Custom, Excise & Service Tax Tribunal
M/S Herbicides India Ltd vs Cce, Jaipur on 9 May, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Date of Hearing : 24.4.2014
Date of Pronouncement : 9.5.2014
Appeal No. E/3318/2010-EX(SM)
[Arising out of the Order-in-Appeal No. 340-341(DKV)ST/JPR-I/2010 dated 21.7.2010 passed by the Commissioner, Central Excise, Jaipur)
For Approval & signature :
Honble Ms. Archana Wadhwa, Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it would 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 the order?
4.
Whether order is to be circulated to the Department Authorities?
M/s Herbicides India Ltd. Appellants
Vs.
CCE, Jaipur Respondent
Appearance Shri Bipin Garg, Advocate - for the appellant Shri R.K. Mishra, A.R. - for the respondent CORAM:Honble Ms. Archana Wadhwa, Member (Judicial) Final Order No.52077/2014 Per Archana Wadhwa :
The appellants are engaged in the manufacture of pesticides falling under Chapter Heading 38 of the Central Excise Tariff Act, 1985. Their factory was visited by Central Excise officers on 9.11.2000, who conducted various checks and verifications. As a result raw material involving duty of Rs.6,162/- was found short.
2. Further the officers recovered commercial invoices other than the invoices maintained under Rule 52A. On being questioned Shri Rakesh Mishra, authorised representative revealed that the said commercial invoices are in respect of duty paid goods which were rejected by their customer and were kept outside the factory and were diverted from their only.
3. On the above basis, proceedings were initiated against the appellant vide issuance of Show Cause Notice dated 29.11.2001 proposing demand of duty of Rs.8,41,705/- along with the duty involved in respect of the short found raw material and for imposition of penalties. The said Show Cause Notice culminated into an order confirming the demands as proposed. On appeal against the said order, Commissioner (Appeals) took into consideration the appellants submission that the commercial invoices were in respect of the returned goods and also found that the appellant had addressed a letter dated 24.8.1998 to the Commissioner, Central Excise, Jaipur to allow them to store duty paid goods returned from the distributor/consignment agent. He also took into consideration that a consignment of returned goods from M/s Trades Worth vide their delivery challan No. 361 dated 30.7.1998 stand intercepted by the Sales Tax department. However, he allowed the benefit of duty involved in the returned goods to the extent of 2,50,953/- involved in the above transaction and confirmed the balance demand of Rs.5,90,872/-.
4. The said order was challenged by the appellant before Tribunal, who remanded the matter to the original adjudicating authority to take into consideration the report of the Assistant Commissioner as regards the return of the rejected goods.
5. In remand, both the authorities below again confirmed the demand on the findings of clandestine removal. Hence the present appeal.
6. After hearing both the sides, I find that the Commissioner (Appeals) has observed that the appellants stand that the goods were cleared either from the premises of the transporters or dealers is not possible inasmuch as they have repacked the goods from larger packs to smaller bags, which activity is not possible at the premises of the transporter. However, I find that the entire charge of the Revenue is a clandestine removal of the appellants final product, which is based upon the commercial invoices recovered by the Revenue during the course of search of the factory. The appellants had taken a categorical stand that such commercial invoices stand issued subsequent to the clearance of the goods on payment of duty, in respect of the rejected goods by their customer. In fact, the Commissioner (Appeals) in his earlier order has himself extended the benefit of the duty around of Rs. 2.50 lakhs, where there was clear evidence of return of the goods by the customer. The said part of the earlier order of Commissioner (Appeals) does not stand challenged by the Revenue. As such, the same lends credence to the appellants stand that commercial invoices are in respect of the goods already cleared on payment of duty and returned by their customers, which are not brought back to the factory but are cleared either from the dealer/distributor premises or from the transporters premises.
7. In any case, in any view of the matter, I find that having recovered commercial invoices, the Revenue did not make further investigation as regards the identity of the buyers and the transporter etc. so as to corroborate the charge of clandestine removal. No efforts were made to find out the source of the raw material and no statements of the production people were recorded. It is well settled law that charges of clandestine removal cannot be upheld on the basis of non-corroborative evidences. Inasmuch as in the present case there is neither any corroboration to the charge of clandestine removal under the cover of commercial invoices nor any independent evidence produced on record. Further, as the plea of the appellant as regards raising of commercial invoices stands accepted in respect of some of the returned goods, I am of the view that the charges of clandestine removal cannot be upheld against the appellant. Accordingly, the impugned order is set aside and appeal allowed with consequential relief to the appellant.
(Pronounced in Court on..........................) (Archana Wadhwa) Member (Judicial) RM 1