TMI Blog2015 (4) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... ablish impossibility of manufacture of 1,49,524 locks. In absence of any technical or scientific data, it is not possible to discard the conclusion of arise of 1,49,524 locks out of shortage of goods found by investigation. - following the decision of the High Court of Madras in the case of Alagappa Cements Pvt. Ltd. Vs. CEGAT, Chennai reported in [2010 (10) TMI 131 - MADRAS HIGH COURT]. When there was seizure of the locks of different description from the premises of M/s. R.P. Locks, appellant did not disclaim clearance thereof from its factory. The specification of locks seized proved that those were the manufactured goods of the appellant. When the appellant failed to produce evidence of lawful clearance of the specified description of the goods and duty payment evidence, the only inference that can be drawn is that premise of M/s. R.P. Locks was berthing place for clandestinely removed goods of the appellant. Accordingly, the demand of ₹ 1,87,015 also sustains. Revenue brought out its case clearly with evidence recorded. No doubt, there may be certain amount of arbitrariness in best judgment assessment. But the estimation itself when sustained in the first round of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price of 4,116 locks and arrived duty liability of ₹ 28,954/-. 1.3 So far as shortage of raw material is concerned, learned Adjudicating authority found clandestine removal of 1,49,524 key locks evading Central Excise Duty of ₹ 10,51,824/-. He noticed that 250 gms of CR Strips were used for manufacture of 1,49,524 of number of locks valued at ₹ 76,75,725/- out of shortage of 37,381 kgs of C.R. strips and 4526 kgs of MS wires detected during investigation. Those were unaccounted and removed clandestinely. Appellant s plea that the raw materials found short during inventory was due to eye estimation and did not give rise to manufacture of 1,49,524 locks was found to be baseless. The authority granting cum-duty price benefit, duty demand of ₹ 10,51,824/- was determined in re-adjudication. 1.4. So far as demand on job work charges is concerned, the authority observed that during period 1996-97 to 1998-99, job charges to the tune of ₹ 2,01,962/- were paid. Considering 10% of the value of the lock to be job charges duty demand of ₹ 3,72,202/- was determined. Appellant s plea that 10% formula adopted was arbitrary was found to be baseless. Learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issue except re-determination of the value of the locks granting cum-duty price and work out duty liability thereon with consequence of evasion. 3.3 Revenue is correct to say that shortage of 4116 locks established in the reported decision aforesaid. Appellant did not place any material to suggest that the determination of cum-duty value of such locks was erroneous. When no cost sheet was placed by appellant to show the material component in each lock, labour and overhead charges incurred as well as financial expenses made, it is difficult to discard the finding on valuation made by learned Adjudicating authority. Therefore duty demand of ₹ 28,954/- on such count is confirmed. 4.1 On the second issue of shortage of 37,381 kgs. of CR Strips and 4,526 kgs. of MS Wire detected during investigation, appellant s submission was that entire finding of the Adjudicating authority in para 5.1 to 5.11.3 is baseless since the shortage was reported on eye estimation. The CR Strips and MS Wire were in cut pieces for use in the manufacture of locks. The authority did not make weighment thereof. He whimsically suggested shortage. Adjudicating authority s notion that shortage of 37,38 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the premises of the appellant without availing services of many concerns. There was no job working done. The Authorized Representative s evidence as to installation of only two machines by the appellants for manufacture of locks is of no relevance. Appellant further pleaded that they were not issuing material outside for job working but they employed contract workers within factory and making payment for manufacture of locks inside factory. Such payments were called job work charges. Revenue s presumption that the goods were job worked is therefore incorrect. Similarly, valuation of the alleged job worked goods is also erroneous. 5.2 Learned Authorized Representative for Revenue argued that Adjudicating authority found that five firms M/s. Good Luck Painting works, M/s. Raju Polish Wala, M/s. Pramod Job Worker, M/s. Azam Electro Platers and M/s. Aligarh Dye Castings, were different job workers engaged by the appellant for job working. The ledger of the appellant showed payment of job work charges. Learned Authority decided valuation issue properly. It was further submitted by Revenue that appellants did not manufacture locks by its employed workers without muster roll of labou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment 6.2 Revenue on the other hand submits that the goods found with M/s. R.P. Locks were the goods of the appellant. That remained undisputed. Appellant failed to substantiate lawful clearance thereof. Therefore, in absence of evidence of payment of duty the demand of ₹ 1,87,015/- should not be interfered. 6.3 When there was seizure of the locks of different description from the premises of M/s. R.P. Locks, appellant did not disclaim clearance thereof from its factory. The specification of locks seized proved that those were the manufactured goods of the appellant. When the appellant failed to produce evidence of lawful clearance of the specified description of the goods and duty payment evidence, the only inference that can be drawn is that premise of M/s. R.P. Locks was berthing place for clandestinely removed goods of the appellant. Accordingly, the demand of ₹ 1,87,015 also sustains. 7.1 Appellant manufacturer challenged the penalty on the count that the arbitrary adjudication gave rise to penalty of equal amount to duty. There is no doubt that clandestine removal of the goods was proved fact on record. Appellant s plea that mere not recording of the go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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