Custom, Excise & Service Tax Tribunal
M/S. Kamala Plastics vs Cce, Tiruchirappalli on 28 July, 2017
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/493/2007
(Arising out of Order-in-Original No.4/2007 dated 5.4.2007 passed by the Commissioner of Central Excise, Tiruchirappalli)
M/s. Kamala Plastics Appellant
Vs.
CCE, Tiruchirappalli Respondent
Appearance Shri R. Parthasarathy, Advocate for the Appellant Shri B. Balamurugan, AC (AR) for the Respondent CORAM Honble Ms. Sulekha Beevi C.S., Member (Judicial) Honble Shri Madhu Mohan Damodhar, Member (Technical) Date of Hearing : 13.07.2017 Date of Pronouncement: 28.07.2017 Final Order No. 41283 / 2017 Per Bench The appellants are manufacturers of High Molecular (HM)/ polypropylene (PP) plastic carry bags. They were availing value based exemption under Notification No. 8/2000-CE applicable to small scale industrial units.
2. The appellant is a partnership concern with Smt. Kamalam, Shri M.P.C. Thirunavukarasu and S. Chockalingam as partners. The main raw materials used by the appellants are High Density polyethylene and High Density Polypropylene Granules. The appellant obtained supply orders from their various customers and based on such supply orders placed through their sales office, they manufactured cutting bags and carry bags. The finished products were then transferred to their sales office under dispatch slips, from where the goods were cleared to the customers.
3. The officers attached to the Preventive Unit visited the appellants unit on 21.6.2004 to study the computation of value of clearances as the appellants were not paying central excise duty claiming their value of clearances to be less than Rs. One crore and thus availing exemption as per the above stated notification. They also conducted visit to the sales office of Kamala Plastics on 29.6.2004. The officers noticed that Kamala Plastics maintained separate private records in the form of notebooks for recording raw material issue, production and dispatch of final products. They were also maintaining two separate notebooks for recording work orders. Scrutiny of the documents revealed that appellants have indulged in suppression of production and thus availed the exemption benefit. The department seized documents such as chits, stock register, file containing details of daily cash receipt and payment, ledgers, cash bills, day book etc. and mahazar dated 29.6.2004 was drawn up. Enquiries were also conducted with the purchasers of plastic bags as well as transporters. Statements of various persons were recorded. From the evidence it appeared that:-
(i) the appellant manufactured plastic bags and did not account the actual quantity manufactured in the stock register of finished goods maintained by them.
(ii) The actual issue of raw materials and actual production was recorded in their private records.
(iii) Plastic bags were cleared to the customers under cover of chits without issuing invoices. Plastic bags were also cleared by way of cash bills without invoices.
(iv) The notebooks which contained the details of order placed indicated that the customers had placed orders basing on the weight, size of the plastic bags and the value was mentioned on the basis of size, thickness etc. However, while issuing invoices, the appellant indicated the number of bags instead of weight and size of the bags. The value was mentioned in the invoice on the basis of number of bags without mentioning the size, thickness etc. Thus, they deliberately indicated lesser value of the goods cleared for the purpose of availing exemption benefit.
(v) The chits recovered showed that the orders placed were on the basis of sizes, weight and the quantity was mentioned in kilograms as well as their rate per kilogram. Whereas the invoices did not show the rate per kilogram instead showed the rate per numbers (1000 bags).
(vi) The sale proceeds were collected by the appellant based on the value indicated in the chits and the difference between the value indicated in invoices and the chit was collected by them in cash. The value received as per the invoices was noted in the ledger / day books but the excess value received in cash was not entered in these ledgers and day books.
(vii) For some clearances made under chits, no corresponding invoices were issued which indicated that they were clearing goods without issuing invoices.
(viii) The appellant also cleared plastic bags over the counter by issuing cash bills some of which were supported by chits. These were not supported by invoices. Similarly, in such cash bills, weight of plastic bag was not shown and instead the value was noted based upon the number of bags cleared.
(ix) The chits thus indicated actual value of the products cleared which was higher than the value indicated in invoices / cash bills.
