TaxTMI 
TaxTMI 
TaxTMI 
2019 (9) TMI 218
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....sue in this appeal is whether the appellants have clandestinely manufactured and cleared Hellogen Bulbs without payment of duty. The appellant company have got two units i.e. Unit-I and Unit-II . 2. The Unit-I is engaged in the manufacture of bulb shells for Automotive Bulbs and is a 100% EOU. Unit-II is a DTA Unit, which receives bulb shells from Unit-I and thereafter, they manufacture Automotive bulbs by further value addition involving the process of manufacture and clearing the same on payment of duty. 3. A case of duty evasion was booked by the department against the said Unit-I and, a follow up action was also taken in the appellant Unit, i.e., Unit II on 10.08.2005. As a result of the same, it was alleged that the appellant unit ha....
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....mmissioner adjudicated the show cause notice vide Order-in-Original No. 07/2007-JC dated 01.06.2007. The learned Joint Commissioner confirmed demand of Central Excise Duty of Rs. 14,27,268/- under Section 11A of the Central Excise Act, 1944 read with Rule 14 of the Central Excise Rules, 2002 along with interest imposed at appropriate rate under Section 11AB of the Act and imposed penalty of Rs. 14,27,268/- under Section 11AC of the Act on the appellant unit, imposed penalty of Rs. 2,00,000/- on Mr. Mahipal Gupta under Rule 26 of the Rules and imposed penalty of Rs. 1,00,000/- each on Mr. R. K. Mathur, Mr. K. K. Sharma, Mr. Inderjeet Singh [working in the appellant unit], Unit-I and Mr. Gopal Mathur [working in Unit I] under Rules 26 of the ....
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....e crux of the case is on two allegations: (i) The goods cleared by Unit-I (100% EOU) to Unit-II (DTA) were undervalued. (ii) Some goods were cleared clandestinely without payment of duty from Unit-I to Unit-II. 9. First we take up the charge of undervaluation. Unit-I has cleared Halogen Capsules to Unit-II for use in the further manufacture of Halogen Lamps. Since Unit-I as well as Unit-II belong to the same company with the common balance sheet, it is to be considered as transaction between related persons. Since the clearance is from a 100% EOU to DTA, the valuation of goods is required to be done as per Section 14 of the Customs Act, 1962 and duty is required to be paid in terms of proviso to Section 3(1) of the Central Excise Act,....
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....the cited import were only for import of samples and the consignment was only for 200 to 500 nos. whereas the quantity of goods cleared into DTA is in lakhs. The comparison of values can only be made in respect of consignments which compares in terms of identity of the goods as well as the quantity of the transaction. Hence, we find that this comparison is not a valid basis for rejecting the transaction value. 11. It is settled position of law that unless the transaction value is rejected for valid and cogent reason, the value of the imported goods cannot be re-determined. It has been held by the Hon'ble Supreme Court in the case of CC, Calcutta Vs. South India Television (P) Ltd.-2007 (214) ELT 3 (SC) that before rejecting the transactio....
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....l Manager of Unit-I also endorsed the statement of Sh. K.K.sharma. On the basis of these statements, the Department has alleged that the quantity of goods mentioned in the private records, which were not co-related with duty paying invoices, were transferred clandestinely without payment of duty. However, we note that Sh. Gopal Mathur, General Manager has "retracted" his statement. Other than the submissions of the person, there is no corroborative evidence on record to substantiate the stand of the Department that the goods reflected in the diary titled as "MONARK" were clandestinely cleared. The Department also has not carried out investigation regarding the purchase of extra raw material required for manufacture of such additional quanti....