TaxTMI 
TaxTMI 
2015 (5) TMI 528
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....removal of frit by frit manufacturers and cleared to the Ceramic Tiles manufactures:- S. No. Appeal No./ Application Nos. Appellant Orders-in-Original Numbers i E/1851/2010. Nahar Colours & Coatings Limited OIO-11/VDR-II/NAHAR/D-BRH/COMMR/2010 ii E/1852/2010. Raj Surana OIO-11/VDR-II/NAHAR/D-BRH/COMMR/2010 iii E/1853/2010. Manish Nahar OIO-11/VDR-II/NAHAR/D-BRH/COMMR/2010 Iv E/1854/2010. Manikchand Nahar OIO-11/VDR-II/NAHAR/D-BRH/COMMR/2010 v E/1926/2010. Supreme Glazes Pvt. Limited OIO-13/VDR-II/SUPREMEGLAZES/DBRH/COMMR/2010 vi E/1927/2010. Shailesh Dahyabhai Patel OIO-13/VDR-II/SUPREMEGLAZES/DBRH/COMMR/2010 vii E/1928/2010. Dhulabhai Motibhai Patel OIO-13/VDR-II/SUPREMEGLAZES/DBRH/COMMR/2010 viii E/534/2011. Vishwa Glass & Ceramics Private Limited OIO-32/VDR-II/MP/VISHWA/DBRH/ADJ/COMMR/2010 ix E/535/2011. Pradip P Patel OIO-32/VDR-II/MP/VISHWA/DBRH/ADJ/COMMR/2010 x E/672/2011. Prime Ceramics Pvt. Limited OIO-03/BRC-I/MP/2011 xi E/673/2011. Rasikbhai Gordhanbhai Kanani OIO-03/BRC-I/MP/2011 xii E/674/2011. Dhirajlal Hansrajbhai Bathani OIO-03/BRC-I/MP/2011 xiii E/751/2011. Gibraltar Glass & Ceramics Pvt L....
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....in the show cause notices issued to the appellants:- (i) That in January 2008, DGCEI officers conducted certain investigating regarding large scale Central Excise duty evasion by Ceramic/vitrified tile manufactures of Gujarat, located in Morbi and Himmatnagar. (ii) That as per the investigation conducted, these tile manufactures were indulging in large scale undervaluation and clandestine removal of the tiles manufactured. (iii) That huge amount of extra cash was alleged to be received by the manufactures of Frit through Shroffs and Angadias. That this extra cash was generated by selling the Ceramic tiles at much higher prices than the printed MRP at which the tiles were sold by the dealers of Ceramic tiles. Part of the such extra cash amounts collected by the dealers and distributers was spent by the dealers to meet some undeclared expenses and the remaining cash amounts collected by the dealers of Ceramic tiles were either personally collected by the authorized representatives of the frit manufactures from the dealers or by frit manufacturers sales personnel during their visit to the dealers or through Shroffs and Angadias. (iv) That the most common method used ....
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....ating authorities to include extra cash payments made to various frit manufactures to compensate undervaluation and also with respect to frit clandestinely removed. Even in one CD, stated to be produced by Director of SANYO, it was alleged to include payments shown to have been made to Spenta Ceremics but were not reflected in the ledger of Spenta and was also unaccounted payment to the appellants on behalf of SANYO. (xvi) The orders-in-original also rely upon the consumption of natural gas used by the manufacture of frits for manufacturing one unit of frit. Revenue relied upon the statements of the manufactures of frit that for manufacturing 1MT of frit a specific quantity of Natural gas is required by frit manufacturers which is claimed by lower authorities to have been admitted by frit manufacturers. Applying the average quantity of Natural gas consumed it is estimated by Revenue that there is also huge clandestine removal of frit by the Frit manufactures which is claimed to be supported by the Ajtak Ledger maintained by SANYO. (xvii) That it is also contended by Revenue that in the case of Belgium Glass Pvt. Limited vs. CCE, 55 units of electricity were required for....
