TMI Blog2004 (9) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... 2001 (upto August 2000), the appellant M/s. Woodmac had manufactured and cleared 'Decorative Plywood' by misdeclaring it a 'Repressed Plywood' in order to evade payment of appropriate amount of duty; that 'Decorative Plywood' commands higher price than that of Repressed Plywood, that cash receipts of Rs. 9.49 crores, as per books, for the entire period, represent the additional consideration received from the dealers over and above the invoice price; that the appellant's claim that the cash receipts represented sale of 'Seasoned Wood' cannot be believed inasmuch as the seven buyers to whom the 'Seasoned Wood' claimed to have been sold were found to be non-existent. (b) During the hearing, the learned Counsel for the appellant contended that the main allegation is undervaluation of 'Decorative Plywood' cleared in the guise of 'Repressed Plywood' and that this allegation is sought to proved by the Statements of 3 to 4 dealers as against 550 dealers spread all over India. He submitted that there is no misdeclaration regarding description of the goods inasmuch as correct Chapter Heading 4408.30 has been clearly shown in the invoices. In support of this, he tendered a few copie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of cross-examination of these four dealers and the retractions made and in view of the affidavit filed by them the case of the department as regards the evidence of cash or money collection from the dealers is not established. It was brought out that in case of one of these four dealers by M/s. Tej Veneess in his statement dated 26-9-2000 has said to have admitted paying Rs. 5,91,026/- as cash when total sales invoiced to him are of only Rs. 1,38,136/- which cannot be as alleged at 75% over and above the invoiced value. No such exercise of total sale to all dealers and cash payments has been worked out for the reasons that then the departments case would fail. The total sales to these four dealers is about 2% of the total production/clearance and that cannot be the case to extend and apply to all 500 dealers. In any case only 5 dealers were questioned and one of them gave no statements of cash payments and the four have retracted and not produced for cross-examination. (vi) Reiterate the grounds taken in the appeal. (c) (i) Learned Counsel for the dealers mainly submitted that no notice has been given to the dealers from whose custody the goods were seiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7) E.L.T. 466 wherein the Hon'ble Tribunal has considered the judgment of the Hon'ble Delhi High Court in the case of Somany Pilkingston's Ltd. The Hon'ble Tribunal has held that the term ordinarily used in Section 4 means to be accepted as in the normal course where no special circumstances prevail. In a situation where there is no special relationship alleged between the two parties or no factors other than that of purchase and sale for the transaction it is not possible to agree that they were not sales in the ordinary course of trade or not ordinarily sold. The observation of the Delhi High Court that the word 'ordinarily' has been interpreted to mean in majority of the cases but not invariably does not help the assessees case. (iii) It is also their claim that they have more than 500 dealers, but the Department has relied upon only on the statements of 3 to 4 dealers. It is submitted that during the investigation they had not disclosed that they had more than 500 dealers. It was only at the time of hearing before the Commissioner that they submitted a list of the dealers. (iv) However, the statement of the dealers who have admitted that over and above the invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r vehicles did not carry Seasoned Wood on the dates appearing in the delivery challans. Therefore, the so-called transaction of purchase and sale of Seasoned Wood is nothing but figment of imagination to get away from the clutches of law. (viii) Since they did not manufacture Seasoned Wood (regardless of whether it is excisable or not), their reliance on the Supreme Court decision in the case of CCE v. Kutty Flush Doors and Furniture Co. (P) Ltd. is of no help to them. Similarly, their reliance on the decision of the Hon'ble Tribunal in the case of Sharon Veneers and B.G. Plywood Inds. (P) Ltd. is of no help inasmuch as in those cases there was no inflow of huge cash receipts as in this case. (e) Submission of the department as regards the dealers are - (i) On behalf of the appellant-dealers, the learned Counsel had submitted that the Show Cause Notice dated 21-5-2001 is without jurisdiction inasmuch as this notice was issued with the approval of DG, Central Excise Intelligence who was not of the rank of Chief Commissioner. He referred to the Notification No. 38/2001-C.E. (N.T.), dated 26-6-2001 and stated that the DG, Central Excise Intelligence was given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor was there any challenge to the order of confiscation by the learned Counsel appearing for them. In the circumstances, it has to be held that the order of confiscation of the seized goods and imposition of redemption fine in lieu thereof remains unchallenged. The same is, therefore, required to be confirmed. 3.On consideration of the submission and the material it is found - (a) Perusal of Show Cause Notice paras 6.1, 6.2, 6.3, 6.5, alleges admission of 70%, 50%, 75% to 80% as excess cash payments over and above the invoiced prices. Para 6.4 tells above the recovery of a species wise price list, but does not reveal what is the excess therein. How at what level this price list is at higher percentage over the prices on which the duty has been discharged is not forth coming. If the assessee had a valid price list for sale prices for so-called "Decorative Plywood", at any time and was collecting differentiated amounts in cash as company Policy intent, then such collections and prices would be from and same to all the dealers, since no special relationship considerations have been brought out for having different treatment to every member of this group of four dealers. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96) ECR 709 is well founded and following the same, this order cannot be sustained. (iii) The receipt of cash, as shown in the books, to represent the sale proceeds of seasoned Timber is well explained, since the year wise sale of Plywood and receipt of cash are not proved and do not follow a pattern of the alleged percentage of cash recoveries of undisclosed amounts for sale of Plywood. (iv) The ld. Advocate for the appellants has demonstrated that for the year 1996-97, there was no sales effected to the said four dealers, there is therefore no evidence to connect the receipts of cash to be differentiated sale price of Plywood. (v) The denial of cross-examination, of the four dealers, to enable WOODMAC to establish the facts, non perusal of enquires by the department with other dealers, would lead to, a conclusion, that there is no sufficient material to establish the feature of Cash Recovery to be existing at all or normal or in ordinary course of business of sale of Plywood by WOODMAC. Reliance of the appellant on the case of Sommany Pillington - 1995 (76) E.L.T. 281 (Del.) is well founded. Following the same, the values at which the Plywood has discharg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Sharon Veneers - 2002 (146) E.L.T. 655, on the similar grounds where the majority view was that reliance a statement of three dealers as evidence, subsequently rebutted in cross-examination, who constitutes 8% of the total dealers and sale in value by the assessee in that case was not held to be sufficient to cause establishing undervaluation. In the case before us, cross-examination was not allowed and in value terms the sales to the four dealers is only 2.83%. Following Sharon Veneers case, the charge of undervaluation cannot be upheld. (e) It is well settled that an assessee can effect and claim Section 4(1)(a) value determination even if goods are sold at levels which leave no margins of profit or even at loss. Therefore, an assessee can opt to sell, all his goods, at the same price, even if at dealers level in the market certain designs, patterns could fetch different i.e. higher or lower values. The alleged price list recovered is not conclusively proved to be that which the assessee is found or established to have effected sales at the factory gate. It is to be held that there is no material on record to upset the valuations and duties paid thereafter on ba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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