TMI Blog2009 (4) TMI 755X X X X Extracts X X X X X X X X Extracts X X X X ..... ad are liable for confiscation. He had imposed redemption fine in respect of each of these items. He had also imposed penalties on these parties, the details of which are also given in the tabular column. Sl. No. Appeal No. Name of the Parties Amount involved and period of dispute 1. E/1008/2006 M/s. Noble Ply v. CCE, Calicut Duty : Rs. 13,07,455/- Penalty : Rs. 13,07,455/- u/s 11AC Rs. 5,000/ u/r 209A/26 1-10-1999 to 17-10-2002 2. E/1009/2006 K.S. Faizal Penalty : Rs. 5,000/- u/r 209A/26 3. E/1002/2006 M/s. Bhandari Doors Plywoods v. CCE, Calicut Duty : Nil RF : Rs. 20,000/- Penalty of Rs. 5,000/-u/r 26 1-10-1999 to 17-10-2002 4. E/1003/2006 M/s. Neelkamal Laminates v. CCE, Calicut Duty : Nil RF : Rs. 10,000/- Penalty of Rs. 5,000/- u/r 26 1-10-1999 to 17-10-2002 5. E/340/2007 CCE, Calicut v. M/s. Noble Ply Rs. 1,92,95,946/- (Confirmed only Rs. 13,07,455/-) 1-10-1999 to 17-10-2002 4. The assessee M/s. Noble Ply are the manufacturers of plywood and plywood goods, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , he has mentioned the evidences collected by the department and his inferences from those evidences. The CPU of the computer was seized frorn the factory of the appellant M/s. Noble Ply. The said computer was sent to the Government Examiner of Questioned Document for retrieval of the deleted data. The deleted data were retrieved and the statements of Shri K. M. Premjitlal, Computer Operator and also others viz., Shri M. P. Narayanan, an employee of M/s. Noble Ply; Shri K. S. Mohammad Ali, Managing Director of M/s. Prestige Boards; Shri K. S. Faizal, Managing Partner, of M/s. Noble Ply; and also the statements of dealers of M/s. Noble Ply such as Shri Chandran Singh Rathore, Proprietor of M/s. Neelkamal Laminates, Hyderabad; Shri Kailash Bandari, Proprietor of M/s. Bhandari Doors Plywoods, Hyderabad; Shri Sampet Kumar Khaitan, M/s. Agrasen Plywood, Hyderabad; Shri Subash Chandra Agarwal, Manager of M/s. Ajay Plywood Laminates, Hyderabad were also obtained. After going through the documents and statements carefully, the Commissioner came to the conclusion that there is evidence for undervaluation of the goods cleared by the appellants. In fact, it has been recorded that Shri K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dealers/customers are related to them only and not related to all the other dealers/customers of M/s. Noble Ply. In the circumstances, I am constrained to decide that the department has demanded duty in respect of the transaction made by M/s. Noble Ply to all of their dealers/customers except the above-mentioned five dealers/customers on presumption and assumption only. While coming to the conclusion, he had relied on the following decisions : (i) Sharon Veneers v. CCE, Chennai - 2002 (146) E.L.T. 655 (Tri.-Chennai) wherein it is held that price slips recovered from one of several dealers of assessees cannot be relied upon to show that goods have been sold on prices indicated therein to all the other dealers. (ii) The decision of the Hon ble Supreme Court reported in 1983 (13) E.L.T. 1546 (S.C.) that the department has to investigate all of the 40 dealers of the assessee all over of South India to prove under valuation and cannot plead that it is difficult to do so. (iii) Alfa Ceramics Industries v. CCE, Indore - 2002 (145) E.L.T. 454 (Tri.-Del.) wherein it has been held that evidence collected in respect of sales to Madhya Pradesh distributors about collectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Premjitlal to the effect that the price in page 45 is only maximum retail price and the customers were allowed discounts. The Commissioner has given a finding that the price shown in the page 45 is more than double the price shown in pages 42 and 43. It is strange to believe that the discounts allowed to the customers are more than double the basic price of the consignments. 6.6 In Para 53, he has given a clear finding that the statement of Managing Partner is a clear evidence to prove that the assessee was collecting amount over and above the invoice price in cash through their representatives with their knowledge consequent on his action of immediate readiness to pay differential duty towards part of the duty evaded by the unit as detected by the investigating officers. 6.7 In Para 54, he had also rejected the contention of the appellant that for the period prior to 1-7-2000, the normal price, which was available should be adopted. The Commissioner had held that the assessee was hoodwinking the department by showing lesser amount. Therefore, the normal price would be the value shown in the invoices plus the amount collected by them over and above the invoice price. In o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department had conducted investigations only with one dealer as against six dealers appointed by the assessee. The percentage of dealers contacted is miniscule. Moreover, the department has not conducted any investigations with dealers in Karnataka, Maharashtra and Pondicherry. Therefore, the demand confirmed in the impugned Order-in-Original is on assumption and vague statements given by few dealers and is liable to be rejected. The following case-laws were relied on: (i) Sharon Veneers v. CCE - 2002 (146) E.L.T. 645 (ii) Somany Pilkington s Ltd. v. B. P. Verma (Director, Publications) -1995 (76) E.L.T. 281 (Del.). (iv) It was urged that there was no evidence of extra cash collection received by the appellants and its utilization. If the cash allegedly collected according to the department is to the extent of Rs. 7,30,419/-, the same ought to have been reflected in at least some of the documents of the appellants. No such evidence is available to show that the appellants had in fact collected the cash. In the absence of evidence to show that such a huge amount of cash was in fact collected by the appellant. The allegation should be treated as being