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....ross-examination of Shri S.K. Katiyar, Superintendent, DGCEI before the Adjudicating authority in remand proceedings of Wellsuit Glass & Ceramics Pvt. Limited vs. CCE & ST, Vadodara [2014 (304) ELT 618 (Tri. Ahmd.)]. (v) That data contained in the folder AJTAK cannot be used for loading value of all the frit manufacturers due to improper Panchnama as held by Apex Court in A. Tajuden vs. UOI [2015 (317) ELT 17]. (vi) That cross-examination of the third parties like, Tile Manufacturers has not been allowed as per Section 9D of the Central Excise Act, 1944 and all those statements can not be relied upon as evidence in these proceedings in view of ; (a) Raj Ratan Synthetics vs. CCE [2013 (297) ELT 63 (Tri)] (b) Santosh Tobacco vs. CCE [2014 (311) ELT 365 (Tri)] (c) Pan Parag India Limited vs. CCE [2013 (291) ELT 81 (T)] (vii) That in the absence of cross-examination of the Director of SANYO, it will be legally improper to apply the data of Comet AJTAKand CD relied upon by the Adjudicating authorities. (viii) That corroboration of an evidence can only be done on the basis of evidences which itself is credible and conclusive. That no inference can be drawn on the pre....
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....ion value under Section 4 of the Central Excise Act, 1944. That Revenue can not adopt any best judgment valuation method as suggested in Central Excise Valuation Rules to arrive at such additional consideration even if all the statements/ documents relied upon are presumed to be admissible and correct. (xii) That quantity of Frit manufactured based on gas consumption is not scientific as appellants have also taken several steps to reduce the consumption of gas on the lines stated in Para 3.2 to 6 of the order passed this bench in the case of Wellsuit Glass & Ceramics Pvt. Limited vs. CCE & ST, Vadodara - (supra). Learned Senior Advocate made the bench go through the relevant paras of CESTATs order dated 31.3.2014 of this order to bring home the point that in Para 6 of this case law, CESTAT has already opined that the manner of calculating frit quantity manufactured based on gas consumption was not correct. It was his case that on this basis alone the appeals where clandestine removal are estimated, need to be allowed as further studies have not been done by the Revenue in any of these appeals,. It was also his case that calculations/ estimations made on quantity of electricity c....
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.... major and that only these major raw materials effect the price of the product. It was his case that the cost of minor materials (more than 20) used in making of frit can not be ignored as a minor raw material could be very costly and make a difference in the price of the finished frit and the ceramic tiles manufactured. (xix) Based on the remand proceedings in the case of Wellsuit Glass & Ceramics Pvt. Limited vs. CCE (Appeal No. E/13720/2014) case, learned Senior Advocate appearing on behalf of all the appellants also made the following submissions:- (a) That cross-examination was not extended of all the witnesses in spite of the specific directions by this Bench; (b) That tile manufacturers have stated that their statements were not voluntary and that they had neither made unaccounted purchases of frit nor paid any additional consideration to M/s. Wellsuit Glass. In this regard appellant relied upon the case law, A.Tajuden vs. UOI [2015 (317) ELT 177 (SC)] (c) That evidential value of AJTAK printout taken from pen-drives of SANYO and CD can not be admitted as per cross-examination done in the de-novo proceedings of Wellsuit Glass and the facts which came into light. ....
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....ch documents are commonly use in all offices. That no cross-examination of the author of these pads/ ledgers in the case against M/s. Nahar Colours and Coatings Limited & Others was extended. Learned advocate also relied upon the case of J.K. Cigarettes Limited vs. CCE [2009 (242) ELT 189] in the written submissions to argue that cross-examination of witnesses was not given as per Section 9D of the Central Excise Act, 1944 which is akin to Section 138B of the Customs Act, 1962. That the increase in the price of frit after April 2008 was because appellants started manufacturing DFFF (Double Fast Firing Frit) which is higher quality frit. That, same product code can also be sold at different transaction values depending upon the market conditions, relationships with the client and assessable value of the highest of such transaction values can not be made as the basis of valuation under the provisions of existing Section 4 of the Central Excise Act, 1944. That other factors for increase in price of frit after January 2008 are:- (a) Increase in the price of borax and boric acid, which are also imported by appellants. (b) Exchange rate increased from Rs. 44.00 to Rs. 50.00 p....
