TMI Blog2006 (1) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... stigations, Show Cause Notices dated 5-8-99 were issued to the appellants. The Show Cause Notice was answerable to the Addi. Commissioner of Central Excise, however, the Addi. Commissioner did not pass any adjudication order of the matter. Further, statements of Aziz Vagh, Ibrahim Khan and T. Ashok Kumar and Nagaraj were recorded on 29-6-2000, 30-6-2000 and 11-8-2000, respectively. Consequently, a second Show Cause Notice dated 2-2-2001 was issued. The main charges were set out as follows: (a) they have manufactured arid cleared various varieties of plywood as detailed in Annexures A to F and H without raising any in voice/in excess of the quantity indicated in the invoices when compared with the corresponding loading slips; cleared teak veneers in stead of jungle wood veneer, both side teak instead of one side teak, one side rose wood instead of commercial plywood, White Cedar instead of Commercial plywood, etc., actually shown in the invoices and collected premium over and above the value indicated in the invoice on the various types of plywood cleared by them and with out properly determining and paying appropriate Central Excise Duty during the period from 1995-96 to 1998-99 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 to 16-2-99 -11 books. (14) One "Vidya" note book marked as "1/3" - Group Matching Book. (15) "Receipt of finishing goods" register marked as "6/1" - from 1-1-99 to 16-2-99. (16) Production slips in file No. "Z" under pages 1 to 25. (17) Purchase orders, order confirmation etc., in file "X" under pages 1 to 41. (18) Katcha Slips in file "V" under pages 1 to 12. (19) Sample of loading slips, corresponding invoice copies and RG 1 in file "W" under pages 1 to 37. (20) Sample of loading slips, corresponding invoice copies and RG 1 in file "Y" under pages 1 to 21. 3. The Adjudicating Authority passed an Order No. 8/2001, dated 6-12-2001 confirming the demand of duty, ordering confiscation of goods seized and imposing penalties. The appellants approached the Tribunal. The Tribunal in its Order dt.26-3-20 2 remanded the matter to the Adjudicating Authority on the ground of rejecting the request for cross-examination of the witnesses. Thereafter, in compliance with the Tribunals direction, the Commissioner granted cross- examination of the witnesses. The de novo Order-in-Original No. 27/2002, dt.29/31-10-2002 was passed by the Commissioner. This order has been challenged i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants. They requested the Commissioner in their letter dated 15-2-2001 to clarify as to whether the said premium sheet was recovered from the assessee or prepared by the Department in support of the demand of differential duty. The appellants sent two reminders on the issue. The Commissioner in the clarification dated 8-5-2001 has stated that the "Premium Sheet" was pre pared on the basis of Katcha Slips Nos. 1 to 12 recovered from the premises of the assessee. From the above it is clear that the "Premium Sheet" was prepared by the Department on the basis of Katcha Slips alleged to have been recovered from the premises of the assessee. The Mahazar dated 17-2-99 does not indicate that the Katcha Slips were recovered from the premises of the assessee. The Katcha Slips were computer print-outs and were unsigned and unauthenticated. There was also no evidence that a responsible official of the appellants unit generated the said computer print-outs from the computers belonging to M/s. HPW. Further, there is no evidence from any of the customers that they have paid any premium even in a single transaction, even though differential duty is demanded for a period of 5 years involvi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obtained regarding payment of additional consideration by even a single customer as stated in Para 16 of the statement of facts annexed to the Show Cause Notice. (vi) The Show Cause Notice itself clearly states that there is no incriminating evidence to suggest that any of the customers have made any payment in excess of the amounts shown in the invoices. (vii) The direct evidence available in the form of deposition of Sri Prakash Chand Bumb of M/s. Marudhar Plywood before the Adjudicating Authority on 3-9-2002 would further disprove the allegations made in the Show Cause Notice. (viii)Referring to Paras 97 to 101 of the impugned Order, the learned Ad submitted that the Department in its letter dated 25-5- 2001 that the Katcha Slips 1 to 12 were recovered from the premises of the assessee. A perusal of the Mahazar dt.17-2-99 indicates that the Katcha Slips were not recovered from the premises of the assessee. In Para 97, the Commissioner has stated that Mr. Aziz Vagh had handed over 12 Katcha Slips duly signed by him on 18-2-99 while recording the statement. Sri Aziz could not have handed over the Katcha Slips on 18-2-99 if the case is carefully examined. Sri Aziz retracted h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the Adjudicating Authority has made a comparison between details of goods shown in the loading slip, despatching slip and invoices and comes to the conclusion that the appellants had cleared goods having higher value in the guise of those having a lower value and collected the differential mount as additional consideration. The learned Advocate submitted that the above conclusion is only on the basis of certain assumptions and presumptions. The advocate pointed out that the quality of veneers will decide the same price and irrespective of species of timber, they have to be categorised as low categories veneers or