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M/s. Maan Aluminium Ltd. Versus Commissioner of Central Excise, Indore

2015 (8) TMI 739 - SUPREME COURT

Clandestine removal of goods - Seizure of unaccounted goods - Confessional statements - Held that:- from the reading of the statements of Mr. Deepak Das and Mr. J. C. Mansukhani that this aspect is explained in abundance by them in their statements. After reading the statement of these two persons, we find that no such admission was made by them, as recorded in the order of the CESTAT which is extracted above. Mr. Deepak Das had only stated that "In export dies, catalogue weight should be always .....

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ESTAT gets knocked off. - Department had taken only those samples of products with larger quantity and missed out those with lesser quantity and in case all the items are taken together, there would not be any difference in quantities.

In spite of the fact that the aforesaid plea was specifically raised by the appellant in explaining that there was no difference in the quantities and thus, no question of any clandestine removal of the goods from the premises, the said plea has not be .....

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vil Appeal No. 2830 OF 2005 - Dated:- 8-5-2015 - Mr. A.k. Sikri and Mr. Rohinton Fali Nariman, JJ. For the Petitioner : Mr. S. Ganesh, Sr. Adv., Mr. Narendra Kumar, Adv., Mr. Vinod Mehta, Adv., Mr. Rakesh Kumar, Adv. For the Respondent : Mr. K. Radhakrishnan, Sr. Adv., Ms. Shirin Khajuria, Adv., Mr. Rajiv Sharma, Adv., Mr. B. Krishna Prasad, Adv. JUDGMENT A. K. SIKRI, J. The appellant herein is engaged in the business of manufacturing of Aluminium Profils, bars and roads, tubes and papers. These .....

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ounted. These goods were, accordingly, seized. The raiding party also visited the office premises of the appellant. It went to the dealers of the appellant and recorded their statements as well. Statements of some of the employees of the appellant company who were dealing with the affairs of the appellant were also recorded. On the basis of the aforesaid material and the statements recorded, the Department took the view that the appellant had been clandestinely removing some of the quantities of .....

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nt submitted that there was no clandestine removal of any quantity of finished goods and the raw material was in fact used in manufacturing the finished goods. After hearing the appellant, the adjudicating authority passed the Order-in-Original dated 28.08.2002, raising the demand of ₹ 64,82,565/- as differential duty payable by the appellant. The appellant went in appeal, which appeal was dismissed by the Customs, Excise and Services Tax Appellate Tribunal (hereinafter referred to as ' .....

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The SCN alleged that the differential quantity of goods had not been accounted and the same had been clandestinely cleared without payment of duty during the period February 1994 to January 1999. this allegation was also based on the finding that the "gate register" and other records seized from the factory premises had shown that goods had been cleared without invoice and without payment of duty. The demand of ₹ 1,05,67,090/- was raised on a total quantity of 641.145 Mts of goo .....

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s own records and statements. For instance a letter issued by Sh. U. D. Selvan, Senior Engineer of the company, to their Indore office showed the catalogue weight of certain Aluminium Sections as 21986 Kgs. and its physical weight as 21404.2 Kgs. Shri Selvan, in his statement, confirmed this fact. Some official correspondence between functionaries of the company also indicated that the catalogue weight of export goods was 5-10% more than the actual weight. Shri Deepak Das, Senior Manager (Tool R .....

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per the directions of the Managing Director and the latter alone could offer any explanation. Shri J.C. Mansukhani, in his statement, admitted that in some cases of exports, the catalogue weight was higher than the physical weight and the differential quantity of goods remained in the factory. However, he could not say as to how this quantity was disposed of. In the aforesaid example, the quantity of Sections exported under GP2 No. 58 dated 29.12.93 was shown as 21986 Kgs. (catalogue weight) wh .....

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39;s order. He added that the allegation of clandestine removal of goods had not been proved by the department. Yet another submission made by the Consultant was that the difference in weight of the goods was less than 5 which according to him, was too negligible to be taken into account. The DR submitted that he demand of duty was based only on the differential quantity admitted by the appellants and hence was irresistible. We are unable to accept the Consultant's arguments as we have noted .....

