2017 (10) TMI 123 - AT - Central Excise

Interest - Penalty - Notification No. 6/2003 dated 1.3.2003 - Held that - the assessee company in a letter dated 05.05.2003 (Page No. 59 of Appeal Paper book Set -1) to M/s Maruti Enterprises gives the details of the despatched goods for the month of March 2003 to April 2003 and asks for confirmation from their buyers, M/s Maruti Enterprises, that the goods mentioned in the letter bore no logo or brand name. The invoices cum challan also in the name of M/s Maruti Enterprises (given on Page No.60 and 61 of Appeal Paper Book Set-1) also show the said goods as unbranded. BUT the partner of the said buyer, M/s Maruti Enterprises namely Shri Nandlal Meghraj Shah, in his statement (given on Pages 57 & 58 of Appeal Paper Book Set-1) recorded on 11.05.2004 under Section 14 of Central Excise Act, 1944 before the Superintendent (Preventive), Central Excise, Vadodara clearly says that the goods purchased by them are of the brand name Madhuram Chitta Brand , though the same have been mentioned as Unbranded Goods in the two invoices - Appeal dismissed - decided against the assessee.

Summary

Issues Involved:

1. Eligibility for the benefit of Central Excise Notification No. 6/2003.
2. Classification of Vanaspati as branded or unbranded.
3. Admissibility and reliability of documentary evidence and statements.
4. Procedural fairness in the adjudication process.

Detailed Analysis:

1. Eligibility for the benefit of Central Excise Notification No. 6/2003:

The core issue revolves around whether the appellant's product qualifies for the exemption under Notification No. 6/2003. The Tribunal concluded that the appellant had been making "ingenious efforts" to claim the benefit of the notification, despite substantial evidence indicating that the goods were branded and thus not eligible for the exemption. The Tribunal emphasized that the duty of Central Excise is on manufacturing, and the appellant's own declaration dated 03.03.2003 admitted that they manufactured branded Vanaspati. The Tribunal found that the appellant's claim of removing brand labels before sale did not hold, as the duty is imposed at the manufacturing stage.

2. Classification of Vanaspati as branded or unbranded:

The appellant argued that a significant portion of their Vanaspati production was unbranded, as recorded in statutory documents like RG-1 and RT-12 Returns. However, the Tribunal found that the appellant's own records and declarations contradicted this claim. The Tribunal noted discrepancies in the appellant's documentation, such as the rewriting of entries in the Civil Supplies Register to bifurcate branded and unbranded Vanaspati only after the introduction of the notification. The Tribunal also highlighted inconsistencies in transport documents, where original consignor copies described the goods as branded, while carbon copies showed them as unbranded.

3. Admissibility and reliability of documentary evidence and statements:

The Tribunal scrutinized various pieces of evidence, including statements from buyers and transporters, which supported the Revenue's stance that the goods were branded. The Tribunal referenced the Supreme Court's decision in Vinod Solanki Vs. UOI, emphasizing that both confessions and retractions must be considered. The Tribunal found that the original statements of concerned persons, who later filed affidavits contesting their earlier statements, retained their evidentiary value. The Tribunal also noted that the appellant's explanations for the changes in their records were unconvincing and did not justify their claim for the exemption.

4. Procedural fairness in the adjudication process:

The appellant contended that the Commissioner did not allow cross-examination of buyers, relying instead on affidavits. The Tribunal found that the affidavits, in the context of other evidence, did not diminish the credibility of the original statements. The Tribunal also addressed the appellant's claim that the Tribunal had previously dismissed their appeal due to illegible records and documents in vernacular language. The High Court of Gujarat had quashed this dismissal and restored the appeal, ensuring procedural fairness.

Conclusion:

The Tribunal upheld the impugned order, confirming the liability of duty, interest, and penalty against the appellant. The Tribunal found that the appellant's efforts to claim the exemption under Notification No. 6/2003 were not substantiated by credible evidence. The appeal was dismissed as without merits, sustaining the demand of Central Excise duty of ?54,38,208/- along with interest and equivalent penalty.