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2016 (6) TMI 867 - CESTAT HYDERABAD

2016 (6) TMI 867 - CESTAT HYDERABAD - TMI - Demand if duty of excise on clandestine removal on best judgement method - Bonafide mistake - extended period of limitation - It was contended that, the appellant is a maker of sweets/biscuits/pastries. Sweets, though excisable are exempted from duty. Biscuits/pastries are dutiable and attract duty on MRP basis. The appellant was not aware of this and therefore did not pay duty on these goods. - Held that:- The appellants were manufacturing both e .....

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tware professional, who created the Software of print-out for the appellants. He deposed that there is technical problem in the Software in regard to generating report of print outs. Thus the figures of sales in the print outs could not be relied, for calculating the demand. - The adjudicating authority has arrived at the duty demand, basing on the VAT returns, as there was no reliable records and details furnished from the appellant side. - Thus, though the adjudicating authority has used t .....

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peal No. E/3155/2011 - Dated:- 12-1-2016 - Ms. Sulekha Beevi, C.S. Member ( Judicial ) Shri Y. Sreenivasa Reddy, Advocate for the Appellant Shri R.R.Bangar, AR for the Respondent ORDER [ Order per: Sulekha Beevi ] 1. The appellants are aggrieved by the demand raised alleging clandestine manufacture of pastries/biscuits. 2. Basing on specific intelligence that M/s Dadu s are manufacturing and clearing excisable goods without payment of duty, the officers of Anti-Evasion, Hyderabad-II Commiserate .....

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omputer print outs for the period 01-01-2008 to 03-03-2009. Four numbers of computer hard disk were also recovered on 05-03-2009 and the same were sent to Government Examiner of questioned documents, for analysis. The statement of Sri Rajesh Dadu, Managing Partner of Appellant was taken. It was observed by department that appellants crossed limits of ₹ 4 crores during the financial years 2006-07 and are not entitled for SSI exemption for the year 2007-08. Therefore, they were liable to pay .....

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eady deposited during the time of investigation. A penalty of identical amount was imposed under Section 11(AC) besides imposing separate penalty of ₹ 1.00 lakh on Sri Rajesh Dadu. Being aggrieved the appellant filed appeal before the Commissioner (Appeals), who vide order impugned herein upheld the demand and interest and appropriation of the amount paid. However, the separate penalty imposed on Sri Rajesh Dadu was set aside. The appellant has preferred this appeal against the said order. .....

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e did not pay duty on these goods. The Anti-Evasion Officers of the Revenue searched the premises of the appellant and recovered records including copies of bills and computer hard disk. Based on such documents, the officers arrived at the value of the dutiable product. The appellant under pressure was made to give statement to the officers. He deposed the value of the dutiable goods cleared for the period 2007-08 and 2008-09 to be ₹ 18 lakhs and ₹ 24 lakhs respectively. The appellan .....

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l particulars of clearances of dutiable goods made. No further evidence was gathered by department. Thus the value of clearances is not based on evidence but by adopting a method in para 3 Part IV chapter 3 of CBEC s Supplementary Instructions, 2005 for best judgement method. The said para refers to provisional assessment. Applying the same for quantifying clearance is against law. He urged that the demand is based on assumptions and applying mathematical formula and therefore, is not sustainabl .....

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ity to submit comments on the grounds of appeal and submissions made by the appellant. After perusal of such comments the Commissioner (Appeals) has upheld the demand. The appellants have been in the business for fairly long time as is reflected from their VAT registration and returns. However, they did not obtain Central Excise Registration and did not file any declaration, though their sales turnover crossed the exemption limits provided for SSI units. The fact of evasion came to notice only d .....

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actual data available on record by applying the ratio, for which no data is available. That, the demand is not based on surmises and conjunctures, but is based upon the available data obtained from VAT returns and other records. 6. I have heard both sides and perused the records carefully. 7. The appellants were manufacturing both excisable and dutiable goods but they are not maintaining any separate accounts in respect of manufacture of dutiable and exempted goods. It is stated that appellant d .....

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rint outs. Thus the figures of sales in the print outs could not be relied, for calculating the demand. The Commissioner (Appeals) called for commend form the adjudicating authority, who has sent commends to the Commissioner (Appeals) regarding the issues in the appeal. These commends would reflect the manner in which the demand was arrived. The relevant portion is reproduced as under: (i) The assessees have not maintained any records with regard to the inputs and the finished goods viz. cookies .....

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available on record and applying the ratio to the period for which no data is available, as it would be more accurate than the unsubstantiated /presumed figures of sales declared by the assesses. (v) with regard to discrepancy in turnover at paras 5 & 14 of the OIO it is submitted that the value of clearances for the year 2007-08 as stated by Shri Rajesh Dadu in para 5 of the OIO is ₹ 8,66,81,295/- which is inclusive of Sales tax/VAT as per the monthly VAT reports submitted by M/s Dadu .....

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QAE/V/8/2009-AE-II/OR No.09/2010 dated 20-05-2010) This sales value is greater than the sales value declared by Sri Rajesh Dadu. Hence, in the SCN and OIO the correct sales value of ₹ 8,05,72,922/- was taken, as it is substantiated by VAT Returns. 8. From the above it is seen that the adjudicating authority has arrived at the duty demand, basing on the VAT returns, as there was no reliable records and details furnished from the appellant side. The Managing Director of the appellant Sri Raj .....

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yment of duty. Thus, though the adjudicating authority has used the words best judgment method for calculation of the duty demand in effect, he has placed reliance on the VAT returns and other documents available. In the Order-in-Original, it is stated as under: That In the instant case , there is no data other than the one furnished by M/s Dadu s pertaining to the periods cited. In view of the above, it was felt logical, to proceed by the best judgment method of calculation ie. arriving at the .....

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ellants have cleared the goods without payment of duty. Further they have not furnished relevant information for the clearances made. In para 3 Part IV Chapter 3, of CBEC s Manual of Supplementary Instructions, 2005, it is provided as under : in terms of para 3 Part-IV, Chapter 3 of the CBEC s Central Excise Manual of Supplementary Instructions, 2005, when the Central Excise Officers, during scrutiny or otherwise, find that self assessment is not in order the assessee may be asked for all necess .....

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