Custom, Excise & Service Tax Tribunal
Cce, Meerut-Ii vs M/S.M.B. Plywood Industries (P) Ltd on 9 February, 2016
IN THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/Decision:9.2.2016
Excise Appeals Nos.E/428, 429, 430 and 431/2007
(Arising out of Order-in-Appeal No.168-169-CE/MRT-II/2006 dated 23.10.2006 passed by the Commissioner (Appeals), Customs and Central Excise-I, Meerut-II)
CCE, Meerut-II .Appellants
Vs.
M/s.M.B. Plywood Industries (P) Ltd. Respondent
Shri B. Midha, Managing Director Shri M.L. Aggarwal, Manager & Proprietor of Shri Jee Traders M/s. Shree Jee Traders Appearance:
Rep. by Shri G.R. Singh, DR for the appellant. Rep. by Shri Kamaljeet Singh, Advocate for the respondent. For approval and signature:
Honble Shri S. K. Mohanty, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) 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 should 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 Departmental authorities? Coram: Honble Shri S.K. Mohanty, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Final Order No.50203-50206/2016 /Dated:9.2.2016 Per B. Ravichandran:
These four appeals by the Revenue are against the order dated 23.10.2006 of Commissioner (Appeals), Meerut-II.
2. The brief facts of the case are that the main respondent (M/s.M.B. Plywood Industries (P) Ltd. are engaged in the manufacture of flush, doors, block board and shuttering plywood liable to central excise duty. They had various authorized dealers for sale of their products. After certain inquiry and investigation, the Department initiated proceedings against the respondent on the ground of short payment of central excise duty by adopting much lower price for sale of goods to two of their dealers M/s. Shri Ji Traders, Lucknow (SJT) and M/s. Shri Ji Enterprises, Lucknow (SJE), who in turn, supplied the materials to M/s. U.P. Rajkiya Nirman Nigam Ltd. on much higher price. The proceedings concluded by order dated 17.03.2005. The Original Authority confirmed a demand of Rs.16,28,147/- towards differential duty, imposed equal penalty and further penalty of Rs.2,00,000/- each on the Managing Director of the main respondents, SJT and SJE and Shri Agarwal of dealing companies. On appeal, the ld. Commissioner (appeals) vide the impugned order set aside the original order and allowed the appeals. Aggrieved by this order, the Revenue is in appeals.
3. Ld. AR reiterated the background of the case and submitted that the two dealers are apparently linked to the main respondent in their financial transactions as they are preferred by the main respondent for supply of materials to M/s. U.P. Rajkiya Nirman Nigam Ltd.(UPRNN). There is a huge difference between the sale price of main respondent and the price collected by the dealers from UPRNN. This difference has not been satisfactorily explained. There are instances of UPRNN paying directly to the main respondent on some of the sales.
4. Ld. Counsel for the respondent supported the findings in the impugned orders and submitted that the two dealers are not related to the main appellant. There is no allegation or evidence to this effect. The main respondent are selling goods through various authorized dealers; in fact 91% of their sales are to other dealers other than SJE/SJT. There is no allegation or evidence regarding any flow back from these two dealers to the main respondent.
5. We have heard both the sides and examined the appeal records.
6. The only point for decision is whether or not the main respondent short paid central excise duty on account of adopting much less value than the stipulated by the legal provisions. We find that the case of the Revenue is mainly on the ground that the two dealers, who supplied items to UPRNN have realized much more amount than what they paid to the main respondent (the manufacturer). On this we find that in the absence of any extra commercial relationship between the dealers and the main respondent, there can be no reason to allege undervaluation on this ground alone. Another point raised by the Revenue is that there are certain instances of receipt of payment directly by main respondent from UPRNN. Such receipt being much higher than the price at which the goods were subjected to tax. We find this aspect has been examined by the impugned order. It has been stated that the direct payments were as per the advice of the two dealers and by itself will not establish under-valuation of the goods. We find no verification on method of transactions have been made at UPRNN side to link -up the possible dealings of the main respondent directly with UPRNN and to establish the role of SJT and SJE being mere dummies in these transactions. We find the impugned order examined all the allegations made by the Revenue to arrive at the conclusion. In the present appeal, there is nothing on record warranting interference with the said findings. Accordingly, these appeals are dismissed.
[Order dictated & pronounced in the open court] ( S.K. Mohanty ) Member (Technical) ( B. Ravichandran ) Member (Technical) Ckp.
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