TaxTMI 
TaxTMI 
2016 (10) TMI 871
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....,00,000/-. The revenue is partially agreed with the order passed by Commissioner (Appeals) and has challenged the same. Revenue's contention is that the Appellant Company is liable for payment of duty to the extent of Rs. 12,01,683/- and only duty of Rs. 3,84,525/- has been correctly dropped. The Appellant company has challenged the Order-in-appeal to the extent it holds duty and penalty against them. 2. Brief facts of the case are that the Appellant company is engaged in manufacture of medicines falling under Chapter 30 of the Central Excise Tariff Act, 1985. During the year 1997-98 and 1998-99 they were registered as SSI unit and were availing exemption from payment of duty in terms of Notification No. 8/98 dt. 02.06.1998 and 8/99 dt. 28.02. 1999 respectively. The officers of the Central Excise, Indore during their visit to the factory and office of the Appellant company, seized the commercial invoices, register containing details of sales and a chart containing details of sales. On the basis of investigation, the Appellant company was issued with the show cause notice dt.18.02.2003, alleging that the sales shown in commercial invoices were more than the sales as reflected....
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....66, the column no. 14, 15 and 16 are appearing blank, which clearly show that there is no evidence of removal of goods, receipt of payment or acknowledgment by the consignee of the receipt of goods. Therefore, the value of Rs. 40,99,056/- as shown by them in Annexure K1 for the year 1998 99 and value of Rs. 45,48,417/- in Annexure K2 for the year 1999 2000 annexed to the appeal memo is liable to be deducted. That even though the Commissioner (Appeals) has reduced the amount on account of repetition of entries or traded goods or sales tax amount, but he has not given any reason for not accepting their contention, in spite of the fact that except commercial invoices, no evidence of removal of goods was found and there was no affirmation of payment or acceptance from the alleged consignees. That the Commissioner (Appeals) has refused to accept their contention merely on the ground that the demand is sustainable on the basis of relied upon document which is erroneous. That when column no. 14, 15 and 16 were blank, it itself means that there was no evidence of removal of goods, receipt of payment and acknowledgment of receipt of goods by any buyer. Hence, the demand is not sustainable. ....
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....als) rejected their claim for non inclusion of said value only on the ground that details in form of payment by way of D.D. was mentioned in the chart. He also submits that the value of Rs. 9,91,071/- for the year 1998 99 and of Rs. 7,74,302/- for the year 1999 2000 as detailed in appeal memo is not sustainable, since the same was made on the basis of chart seized from their office with no corroboration with even any commercial invoice. That when there is no evidence of removal in case of such goods, no duty demand can be confirmed on such value. That the revenue never tried to ascertain as to whether any clearances were made against such entries from the alleged consignor. That it was not even verified as to whether any payment was received against such supply. That no such amount was found to be deposited in bank account even though the number of Demand Draft/ cheque was mentioned in the chart. He submits that the sale value of generic exempted medicines amounting to Rs. 9,84,601/-, which was exempted, already stands allowed to be deducted by the Commissioner (Appeals). 3.1 He submits that they had sought cross examination of the alleged buyers as well as transporters but the ....
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....as been accepted by the Commissioner (Appeals) and deduction granted to them. That the trading division was preparing commercial invoices just for showing or representing the customers that they are supplying goods, whereas there was no actual supply. Without any proper verification, it cannot be alleged that the goods were manufactured goods of the Appellant. They are also supplying medicines to government departments. As may be seen from the statement of Shri Arun Kharia and their appeal that there are numerous reason for preparing commercial invoices without actual supply. That the government undertakings in the course of inviting tenders for purchase of goods, stipulate conditions that the supplier should have been supplying satisfactorily the pharmaceuticals to the extent of at least 20% of the quantity manufactured against item specified in the schedule of requirement and that the bidder should furnish documentary evidence in support of the satisfactory performance, such as copies of sales invoices etc. and the same is apparent from the copies of tenders annexed to the appeal memo. That since the major work related to supply of medicines to government concerns, the Appellant ....
