TaxTMI 
TaxTMI 
2010 (12) TMI 1139
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....list of Fathima Panels. The slips showed prices of goods supplied by Fathima Panels under Invoice No. 013 and 014 both dated 12-4-2004. The details contained in the slip are as follows : M/s. Navin Glass & Plywoods, Davangere B/B & Plywoods :-  FP Comml. & Marine 12-4-04 19mm BB MR 7x3 09 189 @ 33/= 6,237.00 18mm Ply 8x4 10 320 7x4 10 280 20 600 @ 32.90 19,740.00 12mm Ply 7x4 25 700 @ 22.75 15,925.00 BWP Grade 19mm BB 8x4 49 1568 7x4 76 2128 6x4 08 192 7x3 21 441 154 4329 @ 40/ = 1,73,160.00 19MM Ply 8x4 35 1120 7x4 10 280 45 1400 ....
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.... given by him. Shri Abdul Salaam decided the prices of the goods and intimated the same to the dealers. Confronted with the slips recovered, he stated that he would examine the matter after going through the records and revert. Shri J.M. Ashraf was shown the slips recovered and he appended his signature in token of having seen them. Shri Manoj Kumar Amin, Marketing Executive of BA Group of companies, in his statement dated 6-5-2004 deposed that he collected orders from the customers and informed the same through Shri Salaam or through Shri Ashraf over phone and that he collected the sale consideration from the customers and handed over to Shri Ashraf/Shri Salaam. He stated that invoices were raised by the units of BA Group for lesser values than the invoiced amounts; the differential amounts were handed over to Shri Ashraf/Shri Salaam. He further stated that he had started M/s. Amin Timber and Plywood Agency, in his name, though no transactions were carried out. M/s. Kumar Plywood Agencies was started two years earlier and he had opened an account in the name of M/s. Kumar Plywood Agencies. M/s. Kumar Plywood Agencies did not transact any business. He periodically deposited amounts....
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....ed from M/s. Naveen Glass and Plywoods could not be a primary evidence to find undervaluation against the appellant. The purported pricelist was not seized from the appellant. The appellant had more than 25 dealers and other independent customers in the material period. Statements of only five dealers were recorded and relied upon. The Commissioner had relied on statements of witnesses which had been obtained under duress. These statements were retracted during cross-examination. The dealers categorically denied having received amounts in excess of invoice price. The dealers were forced to sign statements which were prepared and kept ready by the officers. The Current Account No. 1750 did not reflect any cash deposits except approximately Rs. 4,000/- in a period of three years. The theory that the assessee had collected excess amounts and arranged to deposit the same in the Current Account No. 1750 was conjured up by the investigation. The bank transactions involving the assessee had all been accounted for. The Order of the Commissioner was a non-speaking order in that he did not consider certain pertinent submissions made by the assessee. The investigating officers had not ascerta....
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....ve the allegation of clandestine removal with proper and cogent evidence. 3.2 The demand was barred by limitation. The mahazar drawn after documents were recovered was dated 28-4-2004. Show-cause notice was issued on 11-10-2006. The notice was issued after a lapse of 850 days from the date of knowledge and was not sustainable under the provisions of Section 11A of the Act. The assessee relied on several judicial authorities in support of this plea. For instance, in the case of TISCO Ltd. v. CCE [2006 (199) E.L.T. 855 (T)] where it was held that from date of visit of the revenue officers to the factory of assessee, department having knowledge about activities, but no show cause notice issued for a period of six months prior to that date, the demand was time barred. In the case of CCE v. Prashant Electrode [2006 (196) E.L.T. 297 (T)], it was held that show cause notice issued two years after completion of investigation was time barred. The department had invoked extended period in a casual manner. The expression suppression connoted a deliberate and conscious omission to state a fact with an intention of deriving wrongful gain as held in CC v. Tin Plate Co. of India Ltd. [199....
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....arbitrary exercise of power to make assessment on the basis of best judgment. 3.6 The very concept of transaction value impinged upon the fact that each transaction may have to be assigned an independent value. This fact is recognized in the provision by enacting that on each removal, the value shall be determined on the basis of the transaction value under Section 4. The impugned order ignores the above statutory principle and requirement. 3.7 The Commissioner had imposed penalties arbitrarily and the same were, therefore, not sustainable. Several decisions are cited to support the claim that penalty could not be imposed without establishing that the appellants were guilty of the alleged offences and allegations. The judgment of the Apex Court in the cases of Hindustan Steel Ltd. v. State of Orissa reported in 1978 (2) E.L.T. J159 (S.C.) and Akbar Badruddin Jiwani v. Collector of Customs [1990 (47) E.L.T. 161 (S.C.)] were, inter alia, relied on. 3.8 It is prayed that the impugned demand and penalties be set aside. 4. The Ld. Special Consultant appearing for the Revenue argued that undervaluation has been established with evidence and the impugned or....
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....p; He confirmed that he was in-charge of all the day-to-day activities of BA group of companies viz. Hajee Timber Complex, Fathima Panels and Thumbay Holdings Private Ltd. He explained the role played by S/Shri Ashraf and Manoj Kumar Amin. On showing 9 slips seized from the dealers, he offered to examine the matter after going through the records. He never came up with an explanation. Explaining the bank transactions, he stated that in order to meet their financial commitments, BA group of companies discounted cheques from M/s. Kumar Plywoods in their bank accounts and when the funds were arranged they were squared up. 6. Statements of S/Shri J.M. Asharaf, Manoj Kumar Amin. Shri Ashraf confirmed that the 9 slips recovered from the dealer, which clearly indicated the practice of undervaluation adopted by the BA group of companies bore his signatures but he had no comments to offer on the same. Shri Manoj Kumar Amin, in his statement, averred that the invoices were raised by the BA group for lesser values and the difference between the actual value and invoiced value was collected f....
