Customs, Excise and Gold Tribunal - Bangalore
Commr. Of C. Ex. (Appeals) vs Reddy'S Laboratories Ltd. on 16 February, 2006
ORDER S.L. Peeran, Member (J)
1. Both these appeals arises from Order-in-Appeal No. 21 and 22/2005-C.E., dated 28-2-2005 by which the Commissioner (A) has set aside the demands raised on the allegation of undervaluation of the goods cleared in the invoices by collecting additional amounts in the form of cash. After due analysis of the entire matter on record, the Commissioner (A) has found lack of evidence on the charge of receiving extra money by cash. The findings recorded in the para 7-9 are reproduced herein below.
7. On careful perusal of the contents of the order-in-original, it is observed that it was held in the impugned order, as the buyers perceive the subject goods as spent solvents and not as industrial waste in itself sufficient to hold that the subject goods are chargeable to duty as spent solvents. It is settled law that the technical opinion and chemical nature are not relevant as long as the subject goods are perceived in a particular way in the market parlance. In the instant case, the market parlance as shown by the statements and supported by the sale invoices and usage of such goods in such particular industries in the form of spent solvents clearly establish that the subject goods are liable to be classifiable as spent solvents. It is further obvious from the statements of DRL as well as the buyers that the spent solvent cleared is not a particular purity and hence the chemical examination report in respect of any particular consignment cannot form the basis for classification of all the clearances. Accordingly, I uphold the findings of the impugned order that the subject goods are chargeable to duty as spent solvents.
8. DRL have strongly contested the validity of the statements given by the buyers the contents of which are not supported by any material evidence, I have carefully examined the findings of the impugned order on this count and it is apparent that there is no material evidence to allege that DRL received additional amounts on account of sale of the spent solvents. In this regard, it was held that since the statements are valid evidence in terms of Section 25 of the Evidence Act, the same are liable to be accepted as the evidence for the purpose of confirming the demand. However, it is settled law that the statements are at best oral evidence and cannot have independent existence in the absence of any material evidence. It is not brought out in the show cause notice whether the buyers, who have deposed that they paid additional amounts, have recorded such payments in their records. No such records were relied in the show cause notice. This show either there was no record of such payments as claimed or the investigation failed to examine this issue. In both the cases, the department stands failed to discharge its obligation with regard to the under-valuation of the goods. The statements no doubt, create grave suspicion. However, it is also settled law that suspicion however grave, cannot take the place of proof. Accordingly, the contention of under-valuation merely based on statements cannot stand as it has no legs of its own in the form of material evidence. In view of the above, the demand on account of excess amounts claimed to be paid the buyers cannot be sustained.
9. As the demand is hit by lack of evidence, there cannot be penalty in the absence of any duty liability. Similarly, personal penalty is also liable to be set aside.
2. We have heard both sides in the matter.
3. We have gone through the records and we find in the grounds of appeal the same allegation as in show cause notice has been filed. However, the Revenue has not brought along with the Appeal Memo any evidence to prove clandestine removal or receipt of funds in cash. The grounds of appeal states that the documentary evidence to prove clandestine removal would not be direct. Even if this contention is accepted, the Revenue is bound to produce collaborative evidence and every link in the collaborative evidence is required to be proved. The Commissioner (A) has analyzed the entire facts and has dropped the findings for lack of evidence. Order is legal and proper and it does not require to be intervened in the matter. There is no merit in both these appeals and the same are rejected.
(Operative portion of this Order was pronounced in open Court on conclusion of hearing)