TMI Blog2000 (7) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, were issued to each of these assessees. These notices made the following allegations. (i) It was first alleged that in September 1985 the Indian Laminated Manufacturers Association (ILMA) had fixed the floor price for laminated sheets. The prices declared for assessment by each of the assessees were lower than the prices fixed by ILMA. Duty was payable on the value of the goods determined in accordance with the prices fixed by ILMA. (ii) It was next alleged that each of these assessees were illicitly manufactured and cleared quantities of laminated sheets. The basis for this allegation was that the ratio was available between base paper consumed and the quantity of the finished product produced and that the production of each of these assessees fall short of what it ought to be by applying this ratio. (iii) The third allegation was that the appellants had paid lower duty than what was payable on quantities of finished product of the first grade which had been cleared at a lower value as second and third grade. The notices also alleged that the money received as commission by the assessees for which no service had been granted was in fact additional co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional consideration for the sale by it of excisable goods. For that to be held, it will have to be shown that either the value on which duty was payable on the goods was lower than that it ought to have been, or that the quantity of goods on which duty was paid, and the quantity of the goods cleared on payment of duty, was lower than the duty ought to be paid. For the Section 11A to be applied it will have to be demonstrated that there has been short payment or non-payment of the duty, i.e., duty which was required to be paid had not been paid. Where there is no dispute that the value declared is correct, or that the quantity of goods cleared is not questioned, any amount of money received by the manufacturer of such goods, even if unexplained, cannot lead to it being treated as an additional consideration. This would mean it would have to be shown that the appropriate payment of goods has not been received. That is to say, they are either been undervalued or their quantity not declared. It will therefore be necessary to examine these aspects first. 9.The appeal by itself does not directly question the finding of the Collector that the price of the goods declared by ILMA sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Collector it is difficult to accept it. 13.There is, as we have noted, lack of uniformity on the part of the chemists themselves. Each of them has indicated differing ratio of the raw material to finished products. Further, the Collector has not answered satisfactorily various points raised in this regard. The factors that the advocate for the assessee has cited against the view that it is possible to arrive at a precise mathematical correlation between the quantity of raw material and the finished products are, in our view, significant. It is not clear whether chemists had taken into account the factors such as use of barrier paper or use of light colour base paper and both of which cases greater quantity of paper than normally would be required. The Collector's order also does not take into account question of any undisputed losses caused by circumstances such as breakdown in the electricity or in any part of plant and machinery. The Collector's order in effect seeks to apply provisions of Rule 173E, providing for determination of normal production solely on the basis of raw material used. Even for that rule to apply safeguards contained therein have to be given effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second grade and third grade. The Commissioner has held 70% to be grade one and 15% each to the second and third grade, duty is demanded on this score, since the manufacturer had declared and paid duty on higher quality of the inferior goods. The value of the laminated would vary according to what grade it is. The highest value should be grade one, the next grade second and thereafter grade three. Differential duty on this basis has been worked out and demanded. The first basis of the department's case is the recommendation of the ILMA, the second is the statement of Bhandari, the Chemist. The Collector has accepted that there is no basis for the resolution of ILMA that the first grade should be 80%. He agrees that the production of first grade would vary from unit to unit. (We must add that even within the same factory it may vary from time to time depending upon the quantity of raw material and other such parameters). The Collector however, finds that Bhandari, one of the chemist, has accepted that about 70% of the production was of the first quality and it is on this basis that he determines the quality of production. 16.We find acceptable the contention of the advocate for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound the material before it to be insufficient and said that testing of the final product would have substantiated the department's charge. No such testing was carried out in the case before the Tribunal. No such testing was carried out in the case before us either. Applying this ratio we hold that this charge is not sustainable. 20.We now return to the Department's appeal. That as we have noted is on the basis of the money stated to have been received to the dealers. As we have said earlier, that same was alleged to be consideration for sale of the goods by the assessees for the two reasons that we have discussed. Since we have not found the charge of evasion of duty on this ground sustainable the question of demanding duty on the money that the assessees were alleged to have been received from the dealers does not arise. The Collector has correctly appreciated that the demand for duty on the alleged additional receipt of consideration by the assessees was inescapably bound with the demand for duty on the third ground that he was dealt with. We have already held the other two not to be sustainable. The question of including the amount stated to have been received by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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