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s i.e. the difference between the actual (physical) weight and the weight shown to have been cleared for export was proved to have been removed from the factory without invoices and without payment of duty. The differential quantity was admitted but its accountal and clearance in terms of the legal provisions were not shown. (In view of the admission of the differential quantity by the company authorities, it was not necessary for the adjudicating authority to allow them to cross-examine any off .....

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ivision II, Indore, which has not been called in question in these appeals. Yet another ground of challenge to the demand of duty is that many of the exports taken into account by the Commissioner had taken place prior to the period of demand. This, again, cannot be accepted as J.C. Mansukhani admitted that the differential quantities remained in the factory. Such quantities which accumulated from past exports could well be removed during the period of demand. We uphold the above demand of duty .....

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rference. Since the High Court has dismissed the appeal with the aforesaid observation, that was a reason for reproducing in detail, the discussion carried out by the CESTAT in its order. This is how the present appeal comes up for hearing which challenges the orders of the authorities below. In the first blush, the impression that would be gathered is that a finding of fact is arrived at by the authorities below holding that there was clandestine removal of the goods from the factory premises o .....

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ined in the statement of these two employees. He submitted that from the reading of the statement of the two employees it would be crystal clear that there was no such admission made by them at all and what is sought to be read into those statements is not there at all and is conspicuously missing in these statements. It was thus, argued that the present case is a case of perverse findings. It is additionally argued that when the Commissioner or for that matter, the CESTAT relied upon the so-cal .....

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yees, which has resulted in miscarriage of justice. In order to substantiate the aforesaid statement, Mr. Ganesh took us through the reply to the show cause notice, other documents filed as well as the statements of Mr.J. C. Mansukhani and Mr. Deepak Das. Ongoing through this record, we are inclined to accept the argument of Mr.Ganesh that the findings arrived at by the CESTAT which are accepted by the High Court are totally perverse and there is no such admission made by these two persons which .....

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e the dies are being manufactured accordingly so that the produced output should match the specifications. It had also taken support of the technical literature that is available in the market, to prove the aforesaid assertion. On this basis, it was stated that in the export catalogue which was prepared and issued by the appellant in order to take care of the final production with varying specifications because of the aforesaid reason, 10 per cent actual weight would be 5% more or less than the .....

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tated that "In export dies, catalogue weight should be always equal or 10% than the physical weight". This is in reply to Question No. 4 which was put to Mr. Deepak Das. For the sake of clarity and better understanding, we reproduce the exact question and answer given thereto: "Question-4 Please see page No. 359 of file 2B, seized from factory premises on 16.8.96 please explain the meaning of "we may follow the wt. Range in export dies from - 10% to 0%" as mentioned in t .....

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uot;Question 5: Please see page No. 137 of File 49B where catalogue weight for different Section shown as 21986 kg., and same goods were cleared under BP-258, dated 29.12.1993 this BP 2 shows that in case of Export of goods the same are cleared on catalogue weight. Ans. 5. As per my knowledge in certain exports goods we will have to charge them as per catalogue weight and there is possibility of (+-) litter difference in the weight this is because of international rules." Apart from the afo .....

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reply to show cause notice, a specific plea was taken by the appellant that the allegations made in the show cause notice were purely hypothetical and the difference occurred because of +/- 5 per cent tolerance which was admissible in invoicing of export dispatches. It was also specifically pleaded that the exporter always dispatches 10% less quantity and yet the importer pays foreign exchange for full invoice amount, even for 10% less quantity received by him. The statements made in the catalog .....

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n the weight as mentioned in the catalogue. Each export consignment consist of minimum 15-20 different varieties of section/ profiles and out of these different types, only in three four sections there can be variation and in rest of the sections, the weight is almost same. However, the aggregate value of the invoice is always as per the actual weight of the total consignment. To elaborate further, if the quantity of any particular section is 5% less than the catalogue weight, the quantity of ot .....

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the following manner: - "The chart as Annexure 'AE' prepared for differential quantity 4.044 MT pertaining to the exports made during the period from 19.07.93 to 28.06.94 which is totally irrelevant as the relevant period of the proposed demand duty is from Feb, 94 to Jan, 99. The difference worked out in this chart comes to about 4.91% of total 82.391 MT quantity invoiced which is also appeared to be well within the tolerable limit of 5%. Another aspect for this chart is that the .....

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