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Hitkari Fibres Ltd. Versus Commissioner of Central Excise, Raigad

2015 (9) TMI 1208 - CESTAT MUMBAI

Valuation - normal value under old section 4 - Demand of differential duty - Penalty u/s 11AC - Interest u/s 11AB - Held that:- Period 1999 when the old Section 4 was in force and the concept was of the normal value of the goods and not of the transaction value. We also note that at the time of issuance of the show-cause notice itself revenue has claimed that the normal value of the said pillow is ₹ 162/-. Appellant has not questioned the same and did not produce any evidence to show that .....

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rrect assessable value for the goods in question. Accordingly, on merits, we find that the case made by the revenue is correct and we therefore uphold the same. The contention of the appellant was that the extended period of limitation cannot be invoked as all the information was available with the department. We are not impressed with the said argument. The appellant were doing self assessment at the relevant time and the fact that they have sold the pillow at such a low price was suppressed an .....

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e appellant is engaged in the manufacture of pillows. During 1999 they cleared 3928 numbers of luxury pillows at a low rate of ₹ 10 per pillow though similar goods were being sold at ₹ 162/- per piece. In this connection, investigation was taken up. Shri AM Pitke, Excise officer, initially submitted that they will submit all the documents pertaining to the clearance of the said pillow. However, he did not respond to the repeated summons issued over a period of one year. Later on, it .....

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the said pillows were lying with them for the last 5 years. In his statement, Shri Parikh admitted that it was not possible to correlate and give proof of stock of product in question. Further, the invoices issued did not indicate that the pillows being sold are old and damaged. After investigation, a demand notice was issued demanding differential duty and proposing penalty interest etc. the case was adjudicated by the Asstt. Commissioner who vide order dated 22.11.2004 confirmed the demand of .....

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By 1999 these pillows got badly damaged and were in a bad shape and therefore, they sold at a price of ₹ 10 per pillow. He further submitted that the department has not submitted evidence that the normal price of the pillow is ₹ 162/- per piece. In the absence of evidence relating to the normal price value of ₹ 162/pillow cannot be taken. It was further submitted in any case the pillows were badly damaged and would not fetch any value and therefore they were sold like that. He .....

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t and they had not suppressed anything from the department. 3. Ld. AR on the other hand, submitted that the conduct of the appellant from the beginning was evasive. During investigation, the excise in charge had promised to produce the documents but did not respond to the number of summons and finally after one year appellant informed them that the said official has left the unit. Similarly, the Finance Manager also did not respond to summons and later on when he appeared he tried to mislead the .....

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ted there was no reason to keep huge number of pillows for over 5 years. Any prudent manufacturer would dispose of the said pillows within short period on some discount. It was further submitted that the price of ₹ 10 per pillow is very low compared to the normal price of ₹ 162/-. Ld. AR also submitted that the appellant had not disputed that the normal price is ₹ 162/- per pillow and only at the Tribunal stage, the ld. counsel is submitting that no evidence of normal price of .....

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Foods Ltd. vs. CCE 1996 (82) ELT 33 4. Ld. counsel in rebuttal submitted that Hon'ble Supreme Court judgment in the case of Fiat India P. Ltd. (supra) supports him in para 50, wherein Hon'ble Apex Court has clarified that there can be case when manufacturer may sold the goods at lower price if goods are not sold within reasonable time. It was also submitted that RG-1 account is already with department and internal production report was also submitted. It is also submitted that it is for .....

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nue has claimed that the normal value of the said pillow is ₹ 162/-. Appellant has not questioned the same and did not produce any evidence to show that they were selling at some other price to other customers. Ld. counsel's contention that Revenue has not produced any evidence that normal value is ₹ 162/- is therefore dismissed. Further, we note that the invoice and the documents nowhere indicates that the pillow sold were old and damaged. Appellants have also not been able to p .....

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e submitted copies of the production report of the Tailoring department in M/s. Hitkari Fibres Ltd. Mahad for the year 1994. However, on scrutiny of the said production reports, Shri M.J. Parekh could not show that the 3928 pieces of luxury pillows under contention (size 17 X 27 ) were actually manufactured during the year 1994. Further Shri Parekh was asked to submit the relevant RG1 (i.e. stock register) maintained in the factory for the period from 1994 to 1999 to substantiate his explanation .....

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t the goods were manufactured during the year 1994." 7. Ld. counsel's contention is therefore rejected. There is no evidence that RG-1 register are with Revenue. On the contrary, during investigation Shri Parikh was asked to justify from the RG-1 register and he failed to do. Similar is the position regarding internal reports of tailoring department. As far as the case of Continental Engg. Industries P. Ltd. (supra) is concerned, the facts are different. In that case, it was Revenue' .....

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