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TMI Blog2019 (6) TMI 1350X X X X Extracts X X X X X X X X Extracts X X X X ..... alleging similar modus operandi for evasion of duty. The Appellant were issued show cause notice dated 5.4.2010 proposing the duty demands as under:- i) A demand of Rs. 3,28,68,656/- was proposed on the ground that they have under-valued goods. ii) A demand of Rs. 2,95,33,205/- was proposed on the basis of consumption of gas alleging that they have suppressed production as there was excess consumption of gas. iii) A demand of Rs. 81,874/- was proposed on the ground that the appellants have cleared the goods on parallel invoices. iv) A demand of Rs. 62,67,000/- was proposed alleging that during the period 2005-06 to 2008-09, the appellant has wrongly claimed the benefit of SSI exemption under Notification No. 8/2003 dated 1.3.2003 as their clearances exceeded the exemption turn-over. The above proposals were made on the ground that the appellants, by way of under-valuing the finished goods, have cleared the same at much lower rate as found out from the investigation and interrogation of twenty six major buyers for the period 2004-05 to 28.2.2010, which covers about 46% of the total clearances. The buyers have admitted purchase of opaque quality Fritz and paid the amount in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or demand. Not even a single document has been found which can support the allegation of the show cause notice. He points out that all the statements of 26 buyers recorded on different dates are word to word same and the same cannot be a coincidence. It clearly shows that the statements were obtained as per the dictates of the officers. The statements even did not ascribe anything in particular to the Appellant. The ledgers produced by the buyers do not show any cash payment to the Appellant. He also pointed out that even the statements of the buyers kept on changing from time to time. That when the sole basis of allegation of undervaluation of goods was only statement of buyers, in that case the Appellant should have been allowed to cross examine such persons. Pointing out the discrepancies in some statements for instance he shows that Shri Ashok K Savsani in his statement dt. 16.09.2009 had stated that quality of frit varied from manufacturer to manufacturer; and that undervalued price was paid out of cash collected from dealers. He did not quantify amount of cash. However in his further statement dt. 24.12.2009, he stated that he paid Rs. 10/ - per kg in cash and that he did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon instance of Rs. 19,49,200/- having been transferred from Morbi to factory for payment of salary and other expenses. Shri Hitesh Parekh in his statement dt. 23.02.2010 has clearly stated that such amount was not transferred by him. As regard allegation of gradual increase in price of frit after initiation of investigation, he submits that it is apparent from the statement of several buyers that frit was not only of poor quality but was also used for preparing 'engobe mixture' which is used for inner coating of tiles. The quality of the product was low and did not fetch goods prices. The Appellant increased the quality gradually and thus prices were increased. He also draws attention to the fact that cost of raw material Borax almost got doubled from US $ 355 per MT to 600/- per MT and relies upon purchase Bill of Entries for different period i.e. Nov' 2006 to August' 2008 and Feb' 2009 annexed to the appeal memo. That with the above increase in price and also increased price of US$, they also increased the value of finished goods and hence, it cannot be said that due to investigations, the prices increased. He also draws our attention to prices of other raw material Zirc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on alleged parallel invoice alleged to have been issued in 2004 - 05, he submits that the invoice no. 92 dt. 16.03.2005 has been relied upon alleging that the same was issued to M/s Swagat Ceramics. 6. He submits that statement of their employee Mukesh Patel was recorded who refused to have issued such invoice. Even the format of invoice is different from their invoices issued by them. No payment was received from M/s Swagat Ceramics who has shown the issue of cheque against such purchase but no such payment was received by the Appellant. Even their accountant Shri Vishalbhai Patel has refused to have received any payment against such alleged parallel invoice. Even the perusal of transport voucher produced by M/s Swagat Ceramics shows that it does not contain name of any transporter. As regard other invoices he submits that though Shri Mukesh Patel in respect of such invoices has accepted issuance of such invoice but it is not clear as how such invoices came to be prepared at later date. The buyers of goods and proprietor of Appellant unit has denied issuing such invoice. The alleged buyers shown in parallel invoices i.e. Shri Nirav C Soitra of M/s Famous Ceramics in his statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lued the goods. Such demand is based upon the statement of the buyers of the goods. However we find that except the statements of some buyers no evidence has been put on record. The evidence in the form of details of cash receipts from buyers, any document proving cash transaction on account of undervaluation has not been brought on record. We also find from the statement of buyers that the statements were inconsistent as initially they stated that the cash amount was given to Appellant through Angadias or their Tiles dealers. However in subsequent statements they stated that the amount was handed over to Shri Hiteshbhai, employee of Appellant Unit. During investigation no evidence of any unaccounted money having been received by the appellant from any of the tile manufacturers was found. The ledger registers produced by the tile manufacturers before the officers contained details of payment made by them through cheques and no cash payment towards purchase of goods from the appellant was found. Neither there was any entry in their private records showing any unaccounted payment made by them to the appellant. No evidence at all from more than 26 customers to whom the frit was sold b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts and not any evidence. We are thus of the view that the demands on account of undervaluation which is based merely upon the statement of some buyers are not sustainable. 10. A demand of Rs. 2,95,33,205/- has been made against the Appellant on the basis of gas consumption. We find that except alleging excess consumption of gas no evidence in the form of procurement or excess consumption of raw materials has been brought on record. Frit is manufactured from eight raw materials and none of the said raw materials has been shown to have been procured in illicit manner or consumed in excess. In such case the demands has no legs to stand. Pertinently in identical case of M/s R.A. CASTINGS Pvt. Ltd., 2009 (237) E.L.T. 674 (Tri. - Del.), the tribunal has set aside the demands based upon electric consumption. The Hon'ble High Court of Allahabad as reported in 2012 (26) S.T.R. 262 (All.) upheld the said Tribunal order. In such view of facts, we are of the view that the demands based upon consumption of natural gas is not sustainable as the same is not supported by procurement of any raw material, its processing or transportation and identification of any buyer. 11. A demands of Rs. 81,78 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh Angadia or any person. The evidence in the form of books of accounts or any documents showing such undervalued consideration or clandestinely removed goods has not been brought on record. The present case thus stands even on better footing than the case of Belgium Glass & Ceramics Pvt. Ltd stated supra as not a single evidence against the Appellant could be found. 13. A demand of Rs. 62,67,000/- has been made against the Appellant on the ground that after addition of the value of undervalued and clandestine removal, the sale value of the Appellant crosses the SSI Exemption limit and the Appellants are not entitled for SSI exemption in respective years, hence the demand. We find that since as per our above findings, the charges of undervaluation and clandestine removal of goods are not sustainable against the Appellant, hence there is no reason to deny them the benefit of SSI Exemption. The subject demand is therefore not sustainable. 14. Thus in view of our above observation and findings we hold that the demands made against the Appellant is not sustainable and accordingly the impugned order is set aside. The appeal is allowed with consequential reliefs, if any. (Order prono ..... X X X X Extracts X X X X X X X X Extracts X X X X
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