TaxTMI 
TaxTMI 
2004 (2) TMI 153
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....seas Incorporated (WOInc.). The appellant-company has also an office at 19, Gurgaon Road, Kapashera, New Delhi. M/s. DPPCL have a manufacturing unit in the same premises. M/s. WGL have a manufacturing unit at Dehradun and a branch office of M/s. DPPCL is also working in the same premises. The Head Office of the Whale Group of Companies is also situated in those premises. Shri Mukesh Gupta, the appellant in appeal No. E/598/2002, is the Managing Director of the appellant-company. He is also M.D. of DPPCL, WGL and WOInc. 2.The Commissioner's order impugned in these appeals was passed in adjudication of three show cause notices (SCNs). It confirmed various demands of duty against Unit-I and Unit-II of the appellant-company under Section 11A of the Central Excise Act as under :- (a) Rs. 36.20 lakhs against Unit-I for the period 1995-96 to 1998-99 (with interest @ 18% p.a. under Section 11AB) as demanded in SCN, dated 30-3-99; (b) Rs. 2.88 lakhs against Unit-I for the period 1995-96 to 1997-98 as demanded in SCN, dated 30-3-99; (c) Rs. 4.38 lakhs agai....
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....has been confirmed against Unit-II on the basis of a finding that two consignments of stencil paper were cleared clandestinely under gate passes Nos. 58, dated 25-11-97 and 63, dated 4-12-97 without payment of duty. Penalties of Rs. 39.09 lakhs and Rs. 4.63 lakhs have been imposed under Section 11AC read with Rule 173Q on Units-I and II respectively. A redemption fine of Rs. 58 lakhs has also been imposed on the appellant-company in lieu of confiscation of the land, buildings, machinery, etc., of Units-I and II under Rule 173Q. A personal penalty of Rs. 10 lakhs has been imposed on Shri Mukesh Gupta under Rule 209A. The appeals of M/s. Whale Stationery Products Ltd. and Shri Mukesh Gupta are directed against the above decision of the Commissioner. Appeal No. E/143/2003 is by the department. The main grievance raised in this appeal is that interest was not charged under Section 11AB on the duty amounts of Rs. 2.88 lakhs, Rs. 7.76 lakhs, Rs. 5.44 lakhs and Rs. 24,804/-. There is also a grievance that penalty under Section 11AC was not imposed in connection with the duty demands of Rs. 7.76 lakhs and Rs. 5.44 lakhs. 3.Heard both sides. Ld. Counsel for the company and its M....
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....only as declared under Rule 173B. Ld. Counsel further submitted that assessment orders passed by Uttar Pradesh Trade Tax authorities for the assessment years 1995-96, 1996-97 and 1997-98 were also furnished to the adjudicating authority to substantiate the 'manufacturing sales' effected from the appellant-company's Dehradun factories. Similarly, assessment orders of the Delhi Sales Tax authorities for the same period were also supplied to the adjudicating authority to prove the 'trading sales' effected from the Delhi office of the company. Copies of the relevant income-tax assessments were also furnished. But these evidences were not appreciated by the adjudicating authority. Referring to that authority's finding that what was claimed to be sale of paper worth Rs. 50.59 lakhs by the appellant-company to M/s. WGL under bills dated 31-3-97 was not a sale at all for want of transfer of property, Counsel submitted that the goods, which had been purchased by the appellant-company from M/s. WGL on 31-3-97 under bills dated 31-3-97, was resold piecemeal to M/s. WGL during the year and not on 31-3-97 itself. This was evident from the dates of the relevant challans spanning the year. The re....
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....e, extra discount to the extent of 10-15% was given to them. They could not be "related persons" in terms of Section 4(4)(c) of the Central Excise Act merely on account of their being under a common management or of their working in the same premises. The decisive factor for the "relation" was mutuality of interest. The Commissioner did not find any mutuality of interest between the appellant-company and any of the other two companies. These companies were independent legal entities and the transactions between them were at arms length and on a principal-to-principal basis. Therefore, Counsel argued, M/s. DPPCL and M/s. WOInc. were not "related persons" for the appellant-company and, therefore, the transaction value of the goods cleared by Unit-I to the said two companies during the relevant period should be the assessable value of the goods for the purpose of payment of Central Excise duty. In this connection, reliance was placed on the Supreme Court's decision in Union of India & Others v. Atic Industries Ltd. [1984 (17) E.L.T. 323 (S.C.)], the Rajasthan High Court's decision in Renu Tandon v. Union of India [1993 (66) E.L.T. 375] and the Tribunal's decision in Chloride Industrie....
