TaxTMI 
TaxTMI 
2020 (1) TMI 997
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....gainst Order-in Original No. SUR-EXCUS-001-COM-064-14-15 dt. 28.11.2014 passed by Commissioner, Surat - I. M/s JSFPL are engaged in manufacture and trading of furniture classifiable under chapter 94 of the CETA, 1985. The brief facts of the case are that pursuant to investigation against M/s JSSPL on the ground that they are clearing goods under the brand name "Jalaram" and not paying duty on their clearances, the officers visited and carried out search operations at following premises: (i) Factory premises of M/s JSFPL situated at Plot No. 1, Shri Ram Industrial Estate, Laskana, Kamrej, Surat. (ii) Corporate office of M/s JSFPL cum retail outlet M/s Jalaram Furniture, 1,Mangalwadi, Jalaram Estate, Kapodara, Varachha Road, Surat; (iii) Residence premises of Shri Govindbhai Patel, M.D of M/s JSFPL. (iv) Factory premises of M/s Hiral Furniture. (v) Factory premises of M/s Trimurti Steel industries cum retail outlet of M/s Jalaram Furniture (vi) Factory premises of M/s Hardik Steel Furniture and retail outlet of M/s Jalaram Furniture (vii) Factory premises of M/s Hariom Steel industries cum retail outlet of Jalaram Furnitu....
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.... Industries earlier engaged in manufacture and sale of steel furniture was not functioning at that time and Shri Karshanbhai was owner of said unit; that M/s Jalaram Furniture was a Partnership firm engaged in purchase and sale of furniture item; that he himself, his son Shri Rajnibhai G. Patel, Smt. Binalben Rajinibhai Patel (wife of Shri Rajnibhai) and Smt. Dhrutiben Rajeshbhai Patel were the partners in said firm. 3. During course of search at premises of Hariom Steel Industries, Valsad it was found that the firm was engaged in manufacture of steel furniture. The documents were withdrawn and four cabinets bearing brand name "Jalaram" said to be received without bill from M/s JSFPL were seized. The officers also found 102 steel items valued at Rs. 6,87,870/- said to have been received from M/s JSFPL and the same were seized as they could not produce and purchase bill. During search at premises of M/s Hardik Steel Furniture, Proprietorship firm of Shri Mansukhbhai Bhagvanjibhai Vaishnav, Manager Shri Rajesh Rasiklal Mamotra informed that they are selling furniture manufactured by them as well as imported furniture Purchased from M/s Parin Furniture Surat. It was also found that....
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....mleshbhai Nagjibhai Patel, Partner informed that the firm is engaged in trading of wooden and steel furniture and most of the items were manufactured by M/s JSFPL, Laskana and its associated unit in Surat. Shri Patel informed that the furniture has been procured from M/s JSFPL and its associated companies M/s Hiral Furniture, M/s Ambika Steel Industries and other associates. That the items sometime bear the name of "Jalaram" and sometimes it is not mentioned on small items like table and other furniture items like sofa, bed etc. The records/ documents were seized under panchnama. Shri Kamlesh could not furnish any purchase invoice and hence the goods found in said premises valued at Rs. 4,18,851/- were put under seizure. In his statement dt. 06.04.2012 Shri Kamlesh also informed that apart from M/s JSFPL, they are also engaged in purchase and trading of furniture items from other furniture manufacturers and traders. 4. Search was also conducted at Gopal furniture in presence of Shri Rajkumar Hemnani, authorised signatory who informed that since 2007- 08 they have purchased powder coated steel cupboards from M/s JSFPL on couple of occasions and also produced the bill. One paper s....
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....at during search at factory premises of M/s JSFPL files containing Order Acceptances cum Work Orders for the F.Y 2008-09 to F.Y 2011-12 were seized. M/s JSFPL has issued Order acceptance cum work orders for 2008 - 09 to 2011-12. The items mentioned therein were manufactured by M/s JSFPL. On comparing these orders acceptance cum work orders with the aforesaid four types of invoices of corresponding period it appears that the details narrated therein are almost matched with each other which shows that these work orders have been executed by M/s JSFPL and items therein have invariably been manufactured by M/s JSFPL and cleared under tax Resale Invoice. Shri Rajesh Patel director of M/s JSFPL in his statement dt. 21.12.2013 admitted the above fact. M/s JSFPL has shown purchase and clearance of some of the items manufactured by M/s JSFPL as traded items only on paper just to keep the clearance value below 1.5 crores to avail SSI Exemption under Notification No. 8/2003 - CE dt. 01.03.2003. 7. That from the data retrieved from the pen drive and CPU seized from factory premises of M/s JSFPL it appears that M/s JSFPL in addition to the above has manufactured and cleared various items und....
