Custom, Excise & Service Tax Tribunal
M/S Palsana Fibres Pvt. Ltd vs Commissioner, C.Ex. & S.Tax, Surat-I on 16 May, 2016
4In The Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
Appeal No.E/1198,1199/2008-DB
[Arising out of OIA No.RKS/471-472/SRT-I/2008, dt.27.06.2008, passed by Commissioner (Appeals), C.Ex. & S.Tax, Surat-I]
1. M/s Palsana Fibres Pvt. Ltd.
2. Shri Ratanlal Mahavirprasad Daruka Appellants
Vs
Commissioner, C.Ex. & S.Tax, Surat-I Respondent
Represented by:
For Appellants: Shri Mukund Chauhan, Chartered Accountant For Respondent: Shri L. Patra, A.R. For approval and signature:
Honble Dr. D.M. Misra, Member (Judicial) Honble Mr. P.M. Saleem, Member (Technical)
1. Whether Press Reporters may be allowed to see the No Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of Seen the order?
4. Whether order is to be circulated to the Departmental Yes authorities?
CORAM:
HONBLE DR. D.M. MISRA, MEMBER (JUDICIAL) HONBLE MR. P.M. SALEEM, MEMBER (TECHNICAL) Date of Hearing/Decision:16.05.2016 Order No.A/10410-10411/2016, dt.16.05.2016 Per: Dr. D.M. Misra These two appeals are filed against OIA No.RKS/471-472/SRT-I/ 2008, dt.27.06.2008, passed by Commissioner (Appeals), C.Ex. & S.Tax, Surat-I.
2. Briefly stated facts of the case are that the Appellant are engaged in the manufacture of Texturised Yarn out of duty paid Partially Oriented Yarn (POY). On a visit to the factory premises of the Appellant on 08.06.2002, the Officers retrieved a private note book allegedly contained clearances without payment of duty. On completion of investigation, it was noticed that the Appellant had removed 26157.60 kgs of finished Textured Yarn clandestinely without payment of duty during the period from 01.04.2002 to 07.06.2002. Consequently, a Show Cause-cum Demand Notice was issued to them on 28.04.2005 for recovery of duty of Rs.4,71,675.00 and proposition for imposition of penalty on the Appellant company; also personal penalty on the second Appellant. On adjudication, the demand was confirmed and equivalent penalty was imposed on M/s Palsana Fibres Pvt Ltd and personal penalty of Rs.10,000.00 on Shri Ratanlal Mahavirprasad Daruka, the Authorized Signatory of the Appellant Company under Rule 26 of Central Excise Rules, 2002. Aggrieved by the said Order, the Appellants preferred appeals before the learned Commissioner (Appeals) who in turn upheld the orders of the Adjudicating authority and dismissed their appeals. Hence, the present appeals.
3. Learned Chartered Accountant Shri Mukund Chauhan for the Appellant submits that the authorities below had wrongly denied the benefit of Notification No.06/2002-CE, dt.01.03.2002 in calculating the duty liability, even though the Appellant company had satisfied the conditions of the said notification viz. POY used in the manufacture of Textured Yarn had suffered duty and also they have not availed CENVAT Credit on the said POY. It is his contention that after the records were seized from their premises on 08.06.2002, the appellant later on 02.09.2002 submitted the evidences viz. three invoices against which the POY was purchased from one M/s Parsrampuria Synthetics Ltd in January 2002 weighing 23,540.700 kgs. He has argued that that even if textured yarn were cleared without payment of duty, but since duty had been paid at applicable rates on the POY, which were used in the manufacture of the textured yarn, they are eligible to the benefit of Notification No.6/2002-CE, dt.01.03.2002 as amended in computing their duty liability.
4. It is his contention that the details of POY received, consumed in the manufacture of textured yarn including the clearances of 26157.60 kgs during the said period had been submitted in the reply to the Show Cause Notice. It is their grievance that the authorities below, without any contrary evidence on record, erroneously rejected the purchase invoices issued by M/s Parsrampuria Synthetics Ltd. It is their argument that the quantity of POY mentioned in these invoices, had been duly purchased and payments were made through Account Payee Cheques. In support, they had also enclosed a Chartered Accountants certificate about the purchase, receipt and consumption of the said material in their factory during the relevant period. Further, he submits that the entire amount of duty was paid by them soon after the detection of the case and before issuance of Show Cause Notice, therefore, no penalty is imposable on the Appellant. It is his submission that in any case since both the authorities below had not allowed the Appellant to pay 25% of the penalty imposed under Sec.11AC of CEA,1944 on fulfillment necessary conditions in view of the decision of the Honble Gujrat High Court in the case of CCE Vs Harish Silk Mills 2010 (255) ELT 393 (Guj.) and CCE Vs G.P.Presstress Concrete Works 2015 (323) ELT 709 (Guj), they are eligible to the same.
