TaxTMI 
TaxTMI 
2009 (4) TMI 755
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....r confiscation. He had imposed redemption fine in respect of each of these items. He had also imposed penalties on these parties, the details of which are also given in the tabular column. Sl. No. Appeal No. Name of the Parties Amount involved and period of dispute 1. E/1008/2006 M/s. Noble Ply v. CCE, Calicut Duty : Rs. 13,07,455/- Penalty : Rs. 13,07,455/- u/s 11AC & Rs. 5,000/ u/r 209A/26 1-10-1999 to 17-10-2002 2. E/1009/2006 K.S. Faizal Penalty : Rs. 5,000/- u/r 209A/26 3. E/1002/2006 M/s. Bhandari Doors & Plywoods v. CCE, Calicut Duty : Nil RF : Rs. 20,000/- Penalty of Rs. 5,000/-u/r 26 1-10-1999 to 17-10-2002 4. E/1003/2006 M/s. Neelkamal Laminates v. CCE, Calicut Duty : Nil RF : Rs. 10,000/- Penalty of Rs. 5,000/- u/r 26 1-10-1999 to 17-10-2002 5. E/340/2007 CCE, Calicut v. M/s. Noble Ply Rs. 1,92,95,946/- (Confirmed only Rs. 13,07,455/-) 1-10-1999 to 17-10-2002 4. The assessee M/s. Noble Ply are the manufacturers of plywood and plywood goods, which are excisable commodities. They have a factory at Kannur in Kerala and they have a depot in Bangalore. They have deale....
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.... of the computer was seized frorn the factory of the appellant M/s. Noble Ply. The said computer was sent to the Government Examiner of Questioned Document for retrieval of the deleted data. The deleted data were retrieved and the statements of Shri K. M. Premjitlal, Computer Operator and also others viz., Shri M. P. Narayanan, an employee of M/s. Noble Ply; Shri K. S. Mohammad Ali, Managing Director of M/s. Prestige Boards; Shri K. S. Faizal, Managing Partner, of M/s. Noble Ply; and also the statements of dealers of M/s. Noble Ply such as Shri Chandran Singh Rathore, Proprietor of M/s. Neelkamal Laminates, Hyderabad; Shri Kailash Bandari, Proprietor of M/s. Bhandari Doors & Plywoods, Hyderabad; Shri Sampet Kumar Khaitan, M/s. Agrasen Plywood, Hyderabad; Shri Subash Chandra Agarwal, Manager of M/s. Ajay Plywood & Laminates, Hyderabad were also obtained. After going through the documents and statements carefully, the Commissioner came to the conclusion that there is evidence for undervaluation of the goods cleared by the appellants. In fact, it has been recorded that Shri K. M. Premjitlal, Computer Operator had stated that pricelist at pages 42-43 contained the billing prices adopte....
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....s of M/s. Noble Ply. In the circumstances, I am constrained to decide that the department has demanded duty in respect of the transaction made by M/s. Noble Ply to all of their dealers/customers except the above-mentioned five dealers/customers on presumption and assumption only." While coming to the conclusion, he had relied on the following decisions : (i) Sharon Veneers v. CCE, Chennai - 2002 (146) E.L.T. 655 (Tri.-Chennai) wherein it is held that price slips recovered from one of several dealers of assessees cannot be relied upon to show that goods have been sold on prices indicated therein to all the other dealers. (ii) The decision of the Hon'ble Supreme Court reported in 1983 (13) E.L.T. 1546 (S.C.) that the department has to investigate all of the 40 dealers of the assessee all over of South India to prove under valuation and cannot plead that it is difficult to do so. (iii) Alfa Ceramics Industries v. CCE, Indore - 2002 (145) E.L.T. 454 (Tri.-Del.) wherein it has been held that evidence collected in respect of sales to Madhya Pradesh distributors about collection of part of sale price in cash over and abo....
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....rtner of M/s. Noble Ply and Shri Premjitlal to the effect that the price in page 45 is only maximum retail price and the customers were allowed discounts. The Commissioner has given a finding that the price shown in the page 45 is more than double the price shown in pages 42 and 43. It is strange to believe that the discounts allowed to the customers are more than double the basic price of the consignments. 6.6 In Para 53, he has given a clear finding that the statement of Managing Partner is a clear evidence to prove that the assessee was collecting amount over and above the invoice price in cash through their representatives with their knowledge consequent on his action of immediate readiness to pay differential duty towards part of the duty evaded by the unit as detected by the investigating officers. 6.7 In Para 54, he had also rejected the contention of the appellant that for the period prior to 1-7-2000, the normal price, which was available should be adopted. The Commissioner had held that the assessee was hoodwinking the department by showing lesser amount. Therefore, the normal price would be the value shown in the invoices plus the amount collected by them....
