TaxTMI 
TaxTMI 
2025 (4) TMI 1182
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....ii) I confirm the demand oil Central Excise duty amounting t5 Ps.23,30,995/- (Rupees Twenty three Lakh Ninety Thousand Nine Hundred Ninety Five only) on the assorted leaf springs cleared clandestinely during he period January, 2014 to August, 2015 under the provision of Section 11A(4) of the Central Excise Act, 1944 read with Section 174 of the CGST Act, 2017 (iii) I also confirm the demand pf Central Excise duty amounting to Rs. 4,33,895/- (Rupees Four Lakh Thirty |Three thousand Eight Hundred Ninety Five only) involved on the short found stock of 21826 Kgs of Flat Bars and 4200 pieces of Spring leaf assembly under the provision of Section 11A (4) of the Central Excise Act, 1944 read with section 174 of the CGST Act, 2017. (iv) I order for recovery of interest on delayed payment of duty from the party under Section 11AA of the Central Excise Act, 1944 till the payment of duty so confirmed read with Section 174 of the CGST Act, 2017 (v) I also impose a penalty of is. 28,24,890/- (Rupees Twenty Eight Lakh Twenty Four Thousand Eight Hundred Ninety only) upon the party under Section 11 AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002 read wi....
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....ssed above. 2.5 The show cause notice was adjudicated as per the order in original referred in para 1 above. 2.6 Both Appellant and Revenue filed the appeal before the Commissioner. Revenue challenged the valuation of the finished goods which upheld application of Section 4 instead of Section 4A as proposed in show cause notice. Appellant challenged the confirmation of demand on the shortages and clandestine clearances along with interest and penalty. 2.7 Appeal of Revenue was dismissed by the impugned order. Appeal of Appellant was partly allowed to the extent of setting aside the demand on shortages of raw material and associated penalties. 2.8 Aggrieved by the impugned order both Appellant and Revenue have filed these appeals. 2.9 Appellant has filed cross objections in the appeal of Revenue. 3.1 We have heard Shri Nishant Mishra, advocate for the Appellant and Shri A K Choudhary, Authorized Representative for the Revenue. 3.2 Arguing for the Appellant learned counsel submits that impugned order commits gross error in law - by sustaining the charge of clandestine removal without any documentary evidence but purely based on retracted statement and on the hypothetical pur....
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....n value; (b) in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed Section 4A:- Valuation of excisable goods with reference to retail sale price- (1) The Central Government may, by notification in the Official Gazette, specify any goods, in relation to which it is required, under the provisions of the Legal It IS Metrology Act, 2009 (1 of 2010) or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such goods to which the provisions of sub-section (2) shall apply. (2) Where the goods specified under sub section (1) are excisable goods and are chargeable to duty of excise with reference to the value, then, notwithstanding of anything contained in Section 4, such value shall be deemed to be the retail sale price on such goods less such amount of abatement, if any, from such retail sale price as the Central Government may allow by notification in the Official Gazette To determine as to whether "assorted leaf spring" are retail packages we have to go through the relevant provisions of the earlier Standard of Weight an....
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....tion 4A of the Central Excise Act, 1944 (i) The goods should be excisable goods; (ii) They should be such as are sold in the package; (iii) There should be requirement in the SWM Act or the Rules made thereunder or any other law to declare the price of such goods relating to their retail price on the package; (iv) The Central Government must have specified such goods by notification in the Official Gazette; If any of these conditions are not fulfilled in respect of the goods In question, then provisions of Section 4A shall not be applicable and 'assessment of duty' would be under Section 4 of the Act. In the instant case, condition (i) above is not satisfied in as-much as the Assorted leafs of Spring is not cleared in the packaged form rather it is cleared in bare and naked form without any packaging, as such, the Assorted leafs Spring is not packaged commodity to fall in the purview of Legal Metrology (Packaged Commodities) Rules 2011 and there is no requirement under the said Legal Metrology Act or the Rules made thereunder to declare retail sale price on the package. Here, it would be worthwhile to mention that during the search proceedings in the factory premis....
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.... Standard of Weight and Measures Act and Rules made thereunder will be applicable. That being so, in view of the decision of the Hon'ble Supreme Court in case of Jayanti Food Processing (P) Ltd, valuation will have to be done as per Section 4 of the Central Excise Act, 1944 and not under Section 4A ibid. The finding of fact and the application of the case law in terms of the referred decision of Hon'ble Apex Court do not call for any interference and the appeal filed by the Revenue is without any merits. 4.5 In respect of the other issues impugned order records findings as follows: "8. Regarding demand of duty amounting to Rs 2390995/= on account of clandestine removai of finisked goods, it is apparent from the record that the same has been made on the basis of Order Slips resumed during the search. The said clearances were mentioned in the Order slips but no matching invoices were issued resulting in evasion of duty. As recorded on page No.23/25 of the impugned order. the concerned person of the Appellant has confirmed removal of finished goods without payment of duty and purchase of raw material in cash without accountal in the books. In this regard, it is pertinent to mention....
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....n the invoices and as calculated on the basis of the MRP, is received by them in cash. MRP of the spring leaf assorted and the spring leaf assembly is not changed and remained same, however, percentage of discount varied from time to time and discount percentage depends upon cost of raw materials; he also admitted that in some cases, leaf spring assorted and leaf spring assembly which were mentioned in the order slips were cleared by them without payment of due Central Excise duty. The charts prepared by the officers on the basis of the resumed order slips were shown to him and on perusal of the same he admitted that the charts have been prepared correctly and in token of the agreement he put his dated signature on the charts. He also admitted that the raw material had been purchased by them without accountal on cash basis and similarly payment of the finished products which wore cleared clandestinely were received by them on cash basis and no entries of such goods were made by them; Shri Ram Krishna Vishwakarma, Proprietor of the firm in his statement dated 04.04.2018 also endorsed the said statement of Shri Ashu Pandey. Later, Shri Ashu Pandey vide letter dated 25.04.2018 retra....