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....prices. That statements of dealers, Shroffs and Agandias also corroborate that excess cash was handed over to the frit manufacturers either through Shroffs/ Angadia or directly through individuals. That these statements clearly indicate that charges of undervaluation and clandestine removal are not only made on statements but also on the basis of corroborative evidences in the form of documents/ ledgers maintained by the appellants. 3.2 That statements of concerned persons have been retracted through affidavits and such retractions can not be accepted for the following reasons:- i) Cross examination of witnesses cannot be claimed as a matter of right. ii) Noticees took an inordinately long time to file their reply thus delaying the adjudication process. iii) No satisfactory case was made out justifying cross examination o the individual witnesses. iv) In most of the cases, the witnesses produced the records maintained by them or their firm and merely explained the entries made therein. Thus, they were only providing information on true facts relevant to the cases. v) No counter evidence was produced to rebut such documentary evidence. vi) Statements of ma....
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.... the statements were contrary to facts. (iii) Statements of manufacturers/dealers of tiles and shroffs in so far as it related to frit were never retracted. (iv) There is no dispute as to the recovery documents from the Noticees, wherever such recovery was made. (v) No evidence has been produced to establish that the statements were given under threat or duress. That in response to some inconvenient questions, the manufacturers maintained silence and in some cases, the deponents refused to offer any explanation to a fact which stared at their face. This clearly indicated that they were not under duress or threat to answer in a particular way. The argument that all the persons whose statements were recorded were under threat or duress or coercion is indeed far-fetched, given the fact that the number of such persons exceeded 70. Nor can it be said that draft replies were kept ready by the investigating officers since many facts were within the exclusive knowledge of the persons who gave the statements. In this context, reference may be made to Para 6 at page 9 of the Appeal filed in the case of Belgium. There is no specific allegation of threat/coercion. (vi) Statements w....
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....as justice in any proceedings given the specified set of circumstances. Otherwise it could be argued that in such circumstances the concerned statement should be discarded as evidence. (ii) Clause (b) of sub-section (1), on the other hand provides a tool to the Court to admit a statement in evidence in the interest of justice on the basis of examination of the person who gave the statement as witness. Thereupon, such a statement shall become relevant. The inference drawn of witness, followed by a cross examination, and admission of evidence before the same is held as relevant is not sound. It is well accepted that in adjudication proceedings there is no requirement of examination-in-chief and admission of each piece of evidence. (iii) In the instant cases, Section 9D has not been invoked. But for reasons recorded in the Orders the adjudicating authorities have formed an opinion to deny cross examination of witnesses. While this opinion may be set aside by the appellate authority for violation of principles of natural justice but denial of cross-examination cannot by itself render statements recorded under Section 14 of CEA, invalid. Nor can the statement be eschewed from cons....
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....ept by Sanyo in the normal course of business. Comparison with invoices issued by Frit manufacturers establishes the authenticity of Ajtak. Thus, the AJTAK Ledger retains its evidentiary value. Further, incriminating private records were recovered from 8 out of 14 frit manufacturers. Entries therein corroborated the practice of undervaluation and clandestine activity as revealed by the AJTAK ledger. In respect of 2 other frit manufacturers records similar to AJTAK were seized from M/s. Comet Ceramics. Hence, the present cases are not dependent only on entries in the AJTAKledger. 3.3.1 That valuation provisions since 01.07.2000 entail determination of transaction value for each clearance. Since such information is not available in the instant case the values declared in the invoices have not to be accepted. That as per Section 4(1) (a) of CEA, 1944, the value for the purpose of assessment on each removal of the goods shall in the case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer are not related, and the price is the sole consideration for the sale, be the transaction value. By definition, a necessary conco....
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.... on data furnished was considered. This matched with the norm suggested by the management. 4. Gibraltar Consumption norm of 258 SCM (Lowest Avg.) based on data furnished was considered. The norm suggested by the management was 280. 5. Belgium Consumption norm of 450 SCM (Lowest Avg.) based on data furnished was considered. 6. Growmore Consumption norm of 484 SCM (Lowest Avg.) based on data furnished was considered. The norm suggested by the management was 500. 7. Futura Consumption norm of 307.34 SCM based on observing a days production in respect of selected varieties of frit was considered. The norm suggested by the management was 310. 8. Wellsuit Consumption norm of 389 SCM based on test run in respect of selected varieties of frit. This was accepted by the management. Lowest Average consumption as per data furnished was seen to be 318 SCM and the same was taken as the norm. 9. Zirconia Consumption norm of 438 SCM (Lowest Avg.) based on data furnished was considered. The norm suggested by the management was 480. 10. SVM Cera The norm suggested by the management was 280. Consumption norm of 263 SCM (Avg.) based on tes....
