Customs, Excise and Gold Tribunal - Mumbai
Shri Manishkumar Bagdawala, Shri ... vs Commissioner Of Central Excise & ... on 22 March, 2001
ORDER J.H. Joglekar, Member (T)
1. These applications relate to three appeals arising out of the common order of the Commissioner of Central Excise, Surat-I. These are therefore being disposed of vide this common order. We have heard Shri Mayur Shroff, advocate for the applicants and Shri A.K. Jain for the Revenue.
2. M/s. Shree Vishnu Dyeing & Printing Mills Pvt.Ltd. are the central excise assessees. Shri Dharmendra Bakhaswala is the director of the assessee unit. Shri Manishkumar Bagdawala is the assistant dyeing master. When the excise officers visited the mills, they noticed certain processed fabrics which were in excess of the recorded stock. These were seized. The search of the premises yielded certain kachha delivery challans as also four pocket diaries. These were seized from behind the seat of Bagdawala. The panchnama records that before the panchas Bagdawala admitted recovery of the note books. He made the statement that the note books indicate the clearances of processed fabrics without payment of duty. Bakhaswala (referred to as Kalabhai in the panchnama) corroborated this statement. The panchas also witnessed seizure of other documents such as chits etc. the recovery of which was acknowledge both by Bagdawala and Bakhaswala. The panchnama however records at a later stage that the duty master had become unwell and was taken to the hospital.These documents gave the names of a number of traders as also certain figures. In their statements both Bagdawala and Bakhaswala made counter allegations of highhandedness against the officers and denied that any attempt to evade had been made. The statements were recorded of 53 traders. Five of them admitted that they had received the goods processed from Shree Vishnu Dyeing & Printing Mills without payment of duty. The other traders admitted that they had got goods processed from Shri Vishnu Dyeing & Printing Mills. However, on examination of the entries made in the lot registers, and diary they were unable to corroborate the entry therein insofar as they pertained to their units.
3. At the end of the investigations the show cause notice was issued. The three present applicants filed replies. One of the request made was of cross examination of "third parties". The Commissioner after hearing the notices passed orders confirming total duties of Rs.3,54,72,865.55. He imposed following penalties on the following applicants:-
Shree Vishnu Dyeing & Printing Mills: Rs.3,54,72,896.55 Dharmendra Bakhaswala: Rs.20,00,000/- Manishkumar Bagdawala: Rs.20,000/-
These three have filed appeals and the present applications seeking waiver of pre-deposit of these sums and stay of recovery thereof.
4. We have heard both sides at length and have seen the relevant documents.
5. Shri Mayur Shroff states that the statements of the two appellants are exculpatory. He states that the recovery of the kachha challans and the diaries had not been admitted. It is his submission that on perusal of the diaries and the kachha challans it is not possible to establish that they represented details of clandestine removal. He submits that the methodology adopted by the department in computing the duty allegedly evaded has not been set out and that the computation is made in an incompatible manner. He illustrated this by showing the annexure 1 to the show cause notice where in a number of cases the lot registers show the same quantity as shown in kachha challans. As regards the admission made by the five traders it is his submission that the bulk of the traders had not made such submissions. As regards the seizure of fabric it is his statement that which show losses for the last two years. We however find that their liquidity position is not bad.
18. Considering these aspects we direct the assessee company to deposit rupees twenty-five lakhs as a pre-condition to hearing of their appeal. On this deposit being made there shall be waiver of pre-deposit of the remaining amount of duty as well as penalties imposed upon the applicant company. The requirement of pre-deposit of penalties by the other applicants is waived. The deposit is required to be made by the end of May, 2001. Posted for compliance in the first week of June, 2001.
6. We have carefully considered the submissions. The Commissioner's order does not mention the request of the assessees and their officers for cross-examination. We however would go into this aspect at the time of final hearing of the case. The recovery of the diaries and the kachha registers was witnessed in the panchanama and the panchas have recorded that the two other applicants had also owned them. Their subsequent denial will also have to be gone into and evaluated at the time of the final hearing. We have seen the statements made by the traders. It is not that bulk of them have denied the allegations. What has been highlighted by them is the incompatibility of the figures in the registers seized and the lot registers. No attempt seems to have been made by the Revenue to show the method by which short levy was made. Even if a very small number of traders have admitted the fact that certain goods were clandestinely removed by them, the evidential value of those statements at the stage of assessing the prima facie merits exists.
7. Shri Shroff submits that the factory is closed from 1998. He states that substantial amounts are outstanding to bank and other persons. We have examined the financial statements placed on record which show losses for the last two years. We however find that their liquidity position is not bad.
8. Considering these aspects we direct the assessee company to deposit rupees twenty-five lakhs as a pre-condition to hearing of their appeal. On this deposit being made there shall be waiver of pre-deposit of the remaining amount of duty as well as penalties imposed upon the applicant company. The requirement of pre-deposit of penalties by the other applicants is waived. The deposit is required to be made by the end of May, 2001. Posted for compliance in the first week of June, 2001.
(Dictated in Court)