Customs, Excise and Gold Tribunal - Mumbai
Devanand M. Mandhyani, Abdul Vahid ... vs Commissioner Of Customs And Central ... on 16 August, 2001
ORDER
Gowri Shankar, Member(T)
1. These applications are for waiver f deposit of duty of Rs. 94,54,420.57 by K.J. Vakharia and Company, penalty of Rs. 60 lakhs on it under Rule 173Q and Rs. 10 lakhs on H.K. Vakharia, its partner under Rule 209A. Fine of Rs. 5 lakhs for redemption of plant, land and building of the Company ordered to be confiscated and penalties of Rs. 3 lakhs on K.R. Kadiwala, former employee of the Company and as detailed on various others.
2. When the matter was fist heard was found that the facts were not presented to us at all clearly. The matter had been adjourned twice before the hearing was concluded for the reason that paper book was so badly filed. It was difficult to refer to it, documents, were illegible and there was no index, etc. It was adjourned once again for producing the translation of the documents which were in Hindi or Gajarati.
3. K.J. Vakharia and Company is a processor textile fabrics. Duty had been demanded from it and penalties imposed on it on the finding of the Commissioner that it process ed and cleared fabrics without payment of duty thereof. Penalties impose don the Company and its employees are in relation to this alleged contravention. Penalties were imposed on the other persons on the ground that they received from the processor fabrics which thy sent to it after processing, knowing that duty had not been paid on them. The investigations appear to have commenced with the seizure of documents by the income-tax authorities from the resident of Harish Vakharia, which were furnished to the Central Excise department. These records appear to indicate manufacture without payment of duty and accounting in the statutory records of large quantities of processed fabrics by the processor. Officers also seized from the premises of the mill various documents consisting of computerised sheets showing details of job charges for processing in respect of various suppliers of grey fabrics.
4. In his order, the Commissioner cites three types of document, which according to him, show evasion of duty. One is delivery slips, also referred to kutcha delivery challans or job cards. he says, it contains details such as name and address of the supplier of the grey fabrics, lot number, quality, number o pieces and length of fabrics. he notes that Harish Vakharia, partner, had accepted that the goods own were removed without payment of duty and also, another statements as that his professional ignorance about these documents. He also records admission in the statement of suppliers of grey fabrics of the receipt of the fabrics without an invoice showing payment of duty. The Commissioner says, the computerised sheets which contained the details of the job charges charged to the suppliers of the grey fabrics. He relies upon the statements of the Excise Clerk of the applicant and the suppliers to say that the sheets relates to the processor in question and also relies upon the statements of these suppliers to say that they received processed fabrics. he thereafter referred to computerised sheets furnished by the Income Tax department which contained details similar to the other computerised sheets.
5. The only ground in the stay application is that the balance o of convenience lies in the applicants' favour. No further specific grounds raised.
6. The first contention of the common representative for the applicants, that the demand is barred by limitation because it was issued four years from the date of detection of the case, is prima facie, unacceptable. The demand invokes the extended period contained in the proviso to sub-section (1) of Section 11A of the Act on the ground that the manufacturer suppressed the production of he processed fabrics and it is not possible at this stage to say that he extended period of limitation will not apply. it is further contended that the computerised sheets relating to payment of charges do not have sufficient data to co-relate them to determine the date on which it was processed. Therefore it has not been shown that the demand for duty obtained from these sheets is within the time limit. Although the departmental representative contests this point we find considerable merit in it. The computerised sheets shows in relation to each of the supplier, the date, rate, length and the bill amount. The date column in the computerised sheets appears to be the date of the bill and it is difficult to say from these sheets that they shown the date on which the goods were processed. The show cause notice indicates the period for which duty is demanded in the annexures to it. For example, annexure 'E' shows name of suppliers whose grey fabrics was processed by the applicant and annexure 'G' is based on the records seized by the income tax department. They do not even purported to contain the details, dates in question.
7. The Commissioner has also relied upon the statements of a number of suppliers of grey fabrics, accepting that they received fabrics processed by this applicant covered by documents which did not contain details of payment of duty. it is the contention that number of them also paid the duty due on these fabrics. His contention is that duty has been recovered from 97 of them should be adjusted against the duty payable by the applicant. Duty on excisable goods has to be paid by their manufacturer. However, if the department chose to recover such duty from the recipient of these goods, it then become difficult to say that it should also be paid again by the manufacturer. If it is that department's case, and that is what appears to be at this stage that the duty in question has been recovered from the recipient of the goods, it cannot then prima facie, be recovered from the manufacturer.
8. However these statements prima facie, are indicative of the fact that the applicant manufactured and cleared substantial amount of fabrics without payment of duty.
9. There are also a number of applications by the recipients of the grey fabrics, for waiver of deposit of penalty imposed on them. At least for part of the period up to May, 1994, penalty would not be imposable by the application of the ratio of the Delhi High Court in Pioneer Silk Mills Pvt. Ltd. Vs. Union of India 1995 (80) ELT 507 when the provisions of Additional Duties of Excise (Goods of Special Importance) Act, 1957 was amended. Many of these suppliers who also paid the duty were strictly speaking, not required to do so. We do not think that it is desirable or appropriate to consider case of each of the applicants at this stage, having regard to the extend of details that will have to be gone into in determining the duty liability of the manufacturer.
10. In these circumstances we make the following order: K.J. Vakharia & Company to deposit Rs. 25 lakhs within two months form the receipt of this order, towards the duty and penalty upon which we waive deposit of the remaining duty demanded and penalties imposed on all the applicants and stay their recovery.