figment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis of secret books discovered there, and, though no secret books were discovered in respect of the branch office, made a similar addition in respect of the turnover of the branch office as well. Held, on the facts, that from the discovery of the secret accounts in the head office it did not necessarily follow that a corresponding set of secret accounts were maintained in the branch office. However, if secret accounts were maintained in the branch office, that might lead only to an inference- that the accounts disclosed did not comprehend all the transactions of the branch office, but that did not establish or even probabilise the finding that 135 percent or 200 percent or 500 percent of the disclosed turnover of the branch office was suppressed. That could have been ascertained only from other materials. The assessments were arbitrarily made applying a ratio between disclosed and concealed turnover in one shop to another shop of the respondent. It was only a capricious surmise unsupported by any relevant material and the assessments could not be sustained. Shri Shiva Dass submitted that in view of the above decision, the fact of under-invoicing in respect of a few dealer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of the Apex Court in the case of CCE, Meerut v. Century Laminating Co. Ltd. (supra), it was held that enhanced price by depots cannot be considered for the purpose of assessment except for Calcutta depots. So far as Calcutta region is concerned, the Tribunal did not accept the contention of the appellant regarding the availability of factory gate price, as the trade practice was to charge different price in respect of buyers of Calcutta region as there are admittedly 10 instances where the goods were supplied from the factory directly at a price much lower but in all such cases, the cash amount was received over and above factory gate price. It would mean that in respect of all factory sales to Calcutta region, extra cash was collected over and above the factory gate price. In such a situation, factory gate price declared in Calcutta region as reflected in invoices has to be rejected and the extra cash amount received over and above the factory gate price has to be added to the assessable value. Relying on this case Shri Shiva Dass, learned advocate submitted that it is not correct on the part of the department to enhance the assessable value in respect of all the clearances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Adjudicating Authority in terms of the decision of the M/s. Sharoon Veneers and M/s. Alfa Ceramics, demanded differential duty in respect of the clearances made to the buyers. Consequently, demand of interest was also ordered. 9.2 With regard to the appeals filed by the appellants, Shri Ramanan submitted the following: (i) Documentary evidence clearly establishes the existence of two pricelists. One listed the prices for billing purposes and the other actual sales realization. The two prices were with reference to two different units of measurement viz., square metres and square feet. (ii) Billing (invoice) prices were distinctly lower than the actual sales realization (i.e. price actually paid) - 40% in this case. (iii) Invoice price of appellant remained more or less at the same level during the period covered in the show cause notices. (iv) Duty was paid only on that portion which was indicated on the invoices. This resulted in substantial duty evasion. (v) Statements of dealers, in particular that of S/Shri Abdul Basheer, E.P. Varunny and Sunny John revealed details, which were only known to them. These were not retracted at the earliest opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot denied by the Managing Partner. He was, however, not in a position to explain the substantial difference between the two prices. Nor was he in a position to show any evidence of differential discounts being given on higher of the two prices. (iv) Commissioner erred in requiring the department to prove, beyond all reasonable doubt, that in respect of all clearances the concerned buyers admitted payment of amounts in excess of invoiced amounts. This requirement set down by the Commissioner is contrary to the settled law that in adjudication proceedings it is sufficient if the charge is proved by a preponderance of probability . (Apex Court s judgment in the case of D. Bhoormull and Tribunal s decision in the case of Gulabchand Silk Mills [2005 (184) E.L.T. 263 (Tri. - Bang.)] refers in this context and the judgments in the case of C. Velukutty and Alfa Ceramics also bear reference). (v) Evidence in respect of Noble Ply is referred to Pages 401 to 406 and 424 to 431 of paper book. (a) No. of effective buyers during 1-10-99 to 17-10-2002 (b) Value of clearances made to buyers who admitted extra payment to M/s. Noble Ply constituted 21.5% to 31.47% of total sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be arrived at only after adding the extra amount received in cash to the invoice value. Therefore, it is fallacious to argue that a transaction value existed at the factory gate for the goods cleared after 1-7-2000 since evidences adduced have clearly established that it was incumbent on dealers/customers, who purchased goods from these units to pay substantial part of the actual sale realization by cash over and above the prices indicated on the invoices for each sale. Hence, by no stretch of imagination, it can be said that there existed a transaction value in terms of Section 4(1)(a) at the time and place of removal, in respect of the clearances effected by the units and that the same, that is to say, the invoice price should have been applied for all clearances. 