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M/s. Atishay Trading Company, M/s. Delhi Gondia Roadlines, M/s. Lamba Door to Door / Godown Service Versus , CCE, New Delhi

2016 (7) TMI 987 - CESTAT NEW DELHI

Demand of duty - manufacture of gutkha - clandestine manufacture and clearance - Held that:- admittedly the various machines required for manufacture of gutkha were installed in the appellants factory. Not only that the visiting officers also found the pouches of gutkha fully manufactured in the manufacturing premises. The statement of Supervisor recorded at the time of visit of the officers is clearly to the effect that they were engaged in the manufacture of Tufan brand gutkha without obtainin .....

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During investigations, the statement of raw material supplier, the transporters as also the buyers were recorded. The said statements clearly showed that the appellant was indulging in clandestine clearance of their final product. - These facts further get corroborated from the fact that raw material as also the final product along with a fully manufacturing set up with power backup and employment of 12 persons including production Incharge and Supervisor was found at the time of visit of .....

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ecided against the assessee. - Excise Appeal No. 2634, 3355 & 3356 /2010 - Final Order No. 52428-52430 /2016 - Dated:- 12-7-2016 - Ms. Archana Wadhwa, Member (Judicial) And Mr. B Ravichandran, Member (Technical) Shri Prabhat Kumar, Advocate for the Appellants Shri R K Mishra, Advocate for the Respondent ORDER Per Archana Wadhwa: All the appeals are being disposed of by common order as they arise out of same impugned order passed by the Commissioner vide which he has confirmed demand of duty of & .....

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terms of provisions of Rule 26 of the Central Excise Rules. 2. As per facts on record, the factory premises of M/s. Atishay Trading Company located at WZ-406 Naraina Village, New Delhi was put to search on 26.11.07. One Shri Sanjeev Kumar, supervisor was found to be present in the said premises and informed the visiting officers that they were manufacturing gutkha with brand name Tufan and they have not obtained any registration from the Central Excise duty. Search of the premises revealed that .....

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r, supervisor informed the visiting officers that Shri Abhay Kumar Jain is proprietor of the manufacturing unit and the factory runs in one shift of 8 hours and was not registered with the Central Excise Department and the goods were not being cleared on any Central Excise document. The officers on a reasonable belief that the appellant was indulging in clandestine manufacture and removal of the gutkha and the final product lying in the factory were meant for clandestine activities, seized the f .....

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n gutkha at their factory located at WZ-406, Naraina Village which is owned by his wife. He also gave the details of purchase of machine, from various sources and deposed that raw material as also printed laminates was being purchased by them in cash. He gave the details of such raw materials suppliers. He further deposed that gutkha was dispatched by them either through railways or road transport and he hired vikram tempo for transportation of the gutkha through railways or transporter tempos. .....

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ansporters under the bilties recovered from the premises whereas three bags of zarda have been shown. He also deposed that all the sales were against cash and cash received by them is again used for purchase of raw material etc. The total sales made by them were disclosed to be around ₹ 80 90 lakhs. Shri Abhay Kumar Jain, proprietor also voluntarily gave two pay orders of ₹ 16,00,000/- (Rupees Sixteen lakh only) and ₹ 14,00,000/- (Rupees Fourteen lakh only) towards duty evaded .....

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aw materials as also the finished goods manufactured out of it. He further agreed that deliveries made to M/s. Sonu Stores were on the fictitious bill in the name of M/s. Shill Enterprises. The duty evasion in respect of clearances made to M/s. Sonu Stores, Naraina, New Delhi during the period October, 2006 to November 2007 was admitted to be around ₹ 7,11,275/-. He also agreed that pouch making machines found in their premises has the capacity to produce 110 pouches per minute. It may not .....

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aching the transporters M/s. Delhi Gondia Roadlines, Shri Vijay Kaushik, authorized signatory and husband of the proprietor, in his two statements dated 28.11.07 and 2.5.08 agreed that the documents recovered from their premises relate to transportation of Tufan brand gutka and in respect of certain GRs where the number of packs was shown as 3, they were actually 21 and the correct number of packs was never reflected in the GRs. Usually the packs were 6 or 7 times more than the number of packs r .....

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ment of Shri Pankaj Suri, Manager was recorded wherein he admitted having transported the Tufan gutkha under the fictitious bill of M/s. Shill Enterprises. 7. Further investigations were made at the end of other connected parties. Shri Alok Maheshwari, proprietor of M/s. Point Marketing, Kanpur in his statement recorded on 2.5.2008 stated that his firm is engaged in the designing of posters and pouches and that they have developed design for the pouch of Tufan gutkha . The seller of the raw mate .....

