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Synotech International, Krishan Mohan Garg Partner, Bharti Electronics Versus C.C.E. Delhi

2017 (12) TMI 444 - CESTAT NEW DELHI

Clandestine manufacture and removal - suppression of facts - Revenue has alleged that during the disputed period SI failed to account the entire raw materials purchased and used such unaccounted raw materials in the manufacture of CTVs which were clandestinely removed to trading unit M/s AEPL without payment of Excise Duty - Held that: - All the three firms viz M/s SI, M/s BE and M/s AEPL belonged to the same family and are controlled and run by Shri Vinod Kumar Garg as well as Shri K. M. Garg. .....

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procured clandestinely by M/s AEPL. It stands admitted by Shri K.M. Garg, Director, M/s AEPL that these fictitious firms did not have any manufacturing facility and that the raw materials procured by M/s AEPL were only to make CTVs and further that the goods made by M/s BE and M/s SI were sold through M/s AEPL. - M/s AEPL had got CTVs manufacture by M/s SI and M/s BE and sold to various dealers. The raw materials were procured through fictitious firms and utilized the same in the manufacture .....

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inst appellant. - Appeal No. E/55654, 55656, 55657/2014-EX [DB] - Final Order No. 58243-58245/2017 - Dated:- 7-12-2017 - Hon ble Justice Dr. Satish Chandra, President And Hon ble Mr. V. Padmanabhan, Member (Technical) Shri S.S. Dabas, Advocate for the appellant Shri H. Saini, DR for the respondent ORDER Per: V. Padmanabhan 1. These appeals are against the Order-in-Appeal No. 47-51/2006 dated 04/07/2014. This is the second round of litigation before the Tribunal. In the first round of litigation .....

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he year 2001. Undisputedly, the impugned order was passed in 2007, that is, much after deletion of power of remand to the Commissioner (Appeals). Being so, the impugned order remanding the matter cannot be sustained and is liable to be set aside and the matters need to be sent back to the Commissioner (Appeals) to deal with the same in accordance with the provisions of law Section 35A (3). 4. It has been informed that pursuance to the direction in the impugned order, the Additional Commissioner .....

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ned orders are hereby set aside without expressing any opinion on the merits of the case and the matters are remanded to the Commissioner (Appeals) to dispose of the appeals in accordance with the provisions of law. 2. In the impugned order, which was passed in the remand proceedings, the Commissioner (Appeals) confirmed the demand of Central Excise duty amounting to ₹ 36,99,969/- against M/s Bharti Electronics(BE) and ₹ 6,51,219/- against M/s Synotech International (SI). Penalties o .....

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of duty, bearing the brand name of others. Such colour television sets were being sold through their trading Company i.e. M/s Anuj Electronics Pvt. Ltd. (AEPL). Shri Vinod Kumar Garg and Shri Krishna Mohan Garg were the Directors of AEPL and were also partners in M/s BE and M/s SI. During the period in question (Oct 1997, to July 1999), black and white televisions were fully exempt from payment of Excise Duty. M/s BE was registered for the manufacture of black and white televisions. The trading .....

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period, AEPL had purchased raw materials and components and supplied the same clandestinely to M/s BE and M/s SI who in turn manufactured colour televisions and supplied back to M/s AEPL either clandestinely or in the guise of fictitious trading activities. The investigations also revealed that M/s AEPL had floated the following four fictitious firms to facilitate clandestine procurement of raw materials for manufacture by M/s BE and M/s SI and also removal of branded excisable goods. A. Raghav .....

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crutiny of purchase bilsl indicated that they had purchased 818 Nos. of colour picture tubes but failed to account 216 pieces. ii. Outward register was recovered which contained the details of goods removed from the factory. In many of the cases it was found that invoices were not issued by M/s SI in respect of colour televisions shown as cleared in the outward register . Details of 317 colour TVs were found reflected in the outward register . iii. Receipt of colour picture tubes (272 of JCT mak .....

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hout payment of Excise Duty. 8. The evidence against M/s BE is summarized as follows :- i. During the search on 18/7/1999, the departmental officers found stock of 4 CTVs and 153 Coolers. Further various raw materials were shown as purchased from the four fictitious firms but were in effect used in the factory of M/s BE. M/s BE was also found to have stock transferred their entire production to M/s AEPL and dispatched the same to their godown in Jhandpura. ii. Documentary evidence regarding purc .....

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ice circular for CTVs with Eyeline brand with effect from 28/05/1999 which indicated that they were manufacturing and selling CTVs. 9. Evidence against M/s AEPL is summarized below: i. The business premises and godown of M/s AEPL as well as the residence of the Director and also the manufacturing premises of M/s SI were found to be the same premises at Shahadra, Delhi. This clearly indicated that M/s AEPL, M/s SI as well as M/s BE were all separate on paper but were de facto a single family conc .....

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in the above day book was more than what was account by both M/s SI as well as M/s BE. Even though M/s SI had obtained registration for CTVs, the evidences indicate that M/s BE had also manufactured and sold CTVs. iv. Since M/s AEPL did not have any manufacturing unit of their own, it is obvious that the raw materials procured for manufacture of CTVs were meant only for M/s SI and M/s BE. 10. The Ld Counsel for the appellants, Shri S.S. Dabas argued that M/s Bharati Electronics were making only .....

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itted that the records seized does not indicate any activity of repairs of colour televisions being carried out in the premises of M/s BE. He argued that on the basis of documents recovered as well as statements recorded it is coming out that M/s AEPL were the owners of brand names Televista and Eyeline and got the TV manufactured from M/s BE as well as M/s SI and sold the same with their brand names. He further argued that the evidences recovered show that the two manufacturing firms have not f .....

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