeal Nos. 5862-5863/99 [2002 (142) E.L.T. A279 (S.C)]. The Honourable Apex Court has observed as below : "After hearing the learned Counsel for the parties, on the facts of this case, we are of the opinion that the stand of the respondents is correct. Various calculations have been made and we have taken into consideration the subsequent price which has been approved by the Department with effect from 8-10-1992 and it clearly appears to us that the revision of the price was cum duty and, therefore, the element of duty in the increased amount had to be deducted. The appeals are dismissed. No costs." The Apex Court had an occasion to examine the said issue of cum duty price in the case of Commissioner of Central Excise, Delhi v. Maruti Udyog Ltd. reported in 2002 (141) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Learned Advocate of the Applicants do not take into consideration the decision of the Larger Bench in the case of Digambar Foundry v. Commissioner of Central Excise, Allahabad reported in 2000 (118) E.L.T. 85 (Tribunal-LB). The facts and circumstances of the case of the applicants are in all fours with the case decided by the Tribunal. The Applicant is also availing small scale exemption and has filed a declaration for the same but the turnover of the Applicant is more than the limit specified. The Tribunal has analysed the provisions of Notification No. 1/93-C.E., Ministry's Order No. TS/36/94/TRU dt. 1-3-1994 issued under Rule 57G(2) of the erstwhile Central Excise Rules, 1944 and also the contrary decision taken by the Tribunal in the case of Collector of Central Excise, Coimbatore v. Venkateswara Steel Industries reported in 1996 (86) E.L.T. 446 (Tribunal) and thereafter it has held that : "the re-rollers, whose aggregate value of clearances in the financial year had exceeded Rs. 75,00,000/- and when they were paying the applicable rate of excise duty on the clearances beyond the value limit of Rs. 75,00,000/- were not eligible for the benefit of Ministry's Deemed Credi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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