TaxTMI 
TaxTMI 
2003 (3) TMI 663
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.... nails and barbed G.I wire in the guise of traded items namely M.S. Wire and G.I wire. 3. The said demand notice was adjudicated by Additional Commissioner vide o-in-o No. 66/CEX/99, dated 31-1-1999 confirming the duty demanded and also imposing penalty under Section 11AC, interest under 11AB of the CEA'44. Personal penalties were also imposed on the co-noticees. 4. An Appeal was filed before Commissioner (A) and the same was pending at the time of filing application for Settlement on 18-12-2000. 5. In the application filed for settlement the applicant admitted a duty liability of Rs. 5,24,000/- and sought adjustment of amount of Rs. 4,00,000/- already paid by them during investigation. The applicant(s) also sought immunities u/s 32K of the CEA'44. 6. Vide Interim Order No. 3/CE/2001, dated 9-4-2001, the applications filed for settlement were allowed to be proceeded with in terms of Section 32F(1) of the CEA'44. The balance admitted amount of Rs. 1,24,000/- was paid vide TR-6 challan on 3-5-2001. 7. A report on sealed cover contents viz. Annexure was received from the jurisdictional Commissioner, Central Excise, Pune-I on 29-10-2001. 8.&em....
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....at the goods cleared under the guise of trading are actually manufactured goods. 14. Final hearing in the matter was held on 5-2-2003. 15. The Applicants, M/s. Amboli Wires Pvt. Ltd., Shri Vasant Srirang Mane, Driver, M/s. Maharashtra Wire Company, Shri Surendra Bandu Jagdale, Director of M/s. Amboli Wires and Shri Vijay Pukhraj Parmar, Partner of M/s. Maharashtra Wire Company were represented by Shri A.G. Kulkarni, Chartered Accountant. Shri S.B. Jagdale, Director, also remained present. 16. The Ld. Chartered Accountant submitted that the last revised admitted duty liability of Rs. 6,10,927/- is the correct amount of duty of the applicants against the demand of Rs. 13,70,554/- raised vide Show Cause Notice dated 2-4-1998. It was further submitted that the applicants have also submitted the calculation chart vide their letter on 15-7-2002 and other circumstantial evidence such as electricity bill etc. to show as to how they have arrived at this conclusion. 17. It was submitted that the import of the Revenue dated February 2003 has been received only a few days ago. 18. Shri S.B. Jagdale informed that the raw materials M.S. Wire (lot of 80 kgs....
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....t on 28-10-2002 against the Commission's Interim order dated 9-4-2001. We have been informed by the Representative for the Revenue that the matter has not yet been heard by the Hon'ble High Court and no stay has been granted against the proceedings before this Bench. We proceed to settle this case being more than two years old because these proceedings have not been hampered by order of any Court. 27. It is the contention of the Revenue that the applicant has clandestinely cleared manufactured goods viz. M.S. Nails and barbed wire under the guise of trading invoices of M.S. Wire and G.I. Wire. Although at the time of removal of such manufactured goods from the factory, the applicant issued hand written Invoices indicating the correct description of the goods. After the goods reached their destination, they used to tear off the said invoices and issue fresh typed invoices and the description of the goods in the fresh invoices was shown as M.S. Wire, G.I. Wire, being traded goods. The said modus operandi has been admitted by the concerned persons whose statements are relied upon in the demand notice. However, it is pertinent to note that the applicant is also engaged in "genu....
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....es in which they are packed apart from consignee's name and transport vehicle number, if any. However, the fact remains that for the purpose of settlement of their case, the applicant themselves have identified certain invoices issued during the period 1995-1996, 1996-97 and 1997-98 which although have no corresponding documents co-relating them as manufactured goods but still have been accepted to be manufactured goods. Since genuine trading activity was also being under taken by the applicant which fact has been accepted by the Revenue, what remains is appreciation of available evidence. No doubt statements have evidentiary value but the statement recorded in the present case is not the only piece of evidence which the Revenue relies upon while raising the demand notice. A co-relation has been arrived with the loading book entries/delivery challans which have "explicitly", indicated the nature of goods covered under the invoices issued. In respect of the ones where no such co-relation is available, Revenue seeks to rely on the very same statement to push forward their claim. This we feel is not fully justified in the facts of the case before us. Further, Revenue also relies upon ....
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....respectively. However, on verification of sales invoices, as claimed to be "trading " in the work sheet submitted by the applicant, in none of the cases the goods are cleared in the multiple of 80 kg or 130 kg. Instead it was cleared either in the bundle/coil of 50 kgs or a bundle weighing 17-40 kg. This clearly indicates that the goods cleared under the guise of trading is actually manufactured goods. The segregation of manufactured invoices is done on the basis of facts mentioned above in the cases where no documentary co-relation is available." 35. We refer to the statement dated 5-2-1998 wherein Shri Surendra Bandu Jagdale, has given the following answers to the questions posed to him :- "Q.10. Briefly state the process of manufacture of wire nails and barbed wire. How the machines work? A. Wire nails are manufactured from wires in machines which first forms the head, draws it to its required length and cuts it to form the point. These 3 functions are performed sequentially and continuously. The nails so formed are collected and put into the polishing barrel to remove oil. The nails are next fed in gunny bags. Barbed wire is manufactured from G.I. Wire. Two ....
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....es from 17 kgs to 40 kgs. Incidentally, in the statement dated 18-10-1997, it is averred that barbed wire is sold in bundles of 25 kg to 35 kg each; (d) M.S. Wire are sold in bundles having weight which varies from 10 kgs. to 125 kgs; (e) G.I. Wire bundles are sold having weight varying from 35 kgs to 100 kgs. 39. It is the Revenue's contention in the report dated 3-2-2003 that they have relied upon "weight system" and the same holds good for all the invoices. Further, in respect of those invoices which the applicant claims are "trading invoices", in none of the cases, the goods are cleared in multiple of 80 kgs or 130 kgs, instead it is cleared either in bundle/coil of 50 kg or a bundle of 17 - 40 kgs. As such, these are also manufactured goods. 40. The point sorely missed by the Revenue is that the raw materials viz. M.S. Wire and G.I. Wire which are received in form of coils are not "Single coils" in running lengths weighing 130 kgs or 80 kgs. As informed by the applicant during the hearing, these coils having various gauges (thickness) are received in bundles which consist of 4, 5 or more individual coils tied toge....
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....000/-, they are directed to pay the balance amount of duty of Rs. 1,51,835/- within thirty days of receipt of this order. 2. Penalty on the applicant M/s. Amboli Wires Pvt. Ltd. :- We find that the applicant has on more than one occasion revised their duty liability inasmuch as they had in their application for settlement dated 18-12-2000 admitted an additional duty of Rs. 5,24,000/-, then revised the same to Rs. 7,06,099/- during the hearing on 18-6-2002 and later to Rs. 6,10,927/- in their submission dated 15-7-2002. The facts of the case clearly indicate that the evidences available with the Revenue are not concrete enough to demand the Central Excise duty of Rs. 13,70,554/- as has been alleged in the demand notice dated 2-4-1998. Both the applicant and the Revenue are unable to substantiate entry by entry that the invoices issued belong to either manufactured or trading activity. It is here that the applicant has come forward with a proposal of settlement and accepted Central Excise duty liability in respect of even those invoices where there are no co-relating documents available with th....