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....er "Whale" trademark by the appellant-company did not entitle the latter to get over the bar contained in Para 4 of the notification in respect of the goods. In this connection, DR relied on Final Order Nos. 86-89/2003-B, dated 18-12-2002 passed by this Tribunal in the case of Siddarth Agarwal & Others v. CCE, Delhi - 2003 (160) E.L.T. 195 (Tribunal) [Appeal No. E/244/2002 etc.]. On the question of "related persons", the DR relied on the decision in Narendra Industries v. CCE, Rajkot [2001 (132) E.L.T. 141]. On other issues, the relevant findings in the impugned order were reiterated. In the Revenue's appeal, the DR argued that penalty under Section 11AC was liable to be imposed on the appellant-company in connection with the various demands of duty as suppression of facts with intent to evade duty was found against them. DR argued likewise for levy of interest under Section 11AB on the duty amounts. 10.We have carefully considered the submissions. The major demand of duty confirmed against the appellant-company is that of Rs. 36.20. lakhs. A major part of this demand of Rs. 36.20 lakhs, confirmed against Unit-I, is for the period 1995-96 and 1996-97 and the same is on the diffe....
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....of 31-3-97 but a transaction which was made piecemeal during the year and that all such piecemeal transactions were accounted on 31-3-97 only. The Commissioner took a view to the effect that the 'purchase' and 'resale' of goods were only manipulations to show trading sales and cover up the clandestine removal of manufactured goods from Unit-I. It has been submitted before us that the relevant challans covering the piecemeal transactions were not considered by the Commissioner. If the plea of piecemeal resale is well-founded, the above view of the learned Commissioner would not be so. The Commissioner should have examined the said plea with reference to the challans coupled with the trade tax/sales tax assessment orders for the relevant period. The Commissioner has also found, from the Balance Sheets, that raw materials viz. paper, ink and solvent were consumed during the relevant period and hence goods must have been manufactured out of them and clandestinely cleared. The assessee has, in their appeal, contended that the expression "consumption" used in the Balance Sheets has been misunderstood by the department and the adjudicating authority. The expression did not necessarily ind....
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....ds cleared under "Whale" brand-name for periods subsequent to the effective date of registration of the brand-name in favour of the appellant-company. The goods were cleared under their own brand-name and not under the brand-name of any other person. Hence the bar created in Para 4 of Notification No. 1/93-C.E. did not get attracted. The said clearances were, therefore, eligible for the benefit of exemption under the notification. Consequently, the above demands of duty are not sustainable. 12.In the impugned order, the Commissioner rejected the transaction value of the goods cleared by Unit-I to M/s. DPPCL and M/s. WOInc., holding that the latter were related persons/favoured buyers of the former. He determined the assessable value of the goods in terms of proviso (iii) to Section 4(1)(a) of the Central Excise Act (as the Section stood at that time) and confirmed the demand of Rs. 2.88 lakhs against Unit-I on the differential value. M/s. DPPCL and M/s. WOInc. were held to be "related" to the appellant-company on the basis of the findings that the three companies had a common Managing Director; that the wife of Shri Mukesh Gupta (Managing Director) was a common Director in all t....
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....d WOInc. and the demand of Rs. 2.88 lakhs is not sustainable. 13.With regard to the demand of Rs. 24,804/- against Unit-II, we note that this demand was raised on the basis of the 'Material Out Register' and the relevant Gate Passes as well as a statement of Shri Ashok Singh, Authorised Signatory. Shri Ashok Singh had admitted in his statement that the goods covered by the gate passes had been cleared to DPPCL without accountal and payment of duty. The statement was never retracted. Though Shri Ashok Singh had disputed the quantities of goods cleared under the two gate passes, he could not rebut the documentary evidence on the point. Where the confessional statement and documentary evidence were in place, there was no need of any further evidence to establish clandestine removal of the goods. Such clearance already stood established. We, therefore, do not find any reason to interfere with the Commissioner's decision on the point. 14.We have found that the demand of duty of Rs. 25.78 lakhs requires to be adjudicated afresh and that none of the remaining demands of duty except the small demand of Rs. 24,804/- is sustainable. Consequently the confiscation of land, building, plan....