2009 (5) TMI 765 - AT - Central Excise

Tribunal Upholds Confiscation and Fines, Re-quantifies Duty, Revenue Appeal Partially Allowed

HERO PLYWOODS & BOARDS Versus COMMISSIONER OF C. EX., CALICUT

The Tribunal upheld the confiscation of goods, imposition of redemption fines, and penalties for undervaluation. It directed re-quantification of duty ... Undervaluation - Suppression of value - Confiscation, fine and penalty - Demand - Revenue has collected enormous documents to sustain the charges of undervaluation or under-invoicing in respect of the clearances made by M/s. Hero Plywoods and Boards, who are the main party in the appeals Issues Involved:1. Confiscation of Goods2. Imposition of Redemption Fine3. Imposition of Penalties4. Allegation of Undervaluation5. Demand of Differential Duty6. Evidence and Corroboration7. Retraction of Statements8. Determination of Normal Price and Transaction Value9. Cum-Duty Benefit10. Admissibility of Computer Printouts as Evidence11. Revenue's Appeal against Partial Demand ConfirmationIssue-wise Detailed Analysis:1. Confiscation of Goods:The Commissioner held that goods seized from various parties were liable for confiscation based on evidence of undervaluation. The Tribunal upheld the confiscation and Redemption Fine imposed, citing overwhelming evidence of undervaluation supported by documents and statements.2. Imposition of Redemption Fine:Redemption Fine was imposed on the seized goods from the parties. The Tribunal confirmed the fines, agreeing with the Commissioner's findings that the goods were cleared on undervaluation by paying lesser duty.3. Imposition of Penalties:Penalties were imposed on the parties involved in the undervaluation. The Tribunal upheld these penalties, including those on the dealers from whom goods were seized, under Rule 209A/26 of the Central Excise Rules.4. Allegation of Undervaluation:The main allegation was that the assessee paid duty only on one-third of the actual value, receiving the balance in cash without paying duty. The Tribunal found overwhelming evidence supporting the allegation, including statements from dealers and data retrieved from the computer.5. Demand of Differential Duty:The Commissioner restricted the duty demand to transactions with five dealers who admitted undervaluation. The Tribunal remanded the matter for re-quantification of duty, directing the Commissioner to determine the normal price for pre-1-7-2000 clearances and transaction value for post-1-7-2000 clearances based on available evidence.6. Evidence and Corroboration:The Tribunal found sufficient evidence of undervaluation, including statements from dealers and data from the computer. The Commissioner's reliance on these evidences was upheld, rejecting the assessees' contention that the demand was based on assumptions.7. Retraction of Statements:The Commissioner ignored the retractions made long after the investigations, following certain case laws. The Tribunal agreed, emphasizing the reliability of the initial statements corroborated by other evidence.8. Determination of Normal Price and Transaction Value:For pre-1-7-2000 clearances, the Tribunal directed the Commissioner to determine the normal price based on available evidence. For post-1-7-2000 clearances, the transaction value should be determined for each transaction, confirming differential duty only where evidence of excess collection exists.9. Cum-Duty Benefit:The Commissioner granted cum-duty benefit to the assessee, which was upheld by the Tribunal, relying on the decision in the case of Srichakra Tyres.10. Admissibility of Computer Printouts as Evidence:The Tribunal upheld the admissibility of computer printouts, retrieved by the Government Examiner of Questioned Documents, as valid evidence. The authenticity was confirmed by the statements of the computer operator and the managing partner.11. Revenue's Appeal against Partial Demand Confirmation:The Revenue appealed against the partial confirmation of the duty demand. The Tribunal partially allowed the appeal, directing re-quantification of duty for both periods, pre and post-1-7-2000, based on the principles of normal price and transaction value respectively.Conclusion:The Tribunal remanded the matter to the Commissioner for re-quantification of duty, confirming penalties and Redemption Fines imposed. The appeal by the Revenue was partially allowed, directing the Commissioner to re-compute the duty liability based on the findings and principles outlined.