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.... Nos. E/1926 to 1928/2010, E/534 to 535/2011, E/672 to 674/2011, E/751 to 752/2011, E/796 to 798/2011, E/13289 to 13290/2014, E/13646 to 13647, E/13720 to 13721/2014 and E/12386 to 12387/2014 are those where clandestine clearance of goods have been worked out on the basis of average consumption of natural gas used in the manufacture of Frits. In addition, value of grit manufactured by these manufacturers is proposed to be enhanced alongwith clandestine removal of frit on the basis of private records, pen-drives and CD recovered from the tile manufacturers. In addition personal ledger recovered from a tile manufacturers M/s. Comet and certain writing pads and diaries recovered from the tile manufacturers. 5.2 The issue involved in Appeal Nos. E/1851 to 1954, E/11960 to 11962/2013, E/13649 to 13651/2014 is only regarding enhancement of value of frit based on the pen-drive recovered from SANYO and writing pads recovered but no clandestine clearances have been estimated by investigation on the basis of average consumption of natural gas as done in the case of appeals mentioned in Para 5.1 above. 6. In these proceedings the following issues are required to be deliberated upon:- ....
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....tural gas consumption per day of 24 hours, the net output of ceramic frit per kiln per day by consuming 450 SCMs of gas would not be less than 8.888 MTs. In other words, the minimum monthly production of frit per kiln would be at least 266.640 NTs, and the total minimum monthly production for all the 5 kilns would not be less than 1333.200 MTs. 24.4.5. The above production of M/s. Belgium is fully substantiated from the Annexure F referred supra, wherein it is observed that during a period of 18 months out of the total 65 months covered therein, they have reported production of frit exceeding the quantity of 1300 MTs. In fact, during the month of July 2005, the recorded production quantity was 2574.500 MTs with a total gas consumption rate of 370.557 SCM per MT, which clearly reveals that the aforesaid calculated capacity of 1333 MTs is the barest minimum. Scrutiny of the chart, however reveals that during 15 months, they have declared production quantity less than 1000 MTs per month even with much higher rate of gas consumption. During 32 months, the total quantity declared by them in their statutory records was less than 1275MTs wherein also the gas consumption was exceeding t....
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....ore a capacity of around 1300MTs is justified. The other side of coin will be that appellant has also reflected a quantity of more than 1500MTs of Frit manufactured per month in the records. Such a depiction in the books of accounts gives a certification to the correctness of the data maintained by the appellant. The very fact that using gas consumption method and time taken for packing finished goods adopted by the lower authorities gives different estimations of manufacture and clearances by this appellant, the same can not be taken as a correct/ dependable method for calculating clearances and is also not prescribed. In the case of Belgium Glass & Ceramic Pvt. Limited, as per Annexure-F to the show cause notice dated 08.10.2009, gas consumptions of 383.715SCM and 321.959 SCM for manufacturing one MT have also been indicated in the records of the appellants alongwith higher consumption of gas. It is not understood as to why an arbitrary figure of 450SCM per MT is required to be taken for estimating the production/ clearance of finished goods Frits. In the same Annexure-F the units of electricity consumed in certain months is less than 55 units and is even as low as 40.153 units. ....
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....s reproduced below:- 38. It was, therefore, the submission of the ld. Senior Advocate that, in three cases cited by the ld. Special Counsel for the Revenue, this Tribunal and Honble High Court of Gujarat had taken a view that there was no need to prove such clandestine clearance with mathematical precision. These were cases where evidence was available regarding unaccounted duty paid goods being found, shortage of finished goods found and evidence regarding supply of raw materials and receipt of commission by brokers, which were all tangible evidence of clandestine clearances. It was further submitted by the ld. Senior Advocate that the cases cited by him were cases where no such evidence was available at all and the law laid down as applicable to such cases, to which category the present case belongs. 40. After having very carefully considered the law laid down by this Tribunal in the matter of clandestine manufacture and clearance, and the submissions made before us, it is clear that the law is well-settled that, in cases of clandestine manufacture and clearances, certain fundamental criteria have to be established by Revenue which mainly are the following : (i) There sh....