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....thus well settled law that strict rules of the Evidence Act, and the standard of proof envisaged therein do not apply to departmental proceedings or domestic tribunal. It is open to the authorities to receive and place on record all the necessary facts though not proved strictly in conformity with the Evidence Act. The evidence must be germane and relevant to the facts in issue. In grave cases like forgery, fraud, conspiracy, misappropriation, etc. seldom direct evidence would be available. Only the circumstantial evidence would furnish the proof.... There must be evidence direct or circumstantial to deduce necessary inferences in proof of the facts in issue. There can be no inferences unless there are objective facts, direct or circumstantial from which to infer the other fact which it is sought to establish........ The standard of proof is not proof beyond reasonable doubt 'but' the preponderance of probabilities tending to draw an inference that the fact must be more probable. Standard of proof cannot be put in a strait jacket formula. No mathematical formula could be laid on degree of proof. The probative value could be gauged from facts and circumstances in a given case. The s....
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....ng lower prices in the invoices would have been in vogue for all clearances in view of the evidence gathered by the Revenue. 4.7 Revenue placed reliance on the following cases :- (a) Apex Court decision and observations in the case of CIT v. H.M. Esuf Ali & H.M. Abdullah - 90 ITR 271 SC, wherein, on the basis of private records pertaining to 19 days, projection of turnover for 355 days by the CTO was approved by the Apex Court. (b) The ratio of the decision of this Bench in the case of Gulabchand Silk Mills v. CCE, Hyderabad-II [2005 (184) E.L.T. 263 (Tri.-Bang.)] after weighing the evidence and upholding the extension of the charge of duty evasion to all the clandestine clearances on the basis of the circumstantial evidence is squarely applicable to the present cases. On the same rationale, extension of the charge of duty evasion on account of the clandestine activity of recovering amounts over and above the invoice prices, to all the clearances effected by the appellants is fully justified. (c) The private records which form the principal evidence have been vouched for and accepted by the employees/partners of various firms and thus have strong evi....
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....roup of firms revealed the modus operandi followed by the assessee of under declaring the excisable goods manufactured in the invoices for the purpose of paying duty and collecting excess amounts in cash. One of the witnesses opened a firm which did not do any business for two years but deposited huge amounts of money in its current account in Vijaya Bank, Bangalore. As per the account of the witnesses and the bank statements obtained by the investigating agency, funds deposited in Vijaya Bank were transferred to the accounts of BA Group of companies. If one is to go by the statements of various witnesses and other evidences gathered in the form of documents/chits, the assessee had not only undervalued the consignments by about 49.32% in respect of the invoices, details of which figured in the chit recovered, but also for the entire material period. However, the appellants have challenged such a finding in the impugned order on the basis that the same was arbitrary and not supported by reliable evidence. The objections raised are discussed below : 5.1 The statements of the witnesses had been obtained under duress. These were retracted during cross-examination. Therefore, th....
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.... or a Judge may order that such party be at liberty to inspect and take copies of any entries in a banker's book for any of the purposes of such proceeding, or may order the bank to prepare and produce, within a time to be specified in the order, certified copies of all such entries, accompanied by a further certificate that no other entries are to be found in the books of the bank relevant to the matters in issue in such proceeding, and such further certificate shall be dated and subscribed in manner hereinbefore directed in reference to certified copies. (2) An order under this or the preceding section may be made either with or without summoning the bank and shall be served on the bank three clear days (exclusive of bank holidays) before the same is to be obeyed, unless the Court or Judge shall otherwise direct. (3) The bank may at any time before the time limited for obedience to any such order as aforesaid either offer to produce their books at the trial or give notice of their intention to show cause against such order, and thereupon the same shall not be enforced without further order." On a perusal of this Section, it appears that in order to inspect or t....
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....oner quantified the duty liability of THPL to be Rs. 7.12 lakhs for a year, whereas even accepting the formula derived on the basis of a chit recovered from its dealer, the duty actually may work out to only Rs. 2.36 lakhs. In this case, the Commissioner enhanced the declared value by 49.32% across the board for all clearances. In any case, in respect of clearances not supported by evidence, as in the case of instances reflected in the documents recovered, the probability of undervaluation being to a different extent is very high. That introduces a definite element of arbitrariness in the demand. The Tribunal cannot pass such orders. 5.5 It is claimed that the demand was barred by limitation for the reason that the officers visited the premises of the dealer on 28-4-2004 but the show-cause notice basic to the proceedings had been issued sometime in 2006 and, therefore, the demand was time barred. We find that Section 11A provides for issuing show-cause notice for demanding duty not paid, short paid, wrongly refunded, etc. by reason of fraud, collusion or any misstatement or suppression of facts or contravention of any provisions of the Act or the Rules made thereunder withi....
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....e is entirely different from the concept of normal value. While the normal value can be notional, the transaction value is the actual amount transacted in respect of the goods. Of course, under certain circumstances, the transaction value has to be determined in accordance with the Rules. Anyhow, we would not go into that. Suffice it to say that for all the clearances after 1-7-2000, the value has to be determined based on each transaction. Therefore, the differential duty should be confined only to the evidences available on record. These are our two observations. Therefore, the Revenue's contention that uniformly for all the clearances, 70% should be added to the invoice value is not accepted. We reiterate our finding to say that for the period prior to 1-7-2000, the Commissioner has to decide' the normal price for each variety of goods and he can adopt the same for all the clearances. It does not mean that the invoice value has to be accepted. The normal price has to be determined based on the evidence available. 11.13 As regards the period after 1-7-2000, the Commissioner has to go strictly by the transaction value and decide the short levy. After deciding the different....