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pproached them for selling Tufan gutkha along with Tufan bidi and such Tufan gutkha was being received by them through railways without any bills etc. The payments were made in cash and he used to receive 40 bags per month during the period October, 2006 to November, 2007. The said statement of Shri Suresh Khurana was also accepted by Shri Abhay Kumar Jain, to be correct statement. 8. Further, Shri Sachin Matta of M/s. Sonu Stores, Naraina Village, New Delhi, in his statement recorded on 17.4.20 .....

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by them in their books of accounts. 9. Based upon the result of the above investigation, as also on scrutiny of various records, and incriminating documents recovered during the course of search, proceedings were initiated against the appellant alleging the total removal of Tufan gutkha involving Central Excise duty of ₹ 35,19,256/- during the period October, 2006 to November, 2007. The notice issued to the appellants also proposed confiscation of the seized goods as also imposition of pen .....

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ket of Tufan brand gutkha ; that the statement of other person recorded by the officers cannot be taken into consideration for the purpose of holding against them, being statement of third party and the same would amount to confirmation of demand on the basis of assumption and presumption. The appellant also contended that MRP mentioned on the pouches should not be adopted for the purpose of valuation of duty and the value for the purpose of levy of duty should be 25 paise per pouch as MRP print .....

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t dated 17.4.2008. Statement of various persons who could not be produced for cross examination have to be kept out of consideration. 11. During the course of adjudication various persons were produced for cross examination. Personal hearing was conducted wherein the averments made by the appellants orally as also in written submissions were retracted. 12. The said submissions made by the appellants were not accepted by the adjudicating authority who confirmed the demand against M/s. Atishay Tra .....

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00,000/- deposited towards payment of duty also stand appropriated. Penalty of ₹ 5 lakh stand imposed on M/s. Delhi Gondia Road Lines and penalty of Rs.One lakh was imposed on M/s. Lamba Door to Door / Godown services under Rule 26 of the Central Excise Rules. The said order of the original adjudicating authority was appealed against before Commissioner (Appeals) who upheld the same. 13. Hence, the present appeals. 14. Learned advocate Shri Prabhat Kumar appearing for the appellant Atishay .....

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being any corroborative evidence. He submits that the appellant was engaged in the manufacture of samples of the Tufan brand Gutkha along with the Tufan bidi and were still adjudging the market for the same. The final product found in their factory was only a trial production as market response was not found encouraging and the same was not meant for clearance. As such, it is the submissions that their being no cogent and tangible evidence, allegation of clandestine clearance are required to be .....

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weight of 10 gms or less are not covered by the RST printed on the same. He also submits that they were giving three packets free with one packet of 10 gms and as such the value of one pack should be considered as 25 paise. 15. Countering the arguments, learned DR submits that the Revenue s case is not based upon only on the statements of the appellants but the same stand corroborated by the statements of various persons like the raw material supplier, the transporter as also the buyer of the g .....

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ence on record, we find that admittedly the various machines required for manufacture of gutkha were installed in the appellants factory. Not only that the visiting officers also found the pouches of gutkha fully manufactured in the manufacturing premises. The statement of Supervisor recorded at the time of visit of the officers is clearly to the effect that they were engaged in the manufacture of Tufan brand gutkha without obtaining any registration from the department and without even intimati .....

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nsporters as also the buyers were recorded. The said statements clearly showed that the appellant was indulging in clandestine clearance of their final product. These facts further get corroborated from the fact that raw material as also the final product along with a fully manufacturing set up with power backup and employment of 12 persons including production Incharge and Supervisor was found at the time of visit of the officers. As such, we are of the view that there is sufficient material on .....

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ence available in that particular case. In the present case, as already observed by us, Revenue has been able to establish the clandestine activity, by carrying out the detailed investigations at all the possible ends and by bringing out the evidence leading us to conclude that the appellant was indulging in clandestine activity. As such, it may safely be held that Revenue is able to discharge its burden, to establish the clandestine activities, placed upon them. We find that the statements of t .....

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the final product without payment of duty. As such, we uphold the impugned order of the lower authorities. 18. As regards the quantification of the duty, the appellants have contended that the gutkha pouch being less than 10gms were not sustainable to duty in terms of section 4A of the Central Excise Act, 1944 and has relied upon various decisions of the Tribunal wherein it was held that individual sachets being less than 10 ml are not sustainable to duty in terms of section 4A and the assessmen .....

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ence that the goods were sold at less than ₹ 1/- rate, we deem it fit to direct the lower authorities to recalculate the duty. 19. Learned advocate has also submitted that they were giving three packets of gutkha as free with one packet in which case the value should be adopted as 25 paise per packet. The said plea of the appellant stands considered by the adjudicating authority as also be the appellate authority wherein it stand observed that each packet found in the appellants factory wa .....

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