TaxTMI 
TaxTMI 
TaxTMI 
2015 (4) TMI 69
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....uty free raw materials i.e. different types of Copper scrap, Aluminium scrap and Brass scraps. On 27/28.04.2005, the Central Excise officers from the Department of Revenue Intelligence (DRI) visited the factory premises of the assessee, conducted stock verification and found shortage of 5.867 MT Zinc Scrap. The said officers also visited the premises of Appellant No. 5 and 7 and recorded the statements of various persons, partner of the assessee, transporters, Shri Kishorbhai Purohit, Manager of M/s. Sai Flipped Coil Pvt. Limited (Appellant No.8) and Shri Anil Sohanlal Jain, Power of Attorney holder of M/s. Vitrag Impex (Appellant No.6). 3. A show cause notice dated 30.6.2006 was issued to the assessee proposing demand of Customs duty alongwith interest on 203.428 MT of imported duty free raw materials used in the manufacture of finished goods, which was diverted in the local market and demand of Central Excise duty alongwith interest on 31.537MT and 64.902MT of finished goods cleared to M/s. Sai Flipped Coil Pvt. Limited and M/s. Vitrag Impex, respectively without payment of duty. It has also proposed confiscation of goods and imposition of penalties on the assessee and other app....
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....ted to supply in DTA to M/s. Vitrag Impex against the foreign exchange payments received from the Overseas. It is submitted that the appellants paid duty on the supplies in DTA. Learned Advocate drew the attention of the Bench to the relevant paragraphs of the Policy and various documents in respect of permission of the Central Excise authorities and Departmental authorities for supply of the goods to M/s. Sai Flipped Coil Pvt. Limited, Advance Licence holder and M/s. Vitrag Impex in DTA sales. It is contended that both the parties have admitted the receipt of the goods and the demand of Central Excise duty is not sustainable. It is further contended that according to the Department, the raw materials were used in the finished goods, which were diverted in the local market. As the demand of Central Excise duty were raised on the finished goods and therefore, demand of Customs duty on raw materials can not be sustained. He relied upon various decisions, as under:- (a) CCE vs. Sanjari Twisters 2009 (235) ELT 116 (b) Commissioner vs. Sanjari Twisters 2010 (255) ELT A15 (c) Vandevi Texturisers Pvt. Ltd vs. CCE 2007 (220) ELT 289 5 He also submits that the adjudicating authority mer....
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....ent of freight made in respect of the consignment received from the assessee, was found during the search. Shri Anil Sohanlal Jain, Power of Attorney Holder of M/s. Vitrag Impex (Appellant No.6), in his statement dated 27.2.2006 stated that the goods covered under various invoices issued by the assessee in their favour, were not received at all by them; that the said transactions were made at the behest of Shri Pratik Gandhi, partner of the assessee. The adjudicating authority also observed that the duty free raw materials procured by the assessee were not used for intended purposes. In fact, the finished goods manufactured out of imported duty free raw materials, were removed clandestinely without duty paying documents and in order to cover up the said illegal transactions, they have shown to have cleared the goods on deemed export basis or against the advance licenses. It is further noticed that in some cases, the duty free materials were diverted into local market without payment of duty. 9. As regards the clearances of goods to the quantity of 31.537MT of Aluminium ingots to M/s. Sai Flipped Coil Pvt. Limited, it is submitted by the appellant that they supplied the materials t....
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....xcise as sold by them as per permission of the Assistant Commissioner of Central Excise, Rajkot. 10. The assessee supplied the goods to M/s. Vitrag Impex as per Para 6.9(b) of the Policy against foreign exchange remittance received from Overseas upon payment of full duty. Relevant portion of the policy is reproduced below:- 6.9 Other Supplies in DTA : Following supplies effected from EOU/EHTP/STP/BTP units to DTA will be counted for the purpose of fulfilment of positive NFE:- (a) . (b) Supplies effected in DTA against payment from the Exchange Earners Foreign Currency (EEFC) Account of the buyer in the DTA or against foreign Exchange remittance received from overseas. 10.1 The assessee by letter dated 15.3.2004, sought permission from the Development Commissioner, Kandla Special Economic Zone, Gandhidham to sale the finished goods in DTA under Para 6.9(b) of the Policy against foreign exchange remittance received from M/s. Reza Overseas Metal Trading. The assessee also enclosed the letter of the overseas buyer with the said letter. By letter dated 21.3.2004, the Deputy Commissioner, Kandla Special Economic Zone, Gandhidham permitted the assessee to sale the goods to M/s. Vitra....
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....from where the goods were purchased as Shri Kishorbhai looked after the same. Shri Kishor Purohit, Manager of M/s. Sai Flipped Coil Pvt. Limited (Appellant No.8) in his statement dated 26.11.2005 and 30.11.2005 stated that they purchased Aluminium ingots and Aluminium scraps from the assessee against advance license and availed exemption from duty. He stated that Shri Satishbhai of M/s. Asia Metals was ordered for supply of Aluminium ingots and Aluminium scrap against advance license; they sent the copies of advance licenses, based on which they obtained permission from their jurisdictional Central Excise office and provided copy thereof to them; they had sent the original advance license with Release Advise issued from the ICD, Ahmedabad, where the licences were registered; based on which they sent them the goods as mentioned above; they also made entries of receipt in the respective statutory registers; they paid them the amount for the supply they received; the transportation charges were to be paid by them and they paid. In his statement dated 30.11.2005, it was further stated that they purchased raw materials for their factory from M/s. Asia Metals under four bills, details of....
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....e numbers are fictitious and are not capable of loading huge quantity, can the Tribunal overlook and ignore the evidence collected through investigation and brought on record. In the said case, the Respondent took a stand before the adjudicating authority in response to the show cause notice and submitted reply as under:- (1) There is no evidence with the Department that the raw material has been directed to some other destination, instead of being transported to the manufacturers factory/premises. (2) The payments were made through cheques/demand drafts. (3) Inputs in question have been used in the manufacture of final products which have been cleared on payment of duty. (4) The RT-12 returns have been assessed finally by the Range Officer, which contains all the documents including (the invoices under dispute) on the basis of which the Modvat credit has been availed and utilised. (5) The respondents had not played any role in the wrong mentioning of wrong vehicle numbers and the Modvat credit was passed rightly. The Adjudicating Authority vide its order dated 21.12.2004 held that the charges levelled in the show cause notice stands established against the respondents who in....
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....xport obligation under the advance license. Similarly, the supplies made to M/s. Vitrag Impex in DTA against receipt of foreign exchange. The appellants sought for permission for sale in DTA from the Development Commissioner based on the purchase order placed on the appellant by M/s. Reza Overseas Metal Trading of UAE for delivery of goods to M/s. Vitrag Impex. It is important to note that the said sale was made on full payment of duty. In view of the above materials, I do not find any justification to raise demand of Central Excise duty on the goods supplied to the said Companies. So, the demand of Central Excise duty alongwith interest and confiscation of goods and imposition of redemption fine in respect of supply of materials to the said two parties are not sustainable. 14. The other issue in these appeals is the demand of duty on the raw materials under the Customs Act and confiscation of the said goods and imposition of redemption fine. I find force in the submissions of the learned Advocate on this issue. The adjudicating authority observed that the raw materials imported by the appellant have been utilised by them in the manufacture of finished goods and the said resultant....