4. Show cause notice dated 17.11.2005 was issued for the period from 2001 02 to 1.11.2004 and a second show cause notice dated 3.1.2006 was issued for the period 2.11.2004 to 31.3.2005. In the first show cause notice, duty demand of Rs.64,98,583/- along with interest as well as penalties were proposed. The duty demand proposed in the second show cause notice is Rs.6,95,022/- along with interest and penalties. After due process of law, the adjudicating authority vide common Order-in-Original confirmed demand of Rs.37,27,279/- for the period from 2001 2002 to 2004 2005 (upto 1.11.2004) covered by the first show cause notice and confirmed demand of Rs.6,95,022/- for the period covered in the second show cause notice. Besides confirming interest thereon, penalty of Rs.44,22,301/- was imposed on the appellant under section 11AC of Central Excise Act, 1944 r/w Rule 173Q of Central Excise Rules, 1944 and Rule 25 of Central Excise Rules, 2000.
5. Being aggrieved, the appellants are now before the Tribunal.
6. On behalf of the appellant, learned counsel Shri R.Parthasarathy, Advocate made the following main submissions, inter alia, which are summarized as under:-
6.1 That the clearances made as per invoices and cash bills are the actual clearances made by the appellant and value of such clearances for the period covered in the show cause notice are much below Rs. One crore and therefore the appellant has rightly availed the SSI benefit of exemption as per Notification No. 8/2000.
6.2 That search was conducted on 21.6.2004 and stock register was seized. This stock register would show the raw material account from 17.4.2003 to 31.3.2004 only and that such evidence cannot be made the basis of demand of clandestine removal for the entire period.
6.3 The appellant manufactures plastic bags of various sizes according to the requirement of the customers. The orders are placed basing upon the weight, size etc. of the bags and such specifications are noted on chits; but when the finished products are cleared, the appellant raises invoices showing the quantity in numbers. The handwritten chits recovered from the sales office were merely orders received from customers and cannot be made the basis for ascertaining the value of clearances of finished products.
6.4 The cash bills were raised for over the counter sales which was accounted by the appellant in their sales tax returns.
6.5 The computation of duty is highly erroneous.
6.6. For ascertaining the value of plastic bags for which invoices are available, the department has taken the thickness of bag mentioned in the invoices. In cases where the thickness of the bag (gauge) was not mentioned in the invoices, the minimum thickness of plastic bags that is 40 gauze (10 microns) has been taken as thickness for arriving at the weight. That by adopting such method, the department has boosted the value of clearances and thus denied the benefit of notification. Further, the method adopted for ascertaining valuation, stating that rate of per 1000 numbers of bags indicated in the invoices as rate per kg is without any basis and therefore the duty demand is not sustainable. The learned counsel submitted that after computing the duty by applying the formula, the department has accepted the higher amount arrived wherever the invoices showed lesser amount. When the amount arrived on computation was lower than the value shown in the invoices, the department has taken the higher value shown in the invoice to ascertain the value of clearances. That this shows fallacy of the ascertainment of value of clearances.
6.7 That such computation of clearances cannot be reconciled with the consumption of raw material and electricity.
6.8 The department has erroneously included the raw materials issued to Venkateshwara Plastics (VP) to ascertain the quantity of clearances of the appellant. That this happened only because the same accountant Shri Valliappan was not only managing the accounts of appellant but also other units namely, Venkateshwara Plastics as well as M/s. Ananda Polymers and M/s. V. Subramanian & Co.
6.9 That Shri Valliappan had given an affidavit to the effect that the production/valuation of clearances based on the private note books maintained by him is not correct. That note books (Sl.No.s.21,23, & 24) contain combined entries for the period. He has also stated that common notebook was used for raw materials stock and issue of granules for appellant company and other units. That department has not given any weightage to the affidavit filed by Valliappan.
6.10 Similarly, an affidavit was field by S. Rengaraj, who is the accountant of M/s. Subramaniam and Co. in which he has affirmed that during the financial year 2003 04, their company did not procure plastic bags weighing 82574 Kgs valued at Rs.62,88,789/- and during the financial year 2004 2005 did not procure plastic bags weighing 105959 Kgs. valued at Rs.88,34,702/-. The department has not considered this affidavit also. These affidavits would show that the basis of arriving the value of clearances and computations of duty is entirely wrong.
6.11 That the entire investigation was done basing upon the records for the year 2003 04 but the invoices have been taken for compare for year from 2001 05. That no documents were received for the period 2004 05.
6.12 The entire case is thus made out on the basis of value of clearances ascertained by assumptions and that there is no corroborative evidence for the duty demanded except the private documents recovered such as notebooks, chits etc. That the appellant has refuted these documents and explained these documents. They also furnished the affidavit of the above persons which have not been taken into consideration. He pleaded that the demand may be set aside and the appeal may be allowed.
