Custom, Excise & Service Tax Tribunal
M/S. Sree Skanda Spinners vs Cce, Madurai on 24 October, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/338 to 340/2005
(Arising out of Order-in-Appeal No.7 to 14/2005 dated 31.1.2005 passed by the Commissioner of Central Excise (Appeals), Madurai)
M/s. Sree Skanda Spinners
D.D. Jeyaram
V. Bhaskaran Appellants
Vs.
CCE, Madurai Respondent
Appearance Ms. S. Vishnupriya, Advocate for the Appellant Shri B. Govindarajan, AC (AR) for the Respondent CORAM Honble Shri D.N. Panda, Judicial Member Honble Shri Madhu Mohan Damodhar, Technical Member Date of Hearing / Decision: 24.10.2016 Final Order Nos. 42023-42025 / 2016 Per D.N. Panda Appellant submits that there were no adequate evidence to make allegation of any evasion caused by the main appellant M/s. Sree Skanda Spinners. What that was the material recovered in the course of investigation does not directly demonstrate any involvement of the appellant manufacturer, M/s. D. D. Jayaraman and V. Baskaran to cause evasion. Therefore, there should not be penalty on them and no duty demand realizable from the main appellant.
2. Revenue on the other hand says that there was a massive evasion caused by the appellant issuing parallel invoices and also disguised clearance made claiming the goods to be hank yarn and duty free. Therefore, there was a proper adjudication done raising duty demand and levying penalty.
3. Perusal of the records show that in the course of investigation on 19.2.2000 to the premises of the appellant M/s. Sree Skanda Spinners and its sales depot, investigating team found that cotton cone yarns were cleared in the guise of hank yarn to the buyers to claim duty exemption and parallel invoices were issued to make the transaction. The adjudicating authority found that the investigation story was based on the material recovered in the course of search demonstrating such modus operandi by the appellant. Learned Commissioner (Appeals) also found that there was adequate evidence on record to support the adjudication for which he dismissed the appeals of these appellants.
4. The modus operandi followed by main appellant M/. Sree Skanda Spinners to cause evasion was that there were no process of conversion of cone yarn done by the appellant to produce hank yarn by M/s. Rockwell Textiles (in short, M/s. RKT). Investigation into the premises of M/s. RKT revealed that no processing was carried out thereat. The appellant M/s. Sree Skanda Spinners had cleared the cotton cone yarn to the yarn dealers, in and around Tiruppur as well as to its depot at Tiruppur using one set of invoices indicating the goods cleared as cotton yarn only and the invoices exhibited the goods to be dutiable goods. But no such duty has gone into treasury. As soon as the goods reached to the place of buyer as well as to depot of the appellant, the appellant was issuing another set of invoices for the same goods indicating the clearance of cone yarn to M/s. RKT for conversion into hank yarn. This methodology was followed to claim duty exemption pretending to have processed cone yarn into hank yarn. There was actually no conversion done. Records were fabricated to exhibit that there was conversion taken place by M/s. RKT and the converted hank yarn were dispatched to the buyers at Tiruppur. While one set of invoice showed that there were clearance of cone yarn on payment of duty and those were destroyed, the other set of invoices showed clearance of hank yarn falsely without any processing done by M/s. RKT to convert the cone yarn into hank yarn. All such allegations could not be discarded by appellants.
5. Revenue made out a calculation of duty loss in respect of 310565 Kilograms of cone yarn and exposed that to the appellant for rebuttal. But, the appellant failed to defend.
6. On the above premise, Revenues case was that the appellant M/s. Sree Skanda Spinners maintained two set of invoices to transact the goods. The false invoice showing payment of duty clearing cone yarn was prepared and destroyed later and the other set of invoices showed clearance of hank yarn although cone yarn was cleared. This was done to take benefit of duty exemption. The unaccounted goods were purchased by the buyers M/s. Viji Garments, Tiruppur, M/s. Sandeep Traders, Tiruppur, M/s. CEM Fabrics, Tiruppur, M/s. Midhun Textiles, M/s. M.P. Creations, Tiruppur, M/s. New Dynamic Apparels, Tiruppur, M/s. Om Sakthi Impects, Tiruppur and to their Depot.
7. There were also fictitious parties who accommodated the appellant to replace unaccounted invoices for hank yarn and they were M/s. Archana Yarn Traders, Salem, M/s. Hindu Textiles, Salem, M/s. Saroja Yarn, Salem, M/s. Sivakami Textiles, Salem, M/s. Sri Thillai, Salem, M/s. T.R. Sentilvelu, Salem, M/s. Karpagambal, Salem, M/s. Ramasamy Yarn Corporation, Salem and M/s. KNS Clothigs, Tiruppur.
8. Maintenance of record by the appellant was found to be fabricated and false and appellant caused loss of revenue for which it faced adjudication with the consequence as enumerated by the appellate authority in para 9 of his order.
9. There were no evidence led before us today to discard the appellate authoritys findings as to the falsification of record and issuance of fabricated invoices. So also there is no evidence to repel the evidence given by the buyers.
10. On the above circumstances, it is not possible to intervene to the order passed by learned Commissioner (Appeals) for which all the three appeals are dismissed.
(Dictated and pronounced in open court)
(MADHU MOHAN DAMODHAR) (D.N. PANDA)
Technical Member Judicial Member
Rex
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