TaxTMI 
TaxTMI 
2008 (5) TMI 225
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....ise Rules, 1944 and penalty of Rs One lakh each under Rule 209A on Shri T.K. Diwan and Shri D.N. Gupta (Director (Sales) of the appellant company. The period of dispute is from March 1992 to January 1996 and the allegation against the appellants is that during this period, they were evading central excise duty by clearing 'Flush Doors', which were chargeable to duty, without payment of duty by mis-declaring the same as 'Panel Doors' and 'Baton Door', which were fully exempt from duty and in this manner evaded duty amounting to Rs. 88,72,686/-. 1.1 The duty demand of Rs. 3.5 lakh is on account of wrong calculation of duty liability during the year 1992-93, as during that year while the appellants were eligible for full duty exemption under notification No. 175/86-CE in respect of clearances for home consumption upto Rs. 20 lakhs only, they had availed full duty exemption in respect of clearances upto Rs. 30 lakhs, resulting the short payment of duty of Rs. 3.5 lakhs. However we find that this duty demand had neither been raised in the Show Cause Notice No. V (44) 15/335-CE/96/808 -12 dated 24/2/96 issued to the appellants, nor this issue had been adjudicated in the first adjudicat....
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.... flush doors and that they had never purchased panel doors from the appellant company. They also produced the purchase orders. Three other builders from Gurgaon-M/s Mehra Construction, Gurgaon, M/s Mehra Builders, Gurgaon and M/s Make Waves Sea Resorts, Gurgaon on inquiry informed that their 50% to 75% of the purchases of Doors from the Appellant's company were of flush doors and only the remaining purchases were of panel doors. As against this, as per the records of the Appellants, their all the sales of doors to the above mentioned builders were of flush doors. (c) In majority of the cases, the Appellants have arranged their clearances in such a way that they first issued the invoices/gate-pass to their godown at "A-168, Mahipalpur Extn., Delhi" and from the godown, the sales have been shown to their customers. On inquiry, the godown was found to be non-existent. 1.2.1 It is on the basis of the above evidence that the Revenue has alleged that all the clearances of doors during March 92 to March 96, shown in the Appellant's records as of 'Panel doors' or 'Baton doors', were actually of 'Flush doors' and on this basis the above mentioned duty demand has been raised. 2. Shri G.L.....
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....based on inquiry with the 15 customers is not sustainable, and the entire demand of duty is liable to be set aside. It was emphasized that the burden of providing the allegation of duty evasion against the Appellants is on the Revenue and the Revenue has failed to adduce credible evidence in this regard. 3. Shri Deepak Garg, the learned Departmental Representative emphasized that recovery of flush doors from the tempo while the invoice covering the goods mentioned the same as 'Panel doors' coupled with the fact that at that time, while RG-1 register of the Appellant was showing certain stock of Panel doors, but actually there was no stock of Panel doors, clearly shows that the Appellants while actually manufacturing and clearing the flush doors, were showing the same in the RG-1 register and in the invoices as Panel doors. Therefore, the declaration of the production and clearances of Panel doors and Baton doors in the RT-12 returns has no meaning. He also emphasized that the Revenue's case is not based on only the statements of the employees/Directors/ Proprietors of the 15 builders companies as these companies had also produced the supply orders placed by them on the Appellants,....
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.... M/s DLF Industries Ltd. ; M/s The Dream House Construction ; M/s Ansal Housing & Construction Ltd. ; M/s DLF Universal Ltd., New Delhi ; Shri Ram Dayal Singh, Govt. Construction, Guna ; M/s S. Kumar & Co., Jaipur ; M/s Jyoti Swaroop Mittal, Jaipur ; which in the invoices issued by the Appellants have been shown as of 'Panel doors', or 'Baton doors' shall be treated as of 'Flush doors' and the duty shall be charged accordingly and in respect of Appellant's sales shown to be of 'Panel doors' or 'Baton doors' to M/s Mehra Builders, Gurgaon ; M/s Mehra Contractors, Gurgaon and M/s Make Waves Sea Resorts, Gurgaon during the period of dispute, 75% of the sale value shall be treated as of flush doors and duty charged accordingly. 4.1. The next question to be decided is as to whether the conclusion arrived at on the basis of inquiry with the above mentioned customers of the Appellants can be applied to their all other customers during the period of dispute, which, according to the Appellants, are several hundred and whether on this basis it can be concluded that the during the period of dispute the Appellants neither manufactured nor cleared any 'Panel doors' and 'baton doors' and all cl....