7. Against this, learned AR Shri B. Balamurugan reiterated the findings in the impugned order. He submitted that the appellant was maintaining private records for the purpose of noting down the value of unaccounted raw materials used as well as unaccounted finished products (plastic bags) cleared by them. The department had recovered stock note/ register, chits, file containing daily cash receipts and payments, ledgers, cash bills etc. From the chits, it was seen that orders were placed on the basis of the size of the bag as well as its thickness. The chits contained the customers name, size of bag, gauge of plastic bags to be supplied, quantity in number, quantity in kilograms and rate per kilogram. It is well known that the value of the plastic bags differ and vary depending upon the thickness and the size of the bags. Instead of arriving at the value of the plastic bags on the basis of weight, size and thickness, the appellant raised invoices showing the rate based on number of bags whereas, the chits which were used for orders of customers indicated the rate per kg basing on size, thickness etc. Some of these chits were not supported by invoices which proved that the appellants were also clearing the plastic bags without issue of invoices. Apart from these, clearances were made on issuance of cash bills. In the cash bills, similarly the weight of the plastic bags were not shown and the value was indicated on the basis of number of bags, whereas the chits corresponding to cash bills showed the value mentioned with regard to weight size, thickness. Again, some of these cash bills were not supported by chits which indicated that appellant has also been clearing plastic bags over the counter without issuance of cash bills.
7.1. The contention of the appellant that only documents relating to the period from 17.4.2003 to 31.3.2004 were recovered and that the details in such documents have been applied to demand duty for the entire period is baseless for the reason that the department has recovered documents relating to the entire period. The document which the appellant is referring to is only the stock register which was seized. The department has seized not only the stock register but also chits, cash bills, ledger etc. which would show the activity of clandestine clearance of plastic bags undertaken by the appellant. The handwritten chits were recovered from their sales office.
7.2. The details of raw materials issued for production and the actual production of plastic bags was available in the notebooks serially numbered 23 and 26 in the Annexure. On comparison with the production and clearance shown in the Stock Register maintained by appellant there was much variance. For example, the quantity of raw material issued for production on 1.12.2003 as per note book Sl. No. 23 is 675. The production and clearance as per Sl. No. 26 on the same date is 482.700; whereas the production and dispatch shown in the stock register (C2) is nil. Shri Valliappan, the manager cum accountant and partner Shri S. Chockalingam has stated that as per practice, in their unit, the quantity of PP bags dispatched in a day is the quantity of plastic bags manufactured on that particular day and no finished products are left over in the unit. There is a suppression of quantity of 482.700 for the entire disputed period and on almost all days, there is such variation. Again, out of the total production of 101329.390 Kgs. of plastic bags as per note book No.26, during the period from 11/2003 to 3/2004, the appellant has accounted only 42,528 Kgs. in their Stock Register. Thus, a production of 58,801.390 Kgs. of plastic bags has been suppressed.
7.3 The notebook Serially numbered 21 contains the daily production account of HM products in respect of the appellant unit. This contains details for the period 4.8.2003 to 29.11.2003. Shri Valliappan was maintaining this note book. In a few pages, details of production of Venkateshwara Plastics are also seen recorded. In a few pages, details of production of LD products of M/s. V.Subramaniam & Co. is also seen noted. This is clearly stated in the SCN itself which establishes that the department has taken the daily production with regard to appellant only. The contention of the appellant that the clearances with respect of Venkateshwara Plastics have also been added to the clearances of the appellant for raising the demand is therefore false. Further, the contention of the appellant that during the period from 2003 04, M/s. Subramanian & Co. had not purchased relevant quantities from the appellant is false and the affidavit filed by Shri Rengarajan, Accountant of M/s. Subramanian & Co. and Shri Valliappan cannot be accepted in evidence.
7.4 The contention of the appellant that there is no evidence to prove unaccounted consumption of raw material and consumption of electricity etc. for producing the quantity of bags of value exceeding the exemption limit of Rs. One crore, is untenable for the reason that it is clearly brought out from evidence that the appellant was maintaining two different records; one showing the actual issue of raw materials for production and the actual manufacture of plastic bags and the other showing a lesser quantity of issue of raw materials and production of finished goods, which was ultimately used by them for disclosure to the statutory authorities. The stock Register and private notebooks clearly prove that the appellants have indulged in clandestine clearance.
