TMI Blog2008 (3) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 1-3-2006 introduced with effect from 9-7-2004 made clearance of footwear availing exemption/concessional rate of Central Excise Duty and abatement on such clearance also claimed u/s Section 4A of the Central Excise Act, 1944 (hereinafter referred to as the Act ). It was noticed that such undue benefit was availed till the date of search by Revenue made on 19-12-2006 to the premises of the Appellant. 1.2 The search conducted on 19-12-2006 resulted with finding of 18,061 pairs of finished footwear in the premises of the Appellant without showing price of such footwear embossed or such price marked by indelible ink thereon. Details of such goods were made in Annexure B to Annexure AA of the seizure list dated 19-12-2006 under signature of representative of the Appellant which also indicated that there is no MRP marked in indelible ink or embossed on the footwear in respect of all the items mentioned above. All the above footwear are packed in unit container boxes and duly entered in the Daily Stock Account of the assessee . This is available at page 363 of the paper book filed by the Appellant. 1.3 The observation above, led the investigating team to make out a case again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to arrive at the quantum of loss of revenue. To do so, Department took into consideration various invoices, copies of ER-1 and master computer data supplied by the Appellant. Loss of Revenue for the period 20-4-2005 (w.e.f. 9-7-2004) was worked out in Annexure C-1, C-2 of the SCN. Similarly Annexure C-3 and C-4 to the SCN showed loss of Revenue for the period 2005-06 (up to February, 2006). Annexure C-5 C-6 showed the figure relating to manufacture of March, 2006 and loss of Revenue. Annexure C-7 to C-9 indicated figures for the period 20-6-2007 (up to 19-12-2006) to complete loss of Revenue. Considering that higher rate of duty was applicable on the facts and in the circumstances of the case, aggregate loss of Revenue was calculated and exhibited in Annexure-C to SCN in detail. Such exercise gave rise to the demand in adjudication. 1.7 In view of the above, Revenue was prima facie of the opinion as under for issuance of SCN and adjudicate the matter invoking HA of the Act :- (1) The assessee manufactured TITAS Branded sports shoe and leather shoe at their factory by injection moulding and by pasting unit sold of PVC respectively. (2) The assessee cleared their ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion warranting levy of duty, penalty and interest as aforesaid. 3. Shri Bipin Garg, learned counsel along with Shri Amit Awasthi, appearing for the Appellant, reiterated grounds of appeal and inviting reference to various documents in the voluminous paper book filed, vehemently objected the adjudication on following primary grounds with prayer for leave to argue other grounds and adduce elaborate evidence in the course of regular hearing : (1) Search was illegal when no Panchnama was prepared in the presence of independent witnesses. Also seizure of 18,061 pairs of footwear was uncalled for without examining each and every footwear in the presence of independent witnesses to ascertain whether all the pairs of footwear were without any mark of price by indelible ink or such price embossed therein. When nothing was examined except a bald observation in the documents prepared by the investigation team, unilateral and arbitrary proceeding made under bias is fatal and the demand is unsustainable. (2) When investigation team physically found 24,057 pairs of footwear in the course of search, no seizure of 5,996 pairs of footwear proved that the team could be able to only exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cogent evidence suggesting ingredients of Section 11A of the Act shall not make the Appellant liable to the impugned demand. (10) Adjudication was arbitrary without full proof evidence against the appellant and without physical recovery of any footwear without price mark relating to past periods prior to search, search made illegally shall not make the appellant liable to demand. (11) There was no test check done by Revenue with the retailers who filed affidavit proving that the footwear itself contained price within it in proper manner. Such affidavits not being contradicted by Department those were not liable to be discarded. Department has also not brought out any evidence to prove that excessive price was realized by Appellant over and above the price appeared in the price list issued from time to time. (12) The proceeding was time barred when all facts and figures were in the records of Revenue and Revenue did not question the Appellant at all from 9-7-2004. When the Authorities were aware of introduction of condition in Notifications limiting exemption to particular category of footwear and concessional rate of duty prescribed for certain category, no enquiry in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be made which shall seriously prejudice interest of Revenue. 5.1 Heard both sides and perused the record. 5.2 Having given patient hearing to the appellant for a quite long time and examining respective documents relied upon by the appellant to which our attention was drawn, we were unable to be convinced by the learned counsel as to how many pairs of footwear remained in different stages of manufacture awaiting pricing when the representative of the appellant subscribed without any objection to the adverse remark of the investigating Officer that 18,061 pairs of footwear were without price mark as described in the seizure list aforesaid. Relevant Annexure to show cause notice were observed to be suitable basis for issuance of show cause notice as well as process of adjudication. Appellant s grievance that there were no independent witnesses in respect of seizure lost significance for the reason that Annexure AA which dealt 18,061 pair of footwear said to have contravened law had borne signature of two independent witnesses. 5.3 Department made out a very clear case against the appellant showing sizes of footwear of different varieties, number of pairs thereof without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culties since Revenue s interest also weigh equal consideration. 7. In view of our aforesaid observations, we are unable to appreciate at this stage whether balance of convenience tilts in favour of the appellant and whether there is a strong prima facie case in favour of the appellant for dispensing pre-deposit of the demand during pendancy of appeal. Accordingly, we are of the view that interest of Revenue shall be prejudiced if mere plea of financial hardship of the appellant without any evidence is weighed heavily. Keeping in view the ratio laid down by Apex Court in the case of Benera Valves Ltd. v. Commr. of Central Excise - 2006 (204) E.L.T. 513 (S.C.) and Indu Nissan Oxo Chemical Industries Ltd. v. U.O.I. - 2008 (221) E.L.T. 7 (S.C.), we dismiss the stay application of the Appellant and direct the Appellant to pre-deposit Rs. 50,00,000/-(Rupees Fifty Lakhs only) within eight weeks from the date of hearing of stay application and report compliance on 27th of May, 2008 to proceed further in the matter. If such direction is carried out by the appellant, recovery of balance demand shall be stayed till disposal of appeal. (Operative part of the order and reasons of decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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