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Tulsyan Nec Ltd Versus Commissioner of Central Excise, Customs and Service Tax Bangalore-I

2015 (10) TMI 1291 - CESTAT BANGALORE

Duty demand - Clandestine Clearance of goods - Held that:- Appellant has not been able to substantiate their pleading and the argument that they did not manufacture the subject goods mentioned during the period from November 2003 to January 2004 which have been called as the difference between RG-I Register and “private production register”. When there has not been any evidence of payment of duty for the said quantity of goods and there could not be any possibility of such evidence also, when th .....

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perations and is not done simultaneously during the manufacturing activity for the current period. The audit is mainly based on the examination of records though the department has not taken the statement of the manufacturer of the contractor. Therefore, here it is not binding on the Department to produce some extra evidence regarding the difference in quantity of two documents namely ‘private Production Register’ and the RG-I Register. As the matter concerns with the past production and clearan .....

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the quantities of entries made in the said private register and RG-I register, though it was not found acceptable. - No other option but to confirm the liability of payment of Central Excise Duty along with interest against the appellant for the subject production of the goods except for the production made during the period of November 2003, which has been found to be beyond the time limit of five years from the relevant date under provisions of Section 11 AC of Central Excise Act, 1944 read w .....

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ter relates to the allegation of clandestine clearance of the product namely HDPE woven sacks/bags, which are manufactured by the appellant. Learned advocate, Mr. Ramesh Ananthan pleads that the case of the department is entirely based on the audit objection. He says, in this regard, they submitted a letter dated 7.1.2005 to the Superintendent, Central Excise, Mahadevapura Range, Bangalore inter alia saying therein that: Since the work related to conversion of fabric to sacks were being handled .....

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the same. As such we submit that we have not removed any goods without payment of duty and we are not liable to pay any duty as mentioned in para 13 of the IAR. 2.1 Learned advocate for the appellant pleads that they had engaged a contractor who was doing stitching of the fabric converting the same into bags and once bags were made, they were entering them in the RG-I register and paying duty. It was pleaded by the learned advocate that along with their own manufacture, they were doing job work .....

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ken into account for the liability of Central Excise duty against the appellant as per Central Excise Law. 2.2 Learned advocate argues that though there is difference between the entries in private register and the entries in the RG-I register, this difference is mainly on account of their job work and for the said job work, duty was payable at the end of principal manufacturer. He also pleads that this private register is not maintained by them. It is maintained by their contractor. 3. Learned .....

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estinely. The learned A.R. refers to para-10 of the order dated 29.12.2009 of the original adjudicating authority, wherein inter alia the following has been mentioned: 10.....The assessees have promised to produce such job work challans as documentary evidence before the adjudicating authority for necessary consideration. The assesees have produced only few copies of jobwork challans dated 30.10.2003, 29.11.2003, 8.11.2003, 16.12.2003, 29.12.2003,and 31.12.2003. It is observed from the said copi .....

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manufactured any of the HDPE woven sacks/bags on job work basis for their principal manufacturer. 3.2 Learned A.R. refers to the Miscellaneous Order No. 25447/2013 dated 19.3.2013 passed in this case by this Tribunal where-under the appellant was asked to make predeposit of ₹ 10,00,000/- within eight weeks from that date. The learned A.R. mentions about the contents of the para 4 of the said Misc.(stay) order dated 19.3.2013 arguing that there has not been any production or manufacture of .....

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ssue quantity and the balance. Further in quantity column, at the total level, figures in decimals have been indicated whereas there are no decimals anywhere. The register does not have any indication of the production of sacks manufactured nor appellants have any evidence to show that sacks were manufactured by them on job work basis. As regards time limit, we find that the submission of the learned AR are correct and the demand for the month of November will have to be excluded. 4. I have care .....