7.5 The fact that the chits contained the mention of weight of the bags with details of thickness and size whereas the invoices contained only the description, with regard to number of bags cleared would show that the appellants have not been fairly accounting the finished products. The file serially numbered 7 seized from the sales office of the appellants contained many handwritten chits. In the chits, the details such as actual weight of the bags, size of the bags and value of the bags are mentioned. For example, in a chit dated 4.3.2004, the customer name is shown as Jegan / VRT 80 grams NLF 6 x 9 (the particulars of HM bags) sent 40 Kgs. (weight) Rs.3,120/- amount is shown. This means 40 kgs of plastic bags of size 6 x 9 40 kg was despatched to Jagan for value Rs.3,120/-. On scrutiny of the invoice for the above date, it is seen that Invoice No. 8392 dated 4.3.2004 is issued to Jegan S, Virudhachalam showing 6 x 9 x 80 grams 25,000 numbers 78 (Rate) Rs.1,950/-. From the above, it is seen that though actual value of the plastic bags supplied to Jegan S, Virudhachalam on 4.3.2004 was Rs.3,120/- the invoice was raised by appellant only for Rs.1,950/-. Thus, in the invoice, the rate is computed and mentioned per 1000 numbers of plastic bags showing a lesser value. On comparison of the rate with per kg rate, shown in the corresponding chits, it is seen that per kg rate in the chits and rate per 1000 numbers of plastic bags in the invoice are same.
7.6 There are also instances where the appellant has cleared plastic bags without issuing invoices but only chits. For example, the chit dated 2.3.2004 found at Page 123 of the file serially numbered 7 shows that appellant cleared 166.140 Kgs. of plastic bags valued at Rs.16,135/- to M/s. MR Plastics, Thanjavur. But on scrutiny of invoices, there is no corresponding invoice for the above quantity cleared by the appellant. Thus, appellants have been not only undervaluing but also clandestinely clearing plastic bags without issuance of invoices but covered only by chits.
7.7. Another method adopted by appellant for suppression of value of clearances is the clearances made under cash bills. Documents were recovered from R.P.R. Essence Mart, Pattukottai, who are one of the dealers for appellant. These documents pertained to appellant and included certain printed cash bills and relevant handwritten chits of appellant for supply of plastic bag which is found in the account maintained by RPR Essence Mart. For e.g. Vide Cash Bill No. 10421, 10422 and 10423, a total amount of Rs.1,266/- is seen cleared by appellant to RPR Essence Mart. The corresponding quantity shown in the chit of the same date, shows total amount to be Rs.3,607/-. Thus, the appellants cleared plastic bags by issuing printed cash bills accompanied by written chits and the value of the plastic bags indicated in the cash bills was lesser value. The sale proceeds were received on the basis of the higher amount indicated in the chit. The difference in value was received by them by cash.
7.8 Another document relied upon by the department is the file serial number 8 seized from the Sales office of the appellant pertaining to the calculation of commission paid to the dealers / salesman. The statement of calculation of commission for month May 2004 in respect of one sales man Shri S. Venkataraman shows that the total value of plastic bags sold through him during the month of May 2004 is Rs.3,39,275/- and an amount of Rs.19,864/- was paid to him as commission. The details when compared with the invoices revealed that the appellants were clearing plastic bags without issue of invoices. They have not raised invoices for the quantity of bags sold by the salesman for which commission was paid. Similar calculation statements with regard to commission paid to others were also recovered.
7.9 The department has also collected evidences from the transporters. On verification of the details of despatch made by appellants through one transporter namely Jothi Van Service with the invoice issued by the appellants for the corresponding period, it is seen that for many clearances/despatches there are no corresponding invoices. e.g.: The records maintained by Jyothi Van Service showed Parcel booking receipt No.3758 dt.1.1.2004 despatched to Diamond Supermarket, Pattukottai. But no invoice was available for this. There were several such instances with Jyothi Van Service, M/s.A.K.R.Parcel Service and ABT Parcel Service.
7.10 From the evidences, it is clear that the contention of the appellants that the handwritten chits were merely orders placed by the customers is false and cannot be accepted. The modus adopted by the appellant has also been admitted by Shri S. Chockalingam, Shri Thirunavukarasu who are partners in the statement given by them.