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....difference in balance sheet value and actual value is due to number of factors like trading activities and clearance of exempted goods. The show cause notice does not controvert the statement of Shri Arun Kharia in as much as he stated that the traded goods and exempted goods value is also included. Clearly the demand is flawed and having been made without any investigation, cannot be made from the Appellant firm. The show cause notice and the impugned order has contended that Shri Arun Kharia when shown the duty calculation charts for the year 1998 99 prepared on the basis of various documents viz. excise invoice and reports of follow up, accepted the authenticity of the chart and stated that he is ready to deposit the excise duty which is wrong. It can be seen from statement dt. 09.01.2003 of Shri Arun Kharia that in his statement he has clearly stated that he is not able to say anything on the basis of chart shown to him. That he be provided copies of relevant document on the basis of which chart was prepared and the copy of said chart, so that he could verify the same. That further when in the last question of his statement he was asked that the duty liability upon the Appellan....
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....ial invoice and the chart/register in some instances, there is no corroborative evidence towards removal of goods by the Appellant. Hence no duty can be demanded from Appellants. He relies upon the judgment in the case of CCE, CHENNAI Vs. DHANAVILAS (MADRAS) SNUFF CO. 2003 (153) E.L.T. 437 (Tri. - Chennai), S.T. TEXTURISER Vs. CCE, SURAT-I 2006 (200) E.L.T. 234 (Tri. - Mumbai), ESSVEE POLYMERS (P) LTD. Vs. CCE, CHENNAI 2004 (165) E.L.T. 291 (Tri. - Chennai). He submits that thus the demand against M/s Modern is not sustainable. He submits that the penalty against Shri Kharia has been rightly set aside as no removal was made without payment of duty. 4. Per contra, Sh. M.R. Sharma, the Ld. AR appearing for the respondent reiterates the ground of appeal supporting the Order in-Original and further submits that no deduction should be allowed to the Appellant concern. 5. Heard the ld. counsel for both the sides and perused the records. 6. I find from the available records that the Central Excise duty demand was confirmed by the authorities below based on the commercial invoice which are alleged to have been corroborated either with the transporter LR, follow up reports of the a....
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....t in case of entries alleged to be corroborated with Lorry receipts, not a single Lorry receipt has been brought on record nor any Lorry receipt was seized from any person or transporter. Though the statement of two of the transporters were recorded and relied upon but only two dispatch register were recovered which has not been corroborated with the Lorry receipt or commercial invoice. These Lorry receipts have not been confirmed by the consignees. Since the dispatch register of the transporter were not corroborated with the Lorry receipt or commercial invoices alleged to have been used for clearance of goods, therefore it cannot be said that the goods were transported. M/s Modern Laboratories had asked for the cross examination of the consignee, transporters and the witnesses. However the same was denied in the impugned order on the ground that it is tactics on the part of the assessee to prolong the case. I am of the view that the whole case was booked on the basis of follow up reports and other details as narrated above. Also except two transporter not a single statement of any of the person i.e. consignee of goods, other transporter was recorded. In that case, the Appellant sh....
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....mination was allowed to check veracity of confirmation; the demand cannot be made on such value. I further find that the Appellate Commissioner has held that value of Rs. 9,84,601/- for the year 1998 - 99 is not liable for duty as the goods were generic medicines and hence exempted from duty. Since this fact remains undisputed, I am of the view that no demand can be made on such value. I further find that the Commissioner (Appeals) has found the claim of the Appellant of deduction of Rs. 79,048/- and of Rs. 29,636/- for the year 1999 2000 as correct on account of goods being fully exempted. I therefore hold that this amount is not liable for duty. 8. Also I find that the even though the demand is mainly based upon the commercial invoices, but during investigation any excess production than recorded in books of the Appellant concern was not found. Further no excess raw material was found to have been procured. I also find that in case of excess goods found at the premises of the Appellant concern in the instant investigation, the Tribunal held that there was no attempt by the Appellant concern to remove the goods clandestinely. I therefore find that the duty demand against the Ap....