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....es the accused and which the court sees no reason to disbelieve, could be accepted In the case of Union of India Versus Anil Chanana as reported in 2006(10) LCX 0082 equivalent to 2007 (207) ELT 0351 (Del.) The Hon'ble High Court Deciding the: Writ Petition(Civil) No. 12912 of 2006 on 17.10.2006 held as under "As long as an applicant admits that he has committed an offence, of which compounding is sought, he has already fulfilled the requirement of making a full and true disclosure." In the number of cases the various Tribunals has held as under: Statement - Retraction of allegation that statement obtained under duress, threat etc made only in reply to the show cause notice not substantial evidence of retraction - Sections 107 & 108 0f Customs Act, 1962 - Mangatram V Commissioner reported in 2001(129) ELT 771 (Trib. Del.) Reliance upon - Mere retraction without evidence of duress, or coercion, do not deflect from evidentiary value of statement, especially if facts stated therein are corroborated by other evidences. Mahesh Kumar Goyal V Commissioner - 2004(177) ELT 561 (Tri.- Kolkata) Similarly, the hon'ble Tribunal in the case of Jagdish Shankar Trivedi versus C....
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....estinely without cover of excise invoice. Since the party was not able to provide the item-wise details of goods cleared by them through invoices, the differential duty has been calculated on the basis of total monthly clearances reflected in the order slips and total monthly clearances calculated on item-wise clearances provided by the party. Accordingly, the following chart shows the details of the duty calculated by the party on the monthly basis for the clearances made on invoices, which were accounted for by them. Further, the clearances as reflected in the order slips include clearances clandestinely made by them as well as clearances accounted by them in invoices for the period from January 2014 to August 2015. Month As per invoice No. of spring leaf assorted Cleared As per order slip Difference In Nos Assessable value as per Section 4 of C. Ex. Act, 1944 (in Rs.) Duty payable @12.05% l Excise duty @12%, Edu.Cess @2%, H.E.Cess @1% (in Rs.) No. of spring leaf assorted Assessable value as per Section 4 of C. Ex. Act, 1944 (in Rs.) 1 2 3 4 5=4-2 6 7 January 2014 10477 2991617 1218 0 0 0 February 2014 10126 2713442 0 0 0 0 March 2014 13....
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....Duty amounting to Rs 3,24,765/- have gone through the panchnama and observed that the entire proceedings of physical stock verification were done before two independent witnesses and Shri Ashu Pandey, authorised representative of the Party and they had put their dated signature on the Panchnama. in token of their agreement with the result of the physical stock verification. In. view of above, it is amply clear that party neither on spot nor in his defence reply was able, to put any plausible explanation which indicate that shortage found in stock of raw material and finished goods was for the reason other, than clandestine removal. It is, therefore, established that there existed a shortage of 21826 Kgs of Flat Bars (raw material) valued at Rs 8,73,040/- involving Central Excise duty Rs. 1,09,130/- and shortage of 4200 pieces of Spring leaf assembly valued at RS 25,98, 120/- involving Central Excise Duty amounting to Rs 3,24,765/- Therefore, hold that Central Excise duty amounting to RS. 4,33,895/- involved on the shortage of 21826 Kgs of Flat Bars and 4200 pieces of Spring leaf assembly is recoverable from them alongwith interest as proposed in Show Cause Notice, Now I discuss t....
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.... 2713442 0 0 March 2014 13113 3060158 259 0 April 2014 9860 2774928 4129 0 May 2014 16364 3579925 1178 0 June 2014 12164 2907362 12729 565 July 2014 7225 1786720 9195 1970 August 2014 6235 1698522 8176 1941 September 2014 7364 1993309 11826 4462 October 2014 3925 1075053 12443 8518 November 2014 8559 1926599 15116 6557 December 2014 7461 1965359 13797 6336 January 2015 7852 2290517 16027 8175 February 2015 7038 1827952 14552 7514 March 2015 5447 1274728 20086 14639 April 2015 11587 2565306 15183 3602 May 2015 9910 1952970 12951 3041 June2015 7324 1822588 15587 8263 July 2015 8025 1949274 8899 874 August 2015 6978 1468082 110 0 TOTAL 177036 193465 76457 From the comparison of the total in column 4 with the total in column 2 the difference i.e. the alleged clandestinely cleared assorted leaf springs after adjusting the excesses and shortages over the entire period of dispute should be 1,93,465-1,77,036=16,429. As per the column 5, where in excesses as per order sheets over the invoices in several months have been ignored the figure is computed as 76,457. Thus d....
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....pellant was never put to notice about any such presumption in the show cause notice. 4.11 The demand made on the basis of such erroneous computations and presumptions do not satisfy the test of pre-ponderance of probability enunciated by the Hon'ble Supreme Court in case of D Bhoormull [1983 (13) ELT 1546 (SC)], and relied in the impugned order. The demand thus made in respect of alleged clandestinely cleared goods on the basis such erroneous computations and presumptions need to be set aside. 4.12 We also note that impugned order has upheld the demand made against the Appellant in respect of shortages of finished goods detected at the time of visit. Interestingly at the time of visit of the premises of the Appellant certain excesses were also found for which proceedings were initiated against the Appellant by the show cause notice dated 29.01.2016. The excesses were found in respect of the assorted leaf springs and the shortages were in respect of spring leaf assembly. The excesses and shortages are stated in the annexure to the panchnama. However there is no mention of the shortages detected on the body of panchnama. The panchnama records following in respect of the excesses: ....