Customs, Excise and Gold Tribunal - Calcutta
Commissioner Of C. Ex. vs Shree Narottam Udyog (P) Ltd. on 11 July, 2003
Equivalent citations: 2003(89)ECC351, 2003(156)ELT775(TRI-KOLKATA)
ORDER Archana Wadhwa, Member (J)
1. The present appeal is against the Order of Commissioner of Central Excise (Appeals) vide which he has set aside the Order passed by the authorities below, confirming the demand of duty of Rs. 7,44,285.00 (Rupees seven lakhs forty-four thousand two hundred and eighty-five) against the respondents. The said demand was confirmed based upon the documents/private records recovered by the Officers of the DGAE, Calcutta, during the course of search of the business premises of the assessee's dealers/distributors and on the finding that the respondents were making some extra collections over and above the bill amount in respect of sale of plywood despatched from the respondents' factory, on which duty was being paid by them on the factory gate sale basis.
2. The Commissioner (Appeals) has observed that the show cause notice is vague and non-specific, inasmuch as the same neither indicates quantity, variety, quantum of value suppressed, relevant price declarations, periods of demand, rates of redetermined values, etc. She has also relied upon the earlier Orders of the Tribunal in the case of Indian Aluminium Co. Ltd. reported in 1987 (31) E.L.T. 936 (T) and in the case of Shree Dyeing & Bleaching Works reported in 1989 (40) E.L.T. 102 (T), wherein it has been held that the basis for quantifying duty has to be indicated in the show cause notice and the show cause notice is invalid when period is not stated. She has observed that in the present case, the show cause notice neither indicates quantity, variety, quantum of value suppressed, periods of demand, etc.
3. The Commissioner (Appeals) has also granted benefit on the ground that the documents relied upon in the show cause notice were not supplied to the respondents in spite of their repeated requests to do so, and the adjudicating authority has wrongly observed that their above request for supply of documents is infructuous, since they have inspected the documents at the Office of DGAE, Calcutta. Reliance has been placed by the Commissioner (Appeals) on the Rajasthan High Court's judgment in the case of PGO Processors reported in 2000 (122) E.L.T. 26 holding that authenticated copies of documents relied upon by the Department are required to be supplied and mere opportunity to inspect documents and to obtain photocopy thereof, is not sufficient.
4. The main reason for allowing the appeal filed before the Commissioner (Appeals) is that there is absolutely no proof, documentary or otherwise, to substantiate the allegation of some extra collections over and above the bill amount. She has observed that the draft of Rs. 1,11,462.00 (Rupees one lakh eleven thousand four hundred and sixty-two) which was alleged to be extra payment on undervaluation of the goods, was realised by the adjudicating authority. Investigations did not give any proof of this allegation, and inasmuch as there is an ex-factory gate price available, as approved by the proper officer in terms of the provisions of Rule 173C, the same has to be adopted. By observing so, she has allowed the appeal and set aside the impugned Order.
5. The Revenue in their Memo of Appeal have put forth the following grounds :-
"(1) That the Order-in-Appeal of Commissioner (Appeals) holding that SCN is vague and did not find sufficient evidence to prove allegation in the SCN is being challenged so much so that in course of search of one dealer's premises at Calcutta in C/w a case of evasion by Vidarba Veneer Industries, Nagpur, the DGAE, Calcutta came across the evidences of extra collection in M/s. Sree Narattom Udyog.
(2) That the party during the course of investigation accepted the duty liability of Rs. 7,44, 285.00 and Rs. 5 lakhs was paid through a Demand Draft in favour of Commissioner/Central Excise, Shillong as an ad hoc payment.
(3) The Deputy Director, DGAE, Calcutta vide letter No. 118/CAL/C.E./96/1006, dated 31-7-1997 informed that the relevant papers on the basis of which quantification was made have been examined by the assessee from time to time. They have also seen the calculation and being satisfied with the method of calculation they made payment of Rs. 5 lakhs so the Commissioner (Appeals) having inclined to accept the party's plea that they were not supplied with documents nor offered scope inspection is not tenable.
(4) That there is no inconsistencies and vagueness of the SCN as the allegations were made on the basis of undervaluation by the party and they were satisfied with the method of calculation.
(5) That the submission herein above fully justify admittance of the appeal by the Tribunal for setting aside the impugned order of the Commissioner (Appeals), Central Excise, Guwahati."
6. After hearing both sides duly represented by Shri N.K. Mishra, learned J.D.R. for the Revenue and Shri B.N. Chattopadhyay, learned Consultant for the respondent-company, we find that the Revenue has not referred to any specific evidence in their grounds of appeal, so as to counter the findings of the Commissioner (Appeals). The fact that the respondents agreed to pay an amount of Rs. 5.00 lakhs (Rupees five lakhs) during the course of investigations, by itself is not a sufficient proof of their guilt. The respondents have explained that such deposits were made at the insistence of the Investigating Officers. In any case, the same cannot take place of evidence and the Revenue while making the allegations are required to prove the same by production of sufficient and affirmative legal evidence. Inasmuch as there is nothing on record as observed by the Commissioner (Appeals), and not countered by the Revenue in their Memo of Appeal, we do not find any reason to interfere in the Orders of the Commissioner (Appeals). Accordingly, the appeal filed by the Revenue is rejected. Cross-objection filed by the respondent-company also gets disposed of in the light of the above Order.