2014 (3) TMI 559 - HC - Central Excise

Natural Justice - non consideration of argument by the tribunal - Clandestine clearance - weight of the copper cables recovered from the wooden drums - assessee contended that method of arriving at the weight (core x sq. mtrs.) was fallacious and submitted that this aspect was highlighted as early as the time when the hearing before the Commissioner took place during the show cause notice proceedings. - Revenue resists the submissions and contends that full opportunity was given and that the finding as to the question of true weight or the method adopted is a factual one which do not warrant interference by this Court. Held that - The Tribunal did not make its order contemporaneously or within a month of the date of hearing; in this case it rendered its order and published it after about five months. In these circumstances, without any explanation as to whether the written submissions were handed over, particularly since they do not bear any date, it would be hazardous for this Court to conclude that the argument on this aspect was made before the Tribunal which failed to apply its mind. We have deemed it appropriate to discuss this aspect since the appellant s counsel repeatedly submitted that this had a direct bearing on the question of valuation and that the Tribunal ought to have taken care to address the issue. The affidavit in support of the appeal no doubt states that the copies placed on the record are true copies, yet significantly there is no date attributed to the written submissions in any of the pleadings - no substantial question of law arises - Decided against assessee.

Summary

Issues: Valuation of seized goods by Revenue, Method adopted by Revenue, Allegations of evasion of duty, Substantial question of law regarding valuation

In this case, the High Court of Delhi considered appeals challenging an order of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) regarding the valuation of seized goods by the Revenue. The manufacturers, collectively known as the appellants, were accused of evading duty by claiming Small Scale Industries (SSI) exemption improperly. The excise authorities conducted search and seizure operations, alleging that the appellants had suppressed quantities and made false declarations. The Commissioner of Central Excise issued a show cause notice, leading to a demand for duties and penalties confirmed in the order in original. The appellants appealed to the CESTAT, which upheld the decision.

One of the main contentions raised on behalf of the appellants was the method adopted by the Revenue in valuing the seized goods, specifically the weight of copper cables recovered from wooden drums. The appellants argued that the method used to calculate weight was fallacious and led to an overestimation of the seized goods. They suggested a simpler method of subtracting the weight of the goods instead of a complex calculation based on core x sq. mtrs. The appellants claimed that this aspect was not adequately addressed during the proceedings before the Commissioner and the Tribunal.

The Revenue opposed the appellants' submissions, stating that a full opportunity was given, and the issue of true weight was a factual matter not warranting interference. They contended that the appellants did not raise this specific point before the Tribunal during the hearing. The Revenue highlighted statements made by partners and directors of the appellants admitting discrepancies in the goods sent, including misdeclaration of description, quantity, and value, which supported the Revenue's allegations of duty evasion.

The Court examined the submissions and material on record, noting that the Commissioner had observed discrepancies in the goods seized and the accompanying invoices, providing evidence of duty evasion. While the Tribunal's order did not address the specific point raised by the appellants regarding the method of valuation, the Court found that without concrete evidence of the argument being presented before the Tribunal, no substantial question of law arose for consideration. As a result, the appeals were dismissed, along with all pending applications.

In conclusion, the judgment analyzed the issues of valuation of seized goods, the method adopted by the Revenue, allegations of duty evasion, and the substantial question of law regarding valuation. The Court emphasized the importance of raising specific points during proceedings and providing concrete evidence to support arguments, ultimately leading to the dismissal of the appeals in this case.