7.11 The contention of the appellant that the computation done by the department is erroneous cannot be accepted. That the said formula applied by the department is an accepted formula in the industry and has also been stated so by the Managing Partner of the appellant. The value of the clearances made under invoices and cash bills wherever the size and thickness of plastic bags has been indicated is stated to be arrived by using the following formula:-
Length (L) inch x width (W) inch x thickness Weight of 1000 Nos. (in guage) Of plastic bags ____________________________________ 3600 The above method of arriving at the weight of the plastic bags was adopted by the department for the reason that the appellant actually sold to the dealers on the basis of weight and they did not deliberately mention the weight in the invoice and cash bills and instead mentioned the value on the basis of number of bags cleared. Further, the department also conducted test check of weight in respect of plastic bags of various sizes at the premises of MR Plastics, Thanjavur and the test check clearly proved the method arriving at weight of plastic bags from the size and thickness of plastic bags by applying the above mentioned formula is correct and is confirmed by the actual weighment done by the department. The weight adopted based on such formula is also corroborated by the work order, notebook serially numbered 16 recovered from the appellant. The argument of the learned counsel that the department has accepted the higher value shown in the invoices whenever, the value arrived at by computation was lesser and taken higher amount arrived by computation whenever value shown in invoice was lesser is explained by the learned AR referring to the show cause notice and the discussions in the impugned order. While ascertaining the actual value, wherever the thickness was mentioned in the invoices, the same was taken into account for arriving at the actual weight. In cases where the thickness of the bag (gauge) was not mentioned, the minimum thickness of plastic bags i.e. 40 gauge (10 micron) has been taken as the basis for arriving the actual weight. That the bags are of different gauges of 40, 60, 80 etc. The department has taken the minimum gauge of bag for arriving at actual weight. Thus, the duty demand raised is legally sustainable.
8. We have heard the submissions made by both sides.
9. The allegation raised against the appellant is that they undervalued as well as clandestinely cleared the plastic bags thereby suppressing the value of clearances in order to be eligible for availing the benefit of exemption as per Notification 8/2000. The main allegation raised against the appellant is that they received orders from their customers for supply of plastic bags and such orders were placed on weight basis after specifying the size, thickness of the bag. Though the orders were placed on the basis of size and thickness and weight of the bags which was noted by appellants on chits, the appellants raised invoices to customers for lesser value on the basis of the quantity shown in numbers. Thus, the actual sale price was collected under cover of handwritten chits and the amount mentioned in the invoices by way of numbers was recorded in the statutory registers and other records furnished to the authorities. For some clearances, invoices were not issued at all. In some cases, size and thickness of plastic bags mentioned in the chits did not tally with the invoice issued to the party on the same date. It is the case of the department that the weight of plastic bags were deliberately not shown and the quantity of bags were cleared by showing the numbers only, to under value the finished products so as to keep the value of clearances less than one crore i.e., within the SSI limit. Investigations conducted by the department also revealed that the rate mentioned in the invoices is arrived after considering 1000 number of plastic bags as one kilogram irrespective of the size and thickness of the plastic bags. The sale proceeds in excess of invoice amount was collected in cash and the same was not accounted in their records maintained in regular course.
10. On perusal of records and after hearing the submissions made by both sides, we are able to see that various documents recovered by the department sufficiently brings out the case of clandestine clearance. One major contention put forward by the appellant is that the stock register resumed by the department was maintained only for a period from 17.4.2003 to 31.3.2004 whereas the allegation of clandestine clearance is raised for the entire period basing upon this document. We do not find much substance in this contention of the appellant for the reason that though department has relied upon this stock register which contains the account of raw material issued for production as well as clearances of finished products, for this particular period, the investigation has brought out several private records like S. No. 21, 23, 24 and 26 notebook, which are private records. Further chits showing the weight, size, thickness of bags were recovered. Appellant has not disputed the chits, but only contends that these are written when orders are placed. The appellant has not explained why the invoices were issued with rate in respect of number of bags whereas, while orders were placed, the rate was mentioned on the basis of size, thickness and weight. It is well known fact that plastic bags are sold by their weight (gauge/microns) and not merely by numbers. When the appellants admit that orders were placed by the parties, stipulating the size, thickness of plastic bags, it is dubious that appellants have issued invoices without mentioning the size and thickness, but only referring to the number of bags cleared.
