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C.C.E., Delhi III, Gurgaon Versus Jayhshin Ltd., Shri Vinayak Trading Co. Pvt. Ltd.

2016 (7) TMI 292 - CESTAT CHANDIGARH

Clandestine removal of goods - demand of duty on the basis of turnover of their dealer - manufacturing or automobile parts - Commissioner (Appeals) oberved that clandestine removal of goods is on the basis of assumption and presumption, therefore, the demand of duty are not sustainable - Held that:- As it is clear from the facts of the case itself that M/s SVTC is not exclusively dealer of the appellant and exclusively selling goods manufactured by the respondent M/s JYL but purchasing of goods .....

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r of their dealer. - No demand can sustain - Decided against the revenue. - Central Excise Appeal No. 2884 to 2887 of 2006 - Final Order No. 60103-60106/2016 - Dated:- 19-5-2016 - Mr. Ashok Jindal, Judicial Member and Mr. Raju, Technical Member Present Shri Sanjay Jain, A.R. for the Appellant/Revenue Present Ms. Krati Somani with Ms. Swati Gupta, Advocates for the respondent. Revenue is in appeal against the impugned order wherein the duty demand has been dropped and penalties imposed on all .....

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manufacturing of clandestine removal of goods and selling them through M/s SVTC. The evidences to allege the same are statements of Shri S.K. Dev, (General Manager) of M/s SVTC during the course of investigation and the agreement between M/s JYL and SVTC. Show cause notices were adjudicated and the adjudicating authority confirmed the duty from M/s JYL along with interest and various penalties were imposed on all the respondents. On appeal before the ID. Commissioner (Appeals) the ID. Commissio .....

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therefore, the impugned order is to be set aside. 3. Ld. A.R. appearing for Revenue drew our attention to the adjudication order wherein the adjudicating authority has recorded the fact that Shri S K Dev, General Manager of M/s SVTC has made statement that he was looking after the sales of M/s SVTC and dealt with the product manufactured by M/s JYL for which they introduced themselves as representative of M/s JYL, He has also said that the orders from the dealers were received indicating that th .....

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he same JYL has shown clearance to M/s SVTC is very less quantity in their books of account where SVTC cleared huge quantity of auto parts, therefore, the said evidence is the crucial evidence from where M/s SVTC procured the goods. On the other hand ID. Counsel for the respondents supported the impugned order. 4. Heard the parties and perused the records. On perusal of the records and considering the arguments advanced by both sides we find that in this case, the case has been made on the presu .....

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w Bansal Agency who are dealers of M/s Maruti Udyog Ltd. and purchasing goods and selling them in the open market and the clearances were presumed by Revenue as manufacture of M/s JYL which is not correct and as per investigation itself, these things have been examined by the Id. Commissioner (Appeals) in the impugned order wherein he has observed as under : 16. The charge of the clandestine removal is based on the fact that the sales made by SVTC were in excess to the goods that had been suppli .....

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e proved by the department by adducing cogent and convincing evidence. 17. The appellants have contended that there is no basis whatsoever on the above finding that there has been clandestine removal of goods by JYL to SVTC and there is no evidence produced by the Department to show that there has been clandestine removal of the goods by the department to show clandestine removal of the goods and merely because there have been some excess sales by SVTC (Which also has been explained by SVTC in t .....

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ad purchased the goods which is as under : - (a) M/s A.P. Motors-Trader (b) New Bansal Agencies-Trader (c) M/s Modern Engg. Works-Manufacturer (d) M/s Trust Auto Corpn.- Manufacturer (e) M/s Tacco Auto Industries Manufacturer 19. The appellants had further denied the allegation made that they only issued invoice and the goods have not been supplied as this allegation was without any basis and no evidence had been produce in respect of the above allegation. Further, SVTC were the distributor of J .....

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spect of their contention that they had been purchasing the goods from other dealers as well and against the purchases made by them from other dealers, they were making the payment through cheque and this would show that transaction were duly accounted as well. 20. Further on perusal of statement dated 12.08.99 of Sh. Dev, Manager of SVTC and statement dated 10.1.2001, it has been stated that SVTC were dealing with the goods of JYL. It would be wrong to conclude that SVTC were only dealing with .....

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s were purchased from AP motors. Therefore it becomes clear that majority of the goods were purchased by them from the local dealers. This supports the submission made by SVTC that they were purchasing the goods from other dealers as well and there is no rebuttal to these evidence that they had purchased these goods from the local dealers. 22. The impugned order has relied on the facts that the invoices under which goods have been purchased by SVTC from the local dealers does not have certain pa .....

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ention that they had purchased from the local dealers and that there is no excess sale made by them. It is further found that the impugned order had decided on the basis that SVTC could sell only goods supplied by JYL and no other goods. This finding appears to be not correct in view of the fact that SVTC were the distributors of JYL which only meant that JYL would sell the goods in the replacement market through SVTC and this does not mean at all that SVTC cannot buy goods on its own from other .....

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