Appeal remanded for revaluation of goods, breakages, and exemption claims under Notification No. 2/95.

The Tribunal remanded the appeal to the jurisdictional Commissioner for a de novo examination of the issues related to the alleged shortage of slabs, valuation of goods, and the applicability of Notification No. 2/95. The Commissioner was directed to verify the appellants' claims regarding breakages/wastages and re-evaluate the valuation and exemption claims based on the evidence provided by the appellants. The appeal was allowed by remand in these terms.

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Issues Involved:
1. Clandestine removal of irregular polished granite slabs
2. Valuation of goods
3. Applicability of Notification No. 2/95
4. Levy of additional duty under Section 3(1) of the Customs Tariff Act
5. Maintenance of RG 1 Register for breakages/wastages

Issue-wise Detailed Analysis:

1. Clandestine Removal of Irregular Polished Granite Slabs:
The appellants were accused of clandestinely removing 7917.1598 sq. mts. of irregular polished granite slabs without payment of duty. The Commissioner based this allegation on a stock verification conducted on 6-10-1994, which revealed a shortage in the RG 1 Register. The appellants contended that the shortage was due to breakages and wastages during the manufacturing process, which were not accounted for in the RG 1 Register. The Commissioner did not find this explanation satisfactory and concluded that the slabs were clandestinely removed. However, the Tribunal noted that the appellants had repeatedly claimed that the wastages were still lying in the factory premises and that the RG 1 Register for wastages had not been considered. The Tribunal remanded the case to the Commissioner to verify the existence and accountal of such breakages/wastages.

2. Valuation of Goods:
The appellants disputed the basis of valuation adopted by the Commissioner, arguing that the price of Rs. 1721.60 per sq. mt. for 'galaxy' variety slabs was inappropriate as they did not manufacture this variety. They contended that the price of similar products ranged between Rs. 450/- to Rs. 550/- per sq. mt. The Commissioner rejected the invoices submitted by the appellants and relied on the price of similar goods cleared by another EOU. The Tribunal directed the Commissioner to re-examine the valuation issue, considering the appellants' claims and allowing them to verify the sale invoices of Coromandel Granites.

3. Applicability of Notification No. 2/95:
The appellants claimed the benefit of Notification No. 2/95, which provides for concessional rates of duty. The Commissioner denied this benefit, stating that the appellants had not produced a certificate from the Development Commissioner certifying the fulfillment of conditions specified in the notification. The Tribunal allowed the appellants to present appropriate evidence to the Commissioner during the de novo proceedings to substantiate their claim for the benefit of Notification No. 2/95.

4. Levy of Additional Duty under Section 3(1) of the Customs Tariff Act:
The Commissioner held that the additional duty leviable under Section 3(1) of the Customs Tariff Act includes customs duty. The appellants argued that this additional duty is not the customs duty contemplated under Section 12 of the Customs Act. The Tribunal agreed with the Commissioner's interpretation that additional duty is a customs duty as per Section 12 of the Customs Act, relying on the Gujarat High Court judgment in Garden Silk Mills Pvt. Ltd. v. Union of India and the Bombay High Court judgment in Bralco Metal Industries (P) Ltd. v. Union of India.

5. Maintenance of RG 1 Register for Breakages/Wastages:
The appellants argued that the alleged shortage was due to breakages and wastages not accounted for in the RG 1 Register. The Commissioner noted that there was no mention of such wastages in the RG 1 Register for polished granite slabs. The Tribunal remanded the case to verify whether the appellants maintained a separate RG 1 Register for breakages/wastages and if the shortage could be attributed to these breakages.

Conclusion:
The Tribunal remanded the appeal to the jurisdictional Commissioner for a de novo examination of the issues related to the alleged shortage of slabs, valuation of goods, and the applicability of Notification No. 2/95. The Commissioner was directed to verify the appellants' claims regarding breakages/wastages and re-evaluate the valuation and exemption claims based on the evidence provided by the appellants. The appeal was allowed by remand in these terms.

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