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and they claim that they were not maintaining any records for the job work. Further, during the audit done by the Central Excise Department, the same private register ( small book containing leaves ) was produced by the appellant before the audit officers of the Central Excise department. About the contents of the same private register , the appellant themselves say that they had written a letter dated 7.1.005 to the Superintendent of Central Excise. It is pointed out by the learned advocate tha .....

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onsidered view that the manufacturer registered under Central Excise law has to explain and give their version regarding such difference in the quantities. Here manufacturer appellant has definitely come out with the explanation through their letter dated 7.1.2005, when they say that this difference is because of production of Bags as a job worker for their principal raw material suppliers or the principal manufacturer(s). 4.1.1. However, I find that the facts on record have not established that .....

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his difference in quantity the arguments and the submissions of the appellant on this count cannot be accepted on any judicious cirterion. The learned advocate for the appellant has consistently tried to wash off the manufacturer appellant s responsibility regarding the activities and operations carried on in their premises by their contractor, who was stitching HDPE fabrics into HDPE woven bags/sacks. Thus the appellant s explanation that difference in the quantity is because of production of b .....

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ive years from the date of the show-cause notice. Therefore, one has to accept that the liability of payment of central excise duty for this period against the appellant has to be excluded as per the provisions of law of Central Excise. 6. From the above analyses and discussion, I am of the considered view that the appellant has not been able to substantiate their pleading and the argument that they did not manufacture the subject goods mentioned during the period from November 2003 to January 2 .....

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he National Exchequer in this regard. 6.1 It is needless to say here that the manufacture and production done during November 2003 cannot attract the liability of payment of central excise duty as it is now beyond the period of limitation i.e. five years and respondent s case in this regard is not sustainable under the law of Central Excise.Consequently the appellant is liable for the payment of central excise duty for all the goods produced/manufactured except for the production of the month of .....

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tment to give corroborative evidence. The learned advocate also argues that the department has not taken any statements nor made any investigations or any other evidence in this regard. I am of the considered view that the case laws mentioned by the learned advocate are not applicable to the unique facts of the current case. 7.1. I am of the considered view that this case is of peculiar facts wherein department made the audit in November-December 2004 for the manufacturing operations done since .....

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e RG-I Register. As the matter concerns with the past production and clearance, the Department can not always find such goods and produce before the adjudication. 7.2 Further the Private production Register cannot be questioned for the entries made therein when the manufacturer appellant themselves came forward to give explanation about the same through their letter dated 7.1.2005 mentioned above. The manufacturer appellant has not stated that the entries made there are faulty or erroneous. They .....

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PE woven BAGS/SACKS. 7.3 Here I would like to refer to the decision given by the Hon ble High court of Madras in the case of M/s Alagappa Cements P Ltd Vs CEGAT CHENNAI & CCE Trichy [2010-TIOL-770-HC-MAD-CX] wherein Hon ble High Court says that when facts are otherwise proving clandestine removal there is no need of further producing positive proof by the department. The Hon ble Madras High court in this case has inter alia stated as follows:- 6.....We fail to understand as to how the appell .....

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nd cement which could have been produced from such excess quantity, which were not noted in the stock register, was well justified and we do not find any illegality or irregularity in such a conclusion drawn by the authorities for the levy of duty and the demand of duty imposed.... 7.3.1 Here I further refer to the CESTAT Mumbai s decision in the case of CCE Pune Vs U.D. Suryavanshi [2007(220) E.L.T. 805 (Tri-Mumbai)] wherein the Tribunal has held that when private records have indicated a large .....

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the decision of the Hon ble High Court of Allahabad in the case of N P Agro (I) Industries Ltd Vs CCE Lucknow [2014-TIOL-2333-HC-ALL-CX] wherein it was held that if there are circumstances coupled with other materials and found sufficient to prove that there had been unaccounted production and removal of the goods in clandestine manner without payment of duty, there cannot be any reason to interfere with the orders passed by the Tribunal confirming the duty, imposing penalty under Rule 209 of t .....

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