Customs, Excise and Gold Tribunal - Mumbai
Unimin India Ltd. And Ors. vs Commissioner Of Customs And Central ... on 28 February, 2005
Equivalent citations: 2005(187)ELT377(TRI-MUMBAI)
ORDER Moheb Ali M., Member (T)
1. These stay applications seeking waiver of pre-deposit of duty demanded and penalties imposed and stay recovery thereof arose out of the order of Commissioner of Central Excise, Daman. The applicants are M/s Unimin India Limited, its Chairman, its Vice President, and M/s Satish Traders and M/s Taher & Co., their dealers.
2. M/s Unimin India Limited is 100% EOU engaged in the manufacture of 100% Spun Bonded Non Woven Polypropylene Fabrics (SBNWPF). The unit obtained advance DTA permission to sell 742 Mts of the said product in the DTA during trial production. The allegation is that the said unit was evading payment of Excise Duty on the goods cleared for DTA by mis-declaring quantity/grade and value. This allegation is based on the statements given by Shri Milind Karkhanis , Vice-President of the unit who seemed to have admitted that the unit was receiving cash over and above the value shown in the Central Excise invoices from their dealers thereby by evading Central Excise Duty on the additional consideration, private diary maintained by the Vice-President of the unit showing day-to-day collection of cash from M/s Satish Traders and M/s Taher & Co (The dealers to whom the DTA sales of the product is made), incriminating documents such as invoice No. 101 dated 19/08/99 which indicated that the invoice value shown in the said invoice did not reflect the correct value of the goods and other incriminating documents and goods seized from the premises of the dealers of the unit. The second allegation is that the goods cleared as rejects are in fact firm quality goods, shown as rejects. This allegation is based on the statements of the dealers and other factory records including the seized goods.
3. Based on the evidence gathered the Commissioner demanded Rs. 3,30,47,399/- being the differential duty on SBNWPF cleared into DTA, imposed equal amount of penalty under Section 11AC on the appellant company. For the various reasons given in the impugned order he imposed penalties of Rs. 75 lakhs on Shri Milind Karkhanin, Vice-President, Rs. 75 lakhs on Shri J.B.S. Bakshi, Chairman & Managing Director.
4. The Ld Advocate for the company, its Vice-President and Chairman & Managing Director argued that during the disputed period the unit was on a trial run and as per the evidence tendered by the supplier of the capital goods the unit was not producing first quality goods; that the supplies made to the domestic market under advance DTA permission consisted of rejects only; that the entries made in the diary maintained by Shri Karkhanin reflected the amount received from the dealers and not the excess money received over and above the invoice value; that the price at which the rejects were sold is still higher than the price at which similar goods are sold by other manufacturers; that the various explanations given by the unit before the Commissioner in regard to diary entries were not considered by him; that penalties imposed on the Chairman & Managing Director and Vice-President are not tenable and that the department had not established that the prime quality goods were sold in the name of rejects. Annual report for the year 2003-2004 was filed to indicate financial hardship.
5. The Ld. SDR argued that the Department was able to establish both the charges i.e. under-valuation and mis-declaration. The Department's allegation all along has been that prime quality goods were sold in the garb of rejects by undervaluing them; he referred to invoice No. 101 dated 19/08/99 in support of his argument that excess cash was received over and above the invoice value; the statement of the Vice-President and the entries in the diary seized clearly establish under-valuation; that at this prima facie stage it is enough if the Department establishes that there is reasonable case in favour of the Department; that the unit has been not indicating the fact that the goods sold in the DTA are rejects of the goods; that the dealers have admitted that the goods sold to them are not exactly rejects and that the differential duty is demandable and the persons concerned rendered themselves liable to penal action under Rule 209A of Central Excise Rules.
6. We have carefully considered rival contentions. The case of the Department is based on the goods seized, diary recovered and the statements made by very important persons of the company. The applicants' contention that the excess amounts received in cash are not relatable to the sale of goods prima facie is not convincing. At this stage it is difficult to believe that the entire DTA sales consisted of only rejects. The Department is able to establish a prima facie case that the goods in question are under-value by mis-declaring them as rejects. The applicants did not file the Shipping Bill under which the goods were exported during the disputed period which would have indicated that the unit was producing nothing but substandard goods which could be called rejects. We therefore conclude that the applicant company has not made out a strong Prima facie case in its favour so as to waive pre-deposit of duty completely. The financial position as reflected in the annual report for the year 2003-2004 indicates that the turn over of the company is more than Rs. 21 crores. Having regard to this position, we direct the unit to pre-deposit of Rs. 80 lakhs towards duty. There appears to be a prima facie case against the unit warranting imposition of penalty under Section 11AC of the Central Excise Act. We therefore direct the company to deposit Rs. 20 lakhs towards penalty.
7. We allow the stay application filed by the Vice-president and Chairman & Managing Direct of the company and waive the pre-deposit of the penalties imposed on them.
8. The stay application filed by the dealers i.e. Satish Traders and Taker & Co are considered. At this Prima facie stage we observe that it is difficult to come to a definite conclusion that penalties are imposable under Rule 209A. The evidence against them has to be gone into at a later stage. Having regard to this we waive pre-deposit of penalties imposed on them.
9. The stay application are disposed off as under:
(a) M/s Unimin India Limited (E/S/1950) is directed to deposit Rs. 80 lakhs towards duty and Rs. 20 lakhs towards penalty within 12 weeks and report compliance on 09/06/2005. Upon such deposit further deposit of duty and penalty is waived and recovery thereof stayed. Failure to do so will result in vacation of stay and dismissal of appeal without further notice.
(b) E/S/1951, 1952, 2108 and 2109/04 are allowed.
(Operative part pronounced in the Court)