TaxTMI 
TaxTMI 
2004 (9) TMI 284
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....artment is that during the period 1996-1997 to 2000-2001 (upto August 2000), the appellant M/s. Woodmac had manufactured and cleared 'Decorative Plywood' by misdeclaring it a 'Repressed Plywood' in order to evade payment of appropriate amount of duty; that 'Decorative Plywood' commands higher price than that of Repressed Plywood, that cash receipts of Rs. 9.49 crores, as per books, for the entire period, represent the additional consideration received from the dealers over and above the invoice price; that the appellant's claim that the cash receipts represented sale of 'Seasoned Wood' cannot be believed inasmuch as the seven buyers to whom the 'Seasoned Wood' claimed to have been sold were found to be non-existent. (b) During the hearing, the learned Counsel for the appellant contended that the main allegation is undervaluation of 'Decorative Plywood' cleared in the guise of 'Repressed Plywood' and that this allegation is sought to proved by the Statements of 3 to 4 dealers as against 550 dealers spread all over India. He submitted that there is no misdeclaration regarding description of the goods inasmuch as correct Chapter Heading 440....
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....ther years the cash sales recorded of Season Wood would not meet the percentage allegations and on the quantum of sales made to the four dealers the figures arrived would not establish the case of Revenue. (v) The denial of cross-examination of these four dealers and the retractions made and in view of the affidavit filed by them the case of the department as regards the evidence of cash or money collection from the dealers is not established. It was brought out that in case of one of these four dealers by M/s. Tej Veneess in his statement dated 26-9-2000 has said to have admitted paying Rs. 5,91,026/- as cash when total sales invoiced to him are of only Rs. 1,38,136/- which cannot be as alleged at 75% over and above the invoiced value. No such exercise of total sale to all dealers and cash payments has been worked out for the reasons that then the departments case would fail. The total sales to these four dealers is about 2% of the total production/clearance and that cannot be the case to extend and apply to all 500 dealers. In any case only 5 dealers were questioned and one of them gave no statements of cash payments and the four have ....
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....contention that they have charged normal price in accordance with Section 4(1) of the Central Excise Act. It was also their contention that additional consideration from 3-4 dealers (even assuming that additional consideration was received from these dealers) cannot be made the basis for enhancement of the assessable value unless additional consideration has been received from majority of the cases. This submissions cannot be accepted in view of the Tribunal's decision in the case of Essel Packaging Ltd. - 2000 (117) E.L.T. 466 wherein the Hon'ble Tribunal has considered the judgment of the Hon'ble Delhi High Court in the case of Somany Pilkingston's Ltd. The Hon'ble Tribunal has held that the term ordinarily used in Section 4 means to be accepted as in the normal course where no special circumstances prevail. In a situation where there is no special relationship alleged between the two parties or no factors other than that of purchase and sale for the transaction it is not possible to agree that they were not sales in the ordinary course of trade or not ordinarily sold. The observation of the Delhi High Court that the word 'ordinarily' has been interpreted to mean in majority of t....
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....cannot be accepted. Consequently, their reliance on the judgment of the Hon'ble Supreme Court cited supra is of no consequence. (vii) Scrutiny of the delivery challans issued in the name of the seven fictitious parties showed that the so-called Seasoned Wood was transported by over 200 vehicles. The details obtained from RTO, Thane revealed that many of the vehicles whose registrations appeared on the delivery challans were registered as tankers and three-wheelers which cannot transport Seasoned Wood. This apart, statements of the concerned persons of M/s. Himalaya Carriers, HMP Roadways and M/s. Pravina Traders clearly show that their vehicles did not carry Seasoned Wood on the dates appearing in the delivery challans. Therefore, the so-called transaction of purchase and sale of Seasoned Wood is nothing but figment of imagination to get away from the clutches of law. (viii) Since they did not manufacture Seasoned Wood (regardless of whether it is excisable or not), their reliance on the Supreme Court decision in the case of CCE v. Kutty Flush Doors and Furniture Co. (P) Ltd. is of no help to them. Similarly, their relian....
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.... goods. This contention, therefore, merits to be rejected. (iii) In so far as imposition of penalties are concerned the learned Counsel submitted that penalty has been imposed on the firms/companies, though the allegations were against the Partners/Directors. Imposition of penalty on the Partners/Directors is, therefore, incorrect in law. It was submitted that Partners/Directors work for the benefit of their firms/companies. The Show cause notice does not allege that their omissions and commissions were for their personal gains. In the circumstances, imposition of penalty on the firms/companies is quite justified. (f) Finally, it is submitted that regarding confiscation of the seized goods belonging to M/s. Woodmac and M/s. Lucky Wood for non-accountal, no submission was made nor was there any challenge to the order of confiscation by the learned Counsel appearing for them. In the circumstances, it has to be held that the order of confiscation of the seized goods and imposition of redemption fine in lieu thereof remains unchallenged. The same is, therefore, required to be confirmed. 3.On co....
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....nvoice wise, as per the alleged sale prices at Dealers levels, for each individual design sheet, the evidence of gross cash receipts, in the books of M/s. WOODMAC has to be examined with this background. Proceeding to do so, it is found - (i) There are 500 or so dealers. The submission, now made by Revenue, that such disclosure was made for the first time by presenting a list of 500 dealers before the Commissioner at the hearing, cannot be accepted, on that ground. This plea, as made by Revenue, is accepting that enquires were not made or and the notice was issued based on half baked enquiries to somehow establish a case. Orders pursuant to such enquiry efforts cannot be upheld. (ii) Even if the statements of four dealers are to be admitted, they cannot lead to an established ordinary course of sale price at practice to exist. The reliance of the appellants on the decision of M/s. Sharon Veneers - 2002 (146) E.L.T. 655 and BG Plywood India (P) - 2001 (96) ECR 709 is well founded and following the same, this order cannot be sustained. (iii) The recei....
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.... to be engaged else where, cannot be evidence that goods were not sold. The plea that truck nos. may be incorrectly noted is a valid plea that cannot be wished away. (viii) The sale of wood during the period to the alleged Seven fictitious buyers was submitted to be Rs. 9,48,95,756/- while the sale of Plywood amounts to Rs. 53,70,548.00 to the four buyer. Therefore, the allegation made in the notice of the sales to buyers of Timber made to fictitious buyers of Seasoned Wood is account for cash receipts generated for sale by Plywood to the four dealers cannot be sustained. (ix) The sale of seasoned woods is claimed to be a trading activity, where delivery is given on transport arranged by the buyers, the vehicle nos. given on Woodmac Sale delivery challans, as given by buyers or written by clerks from memory & sales against cash and carry basis would be a normal commercial manner of Trading in Timber as the plea of a callous attitude in account maintenance would be acceptable to explain the points raised about the Account. Therefore, the allegation of Cash generated by Sale of Plywood and shown in accounts of Ti....