2003 (8) TMI 108 - AT - Central Excise

Excise duty evasion - undervaluation and clandestine clearances of PTY Twisted Yarn - credit facility - HELD THAT - It is relevant to note that the Commissioner held that although this is a case of alleged undervaluation, there is absolutely no whisper of any evidence of flow back of additional consideration from the buyer to the manufacturer, either directly or through any channel . The Commissioner has further held that the burden is on the Revenue to prove that additional consideration has flown back from buyers which the Revenue has not satisfied. He has also held that payment by crossed bearer cheque cannot by itself suggest cash payment or excess flow back to manufacturer or an additional consideration over and above the cheque payment. So long as the Revenue has not been successful in proving that the actual buyer had paid an amount much more than the value shown in the invoice issued at the time of removal of the goods from the factory, the allegation of undervaluation should fail and no demand on that basis can be sustained. Since we hold that the entire demand is not sustainable, it is not necessary for us to refer and consider in detail the contention raised in the appeals by the Revenue challenging the order of the Commissioner for the reason that he has not sustained the entire demand in the show cause notice. Since we are holding that the Revenue has not been successful in proving the allegation of undervaluation, we are not going into the correctness or otherwise of the contentions raised by the assessees that, as a matter of fact, sale to the Bhiwandi buyers took place at the factory gate and not at Bhiwandi. Thus, we dismiss appeals E/2943-2945/02 and 2946/02, E/1711/03 and E/1610/03. Appeals filed by the assessee E/2786/01, 3091-92/02, E/2787-2788/02 and C.O./56/03 in E/1610/03 are allowed to the extent indicated above.

Summary

Issues involved: Multiple appeals filed by both Revenue and assessees challenging various Orders-in-Original related to central excise duty evasion through undervaluation and clandestine clearances of PTY Twisted Yarn.

Summary:
1. The appeals involved challenges against Orders-in-Original related to alleged evasion of central excise duty through undervaluation and clandestine clearances of PTY Twisted Yarn.
2. The Commissioner considered identical issues in previous adjudication orders and dismissed Revenue's appeals.
3. The assessees were accused of undervaluation and clandestine clearances of PTY Twisted Yarn, leading to show cause notices being issued.
4. The Commissioner determined that there was no factory gate sale at Bhiwandi, leading to valuation issues under Section 4 of the Central Excise Tariff Act, 1985.
5. The Commissioner rejected certain proposals in the show cause notice, including confiscation and penalties, and upheld only a portion of the demand.
6. Revenue appealed against modifications made by the Commissioner, while assessees challenged various aspects of the Commissioner's order.
7. The Tribunal found that relying solely on bank statements for assessing undervaluation was insufficient, citing precedents where such evidence alone was deemed inadequate.
8. Ultimately, the Tribunal dismissed some appeals by Revenue and allowed others by the assessees based on the insufficiency of evidence to prove undervaluation.

This summary encapsulates the key issues and details of the judgment, highlighting the legal arguments and decisions made by the Tribunal in the case.