9.7 Shri Ramanan distinguished all the case-laws relied upon by the assessees. With regard to the Sharon Veneers, (supra), which has been relied on by the Commissioner also, Shri Ramanan stated that the evidence presented in the present case is far more detailed, strong and conclusive inasmuch as there are a number of slips, evidencing recovery of extra amounts, corroborated by corresponding entries in the collect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndervaluation. 10. In view of the above submissions, Shri Ramanan requested the Bench that the appeals filed by M/s. Noble Ply and three others should be rejected as devoid of any merit and that the appeal filed by the Revenue should be allowed to confirm the duty demand as set out in the Show Cause Notice issued to M/s. Noble Ply and others. 11. We have gone through the enormous records connected with this case. The facts of this case have already been outlined elsewhere in the beginning of this order. Therefore, we feel that repetition can be avoided. Revenue has collected enormous documents to sustain the charges of undervaluation or under-invoicing in respect of the clearances made by M/s. Noble Ply, who are the main party in the appeals. The period involved in these appeals is from 1-10-1999 to 17-10-2002. The Show Cause Notice proposed confirmation of differential duty of Rs. 1,92,95,946/-. Penalties were also proposed. However, the Adjudicating Authority, after considering the evidences available on record, confined the demand of duty in respect of clearances made to 2 dealers only and confirmed a demand of Rs. 13,07,455/-. Equal penalty has been imposed. In these appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a lot of incriminating documents. We do not want to list them again. They have been enumerated in Para 6 above. All these things have been discussed by the Commissioner in his order. Therefore, as far as the evidence for under-invoicing is concerned, we have to say that there is overwhelming evidence for under-invoicing. We cannot accept the learned Advocate s contention that there is no under-invoicing or corroboration and the entire demand is made on presumptions and assumptions. The depot officials themselves have accepted that cash in excess of the invoice value is being separately collected. In fact, according to the Revenue, 30% of the actual value only is mentioned in the invoice and the remaining 70% is collected as cash. This is the main charge. We cannot say that this charge is baseless because the dealers from whom statements have been recorded have accepted that excess cash is being collected. Therefore, one thing is very clear that the price mentioned in the invoice is not the correct price. There is evidence that the appellants had been collecting cash over and above the invoice price. 11.6 The next question is how to quantify the demand for the period from 1-10-199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or identical with the facts in the other case. The Hon ble Supreme Court of India, in the case of CCE, Bangalore v. Srikumar Agencies - 2008 (232) E.L.T. 577 (S.C.) = 2008-TIOL-220-S.C.- C.X.-L.B, has stated in para 5 that, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper. They have also quoted the words of Lord Denning in this, which is as follows: Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect in deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive. Therefore, we are keeping the above observation in mind while deciding the case. We are reiterating that the esses relied on by both the sides cannot be applied in their entirety to these appeals, as the facts are different. 11.9 The whole issue relates to underval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion, the normal price would be applicable to all the clearances made prior to 1-7-2000. Therefore, we have to remand the matter to the Commissioner for deciding the normal price in respect of each type of goods cleared by the party during the relevant period and compute the differential duty. Needless to say that the normal price would be arrived at in accordance with the law, which prevailed at that time. 11.11 As regards the period after 1-7-2000 for valuation, the concept of transaction value has been introduced. In the concept of transaction value, each transaction is important. Therefore, the transaction value is to be determined for the clearances after 1-7-2000. As far as the period after 1-7-2000 is concerned, the value for assessable purpose is the transaction value. The transaction value is the value for each transaction. The concept of transaction value is entirely different from the concept of normal value. While the normal value can be notional, the transaction value is the actual amount transacted in respect of the goods. Of course, under certain circumstances, the transaction value has to be determined in accordance with the Rules. Anyhow, we would not go into t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability as decided by us. 11.15 As regards the Revenue s appeal, we are of the view that it would not be correct to confirm the entire demand as such on the basis of overwhelming probability. We have already stated that the case-laws relied on by both sides cannot be applied in entirely to the present appeals. Even taking into account the submission of the assessees, we have ordered re-computation of the duty liability for the two periods viz. (i) before 1-7-2000, and (ii) after 1-7-2000 in accordance with Section 4 prevailing during the said period. Therefore, we partially allow the Revenue s appeal in terms of the remand directions. 12. Summing up, the appeals are disposed of in the following manner :- Sl. No. Appeal No. Decision 1. E/1008/2006 Remanded to the Original Authority for re-quantification of duty in the light of the findings given. After re-quantification of the duty, the Commissioner can determine the quantum of penalty. 2. E/1009/2006 Remanded to the Original Authority for deciding the penalty based on the duty liability. 3. E/1002/2006 The appeal is rejected by confirming ..... X X X X Extracts X X X X X X X X Extracts X X X X
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