Custom, Excise & Service Tax Tribunal
M/S Rhoda Textiles Pvt. Ltd vs Cce, Jaipur I on 20 March, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. III DATE OF HEARING : 20/03/2014. DATE OF DECISION : 20/03/2014. Excise Appeal Nos. 1184-1185 of 2007 (SM) [Arising out of the Order-in-Appeal No. 39-40/GRM/CE/JPR-I/ 2007 dated 23/02/2007 passed by The Commissioner of Central Excise (Appeals-I), Jaipur.] For Approval and signature : Honble Ms. Archana Wadhwa, Member (Judicial) 1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of : the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair : copy of the order? 4. Whether order is to be circulated to the : Department Authorities? M/s Rhoda Textiles Pvt. Ltd. ] Appellants Shri S.K. Jain, Authorized Signatory ] Versus CCE, Jaipur I Respondent
Appearance Shri B.L. Narasimhan, Advocate for the appellants.
Shri R.K. Mishra, Authorized Representative (DR) for the Respondent.
CORAM : Honble Ms. Archana Wadhwa, Member (Judicial) Final Order No. 51268-51269/2014 Dated : 20/03/2014 Per. Archana Wadhwa :-
Both the appeals are being disposed of by a common order, as they arise out of the same impugned orders of the authorities below confirming demand of duty of Rs. 18,37,145/- against M/s Rhoda Textiles Pvt. Ltd. alongwith imposition of penalty of identical amount. In addition, penalty of Rs. 50,000/- stands imposed upon Shri S.K. Jain, the Authorized Signatory of the first appellant.
2. M/s Rhoda Textiles Pvt. Ltd. are engaged in the export of made-up textile articles, for which they procure the fabric in running length, without payment of duty, in terms of Rule 19 (2) of Central Excise Rules, 2001. As the fabric is being converted into made-up articles, the wastage occurs at various stages. The percentage wastage declared by the appellant in there ARE-2 is to the tune of around 4 to 5%. However, in some cases, the wastage generated is more than 4 to 5% and the same is being reflected by the appellant in their Form IV register.
3. Revenue, by comparing the declared wastage as also the wastage reflected in the said statutory record alleged that the difference in the percentage wastage has actually been cleared by the appellant, as such, without payment of duty, in the domestic market. Accordingly, proceedings were initiated against them proposing confirmation of demand for the past 5 years, which proceedings culminated into an order passed by the original Adjudicating Authority and upheld by Commissioner (Appeals).
Hence, the present appeal.
4. After hearing both the sides, duly represented by Shri B.L. Narasimhan, Advocate, the learned Counsel for the appellant and Shri R.K. Mishra, learned AR for the respondent, I find that the Revenues entire case is based on the percentage wastage itself, declared by the appellant and actually arisen and reflected in Form IV register. Whereas the declared percentage is 4 to 5% and the actual percentage wastage varies from 7 to 16%. Apart from the above difference, there is virtually no other evidence on record, indicating any clearance of the duty free procured fabrics. In fact, the declared percentage is also by the appellant and they were free to declare the same in there ARE-2 declaration, on the higher side. In fact, the one of the reasoning by the Revenue is that the appellant should have filed a fresh declaration, disclosing the higher percentage wastage.
5. For better appreciation, I also reproduce the relevant paragraph from Commissioner (Appeals)s order :-
7. I also find that, there is a difference in figures of wastage shown in ARE-2 and form IV register, the Adjudicating Authority has held that, differential wastage i.e. 609518 Sq. Mtrs. of fabrics were actually cleared at input stage and hence were not utilized for the intended purpose. In this regard the Appellants has contended that the onus of proving clandestine removal is on the department, I find onus lies on the department has been discharged as the Appellants have shown excess wastage for which neither they informed nor have manufactured goods as per the normal percentage of wastage generated 4 to 5%. In view of this I find that the demand, is based on difference of quantity of waste figures which were put forth by the Appellants in form IV and ARE-2, which is sustainable in law. In the instant case, there are positive evidence of excess waste generated as the Appellants have not shown/informed in Monthly Returns and the account of excess wastage was not explained therefore, the charges of clandestine removal are sustainable.
6. As is clear from above, the Appellate Authority is only going by the differential wastage and by considering the same as sufficient evidence for clandestine removal, is rejecting the appeal. Tribunal in the case of Klene Paks Ltd. vs. CCE, Bangalore I reported in 2009 (247) E.L.T. 271 (Tri. Bang.) has held that confirmation of demand on the allegation of clandestine removal based upon the excess wastage is only an assumption and in the absence of any evidence as to the purchaser of the alleged removed goods, demand cannot be confirmed.
7. In view of the foregoing discussions, I find no justifiable reasons to uphold the impugned orders of the authorities below. Accordingly, the same are set aside and both the appeals are allowed with consequential relief.
(Dictated and pronounced in open court) (Archana Wadhwa) Member (Judicial) PK ??
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