Document Fragment View
Fragment Information
Showing contexts for: supari in Flex Industries Ltd vs Cce, Lucknow on 2 July, 2013Matching Fragments
(C) Demand of Rs.18.19 crores.
This duty demand has been dealt with by the Commissioner from pages 166 to 178 of the impugned order.
Out of this demand of Rs.18.19 crores, the major portion is based on the reconstructed data of hard disc of the CPU of M/s. Gopal Grinding Industries (GGI). M/s. Gopal Grinding Industries was cutting/crushing the supari, katha and cardamom on behalf of the HSG on job work basis.
According to learned Commissioner GGI was owned by MS Rajini Patel who is younger sister of Sh. Mahesh Singh, MD of HSG. That, records recovered from the premises of M/s. GGI, revealed close interconnection between the two firms. He held that, the challans of M/s. GGI to be perfectly admissible as evidence for proving duty evasion by HSG; That, the challan of M/s. GGI reconstructed from the computer were issued in respect of the materials not entered in Form-IV by M/s. HSG; That reconstructed data retrieved from deleted files show authentic information and has got evidentiary value (page 170 of O/O). He confirmed duty demand in respect of supari allegedly received on the basis of seven challans bearing S.No. 6 dated 17-05-2001 provided by Trade Tax Department. According to him even if these challans have not been retrieved from the CPU of GGI still duty could be confirmed as the same was deleted and superimposed and could not be retrieved. He, therefore, confirmed demand on the basis of 986710 kgs. Of cut supari sent by M/s. GGI to HSG and another 7320 Kgs. of supari was sent by using multiple challan No. 06 dated 17-05-2001 (page 171 of O/O). Another demand of Rs. 1,34,75,461/- has been confirmed on 55024.800 Kgs. Of supari (para 33.16 page 172 of O/O) on the strength of cash memo No. 1 dated 01-04-2000 to 1219 dated 09-12-2000 and the said quantities were not found entered in Form-IV of register of HSG. According to learned Commissioner the said statement has been duly attested by A.C. Special Investigation team, Trade Tax Department, Lucknow Zone, Lucknow (page 173 of O/O). However, the learned Commissioner reduced the demand from Rs. 1,34,75,461/- to Rs. 89,83,641 (para 33.22 page 174 of O/O). Another demand of Rs. 14,28,570-00 has been confirmed on the ground that 10,000 kgs. of supari was short entered in the records which according to the learned Commissioner was issued for clandestine removal. According to him the closing balance of FY 1999-2000 was 52,817,440 whereas opening balance as on 1-4-2000 was 42,817.440. He has not accepted submission of HSG that the mistake was rectified subsequently.
In respect of this demand it was the submission of the HSG that Balance Sheet & Stock Register of the firm was in respect of uncut supari whereas the quantity accounted for in Form-IV register was in respect of cut supari received after grinding into granules from M/s. GGI and there is a wastage of supari in terms of powder in huge quantity when uncut supari is subjected to the process of cutting into granules. According to the learned Commissioner records of these principal raw materials are maintained in pursuance Rule 55 and Rule 173 of the erstwhile Central Excise Act, 1944, which were statutory. The party has mentioned Supari as the title under which entries had been made in Form-IV register. There is no mention of Cut or Uncut supari. (para 44.3, page-199 of O-I-O). Hence according to the learned Commissioner, demand on this count was sustainable.
? Without prejudice to the aforesaid and without making any admission it is submitted that even if the Departments case as made out by the Commissioner is taken as it is, the duty quantified by the Commissioner based on alleged receipt of Supari clandestinely comes as under:
Rs. 2.11 crores Balance Sheet and Form IV page 198 Rs. 53.51 lakhs Clerical mistakes pages 199-202 Rs. 28.03 lakhs Mistake rectified pages 202-203 Rs.22.43 crores Cash sales of Mahesh & Co pages 203-213 Rs.18.10 crores Grinding of Supari by Gopal Grinding Company pages 166-178 ? It is further submitted that for total demand of duty of Rs. 137 crores, supari required will be 1.07 crore kgs. As against this, findings about supari are only for duty of Rs. 25.36 crores and each of the said findings is totally perverse and untenable. Without supari, it is simply impossible to manufacture gutkha and pan masala. There is absolutely no evidence about receipt of such a huge quantity of manufactured supari and fact of its being cut in the premises of Gopal Grinders.
? The Commissioner rejected the said submissions on the following grounds:
; In Form IV Register the title under which entries were made was supari, there was no mention of cut or uncut supari.
; Under Rule 55, raw material account has to be maintained in respect of raw material received by the assessee which in this case was uncut supari.
; Thus it can be concluded that supari recorded in Form IV Register was nothing but supari purchased by the HSG.
? It is submitted that the said findings are totally perverse. Firstly, the relevant period under dispute is 1998-99 to 2001-02 whereas Rule 55 of the Central Excise Rules, 1944 was omitted from the Rules vide Notification No. 15/98-CE (NT) dated 02.06.1998. Thus Rule 55 was not even in the statute book for most of the period. Even otherwise, as would be evident from Form IV Register itself, against entries of receipt of supari recorded in the said Register, name of Gopal Grinding Industries as well as the connected Invoice Number and date were clearly mentioned. Thus it was obvious that what was recorded in Form IV Register was the quantity received from Gopal Grinding Industries (pages 1285 to 1297 of Volume IV).