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....ption limit under Notification No. 8/2003 - CE dt. 01.03.2003 as amended at the end of each financial year to avoid payment of duty. That Shri Rajesh Patel, director has confessed in his statement dt. 21.12.2013 that they have evaded central excise duty. That the proprietors/ Partners of six group firms (i) Shri Rajnibhai G. Patel, Partner of M/s Jalaram Furniture, Surat (ii) Shri Karsanbhai B. Patel, Director of M/s JSFPL and Proprietor of M/s Jalaram Steel Industries, Surat (iii) Shri Ramesh M Patel, Partner of M/s Hiral Steel Industries, Surat (iv) Shri NagjibhaiMuljibhai Patel, , Proprietor of M/s Trimurti Steel Industries, Navsari (v) Shri Jayantibhai R. Patel, Partner of M/s Hariom Steel Industries, Valsad (vi) Shri Mansukhbhai B. Vaishnav, proprietor of M/s Hardik Steel Furniture in their statements have accepted to have shown manufacturing & sale of goods just on paper but the goods have been manufactured by M/s JSFPL and thus all the firms have knowingly concerned themselves in evasion of duty. In view of above it was proposed to demand and recover central excise duty of Rs. 1,64,42,851/- on Wooden & Steel furniture cleared by M/s JSFPL. It was also proposed to adjust the ....
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....lear that M/s JSFPL were taking orders from customers as per their item catalogue as well as specific orders which were not in their catalogue and then place order to other manufacturers. Further in his statement dt. 27.08.2012, he elaborated the items manufactured by various entities. Hence in such case the contention of the revenue that the own manufactured items were cleared under the tax resale invoice and Retail Resale invoice is incorrect. 10. He submits that the revenue has also taken a ground that the Order acceptance form shows that the order was given to the factory of M/s JSFPL for manufacture of furniture. He submits that the order acceptance form is common format and cannot be made basis for alleging that the goods were manufactured by M/s JSFPL. The order acceptance form only acknowledges the receipt of amount and common intimation of issue of work order to their factory. However on this basis, it cannot be alleged that the goods were manufactured by M/s JSFPL. He lists out the documents submitted at the time of reply to show cause notice which shows the goods which could not have been manufactured by M/s JSFPL. He submits that M/s JSFPL were selling their products....
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....nvoices by our own firm M/s Trimurti Steel industries to M/s JSFPL, Surat without manufacturing and clearance of goods during the F.Y 2008 - 09 to 2011 - 12. Whereas Shri Karsanbhai B Patel is proprietor of M/s Jalaram Steel Industries but in his statement "M/s Trimurti Steels" is written which shows that the statements were made under dictates of officers. Karsanbhai Patel has given statement as per the dictates of the officers just to buy piece of mind. He is only 8th standard pass and cannot read and write English. It was not possible for him to read/ write English. The signature was made by him in Gujarati. The statement is thus not voluntary but as per dictates of officers and cannot be made basis for demand. M/s Jalaram Steel Industries was established in year 1998-99. The Turnover in three years viz. F.Y 2008 - 09, 2009 - 10 and 2010 - 11 was Rs. 65,71,419/-, 85,09,740/- and Rs. 85,05,103/- respectively and was thus above tax audit limit u/s 44AB of Income Tax Act, 1961. The books were audited by the Chartered Accountant. The figures of Balance Sheets itself show that the manufacturing activity was carried out by said firm. The factory was on rent which was submitted before ....
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....le bill of furniture sale, transportation bill, creditor confirmation certificate and Ledger of M/s Jalaram Steel Industries in books of M/s JSFPL. 13. In case of Hiral Steel Industries, he submits that during search itself it was found that the unit was engaged in manufacture of Steel cupboards, Industrial lockers, steel beds, steel office tables, book cases, cabinets, tubular chairs, mobile storage, steel cabinet rack, sliding door unit, magazine almirah cum display stand etc. The statement of Shri Ramesh M Patel, partner to the effect that the goods were manufactured by M/s JSFPL was recorded as per the wish of the officers. The panchnama dt. 23.03.2012 at Hiral steel Ind. itself states that manufacturing activity was going on and Shri Vallabbhai M. Kachi, Partner informed that firm is engaged in manufacture of Steel cupboards and selling the same under "Jalaram" brand. The statement of Shri Ramesh is not based upon actual facts. Shri Ramesh is only 9th standard pass in vernacular language and cannot read/ write English. He relies upon tax audit report, VAT returns, DIC registration, wage register, creditors ledger, sample bill of raw material purchase, transportation bills, ....