jungle wood veneers or commercial veneers. Our attention was invited to IS 1328:1996 issued by the Bureau of Indian Standards with regard to specification of Veneered Decorative Plywood. (ix) The demand of duty computed under Annexure A-D of the Show cause notice and confirmed in the impugned order is on the basis of the alleged discrepancies between the loading details and invoices. The loading slips. were prepared on the basis of Purchase Orders given to the customers. These slips were thereafter sent to the office for preparation of invoices, while preparing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nexure-B) with respect to the description of the goods with respect to 100 invoices (Annexure-D). It would therefore appear that the discrepancy in the invoices as compared to lo slip is only to the extent of 2.6%. Hence, the changes in the invoices were only exceptions and not as a matter of routine. (x) The demand of differential duty of Rs. 3,14,007/- under Annexure A is on the ground that the goods were cleared without any invoice. This demand is not sustainable because the quantity as shown in the loading Slips were not removed from the factory. The demand of duty of Rs. 3,75,459/- under Annexure-B is on the ground that the goods were cleared in excess of the quantity shown in the invoices. The clearance of goods under invoices is corroborated by Despatch Register, Loading Register, Pass Out, Time Office Daily Register, Form 39 and Declarations for Transit Insurance for the goods. Form 39 is a statutory document, under Section 28A of the Karnataka Sales Tax Act, 1957. This Form is required to accompany each consignment removed and the quantity and description of the goods are subject to verification at Commercial Tax Check Posts en route. The Statutory documents/Returns acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , invoices, despatch register, pass out, time office daily report, Form 39 and statements of transit insurance submitted by the appellants while replying to the Show Cause Notice. He said these documents would clearly indicate that the goods removed were as per the invoice and not otherwise. (xiii) As regards, the demand of duty of Rs. 8,983/- on account of non- accounted in the RG 1 register, it was submitted that the goods would be entered in the register only after inspection for defects. The plywood sheets which are fully manufactured and do not require any further processes are only entered in the Register of the finished goods. In this connection, he relied on the CBEC Circular dated 9-11-64 prescribing the stage of accounting of plywood in RG 1. Hence, he submitted that the demand of duty is not sustainable. Further he submitted that confiscation under Rule 173Q (1) is not attracted when the goods are lying within the factory. He relied on the decisiort of Kanthal India Ltd. v. CCE, Allahabad - 1999 (108) E.L.T. 385 (T.):4999 (31) RLT 547 (T), wherein it is held that the confiscation and redemption fine in respect of goods not accounted for in RG 1 and where there is no at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is document is not authenticated and there is no signature. There is no evidence that it has been seized on 17-2-99. A perusal of the Mahazar also does not Indicate that this document was seized on 17-2-99 along with the other documents. Even in the statements recorded in the year 1999, there is no reference at all to this document. In reply to the appellants' clarification as regards the origin of the so-called Premium Sheet, it was replied by the Revenue that the same has been prepared on the basis of Katcha Slips. Further, the so-called Katcha Slips 1 to 12 have also not been seized on 17-2-99, when the searches took place. The entire charge of under valuation is based on the unauthenticated Premium Sheet, which is supposed to have been prepared on the basis of Katcha Slips. It is not clear as to who prepared the Premium Sheet. The appellants allege that it is a document fabricated by the Department. According to the Adjudicating Authority, the Premium Sheet has been recovered from the assessee's factory premises on 17-2-99. She has stated that the Premium Sheet forms the very basis on which Katcha slips have been generated by Aziz Vagh to collect the amounts due in respect of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tity loaded in the vehicles is much more than the quantity invoiced. But the appellants are able to show contemporaneous evidence in the form of "Form-39" is sued under Karnataka Sales Tax Act, 1957 for each removal of goods from the factory, "Pass Out Slips" issued by Despatch Section for verification at the factory gate, "Time Office Daily Reports" and Statement of Insurance for goods intransit. The appellants have produced all the above evidences to show that what. been cleared is only as per the invoices and not as per loading details slips. The Adjudicating Authority has stated that each loading details slips has been signed by the driver to the effect that the goods have been loaded in the vehicle. From this she comes to the conclusion that the clearances are only as per the 'loading details slips and not as per invoice. Even if we concede this there should be corroborative evidences from the customer's end and also evidence of additional consideration. In the absence of corroborative evidences we are not able to sustain the allegation that the goods have been loaded only according to the loading details slips. 9. Again in respect of the charge that goods of higher value ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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