5. Per contra, the learned Authorized Representative for the Revenue took us through the finding of the Adjudicating authority, where under, the Adjudicating authority has recorded reasons for not accepting the three invoices produced by the Appellant as the quantity mentioned therein were not sufficient to manufacture the textured yarn cleared without payment of duty even after addition of quantity due to oil gain @1.75% to the total quantity mentioned in these invoices. He has also submitted that in the statement dt.08.06.2002 the Authorized signatory has stated that they purchased the POY to manufacture the goods cleared clandestinely. Even though this statement was retracted on 17.10.2003, but the same being an after thought action hence not acceptable. It is his contention that the Appellant could not adduce sufficient evidences in this regard, therefore, they are not eligible to the benefit of the Notification.
He contended that it is brought out in the SCN and OIO that the opening balance of POY shown in Form IV Register as on 01.04.2002 was only 4803.750 Kgs. Further, though the invoices of M/s Parsurampuria Synthetics Ltd are dated 12/16.01.2002, they are not entered in the Form IV Raw Material Register till the officers visit in June 2002, and that the balance sheet was prepared only 03.09.2002.
6. Heard both sides and perused the records. We find that the issue for determination revolves in a very narrow compass. It is an admitted fact that during the period from 01.04.2002 to 07.06.2002, the Appellant had manufactured and cleared 26,157.600 kgs of Textured Yarn without payment of duty. The principal issue which needs to be addressed is: whether the Appellant would be eligible to discharge duty @ 16% as per tariff rate or the benefit of Notification No.6/2002-CE, dt.01.03.2002 be allowed in calculating the duty liability on the cleared quantity of 26157.600 kgs of Textured yarn. On perusal of the said Notification, it is clear that two conditions need to be satisfied so as to be eligible to the benefit of said notification. These are namely, the duty must have been paid on the POY used for texturisation and CENVAT Credit should not have been availed on the said POY. The claim of the Appellant that even though they had cleared 26,167.600 kgs of manufactured Textured yarn without payment of duty, however, the same had been manufactured from duty paid POY and they had not availed CENVAT Credit on the said POY. It is the claim of the Appellant that initially their Authorized Representative shri Ratanlal Mahavirprasad Daruka in his statement dt.08.06.2002 stated that the said quantity of finished goods were manufactured from POY purchased in cash from the market, but the said statement was claimed to have been under pressure and without verification of the proper data. Hence, subsequently, through their letter dt.02.09.2002, the purchase of 23540.700 kgs of POY from M/s Parsurampuria Synthetics against three duty paid excise invoices was submitted and this fact was confirmed by Shri Ratanlal Mahavirprasad Daruka in his subsequent statement on 17.10.2003 while retracting his earlier statement dt.08.06.2002. To corroborate their version, in support, they have produced a Chartered Accountants Certificate and relevant purchase documents. We find that the authorities below had not accepted the quantity of 23540.700 kgs mentioned against the three invoices issued by M/s Parsurampuria Synthetics in calculating the total quantity of POY received and consumed, and also observing that the same did not conform to the quantity of removal of Textured Yarn i.e. 26,167.600 kgs even after adding 1.75% as the quantity towards oil gain, which works out to only 23,952 kgs. In other words, both the authorities below had arrived at the finding that the Appellants had not adduced sufficient evidence to establish that the POY used in the manufacture of 26,167.600kgs of textured yarn had suffered duty. The claim of the Appellants, on the other hand was that they had produced evidences including the CA certificate to show that the said quantity of POY had been purchased and consumed in their factory; the payments were made through A/C payee cheques, accordingly it should be accepted. From the impugned Order we could not notice any observation on the evidentiary value of the said certificate and its acceptability, particularly when the statements dt.08.06.2002 and 17.10.2003 of Shri Ratanlal Mahavirprasad Daruka are contradictory in nature and the invoices were produced on 02.09.2002 by the Appellant before the notice was issued to them on28.04.2005 . Therefore, it is appropriate to verify/examine the said evidences before arriving at the conclusion. Accordingly, in the interest of justice, we remand the matter to the Ld. Commissioner (Appeals) to decide the issues afresh after considering all evidences on record and the evidences that would be produced by the Appellant and in particular the acceptability or other wise of the CA Certificate. Needless to mention a reasonable opportunity of hearing be allowed to the Appellants. After determination of duty liability/quantum of penalty on the Appellants be considered. The Appellant companys argument that they would be eligible to discharge 25% of the penalty in view of the Hon'ble Gujrat High Courts decisions in the case of Harish Silk Mills & G.P.Presstress Concrete Works (supra) subject to fulfillment of conditions prescribed under the relevant provisions, be also considered.
8. The Appeals are disposed of as above.
(Operative part of the Order pronounced in the open court)
(P.M. Saleem) (Dr. D.M. Misra)
Member (Technical) Member (Judicial)
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