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....r manufacturing. A person of normal prudence would never indulge in such exercise to save any tax when his own turnover is below the SSI exemption limit. The five manufacturing units have their own factory with equipment and machinery and the allegation made by revenue is not sustainable. There is no evidence that M/s JSFPL has manufactured the goods in question. The confessional statement of director of M/s JSFPL cannot be considered as corroboration to the statements of partners of the units is absent. Mainly the in culpatory statements were recorded on same day i.e. 21.12.2103 and were made basis of making allegation against the Appellant company and that too without any corroboration. 16. He submits that the demand based on statements are not sustainable as M/s JSFPL had sought cross examination of partners of units whose statements were relied upon. However the same was not provided. In absence of same the statements cannot be relied upon. He relies upon judgments in case of Narendra B Jain 2014 (304) ELT 563 (TRI), Anil PannalalSarogi 2009 (241) ELT 219 (TRI), Sai Kripa Exim P, Ltd. 2003 (156) ELT 225 (TRI) and Super King Manufacturers (Tyres) Pvt. Ltd. 2012 (286) ELT 637 ....
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....e against M/s JSFPL on the ground that they have shown their own clearances as being manufactured and cleared by other units as well as sold own manufactured goods under resale invoices by showing the same as traded goods. The show cause notice has placed reliance upon the statements of partners/proprietors of units and statement of director of M/s JSFPL. It is also alleged that the Order Acceptance cum work order shows that the goods were manufactured by M/s JSFPL. Also that the scanned images of estimate chits and from the statement of Shri Rajkumar Hemnani shows that the goods mentioned on such estimate slips were cleared by M/s JSFPL without payment of duty. That the estimate chits match with the note book seized from the factory premises of M/s JSFPL. Further that the Partners/ Proprietors of the co-appellant firms in their statements dt. 21.12.2013 have confessed that the furniture shown by them as cleared on invoice were infact manufactured by M/s JSFPL and cleared by M/s JSFPL under the cover of Retail Resale Invoices or Tax Resale Invoices. 22. As far as allegation of non manufacturing of goods by the units in which the co-appellants are Partners/ proprietors are concer....
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....l furnitures, Shri Priyank Shah, authorised signatory informed that they have purchased furniture of 'Jalaram' brand from M/s Hiral Furniture. In case of M/s Jalaram Furniture, a Partnership firm, the Partner Shri Kamleshbhai informed the officers that 'Jalaram' brand furniture are being received either from M/s. JSFPL or its associate companies viz. M/s Hiral Furniture or M/s Amibika Steel Industries. The panchnama dt. 23.03.2012 at Hiral steel Ind. itself states that manufacturing activity was going on and Shri Vallabbhai M. Kachi, Partner informed that firm is engaged in manufacture of Steel cupboards and selling the same under "Jalaram" brand. In case of M/s Jalaram Steel Industries, Shri Govind Patel's statement was recorded wherein he stated that M/s Jalaram Steel Industries were earlier engaged in manufacture and sale of steel furniture but were not functioning at the time of investigation and Shri Karshanbhai was owner of said unit. He also informed that M/s Jalaram Furniture was a Partnership firm engaged in purchase and sale of furniture item; that he himself, his son Shri Rajnibhai G. Patel, Smt. Binalben Rajinibhai Patel (wife of Shri Rajnibhai) and Smt. Dhrutiben Rajes....
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....e allegation of non manufacture of goods by the associate manufacturing units was made without appreciating the panchnama/ statements and records. The show cause notice and the adjudicating authority has mainly relied upon the statements of Partners/ Proprietors which were recorded mainly on 21.12.2013 and some other statements. We are of the view that even if some of the statements which were recorded at later date are in culpatory, even that the same cannot be made ground to overlook the actual facts/ evidences. We find that the Appellant during adjudication proceedings have contended that all the partners/ proprietors cannot read/ write English being only 7th or 9^th standard pass in vernacular language and even signed the statements in Gujarati Language. Thus in view of the fact that the evidences found during search are just contrary to the allegations, no adverse inferences can be drawn against Appellant and its associate manufacturing unit. Our view is also based upon Tribunal order in case of M/s Saakeen Alloys Pvt. Ltd. 2013 (296) E.L.T. 392 (Tri. - Ahmd.) as upheld by the Hon'ble High Court of Gujarat reported in 2014-TIOL-739-HC-AHM-CX and subsequently by Hon'ble Supreme....