TaxTMI 
TaxTMI 
TaxTMI 
2018 (11) TMI 1454
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.... Rs. 5,00,000/- under rule 25 of the Central Excise Rules, 2002. Redemption fine of Rs. 5,00,000,00 Rs. 56.03,851/- (approx) market value of seized goods. Rs.25,00,000.00 vide cheque no. 0125519 dated 04.10.2011 drawn on M/s HDFC Bank M/s Hindustan Perfumers Rs.7,37,469.00 including Education Cess amounting to Rs. 14,320.00 and Higher Education Cess amounting to Rs. 7,160.00 Rs.7,37,469.00 on the Appellant firm u/s 11AC of the Central Excise Act, 1944 and of Rs. 1,00,000.00 under Rule 25 of the Central Excise Rules, 2002. Redemption fine of Rs. 1,00,000.00 Rs. 8,79,273/- (approx.) market value of seized goods. Rs.25,00,000.00 vide cheque no. 0123137 dated 04.10.2011 drawn on M/s HDFC Bank Delhi. Ankit Valecha, Partner of M/s Jovex International N.A Rs.6,00,000.00 on the Appellant under rule 26 of the Central Excise Rules, 2002. N.A Sunil Kumar Valecha Director of M/s Zever Marketing P. Ltd. N.A Rs.6,00,000.00 on the Appellant under rule 26 of the Central Excise Rules, 2002. N.A Rs.14,10,000.00/- Cash seized 3. M/s Jovex International (JI for short) is a partnership firm comprising of 2 partners Mr. Ankit Valecha and Mr Anshul Valecha, engaged in manufacturi....
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.... the course of search such certain documents were resumed. The inventory of the entire stock of finished goods and raw materials was prepared. The details are mentioned in the punchnama drawn on the said date 3 October 2011. The value of raw material was ascertained at Rs. 32,45,995/- and that of the finished goods at Rs. 21,46,344/-. The value of the goods was assessed on the basis of the invoices of the raw materials received by the appellant and the finished goods on the basis of MRP written on the packing material of the various products, manufactured and dispatched by the appellants. No stock register was found for proper account of raw materials and finished goods. Accordingly the receipt of raw materials, its issuance for production and subsequent clearance of the finished goods from the factory could not be correlated. The officers further found that the total turnover of the unit during the previous financial year 2010-11 was Rs. 1.45 crore approx., hence for want of correlation, the officer seized the stock of raw materials and the stock of finished goods, totally valued at Rs. 53,92,339/- (this includes the value of goods loaded on the tempo). It was informed that the st....
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.... the goods by Zever Marketing. That the sales turnover of the marketing company in the year 2010-11 was about 3.9 crores and the entire sales was through trading. That the goods sold were based on MRP valuation and the MRP was affixed by the manufacturers of those products, which were Jovex, Dux, etc. That no loan/advances are given to Jovex or dux and the entire purchase of Zever Marketing P. Ltd. were on credit basis. That there were no financial relations with the manufacturers - Jovex, dux etc. That the sales of his trading company during the period April 11 to September 11 (6 months) was approximately Rs. 1.6 crores. The seized goods and the tempo, where provisionally released vide the order dated 19 October 2011, against bond and bank guarantee. Further the goods seized, after considering all the relevant documents evidencing the legal possession of the goods of the brand Chinar and Darling having been effected by dux Shimla, that seizure was lifted on the goods. A show cause notice for the goods seized and cash recovered was issued, dated 2 April 2012. 11. The second show cause notice was issue dated 2nd May, 2013 invoking the extended period of limitation demanding duty an....
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....d Hindustan Perfumers have been purchasing the plastic containers/ packing material in which they pack their finished goods from M/s Talman Containees. The Revenue never interacted with the supplier of the packing material, to find out the quantities of the packing material supplied. Both the appellants have been procuring various raw materials such as corrugated boxes, hard boxes, tubes for manufacturing and packing of their finished products. Though enquires were made from suppliers of packing material but the same is not part of RUD as they have not supported the allegations of Revenue. iv. The process of manufacture of the appellants is mechanized, for which they need electricity also. There is no verification and/ or enquiry with respect to any mismatch in the quantum of usage of electricity and the finished goods manufactured. Neither any statements have been recorded from the staff connected with manufacturing. Admittedly, appellants have to maintain proper record of production along with details of batch of production, which is mandatory under the Drugs & Cosmetic Act, 1940. But the said records have been wholly ignored. v. It is alleged in the show cause notice that the ....
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.... erred in ignoring the categorical statement of Mr. Sunil Valecha, that the cash of Rs. 14.10 Lakhs, found from his residence, was the sale proceeds of ZMPL. Further there is no categorical admission of any clandestine manufacture/ removal. Although the Kacchi parchi/ loose slips were found from ZMPL, they have not been made co-noticee in the show cause notice. Hence the SCN is bad and defective for non-joinder of necessary party. 16. That in absence of any corroboration of the affairs of the appellant, with the said loose slip recovered from ZMPL, the whole demand of duty and penalty is fit to be set aside. There is no case of disproportionate consumption of any input like raw material, electricity, labour cost, etc. That the statements recorded-during investigation have no value as non of the witness of revenue were examined in the adjudication proceedings, as required under Section 9D of the Act. That the appellants were maintaining appropriate records of their transactions and production, as required of SSI unit. That it is also urged that the loose slips recovered from ZMPL were not packed & sealed, thus leaving scope for tempering. As such slips have got no evidentiary value....
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....owards clandestine clearance. The subsequent contention of Mr Sunil Valecha that the amount recovered at the time of search was partly out of family savings and partly was shagun money and not the sale proceeds of ZMPL is an afterthought. This is evident from recovery of cash and admission of Mr Sunil Valecha that he was selling goods on loose slips/Khacchi parchi also. He further submits that the demand is based on the said Kacchi parchi/loose slips which are corroborated by the incriminating statements under section 14 of the act which were not retracted subsequently. He further submits that for the purpose of calculation of tax the goods of the appellants are subject to labelled MRP and they are entitled to abatement of 35% as per notification No. 49/2008 - CE. Mr Ankit Valecha had admitted in his statement that transaction value of goods cleared to ZMPL was 30 to 35% of the MRP. He further states that the duty calculation chart as prepared by Revenue was shown to Mr Ankit Valecha who had signed the same in token of acceptance. Accordingly the Ld. AR for Revenue pray for dismissing the appeals. 21. Having considered the rival contentions, We find that the whole case of Revenue ....