TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 241
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.... Doshi, Chairman & MD of M/s. Atco Rs. 50,00,000/- (Rupees Fifty lakh only) 3. Shri Sharad A. Doshi, Director of M/s. Atco Rs. 25,00,000/- (Rupees Twenty-five lakh only) 4. Shri Vineet A. Doshi, Director of M/s. Atco Rs. 25,00,000/- (Rupees Twenty-five lakh only) 5. Shri T.N. Patel Rs. 10,00,000/- (Rupees Ten lakh only) 6. Shri Jayesh C. Patel Rs. 50,000/- (Rupees Fifty thousand only) 2. As per facts on record, M/s. Atco Industries Ltd. are engaged in the manufacture of various products like Electronic Weighing Scale, poly carbonate bottles, Caps and plugs of PC bottles, time recorder, cash register, plant and machinery for purifying water and parts thereof etc. The dispute in the present appeal relates to clearance of poly carbonate bottles (hereinafter referred to as PC bottles) falling under Chapter Heading No. 3923.90 of Central Excise Tariff. It is seen that the said PC bottles were fully exempted from payment of duty under Notification No. 4/97 Central Excise dated 1-3-1997 and clearances were being affected by them, by availing the said notification as they fulfilled the conditions of the notification for no duty credit paid on the inputs as availed by them. Ho....
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....rejected P.C. bottles in the factory. (vi) All bottles covered by invoice Nos. 1 to 50 during March, 98 have been shown as transported only in two vehicles bearing RTO Registration No. DD03 A 9325 and No. DD03 A 9273. Both these vehicles are owned by M/s. Atco and are of similar size. (vii) When an experiment was made in the presence of panch witnesses, Shri Thakorbhai Patel, Dispatch Executive-cum-Authorized Signatory, and Shri Prabir Kumar Ghosh, Senior Manager, to load vehicle No. DD03 A 9325 to its full capacity, it was noticed that maximum 476 bottles could be loaded in the vehicle. However, a uniform 1500 or 2500 Nos. of P.C. bottles have been shown as cleared under each of invoice Nos. 1 to 50 in March, 98. (viii) Shri Thakorbhai Patel stated during the course of panchnama that statutory RG 1 Register from March '97 to March '98 for all commodities manufactured, except for P.C. bottles, was written by him on day to day basis and when he wrote the said Register, no entry was there on Page 20. The transaction dated 28-3-1998 on Page No. 19 was entered by Shri T.N. Patel in his own handwriting. Page No. 20 of the ....
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....f M/s. Atco, in his statement recorded on 2-12-1999, has deposed that he joined M/s. Atco at Daman on 19-3-1998 as Excise Assistant and that all invoices bearing Sr. No. 1 to 50 were prepared by him in his own handwriting during May, 1998 within two days only as per the directions of Shri Subramanium, General Manager. He has further stated that the said invoices were handed over by him to Shri Subramanium and that as per his knowledge the bottles mentioned in the said invoices were cleared after one month from the factory. The handwritings on these invoices have been confirmed to be of Shri Jayesh Patel vide Opinion dated 28-5-2000 given by the Asstt. Examiner of Questioned Documents, Handwriting & Photographic Bureau, Gujarat State, Ahmedabad. (xiv) Page 34 of one file containing pages 1 to 157 withdrawn from the office of M/s. Atco, Wadala, Mumbai, through panchnama on 17-9-1999 bears monthly sale in value terms effected from M/s. Atco, Daman, during May '97 and May '98. Shri Jayesh Patel in his statement dated 2-12-1999 has inter alia confirmed that the said statement of sales was prepared by him; that the sale value of P.C. bottles sold in the month of March '98 has been shown....
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.... corroborated by the Chartered Accountant's certificate certifying that the value of said 80,000 pieces stand included in the financial statement. (iv) That the statement of Shri Gopalsingh Ramsingh Bhandari, Security Supervisor deposing that no goods were received in the factory or removed outside the factory without being entered in the inward and outward register maintained by him, cannot be made the basis for holding against the appellant inasmuch as if 80,000 pieces of PC bottles cleared under invoice dated 2-3-1998 to 31-3-1998 are not reflected in the outward register, the same are also not reflected in the outward register for the month of June, 1998. As such, it becomes clear that such register does not reflect the correct position. (v) That Revenue relies on the statement of Shri Jayesh C. Patel, ex-employee of the appellant made on 2-12-1999 deposing that RG 1 register in respect of said 80,000 pieces was written by him in May and June, 1998 is not appropriate inasmuch as the said statement stands proved to be factually incorrect. According to the Revenue, out of total 82855 pieces claimed to have been cleared in March, 1998, the cle....