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.... department had conducted investigations only with one dealer as against six dealers appointed by the assessee. The percentage of dealers contacted is miniscule. Moreover, the department has not conducted any investigations with dealers in Karnataka, Maharashtra and Pondicherry. Therefore, the demand confirmed in the impugned Order-in-Original is on assumption and vague statements given by few dealers and is liable to be rejected. The following case-laws were relied on: (i) Sharon Veneers v. CCE - 2002 (146) E.L.T. 645 (ii) Somany Pilkington's Ltd. v. B. P. Verma (Director, Publications) -1995 (76) E.L.T. 281 (Del.). (iv) It was urged that there was no evidence of extra cash collection received by the appellants and its utilization. If the cash allegedly collected according to the department is to the extent of Rs. 7,30,419/-, the same ought to have been reflected in at least some of the documents of the appellants. No such evidence is available to show that the appellants had in fact collected the cash. In the absence of evidence to show that such a huge amount of cash was in fact collected by the appellant....
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....ear 1956-57 the Sales Tax Officer added to the turnover of the head office 200 percent. In regard to general goods and 500 per cent. In regard to sugar on the basis of secret books discovered there, and, though no secret books were discovered in respect of the branch office, made a similar addition in respect of the turnover of the branch office as well. Held, on the facts, that from the discovery of the secret accounts in the head office it did not necessarily follow that a corresponding set of secret accounts were maintained in the branch office. However, if secret accounts were maintained in the branch office, that might lead only to an inference- that the accounts disclosed did not comprehend all the transactions of the branch office, but that did not establish or even probabilise the finding that 135 percent or 200 percent or 500 percent of the disclosed turnover of the branch office was suppressed. That could have been ascertained only from other materials. The assessments were arbitrarily made applying a ratio between disclosed and concealed turnover in one shop to another shop of the respondent. It was only a capricious surmise unsupported by any relevant material and th....
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.... exists, sale price from the depot cannot be taken into consideration, as during the relevant period depots were not defined as a place of removal. Following the decision of the Apex Court in the case of CCE, Meerut v. Century Laminating Co. Ltd. (supra), it was held that enhanced price by depots cannot be considered for the purpose of assessment except for Calcutta depots. So far as Calcutta region is concerned, the Tribunal did not accept the contention of the appellant regarding the availability of factory gate price, as the trade practice was to charge different price in respect of buyers of Calcutta region as there are admittedly 10 instances where the goods were supplied from the factory directly at a price much lower but in all such cases, the cash amount was received over and above factory gate price. It would mean that in respect of all factory sales to Calcutta region, extra cash was collected over and above the factory gate price. In such a situation, factory gate price declared in Calcutta region as reflected in invoices has to be rejected and the extra cash amount received over and above the factory gate price has to be added to the assessable value. Relying on this ca....
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....d not offer any explanation to the vast difference between the billing price and actual consideration. The computer data with regard to the actual price has been corroborated by the statements of five dealers in this case. The Adjudicating Authority in terms of the decision of the M/s. Sharoon Veneers and M/s. Alfa Ceramics, demanded differential duty in respect of the clearances made to the buyers. Consequently, demand of interest was also ordered. 9.2 With regard to the appeals filed by the appellants, Shri Ramanan submitted the following: (i) Documentary evidence clearly establishes the existence of two pricelists. One listed the prices for billing purposes and the other actual sales realization. The two prices were with reference to two different units of measurement viz., square metres and square feet. (ii) Billing (invoice) prices were distinctly lower than the actual sales realization (i.e. price actually paid) - 40% in this case. (iii) Invoice price of appellant remained more or less at the same level during the period covered in the show cause notices. (iv) Duty was paid only on tha....
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...., amounts over and above the prices indicated in the invoices. This bristles with contradiction. (ii) The order also ignores the general practice adopted by the appellants to have two prices, one indicated on the invoices and the other the 'price actually paid', the difference between the two being recovered in cash. (iii) The uniform application of the prices shown in the two price lists was not denied by the Managing Partner. He was, however, not in a position to explain the substantial difference between the two prices. Nor was he in a position to show any evidence of differential discounts being given on higher of the two prices. (iv) Commissioner erred in requiring the department to prove, beyond all reasonable doubt, that in respect of all clearances the concerned buyers admitted payment of amounts in excess of invoiced amounts. This requirement set down by the Commissioner is contrary to the settled law that in adjudication proceedings it is sufficient if the charge is proved by a 'preponderance of probability'. (Apex Court's judgment in the case of D. Bhoormull and Tribunal's decision in the case of Gulabchand Silk Mills [2....