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.... basis for demand. There should be corroborative evidence by way of statements of purchasers, distributors or dealers, record of unaccounted raw material purchased or consumed and not merely the recording of confessional statements. A co-ordinate Bench of this Tribunal has, in another decision, reported in the E.L.T. issue of 5-8-2013 (after hearings in the present appeals were concluded), once again reiterated the same principles, after considering the entire case-law on the subject [Hindustan Machines v. CCE [2013 (294) E.L.T. 43]. Members of Bench having hearing initially differed, the matter was referred to a third Member, who held that clandestine manufacture and clearances were not established by the Revenue. We are not going into it in detail, since the learned Counsels on either side may not have had the opportunity of examining the decision in the light of the facts of the present case. Suffice it to say that the said decision has also tabulated the entire case-law, including most of the decisions cited before us now, considered them, and come to the above conclusion. In yet another decision of a co-ordinate Bench of the Tribunal [Pan Parag India v. CCE, 2013 (291) E.L.T. ....
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.... by the impugned orders, the respondents filed appeals before the Customs, Excise & Service Tax Appellate Tribunal, New Delhi. The Tribunal observed that it is settled principle of law that the electricity consumption can not be the only factor or basis for determining the duty liability, that too on imaginary basis, especially when Rules 173E mandatorily requires the Commissioner to prescribe/fix norm for electricity consumption first and notify the same to the manufacturers and thereafter ascertain the reasons for deviations, if any, taking also into account the consumption of various inputs, requirements of labour, material, power supply and the conditions for running the plant together with the attendant facts and circumstances. The Tribunal further observed that no experiment have been conducted in the factories of the appellants for devising the consumption norms of electricity for producing on MT of steel ingots. Tribunal also observed that the electricity consumption varies from one heat to another and from one date to another and even from one heat to another within the same date. Therefore, no universal and uniformly acceptable standard of electricity consumption can be a....
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....y of frit and made the gas consumption efficient. They also installed three new Refractory Kiln with greater production capacity and used superior refractories which were better maintained from time to time. He drew attention of the Bench to the fact that services of a Ceramic consultant was engaged to get better yield. He relied upon the submissions and records to show the purchase of new Kiln and generating set. It was due to these efforts that the ratio of gas consumption from 2008-09 onwards went down from 844 SCM/MT to 286 SCM/MT as indicated in Para 13.2 of order-in-original dated 10-5-2011. That before 2008 there was no generator available with appellant and every time there was a power failure, large quantities of gas was used in re-firing the Kiln. He produced documents relating to installation of DG Set. He referred to the purchase bills to show superior quality of refractories replaced in the Kilns after 2008-09. He argued that as per the statement of Shri Balkrishna Thakkar himself, which is recorded by the department, there cannot be any fixed ratio of gas consumption and that after the new management took over, they have improved the efficiency of the unit and that me....
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....uring one MT of any quality of frit. The improper method adopted by the Revenue for calculating duty was agitated by the appellants before the adjudicating authority as per Para 4(xi) to (xxxiii) of the order-in-original dated 10-5-2011. It is observed that during conducting of gas consumption studies on 23/24-2-2010 by investigation only frit product code OP 202was being manufactured. It has been contested by the appellant that different frit product codes may consume different quantities of gas. As the appellant is not undertaking the manufacture of one standard product, in the interest of justice, it will be appropriate to conduct a few more representative studies of different frit product codes in order to arrive at a more realistic gas consumption PMT of frit manufactured. 8.6 In view of the above observations made by this Bench it has already been held that method adopted by the investigation to estimate clandestine removal of finished goods is not sound and has to be discarded. However, Revenue was given an opportunity to strengthen their case by corroborating evicence with some more factual data from additional studies. No appeal has been filed by the Revenue against the....
