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2019 (9) TMI 218

..... llegation of manufacture of Automotive Bulbs and clandestine clearance - HELD THAT:- The very basis of the demand (receipt of bulb shells /capsules), no longer remains in existence. The very basis for alleged manufacture and removal of the goods, no longer exists. In view of the findings of a Coordinate Bench of this Tribunal in the appellant’s own case-Unit M/S AUTOLITE INDIA LIMITED, MAHIPAL GUPTA, GOPAL MATHUR, R.K. MATHUR VERSUS VS. CCE, ALWAR [2018 (3) TMI 766 - CESTAT NEW DELHI], where it was held that the charge of clandestine clearance cannot be upheld only on the basis of the seized private record especially in view of the fact that the statements admitting clandestine clearance of such goods stand retracted. Appeal allowed - .....

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..... nt of duty which were manufactured out of halogen capsules received by it from its Unit I. Separate Show Cause Notice dated 07.09.2005 was also issued to Unit I for the same clearance of halogen capsules allegedly cleared by Unit I to Unit II, demanding central excise duty on such halogen capsules. 4. After completion of investigation, show cause notice dated 22.05.2006 was issued to the appellant unit proposing demand of central excise duty of ₹ 13,74,759/- on the halogen bulbs manufactured and cleared clandestinely which were manufactured out of halogen capsules received clandestinely from its Unit I. It was further proposed to demand central excise duty of ₹ 40,416/- for the quantity of halogen bulbs cleared under the alleged .....

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..... t clandestine removal of excisable goods took place on the strength of parallel invoice and the preparation of note book by the employee of the appellant unit was proved and the entries made therein were also affirmed by the various officials whose statements were recorded during the course of investigation. 7. Being aggrieved by the said impugned Order-in-Appeal, the appellant has filed the present appeal before this Tribunal. 8. Ld. Counsel for the appellants brings to notice of this Tribunal, as a result of investigation that notice was issued to the Unit No.I -EOU for alleged clearance of Hellogen Bulbs (Capsules) on the allegation of clandestine clearance to Unit-II. Further, the whole case of Revenue against these appellants is linked .....

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..... backwards. The appellant has raised serious objection to this method of working and it is their submission that Rule 7(3) of the Customs Valuation Rules has no application in the present circumstances, as Unit-II is not manufacturing Halogen Capsules. We agree with the view expressed by the appellant in the circumstances. 10. The entire basis for rejecting the transaction value at which goods were cleared from appellant to Unit-II is the relationship between them. Merely because the two units are related persons, the same would not ipso facto be the ground for rejecting the transaction value. Rule 3(3)(a) of the Customs Valuation Rules, 2007 specifically provides that where the buyer and seller are related, the transaction value shall be a .....

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..... In such circumstance the invoice price has to be accepted as transaction value. The allegation of undervaluation has been raised mainly on the plea of the related person and by citing the import of few samples. We are of the view that the transaction value cannot be rejected for such reasons. Consequently, we are constrained to set aside the demand for differential duty on charge of undervaluation. 12. Next we consider the charge of clandestine clearance. During the course of visit of the departmental officers, a note book MONARK was recovered from Unit-II. This private record indicated receipt of Halogen Bulbs and Halogen Capsules from Unit-I. The author of the private note book was Sh. Satyanarayanan, Store Keeper. We do not find any stat .....

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..... ly in view of the fact that the statement admitting clandestine clearance of such goods stand refracted. 13. In view of the above discussions, we set aside the impugned order and allow the appeals. 9. Ld. Counsel further submits that in view of the aforementioned findings of this Tribunal in the case of Unit No.I, the very basis of the demand (receipt of bulb shells /capsules), no longer remains in existence. Accordingly, he prays for allowing these appeals with consequential benefits. 10. Ld. Authorised Representative for the Revenue has relied on the impugned order. 11. Having considered the rival contentions, I find that the very basis for alleged manufacture and removal of the goods, no longer exists. In view of the findings of a Coordi .....

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