TMI Blog2007 (6) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... Paper and Boards ( India ) Ltd. v. CCE C, Calicut 2. The main appellant M/s. Victory Paper and Boards (India) Ltd. (hereinafter referred to as VPBIL), Palakkad manufactured papers. Investigations were carried on the activities of the appellant by the departmental officers. Consequent to the investigation, proceedings were initiated against the appellants for demanding an amount of Rs. 22,03,027/- under proviso to sub-section (1) of Section 11A of the Central Excise Act, 1944. Interest under Section 11AB was demanded. Penalty under Section 11AC and also under Rules 173Q and 210 of the Central Excise Rules, 1944 were proposed. 2.1 There were three main issues. The appellant cleared major portion of paper manufactured to M/s. Victory Press (P) Limited, Kunnamkulam (hereinafter referred to as VPL), which is a related person under Section 4 of the Central Excise Act, 1944. This will have a bearing on the valuation. The second issue is regarding unaccounted production and removal of goods. The third issue is on the dutiability of waste and scrap of papers. The Adjudicating Authority examined all the three issues. It was held that with regard to valuation, the value at whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lers and government departments (iv) The price charged by the appellant for products sold to M/s. VPL was the same as the price charged for identical products from other buyers and no extra commercial consideration in the matter was shown by the appellant. Therefore, there is no mutuality of interest between the appellant and M/s. VPL. (v) M/s. VPL is a shareholder of the appellant and the appellant did not have any share in M/s. VPL and has no interest except commercial transactions by way of sale of the goods. (vi) The detailed reply to the Show Cause Notice has not at all been considered including the case laws cited and hence, the impugned order is not a speaking order. (vii) The appellant company is a public limited company with more than 67% shares owned by public and other than family member of K. T. Pavunny, Chairman. Hence, VPL and appellant cannot be treated as related person. (viii) The ratio decision of Calcutta Chromotype Ltd. v. CCE, Calcutta - 1998 (99) E.L.T. 202 (S.C.) relied on by the Commissioner is not applicable, since in that case the manufacturer and distributor were private limited companies, whereas in this case the appellant is a public limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te generated, which was not entered in the RG1 had been captively consumed. (xvi) The burden to prove clandestine removal is on the department. The burden has not been discharged. (xvii) There is plethora of case laws, which holds that without corroborative evidence, the charge of clandestine removal does not survive. (xviii)The appellant had contended that they had only second-hand ma chine with capacity of 25 tonnes per day and 60-80% efficient, the average production could be only 15-20 tonnes per day. The submission of the appellant has not been subjected to any verification by the Department. Hence, the demand is not sustainable. (xix) Penalty of Rs. 10,000/- has been imposed on six others. There is no specific allegation about the role played by the appellants in committing the alleged offence except for the fact that four of the Directors are common in both the companies. It is well settled that no penalty can be imposed, when there is no specific allegation about the role played by a person in committing the alleged offence. For the subsequent period pertaining to departmental appeal E/1405/2004, the Commissioner has set aside the penalties on the same set of facts. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he extend of transportation charges only. The differential price was later worked out by the department from the documents produced by them. The Head Offices of VPBIL and VPL are at the same building where the detailed accounts are maintained but with mala fide intention they informed the department that detailed records are kept in the factory office, knowing fully well that no books of accounts are maintained in the factory office except copies of invoices and stock register. This proves their mischievous intention to mislead the department and to avoid payment of duty. The longer period is therefore, correctly applicable. Hence, Revenue has made a prayer for setting aside the Order-in-Appeal dated 21-9-2004 passed by the Commissioner (A), Cochin. Appeal No. E/648/2006 - M/s. Victory Paper and Boards ( India ) Ltd. v. CCE C (A), Cochin . 6. The OIA No. 96-102/2006-C.E., dated 22-2-2006, which is also impugned has been passed by the Commissioner (A). This order relates to the period 1-10-2003 to 31-12-2003. The issue involved in the above appeal is the valuation of the goods cleared by the appellants on account of the fact that the appellant and M/s. VPL a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares are listed in the stock exchange. The goods manufactured by VPBIL are sold not only through VPL but also through others. Even though, a major portion of the goods are sold through VPL. VPL has shares in VPBIL, however, VPBIL does not have any shares in VPL. In these circumstances, it is difficult to say that VPBIL has an interest in VPL. It has been contended that the price charged for the goods sold to VPL was the same as the price charged for identical products to other buyers and no extra commercial consideration in the matter was shown by VPBIL. In these circumstances, we agree with the finding of the Commissioner (A) in his order dated 21-9-2004 that the department has not proved mutuality of interest and also that the relation between the two companies has influenced the price. It is not Revenue's case that all the goods produced by VPBIL have been sold only through VPL. The decision of the Calcutta Chromotype's case (supra) is distinguishable. As in that case, both the manufacturer and distributors were private limited companies whereas in this case VPBIL is a public limited company and VPL is a private limited company. In that case, the distributor was a sole dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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