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TMI Blog2005 (6) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... o- -do- 1. Rs. 8,47,001/- 2. Rs. 10,97,001/- 4. E/1338/2000 Smt. Rose Ann Sapna -do- -do- 1. Nil 2. Rs. 50,000/- 5. E/1339/2000 M/s. Power -do- -do- 1. Rs. 18,912/- 2. Rs. 23,912/- 6. E/1340/2000 Sri Al-Hadaly A.Y, Prop. M/s. Power -do- -do- 1. Nil 2. Rs. 50,000/- 7. E/1341/2000 M/s. Golden Threads -do- -do- Rs. 2,50,000/- Redemption Fine 8. E/1342/2000 M/s. Thread Embayer, -do- -do- Rs. 1,00,000/- Redemption Fine 2. Sri. A.K.J. Nambiar, learned advocate appeared for the appellants and Sri L. Narasimhamurthy, learned SDR for the Revenue. 3. The learned advocate stated the following : A. M/s. Excel Thread Industry I. Revenue has made out a case of clandestine production and removal of goods by the appellants without payment of duty. They have also denied the benefit of SSI exemption Notification on the ground that the appellants used the brand name belonging to others. II. Revenue has alleged clandestine production and removal of goods by the three appellant units for the period from 1996-1999. Even though the Show Cause Notice relied on the statements recorded from thread dealers, transporters, raw material suppliers, fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The product manufactured at Success is sold through a marketing unit namely, M/s. Thread Embayer whose proprietor is Sri Subair, the husband of Smt. Rose Ann Sapna. The raw materials required for manufacturing units at the appellant unit are - (a) Polyester (b) BOPP film, and (c) Packing Boxes/labels. III. Since the clearances from the unit for 97-98 and 98-99 were well below the limits prescribed in SSI Notification No. 1/93 (as amended) no Central Excise registration was taken by the unit. IV. The evidence gathered by the Department against the unit is mainly in the form of statements obtained from raw material suppliers and purchasers. Statements obtained from staff and proprietors of the unit are also relied upon. V. The evidence regarding parallel invoice and production slip is an isolated instance. While it may be a pointer to unaccounted transactions, it cannot be generalized to cover the entire period in the Show Cause Notice. VI. As in the case of Excel Threads, the Department relies on accounting discrepancies at the marketing unit (Thread Embayer) to allege clandestine removal on the manufacturing unit (Success). VII. The estimation is done based on the oral evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation was denied on the ground that the goods cleared borne the brand names belonging to others. It is submitted that the Department has not established through any evidence that the brand name belonged to any other person (cross-examination of Investigating Officer) XI. The learned advocate relied on the following case-laws. 1. 2005 (179) E.L.T. 336 - Sharadha Forge Pvt. Ltd.v. CCE, Rajkot 2. 2005 (182) E.L.T. 413 - Arch Pharmalabs Ltd.v. CCE, Hyderabad 3. 2005 (182) E.L.T. 465 - Lloyds Steel Industries Ltd. v. CCE, Nagpur 4. 2004 (168) E.L.T. 506 - CCE, Raipur v. C.M. Re-rollers & Fabricators 5. 2002 (142) E.L.T. 128 (Tribunal) = 2002 (49) RLT 832 - Meenambal Fire Works Ltd. v. CCE, Madurai 6. 2002 (149) E.L.T. 1020 (Tribunal) = 2002 (53) RLT 1027 - Shabroc Chemicals & Anr. v. CCE, Kanpur 7. 2001 (50) RLT 544 - Shingar Lamps Pvt. Ltd. v. CCE, Chandigarh 8. 2002 (139) E.L.T. 143 (Tribunal) = 2001 (47) RLT 567 - M.M. Dyeing & Finishingv. CCE, Chandigarh 9. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Paper Products. Paper tubes had been procured from Masha enterprises in the name of M/s. India Threads. M/s. Success and M/s. Excel Thread industry had purchased wrappers for sewing threads from M/s. Roto Print, Thrissur and did not account such purchases. They had procured boxes for packing the sewing threads without accounts from M/s. Vinod Cine Printographs, Sivakasi. The units did not have any Central Excise Registration. They cleared the sewing threads to M/s. Golden Threads and M/s. Thread Embayer without accounting/without following the Central Excise procedures and without payment of duty. 7. The above firms are marketing firms owned by family members. They had also been keeping parallel invoices (Invoice books with same serial Nos.) and used the invoices with same numbers more than once. The marketing units had cleared the goods received to their dealers without accounting the same. The Marketing firms further adopted the modus of making Bills in the name of fictitious firms, like National Threads and Indian threads etc., for subsequent removal to dealers and under invoiced them. The sale proceeds of unaccounted goods and those cleared under trading bills of fictitious f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Emporium, Indian Threads, Thread India and Thread Embayer, etc. This is evident from the sales invoices seized from customers in various parts of Kerala. In para 33 of his order the Commissioner has summed up the evidence of illicit clearances which is reproduced below : "To sum up, the investigating officers have unearthed lot of evidences to prove the modus-operandi adopted by M/s. Excel and Success in procuring raw materials in an unaccounted manner and in their unauthorized production and clandestine clearances. The said units had used the trading firms Golden Threads and Thread Embayer, which had otherwise acted as their sole distributors, as conduits to siphon off the clandestinely removed sewing threads. In view of the clear cut evidences adduced by the investigating officers with respect to purchase of raw materials and sale of sewing threads and in view of the fact that the said units had the necessary infrastructure to produce such large volumes of sewing threads, the offence on the part of M/s. Excel & Success has been clearly established." 9. The commissioner has also found that M/s. Golden Thread, a distributor of the goods manufactured by M/s. Excel is a related per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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