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2015 (8) TMI 98 - CESTAT AHMEDABAD

2015 (8) TMI 98 - CESTAT AHMEDABAD - 2015 (328) E.L.T. 109 (Tri. - Ahmd.) - Clandestine manufacture and removal of goods - Whether main appellant has manufactured and cleared Hydraulic Jacks clandestinely as per the investigation carried out by officers of Central Excise (AE), Rajkot - Held that:- Main appellant was getting Hydraulic Jacks manufactured from other 15 job workers as per Para 12.6 of the OIA dated 19.02.2010. Nothing is reflecting in the last statement dated 16.05.2006 of Shri Sure .....

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Revenue as to how much finished goods were the clandestine clearance made by the main appellant.

Observations the fact of manufacture of Hydraulic Jacks and quantification of clandestine clearances by the main appellant fails miserably. Secondly, it is now a well established law that cases of clandestine removal can not be established only on the basis of few statements, especially in this case where the first recorded statement is held to be incorrect and given by a person who is n .....

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epresentative Per : Mr. H.K. Thakur; These appeals have been filed by the appellants against Orders-in-Appeal No. 55 to 67/2010/Commr(A)/Raj dated 19.02.2010 passed by Commissioner (Appeals) Rajkot under which demand of ₹ 34,89,818/-, alongwith interest and equivalent penalty imposed by Adjudicating authority have been upheld against the main appellant M/s. Radhika Hydraulics, Rajkot. Penalties imposed by the Adjudicating authority, against the other appellants for aiding and abetting the .....

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ifferent processes are being got done from job workers or from three other small factories owned by the family members of the main appellant. That Shri Nitin G. Vekaria is the proprietor of M/s. Radhika Hydraulics. That value of clearances of the main appellant is less than the exemption limit. 2.1 That on 26.4.2006, officers of Central Excise (AE), Rajkot conducted the search of main appellant s premises and found a certain diaries/ chits. That certain excess stock of raw materials and finished .....

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acture the complete Hydraulic Jack; that only parts of Hydraulic Jacks are manufactured and other processes are got done from the job workers. That after all the processes of assembly are complete finished goods are brought to the factory premises/godown of the main appellant and sold by affixing the brand name Radhika of the main appellant. That main appellant also furnished a copy of Chartered Engineer certificate to the lower authorities to establish that main appellant does not have the capa .....

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processing capabilities on the machines/ equipments available on the date of Panchnama may be got verified as the same are still operational with the main appellant. However the same was not entertained by the lower authorities. It was also argued that cross-examination of the crucial witnesses were not allowed who maintained the diary from which duty is calculated. That when the manufacture of goods is not established then there can be no cause for demanding duty. That details of finished goods .....

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.04.2006 and 09.05.2006. It was his case that buyer of the goods can only confirm the source of receipt of Hydraulic Jack but can not say as to from where the supplied goods were manufactured i.e. whether the same were manufactured by the main appellant or got manufactured from the job worker and thereafter embossed/ marked with the brand Radhika name of the main appellant. That the concept of manufacture is different in Central Excise and the Income Tax laws. That the seized goods on the date o .....

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sister concerns were held to be independent and within SSI exemption limit of Rs. One Crore and that clearances of all these units with the main appellant were not proposed to be clubbed for denying exemption. That similarly M/s. Patel Plastics, M/s. Maruti Agro Industries and M/s. Sardar Agro were held to be within SSI exemption limit as manufacturers. 3. Shri T.K. Sikdar (AR) appearing on behalf of the Revenue argued that as per 3 CD report dated 05.12.2006 filed by the main appellant with th .....

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harges were paid by the main appellant to M/s. Maruti Agro Industries, M/s. Patel Plastics Products and M/s. Sardar Agro Industries and the contention of the main appellant is that with the sister no job charges were paid due to undertaking mutual job work free for each other. That raw materials for all four units within Gujarat were purchased by Shri Nitin G. Vekaria. That all the raw materials for the four units were procured from outside Gujarat by Shri Rameshbhai Partner of M/s. Patel Plasti .....

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l dated 19.02.2010. 4. Heard both sides and perused the case records. The issue involved in the present proceedings is whether main appellant has manufactured and cleared Hydraulic Jacks clandestinely as per the investigation carried out by officers of Central Excise (AE), Rajkot. The first argument taken by the main appellant is that there are inadequate manufacturing facilities to manufacture complete Hydraulic Jacks and that only certain parts of the Hydraulic Jacks are manufactured at the pr .....

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he activities which are possible with those machines. It is observed from the certificate specifically certified by CA that other machining and assembling are not possible in M/s. Radhika Hydraulics. Main appellant also requested before the lower authorities that its manufacturing activity may be assessed by visiting the factory as the same machines, as on the date of Panchnama, are still existing and working. It is observed from the records of the case that lower authorities; instead of making .....

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erated by a legal entity which may include the manufacturing activity done himself or also got done from others etc. Therefore, main appellant declaring himself as a manufacturer before Income Tax authorities can not be interpreted to mean that all Hydraulic Jacks shown in the balance sheet of the main appellant were manufactured in the same factory of the main appellant. Analogy drawn by the lower authorities based on declaration made before Income Tax department is not proper and misdirected. .....

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en proposed by the investigation to hold that all activities are undertaken as one unit. Revenue has thus, failed to factually establish that all activities relating to manufacture of Hydraulic Jacks are done by the main appellant in his factory. 5. Revenue has based its case on the admission statements of persons managing the main appellant and other three sister concerns. Statement dated 26.04.2006 of Shri Nitin G. Vekaria, Proprietor of Radhika Hydraulics was the first to be recorded in which .....

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tine clearances quantified to have been manufactured by M/s. Radhika Hydraulics. In the second statement dated 09.5.2006, Shri Nitin G. Vekaria is confronted with statement dated 26.4.2006 of his elder brother, wherein, he also says that the records pertaining to the clandestine clearance of his firm are maintained by his elder brother and that he does not have any knowledge of the same and any clarification to that extent should be had from his elder brother only. In another statement dated 16. .....

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dated 15.5.2006 claims that transactions shown in chits/ diaries mentioned at Sr. No. 8, 9 and 10 of Annexure -A to Panchnama dated 26.04.2006 also include transactions of M/s. Patel Plastic Products, M/s. Sardar Agro Industries and M/s. Maruti Agro Industries. The same was considered to be correct by investigation as per Para 7 of the show cause notice dated 17.10.2006 and again Notice No. 2,3,4 and 5 were summoned. In a further statement dated 16.05.2006, Shri Suresh G. Vekaria stated that he .....

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