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Commnr. of Central Excise, Rajkot Versus M/s Satyam Technocast & Anr.

2015 (9) TMI 356 - SUPREME COURT

Clandestine manufacturing and removal of goods - dummy job work units - fictitious invoices showing much lower quantities/value than the actual - tribunal had set aside the demand - Held that:- On going through the order of the Tribunal we find that the prime reason given by the Tribunal in support of its order is that there is hardly any evidence on record to prove the allegations made against the two respondents herein. We find this to be totally erroneous. We have already reproduced the mater .....

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Prasad, Adv., Ms. Pooja Sharma, Adv. For the Respondent : Mr. S.K. Bagaria, Sr.Adv., Mr. Ajit Singh, Adv., Mr. Rajesh Kumar, Adv., Mr. R.K. Srivastava, Adv. ORDER The respondents in these two appeals are M/s. Satyam Technocast and M/s. Prince Time Industries. The proceedings against these two respondents (hereinafter referred to as the assessees') were initiated on the basis of show cause notice dated 10.2.2003. In this show cause notice main allegation was that both the units were run by Sh .....

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work of watch cases being done at M/s. Ravi Tution Classes were being maintained by these two firms. They were also not maintaining any records on production and stock for their products. The statement of Sh Harishbhai Thakar, Manager of M/s. Satyam Technocast as well Sh. Someshbhari Satishbhari Malik were also recorded and in these statements they had accepted that the two firms, namely, Alpa Hardware and Alpa Watch Industries were firms having no legal existence and it was Somesh Malik who had .....

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was concluded that the goods were cleared on fictitious invoices showing lower quantities and value. Another relevant issue framed was issue No. IV, namely, whether M/s. Satyam Technocast could not be considered to be the manufacturer of excisable goods which are alleged in the show cause notice to have been manufactured by them? The defence of M/s. Tecnocast was that they were only the traders of hardware items. This defence has not again been accepted on the basis of statements of the aforesai .....

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partner in this firm and was managing its affairs. The firm was dissolved by Dissolution Deed dt. 16-07-2001. As per this Dissolution Deed, the business of M/s. Pioneer Hardware Industries including its assets and liabilities, were to be taken over by Shri Somesh Malik who is also the proprietor of M/s. Satyam Technocast. The evidence on record shows that Shri Somesh Malik continued to raise invoices in the name of M/s. Pioneer Hardware Industries (as are indicated in Annexure 'D' to th .....

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. Pioneer Hardware Industries and M/s. Satyam Technocast merged in such a way during the period relevant to this show cause notice that both these units are inseparable and the clearances made by both these units have to be clubbed on the ground that both these units belong to the same person i.e. Shri Somesh Malik during the relevant period. The facts and figures of this case establish that these units did not have separate legal entity even though M/s. Pioneer Hardware Industries was a partner .....

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goods under fictitious invoices, which accompanied the consignment. Such invoices showed lesser quantity/value than the actual quantity/value which was correctly recorded and reflected in the 'Order Estimate', 'Debit Note or 'Memo'. Therefore, a consignment dispatched under an L.R. was covered in the fictitious invoice as well as in the 'Order Estimate' or 'Debit Note'. The Noticees vehemently plead for exclusion of such duplication from the clearance value.&q .....

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ion : Rs.1,74,860 Clearance Value after deducting duplication (a-b) : Rs.69,90,002 From 16-7-01 to 31-3-02 (Annexure - D of SCN) (a) Total clearance (OE +Alpa + PNR + SAT) : 2,07,14,634/- (b) Duplications : (i) 27 invoices in the name of M/s Alpa Hardware : Rs.3,02,325/- (ii) 33 invoices of M/s. Pioneer Hard. Ind. : Rs.7,32,055/- Total : Rs.10,34,380/- Clearance value after deducting duplications (a-b) : Rs.1,96,80,254/- Total clearance value for 2001-02 (I+H) : Rs.2,66,70,256/- Duty Liability f .....

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7,945 Total : Rs.3,45,391 Clearance Value after deducting duplication (a-b) : Rs.1,32,47,426 Duty Liability for 2002-03 : (a) for first 100 lakhs : Nil (as per Not. No. 08/2002) (b) On rest : Rs.32,47,426/- VALUE ON WHICH DUTY IS TO BE CHARGED : Cum-duty value permissible deductions / 1 + rate of duty = 32,47,426 / - 1.16 = ₹ 27,99,505 Duty to be recovered (2002-03) : ₹ 27,99,505 / - X 16% = ₹ 4,47,921 Total duty liability during 2001-02 and 2002-03 : Rs.27,47,267 / - On that b .....

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e penalty of ₹ 2000 /- (Rs.Two Thousand only) on them under Rule 25 of the Central Excise Rules, 2002 read with Rule 173Q of the erstwhile Central Excise Rules, 1944. (b) The seized 1,35,010 pcs. of miscellaneous fitting valued at ₹ 34,35,570 /- belonging to M/s. Satyam Technocast are confiscated with an option to the owner to redeem these on payment of redemption fine of ₹ 5,00,000 (Rs.Five lakhs). On redemption, these goods shall be cleared for home consumption only after pay .....

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