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....should be added to the invoice price to arrive at the sale price and determination of value done in terms of the Valuation Rules that existed prior to 1-7-2000. He rejected the argument advanced by the appellant saying that it is devoid of any merit. The normal price can be accepted only when such price is the sole consideration of sale. In this case, it is true that it is not the sole consideration. 9.6 Similarly, in respect of the clearances after 1-7-2000 also, the transaction value should be arrived at only after adding the extra amount received in cash to the invoice value. Therefore, it is fallacious to argue that a transaction value existed at the factory gate for the goods cleared after 1-7-2000 since evidences adduced have clearly established that it was incumbent on dealers/customers, who purchased goods from these units to pay substantial part of the actual sale realization by cash over and above the prices indicated on the invoices for each sale. Hence, by no stretch of imagination, it can be said that there existed a transaction value in terms of Section 4(1)(a) at the time and place of removal, in respect of the clearances effected by the units and that the sa....
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....f Revenue. But the Tribunal further held that 'evidence gathered has convincingly established that part of the sale price from the M.P. distributors have been collected by cash. Such evidence is lacking in respect of dealers in other areas. In such a situation, evidence, obtained in respect of sales to M.P. distributors cannot lead to the reasonable inference that similar was the case in respect of all sales in other areas also. In the present case, he stated that there is overwhelming evidence of the practice of undervaluation. 10. In view of the above submissions, Shri Ramanan requested the Bench that the appeals filed by M/s. Noble Ply and three others should be rejected as devoid of any merit and that the appeal filed by the Revenue should be allowed to confirm the duty demand as set out in the Show Cause Notice issued to M/s. Noble Ply and others. 11. We have gone through the enormous records connected with this case. The facts of this case have already been outlined elsewhere in the beginning of this order. Therefore, we feel that repetition can be avoided. Revenue has collected enormous documents to sustain the charges of undervaluation or under-invoicing in ....
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....ce, should be adopted. This is his main point. 11.4 As regards the period after 1-7-2000, he stated that the transaction value has to be adopted. That means, you have to go only by the evidence and where there is no evidence, he stated that the duty cannot be demanded only on presumptions and assumptions. 11.5 As regards the allegation of under-invoicing is concerned, we find that the investigation done is very extensive. They have confronted the officials of the assessee-company. They had also contacted certain dealers. They had collected a lot of incriminating documents. We do not want to list them again. They have been enumerated in Para 6 above. All these things have been discussed by the Commissioner in his order. Therefore, as far as the evidence for under-invoicing is concerned, we have to say that there is overwhelming evidence for under-invoicing. We cannot accept the learned Advocate's contention that there is no under-invoicing or corroboration and the entire demand is made on presumptions and assumptions. The depot officials themselves have accepted that cash in excess of the invoice value is being separately collected. In fact, according to the Revenue,....
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....alf. So, this case-law also cannot be applied here. He distinguished the other cases also. 11.8 Similarly, the learned Advocate for the assessees produced before us a large number of case-laws to show that the differential duty should be demanded only in respect of the clearances made to dealers, who have been investigated and who had given statement regarding excess collection. At this juncture, we would like to mention that we would not lilke to discuss each and every case-law, which has been cited by both sides because the fact in one case is not completely same or identical with the facts in the other case. The Hon'ble Supreme Court of India, in the case of CCE, Bangalore v. Srikumar Agencies - 2008 (232) E.L.T. 577 (S.C.) = 2008-TIOL-220-S.C.- C.X.-L.B, has stated in para 5 that, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper. They have also quoted the words of Lord Denning in this, which is as follows: "Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail....
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....with law. Once the normal price in respect of each variety of goods is decided, then that value should be adopted for calculation of duty. Once that is done, the differential duty can be calculated. Therefore, this cannot be done at the level of the Tribunal. All the evidences have to be examined. We make it clear that on the basis of the available evidence, the normal price should be decided by the Commissioner in respect of the goods cleared during the relevant period. Once that is done, that would be applicable to all clearances. We want to reiterate that even by the party's own submission, the normal price would be applicable to all the clearances made prior to 1-7-2000. Therefore, we have to remand the matter to the Commissioner for deciding the normal price in respect of each type of goods cleared by the party during the relevant period and compute the differential duty. Needless to say that the normal price would be arrived at in accordance with the law, which prevailed at that time. 11.11 As regards the period after 1-7-2000 for valuation, the concept of 'transaction value' has been introduced. In the concept of transaction value, each transaction is important. Ther....