11. Another contention raised by appellant is that Shri Valliappan who was the accountant for appellant as well as three other units had maintained a combined account and therefore the clearance of another unit, namely Venkateshwara Plastics was also included in the clearances of appellant while ascertaining the value of clearances by department. To substantiate this contention, the affidavit of Shri Valliappan is said to have been filed. Similarly, S. Rengarajan who is the accountant of M/s. Subramanian & Co. is said to have filed an affidavit stating that for the years 2003 04 and 2004 05, relevant weight of plastic bags which have been included for ascertaining the value of clearances and demand of duty, have not been purchased by them from the appellant company. Though, it is stated that Shri Villappan and Shri S. Rengarajan have filed affidavit, on perusal of these documents, we are able to see that these documents are not affidavits. These documents are not attested. They are merely signed and verified by the parties. Such documents which are not attested cannot be accepted as affirmation of a party and therefore are not acceptable in evidence. They are, therefore, discarded in toto.
12. At the cost of repetition it is pertinent to mention that the appellants have not come forward with a plausible explanation as to why they have not mentioned the size and thickness of the plastic bags in the invoices/cash bills when they have mentioned the size and thickness of the bags in the chits. It is admitted by appellants that they were noting down the size and thickness and the corresponding value while orders are placed by the customers. Such chits have been recovered by the department from the sale office of appellant unit. These when compared with the invoice have brought to light that there is much undervaluation by not mentioning the size and thickness of the bags. The appellants have mentioned the quantity of the bags in numbers and have applied the rate for number of bags thereby showing a lesser value for the bags cleared by them. It is also brought out from the evidence from dealers / purchasers like Jegan and MR Plastics that the appellants have cleared plastic bags by issuing chits only and not issuing any invoice or cash bills at all. Such clandestine removal of finished product is unearthed from the evidence collected at the end of transporters also. Thus, we have to say that the department has been able to establish clandestine clearance on the part of the appellants.
13. It is also argued by the learned counsel for appellant that the computation of duty is highly erroneous. The department has explained how they have ascertained the value of clearances basing upon the size and thickness of the bags in respect of invoices / cash bills in which the size and thickness have not been mentioned. The formula (stated in earlier part of this order) applied by the department is accepted by the industry and as seen from the records is also spoken to in the statement recorded by the Managing Partner Thirunavukarasu and S. Chockalingam of appellant-firm. It also needs to be mentioned that applying such formula and method of computation, the value of clearances for the years 2001 02 to 2002 03 is below Rs. One crore and the department has given the benefit of exemption of notification to appellant for these two years. Applying such computation the demand is confirmed for the period 2003 04 to 2004 05 (upto 1.11.2005) when the value of clearances exceeded one crore. Therefore, we do not find any ground to doubt or interfere with the quantification of duty also. The learned counsel for appellant has argued that in such case of high quantity of clearances, the department ought to establish that the appellant has consumed higher quantity of raw material as well as electricity. It is noted and discussed by the adjudicating authority that the appellant was maintaining private records for issue of raw material and the actual issue of raw material was not recorded in the Stock Register maintained by them. The power consumption by itself cannot be taken as a factor, since the variation may be due to several factors.
14. The Ld. counsel for appellant has argued that the 1st SCN dt.17.11.2005 was issued for the period 1.4.2001 to 1.11.2004 invoking extended period on the grounds of suppression of facts. That therefore the 2nd SCN dt.3.1.2006 for the period 2.11.2004 to 1.3.2005 cannot be issued invoking extended period alleging suppression again. He relied upon the decision in the case of Nizam Sugar Factory 2006 (197) ELT 465 (S.C.). That therefore the demand for two months i.e., 11/2004 and 12/2004 which is beyond the normal period in 2nd SCN for an amount of Rs.1,26,386/- is barred by limitation. The facts and evidence establish that appellants have indulged in undervaluation and unaccounted clearances with an intention to evade payment of duty. The same would not have come to light but for the investigation conducted by department. The second show cause notice is based on documents recovered for that period. The department was continuing the investigation. They had to compare these documents with the evidences received from dealers/purchasers, transporters etc. Being a continuous investigation, the appellant cannot take shelter contending that the extended period cannot be invoked.
15. For the foregoing discussions, we find that the appeal is devoid of merits and the same is dismissed.
(Pronounced in open court on 28.07.2017)
(Madhu Mohan Damodhar) (SULEKHA BEEVI C.S.)
Member (Technical) Member (Judicial)
Rex
24
E/493/2007