Customs, Excise and Gold Tribunal - Bangalore
C.C.E. vs Nava Durga Textiles Processors (P) Ltd. on 17 August, 2005
Equivalent citations: 2006(193)ELT444(TRI-BANG)
ORDER S.L. Peeran, Member (J)
1. The Revenue is aggrieved with O-I-O No. 52/97 dated 15-7-1997 passed by the Commissioner of Central Excise, Hyderabad to the extent of setting aside the demands on the ground that Revenue has failed to establish with proper evidence the clandestine removal of goods resulting in loss of revenue. The assessees have also filed cross appeals, challenging the Commissioner's order confirming demands to the extent of Rs. 3,16,735/- besides imposing Redemption Fine, Penalty and Interest.
2. We have heard both sides in the matter and have perused the entire records. The Revenue's challenge is with regard to the findings recorded in para 22 to 26 of the Commissioner's order. In para 22, the Commissioner has set aside the demands of Rs. 2,29,691/- on the ground that the goods had been cleared on Central Excise invoices and merely because the invoices did not tally with serial numbers, that by itself is no ground to confirm the demand. He has noted that serial numbers had not been mentioned on the bundles of fabrics. He also noted the statement of Shri Mahendra Kumar Agarwal, Proprietor of M/s. Kamala Enterprises to confirm that there were no serial numbers on the bundles though in the Central Excise Invoices, the serial numbers of the bundles had been mentioned. The Commissioner noted that the department has proceeded on the sole premise that the packages found in the premises of the dealers did not bear the serial numbers although Central Excise invoices were available. He has noted that it is strange that mere absence of the serial numbers prompted the officers to draw adverse conclusions. The officers ought to have verified the contents of the packages with reference to the Central Excise invoices, which they failed to do so. It is also strange that without adducing any proof of illicit removal of the goods from the factory, M/s. Nav Durga was demanded a duty amount of Rs. 2,29,691/-. He held that the demand on this account is untenable.
3. On our careful consideration, we find that Revenue has not produced or referred to any evidence, which is clinching in nature to show that the appellants had not cleared the goods in terms of the Central Excise invoice but were different goods. The findings recorded by the Commissioner in para 22 are sustainable and are confirmed.
4. In para 23, the Commissioner has set aside the demand of Rs. 42,549/- on the goods seized from the premises of M/s. Giridharilal & Co. The charges were based solely on the statement of Shri Kedarnath Agarwal of M/s. Giridharilal & Co. These statements were denied by Shri Mahendra Kumar Agarwal and Shri Chandrakant Agarwal of M/s. Nav Durga. The Commissioner has held that there is no corroborative evidence to prove the illicit removal of the fabrics in question from the factory of M/s. Nav Durga. In the absence of any corroborative evidence, the charge cannot be held to have been proved. We are agreeable with this finding and confirm the same.
5. Likewise in para 26, the demand of Rs. 7,44,000/- has been set aside as the demands were made solely on the statement of Shri Kedarnath Agarwal without any corroborative or material evidence to prove that the said goods were clandestinely removed by M/s. Nav Durga. It has also been found that Shri Kedarnath Agarwal was not a direct recipient of goods from M/s. Nav Durga and that both the proprietor of M/s. Rajesh & Co. and the Managing Director of M/s. Nav Durga had denied having dispatched any goods to M/s. Giridharilal & Co. or any of the associate firms of Shri Kedarnath Agarwal. The Commissioner has examined the evidence in great detail and found that there was no evidence on record to prove the illicit manufacture and clandestine removal of the fabrics. We have gone through the records and find that this finding is correct and is required to be upheld. In view of our findings, we do not find any merit in the Revenue appeal and the same is rejected.
6. In so far as the cross appeal filed by the party is concerned, they are challenging the confirmation of demand of Rs. 3,16,735/-, Rs. 32,833/-, Rs. 9,117/- and Rs. 13,806/- (a total demand of Rs. 3,72,491/-). The Commissioner has given detailed findings on this confirmation in paras 20, 21 of the order. The statement of Shri Balaram Mishra, Supervisor (Packing) has been relied. The said statements have not been resiled nor the assessees have cross-examined the statement of Shri Balaram Mishra. The Commissioner has noted in great detail, the corroborative evidence with regard to the same. He has also accepted the value and price arrived at by the department which is now challenged.
7. On our consideration, we find that this finding is well founded and the assessee did not challenge this statement of Shri Balaram Mishra, Supervisor (Packing) with regard to the modus operandi adopted for removal of the goods. There is no substance in the submission made that there was no clandestine removal. The assessees have also paid the amounts. Therefore, there is no ground to take a different view on the aspect pertaining to valuation as well as confirmation of demand of the amounts noted. The assessees' prayer is rejected.
8. The assessees have challenged the confirmation of Redemption Fine, Penalty and Interest under Section 11AB on the ground that Section 11AB was not statute book during the period 1992-1994 when the demands were in question. They have relied on the judgment of the Tribunal rendered in the case of Maruti Udyog Ltd. and Circular No. 655/46/2002-CX, dated 26-8-2002 issued by the Ministry of Finance. In view of this position, the confirmation of interest under Section 11AB is set aside.
9. Insofar as the imposition of fine and penalty and personal penalties are concerned, the demands have been raised as Additional Duties of Excise. It is submitted that there were no provision for confirmation of imposition of fine and penalty of Additional Duty of Excise. In this regard, the judgment of Delhi High Court, in the case of Pioneer Silk Millks Pvt. Ltd. v. UOI is relied which is confirmed by the Apex Court in Civil Appeal Nos. 1851 to 1857/94 2002 (145) E.L.T. A74 (S.C.). This plea is well founded. In view of these judgments, the fine, penalty and personal penalties are set aside. The cross appeal is allowed only to this extent. In sum, the Revenue appeal is dismissed and cross appeal is allowed to the extent of setting aside interest, fine and penalties. Ordered accordingly.
Operative portion of the order already pronouced in open court on conclusion of the hearing