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.....N. Thakkar (Superintendent) DGCEI in the cross-examination before the Adjudicating authority that when an article is seized, the same is placed in a sealed cover and mention of the same is made in the Panchnama. It is also admitted by Shri Thakkar that as he remembers the seized pen-drive was placed in a paper cover and sealed with adhesive tapes. It is the claim of the appellants that the way the said pen-drive was handled, it is possible that the same could be tempered with as the same was kept in the paper cover sealed with adhesive tapes. A second Panchnama was made on 30.8.2008 where the said pen-drive was mentioned to have been taken out of a sealed cover when the first Panchnama never mentioned keeping the said pen-drive in a sealed cover. It is also observed that on 30.8.2008 the sealed cover was opened but contents of the silver pen-drive were not opened on 30.8.3008 but instead another black colour pen-drive was opened. On 06.9.2008 under a Panchnama the said silver pen-drive taken out of the sealed cover and on opening this pen drive in the Tally Folder, no data was found to be available. However, under another Panchnama dated 12.09.2008, when the said silver pen-drive ....
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....Section 9D of the Central Excise Act, 1944 is reproduced below:- 9-D. Relevancy of statements under certain circumstances - (1) A statement made and signed by a person before any Central Excise Officer of a gazetted rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains, - (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the Court and the Court is of the opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceedings under this Act, other than a proceeding before a Court, as they apply in relation to a ....
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....possibility of filing appeal against such rejections. The ratio laid down by the J.K. Cigarettes case (supra) has also been followed in series of other judgments. No such rejection orders were given by the adjudicating authorities separately. Hon'ble Supreme Court in the case of UOI & Anr. vs. GTC India and Ors in order dated 03.01.1995 arising out of SLP (C) No. 218131/1994 has already laid the following ratio: Special leave granted. Heard. The impugned order dated 05.9.94 has to be read alongwith Section 9D of the Central Excise and Salt Act, 1944. SO read, there is no infirmity in the impugned order. It may, however, be clarified that in case reliance is placed on the provisions of Section 9D of the Act in respect of any particular witness, intimation of the same is required to be given to the respondents and it would be open to the respondents to approach the High Court against the order made by the authority in that behalf. That appeal is disposed of in these terms. No costs. Further in Para 16 and 19 of case law A.Tajudeen vs. UOI[2015 (317) ELT 177 (SC)] Apex court very recently held as follows on admissibility of statements and cross-examination:- 1....
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....ablish the guilt of the appellant, insofar as the violation of Section 9(1)(b) of the 1973 Act is concerned? In our considered view, even if the mahazar is accepted as valid and genuine, the same is wholly insufficient to establish, that the amount recovered from the residence of the appellant was dispatched by Abdul Hameed, a resident of Singapore, through a person who is not an authorised dealer in foreign exchange. Even, in response to the memorandum dated 12-3-1990, the appellant had acknowledged the recovery of Rs. 8,24,900/- from his residence, but that acknowledgment would not establish the violation of Section 9(1)(b) of the 1973 Act. In the above view of the matter, we are of the opinion that the execution of the mahazaron 25-10-1989, is inconsequential for the determination of the guilt of the appellant in this case. In view of the above, by not allowing the cross-examination of the relied upon witnesses under Section 9D of the Central Excise Act, 1944, the evidentiary value of such statements does not survive and is required to be discarded. We accordingly hold so. 11. It is also the case of the appellants that all the transactions are made by the appellants at the....
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....ain additional consideration coming to the appellant by way of cash flow from the tile manufacturers to the frit manufacturers is required to be added to the assessable value. In the present circumstances and factual matrix the exact amount of such additional consideration was required to be determined for addition to the transaction value even if all the statements and documents were held to be admissible evidence and satisfied the test of Section 9D of the Central Excise Act, 1944. In Appeal Nos. E/11960/2013 and E/12386/2014, the valuation has been enhanced solely based on the assumption that after booking of the case these appellant enhanced their prices. In the case of transaction value realm the same product can be sold at different prices as per Section 4 of the Central Excise Act, 1944 unless actual additional consideration has been shown to have flown back to the appellants. Appellants in these appeals and in Appeal Nos. E/13720/2014 and E/534/2011 have also not admitted during investigation that they have received any additional consideration. In other appeals on the issue of undervaluation investigation attempted to show the flow back of such additional cash flow through....