Custom, Excise & Service Tax Tribunal
Vardhman Chemtech Limited, Chandigarh vs Cce, Chandigarh on 11 July, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SCO 147-148, SECTOR 17-C, CHANDIGARH 160 017 COURT NO. I APPEAL NO. E/1514 & 1520/2011 [Arising out of Order-in-Original No. 22/CE/CHD-II/2011 dated 31.03.2011 passed by the Commissioner of Central Excise (Appeals), Chandigarh-II] Date of hearing/decision: 11.07.2016 For approval and signature: Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. Venkitkrishnan Padmanabhan, Member (Technical) 1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether their Lordships wish to see the fair copy of the order? Seen 4. Whether order is to be circulated to the Department Authorities? Yes Vardhman Chemtech Limited, Chandigarh M/s Suyog Jain, Managing Director : Appellant VS CCE, Chandigarh : Respondent
Appearance Sh. Jagmohan Bansal, Advocate- for the Appellant Sh. Atul Honda, AR- for the Respondent CORAM:
Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. V. Padmanabhan, Member (Technical) Final Order No. 60931-60932/2016 Per: Ashok Jindal The appellants are in appeal against the impugned order demanding duty alongwith interest and imposing penalty on both the appellants.
2. The facts of the case are that the appellants surrendered a sum of Rs. 5.5 Cr before the income tax authorities, during the course of survey conduct in their business premises. The Revenue considered the income surrendered of Rs. 5.5 Cr as gross profit and on the basis of gross profit @ 21.4% calculated deemed sale to the tune of Rs. 25.7 Crore and Central Excise duty thereon. A show cause notice was issued to demand duty along with interest and to impose penalty on both the appellants. The appellants filed reply thereafter, an addendum was issued wherein the sale was enhanced to 45.64 Crore and the matter was adjudicated demanding duty on the said amount on account of clandestine removal of the goods along with interest and imposing penalty on both the appellants. Aggrieved from the said order, the appellants are before us.
4. The ld. Counsel appearing on behalf of the appellants submits that the excise duty payable for manufacture on clearance of the goods. The revenue has not adduced any evidence to indicate purchase to raw material manufacture of finished goods and clearance, therefore, the duty cannot be demanded. It is further submitted that the appellants are engaged in manufacturer of bulk drugs which is raw material to pharmaceutical units. There is no evidence of movement of goods and the statement of buyers to indicate that goods have actually moved to the buyers. Merely, on the basis of surrendered income before the Income Tax Authorities, the Excise duty cannot be demanded. He further submitted that the issue of levy of excise duty on the basis of income surrendered before the Income Tax Authorities has came up before this tribunal in the case of M/s Arisudana Industries Ltd. Final Order No. 196/2016-Chd dated 26.02.2016, wherein this tribunal has set aside the demand therefore, it is prayed that impugned order be set aside.
5. On the other hand, the ld. AR supported the impugned order.
6. Heard the parties and considered the submissions.
7. After hearing both the sides, we find that the short issue involved in the matter is that whether excise duty can be demanded on the basis of income surrendered before the Income Tax Authorities without adducing any independent evidence with regard to purchase of raw material, manufacture of finished goods and sale thereof or not?
8. The said issue came up before this Tribunal in the case of M/s Arisudana Industries Ltd. (Supra) wherein this tribunal has observed as under:-
8. As duty is payable on manufacture of the goods. Revenue have not come up with any positive evidence to shows that the appellant has manufactured excisable goods and cleared without payment of duty. In the absence of such evidence, duty cannot be demanded from the appellant. The same view was taken by this Tribunal in the case of Zalota Industries therefore, the duty cannot be demanded from the appellant according the demand of duty alongwith interest is set aside. As demand of duty is not sustainable, the question of imposing penalty does not arise.
9. On considering the facts that this issue has already been decided by this Tribunal holding that duty is payable of manufacture of goods and no evidence has been produced by the Revenue to that extent, therefore, without manufacturing the excisable goods and clearance the duty cannot be demanded from the appellants.
10. In these circumstances, we do not find any merit in the impugned order. Accordingly, the same is set aside and the appeals are allowed with consequential relief, if any.
(Dictated and Pronounced in the open court) V. Padmanabhan Ashok Jindal Member (Technical) Member (Judicial) rt 4