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....on No. 5/98-C.E., dated 2-6-1998. The Commissioner dealt with all the pleas and has rejected the same on various grounds. 7. We find that the dispute required to be resolved in the present appeal is as to whether the clearance of Poly carbonate containers, as reflected in the statutory documents in March, 1998, were infact cleared in June, 1998, by which time they attracted duty of excise. It is seen that prior to March, 1998, the appellant was manufacturing electric weighing scale and time recorders. It is only in March, 1998 onwards that they started manufacturing poly carbonated containers of 20 Ltr. capacity, which were classifiable under Central Excise tariff Heading No. 39.23 and were exempted from payment of duty of excise. As per the appellants' statement they started manufacturing the exempted products from March, 1998 onwards and prior to that date they intimated the Central Excise officer that they would start new invoice book containing invoice Nos. 1 to 50 for the exempted goods. As such, they used said invoice book for clearance of 80,000 pieces out of total 82855 number of poly carbonate containers recorded in their RG 1 register for the month of March, 1998. After ....
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....rm of any permission granted by Commissioner in terms of Rule 52A(6) of Central Excise Rules, 1944. 10. We find no merits in the above reasoning adopted by the Commissioner for rejecting the appellant's claim for having filed the letter. Admittedly the said letter carries the receipted stamp of office and also allots inward entry No. 04. Merely because the said letter and the inward register is not available in the office of the Assistant Commissioner in the year 2008 by itself cannot cast doubt on the said letter. The inability of the department to trace its own inward register cannot result in an adverse inference against the appellants. We note that the appellants in their reply to the show cause notice filed on 27-9-2000, referred to the said letter dated 6-2-1998 by which time the inward register would have been available with the department. No verification was got done at that particular point of time, neither was it contested by the Revenue that the said letter was not filed and is not available with the Revenue. As such, the Revenue's stand that this letter is not locatable in the year 2008, cannot be appreciated. 10. The appellants have further contended that the cleara....
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.... showing manufacture of 80,000 pieces in RG 1 register was prior to the entry of 2855 containers. If there is no dispute about manufacture and clearance of 2855 containers in the month of March, 1998, we really fail to understand how there can be dispute as regards the manufacture and clearance of 80,000 pieces which entry is appearing before the entry No. 2855 containers. Admittedly the appellants could not have anticipated that the exemption is going to be withdrawn with effect from 2-6-1998. The records were being maintained in the normal course of business and the said entry in March, 1998 appears before the admitted clearance of 2855 pieces, supports their stand that the said 80,000 pieces were actually manufactured and cleared in the month of March 1998 itself. 12. The appellants have also contended that production and clearance of said 80,000 pieces in March, 1998 were included and reflected in the provisional financial statement in the year ending 31-3-1998; which were published in the Business Standard on 1-6-1998 (the date prior to 2-6-1998) when the goods become dutiable. They supported the said statement when Chartered Accountant certificate certifying that the value o....
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....hat the entry in RG 1 register relating to 80,000 pieces finds its place prior to 2855 pieces on the same page of RG 1 register, which admittedly stand cleared by the appellants in the month of March, 1998. As such, the documentary evidence when compared to oral statement of Shri Jayesh C. Patel is to be given preference over the said oral statement. Even as per the said statement of Shri Patel, the entries in RG 1 register was made in May and June, 1998. The goods were exempted even in May, 1998 and it could not have been known to the appellants in May, 1998 that the same were going to be dutiable in June, 1998 so as to prepare the invoices for clearance of June, 1998 in May, 1998 itself and to show the clearance in March, 1998. There seems to be no convincing and conceivable reasons for preparing the invoices in May, 1998 showing the same for March, 1998, when the goods itself was exempted in May, 1998. 15. Similarly, the reasoning adopted by the adjudicating authority that the appellants were required to be issued invoice number consignment-wise and the vehicles could not carry the consignment, as shown in the invoices does not advance their case that the invoices were prepared....
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....eration. 18. The part of the demand stands confirmed against the appellant on the allegation and finding that they were indulging in clearance of fresh manufactured PC bottles, under the guise of repair/reprocessed bottles under Rule 173H of Central Excise Rules, 1944. For holding against the appellants, Commissioner has relied upon various evidence collected during the course of investigation as also on the statement of various persons. He has also observed that clearances were being effected to M/s. Atco Health Care Ltd., sister unit of M/s. Atco. He has referred to the ledgers maintained by M/s. Atco Health Care Ltd., which indicates purchase of 8364 PC bottles from M/s. Atco. On the other side, M/s. Atco have shown the clearance of said 8364 bottles under the invoices as 'return of rejected bottles after repair'. As such, he has held that appellants have cleared fresh manufactured bottles by showing them as rejected and repaired bottled. 19. The appellants in their appeal memo have contended that every time they received back the rejected bottles, an intimation under the erstwhile Rule 175H was filed with the Revenue and the same were duly accounted in the Form IV. Further, a....