Custom, Excise & Service Tax Tribunal
Madura Coats Private Ltd vs Cce Tirunelveli on 13 January, 2009
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.E/315/2008
[Arising out of Order-in-Original No.01/COMMR/CE/2008 dated 31.3.2008 passed by the Commissioner of Central Excise, Tirunelveli]
For approval and signature:
Honble Ms.JYOTI BALASUNDARAM, Vice-President
Honble Mr. P.KARTHIKEYAN, Member (Technical)
1. Whether Press Reporters may be allowed to see the 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 the Members wish to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
Madura Coats Private Ltd.
Appellant/s
Versus
CCE Tirunelveli
Respondent/s
Appearance :
Shri S.S.Thakur, Vice President Shri N.J.Kumaresh, SDR For the Appellant/s For the Respondent/s CORAM:
Honble Ms.Jyoti Balasundaram, Vice-President Honble Mr. P. Karthikeyan, Member (Technical) Date of hearing : 13.1.2009 Date of decision : 13.1.2009 Final Order No.____________ Per Jyoti Balasundaram We have heard both sides on the appeal of the assessee against confirmation of demand of duty of Rs.43,35,307/- together with interest and penalty of equal amount under Section 11AC of the Central Excise Act, 1944.
2. The case of the department, in brief, is that the EOU had clandestinely cleared grey and processed fabrics in excess of the quantity covered by invoices issued by the said unit in respect of DTA clearances to Aladiyur Unit, and two third parties. The case of the department is built on Monthly Manufacturing Reports (MMRs). We find that in respect of charge of clandestine clearance of yarn in excess quantity covered by invoices issued by the EOU in DTA, the excise authorities initiated proceedings by issuing show-cause notice dated 12.9.01 covering the period November96 to December99; the proceedings initiated under the notice was dropped by the Commissioner (Appeals) vide an order dt. 12.7.04; the appeal of the Revenue bearing No.E/1283/04 claimed to be dismissed by the Tribunal by its Final Order No.1493/05 dt. 11.11.05 holding, inter alia, that the MMRs were internal reports prepared on the estimates only and not meant to satisfy any statutory requirement. The relevant paragraph of the Tribunals earlier order is reproduced herein below :-
4. After giving careful consideration to the submissions, I find that the finding of clandestine removal of goods recorded by the original authority was based on some internal records of the EOU of the respondents and their sister unit (DTA unit at Aladiyur). The records from the EOU are MMRs and Dispatch memos and those from the other unit are Traffic Register and P&L Account. The original authority itself appears to have accepted the fact that the MMRs prepared by the assessee were based on estimates only. It was also accepted that the P&L Account of the DTA unit was based on the MMRs of the EOU. The assessee claimed before the original authority that the MMRs were internal reports prepared by the Manager incharge of the EOU to appraise Divisional heads of the performance of the unit with regard to production, clearance, utilization, efficiency etc. and that these reports were not meant to satisfy any statutory requirement. The data contained in these reports were only estimates as stated by Sri S.Sankarabagam, Manager, incharge of the unit. The Profit & Loss Account was also an internal report prepared on the basis of the MMRs as stated by S/Sh P.Karthick, S.Gopalakrishnan and T.Dhandapani. It was also pointed out that the quantities in MMR and P&L Account did not tally. These statements of the assessee have not been rebutted by the Revenue. It has been consistently held by this Tribunal that any entries made in private records of a manufacturer are not sufficient to establish the charge of clandestine removal of excisable goods. The view taken by ld. Commissioner (Appeals) in this regard is perfectly justifiable. It is fully supported by the Tribunals decision in CCE Vs Sangamitra Cotton Mills 2004 (163) ELT 472. As rightly observed by ld. Commissioner (Appeals), in this case, there is no evidence of extra quantity of inputs having been used or of extra electricity having been consumed in the factory during the material period for unaccounted production of goods. There is no evidence of the respondent-unit having physically removed any yarn in excess of the quantity mentioned in the relevant invoices to the Aladiyur unit during the said period, nor is there any evidence of the latter unit having physically received any such goods during the said period. I have perused the statements of the employees of the two units and have not found anything to show that any of them admitted the charge of clandestine removal of yarn from the EOU to the DTA unit. In the circumstances, it cannot be held that the Revenue has succeeded in establishing the charge of clandestine removal of yarn against the respondent. It is not out of place to mention that the proposal to impose penalties on S/Sh S.Sankarabagam (Manager) and R.Nallasivan (Executive-Sales Admn.), who were closely associated with production and clearance of yarn form the EOU was dropped by the original authority. This has certainly a weakening effect on the Revenues case that the company indulged in clandestine removal of goods.
3. In the present impugned order, the Commissioner has noted the Tribunals order cited (supra) but has held that he has considered various other factual details which were not considered earlier and given detailed reasons for sustaining demand covered by the Annexures IX & X and, therefore, earlier decision of the Tribunal was not applied in the present case. However, on going through the impugned order, we find that the entire basis of the departments case is MMRs and no other evidence has been relied upon or considered or discussed by the Commissioner to conclude that the charge of clandestine removal has been established against the assessee. The ratio of the Tribunals order in the assessees own case (supra) is, therefore, applicable on all fours to the facts of the present case and following the same, we set aside the impugned order and allow this appeal.
(Dictated and pronounced in open court)
(P.KARTHIKEYAN) (JYOTI BALASUNDARAM)
MEMBER (T) VICE-PRESIDENT
gs
1
5