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TMI Blog1990 (12) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... scription of the goods as ACSR conductor code ' Panther ' size rejected quantity two drums with total value of Rs. 31,499.99 and also produced one goods receipt No. 13718 dated 14-7-1981 issued by M/s. Pindi Goods Transport Co., Faridabad, one Form No. 38 (pertaining to Sales-tax) and one proforma Invoice No. 523 dated 14-7-1981 issued by M/s. Indian Aluminium Cables Ltd., Faridabad showing the description of the subject goods as two drums weighing 4.197 MT rejected Panther Conductor (greasy and weather damaged) issued in the name of M/s. Sapna Enterprises, 4935, Phatak Namak, Hauz Qauzi, Delhi. The truck driver could not produce any Central Excise document in respect of the said consignment. The truck driver Shri Raj Kumar S/o Shri Bani Singh in his statement stated that the goods were loaded on 14-7-1981 from the factory premises of M/s. Indian Aluminium Cables Ltd., Faridabad but no Central Excise documents were given to him by the party. On enquiry from the assessee, the assessee failed to produce any Central Excise records showing the clearance of payment of duty on the said goods. The assessee's Manager and authorised signatory Shri R.C. Aggarwal in his statement stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny of the weights shown in the details given by the party with their letter dated 30-7-1981. Therefore, they were of the view that the assessee's plea was not tenable. It was commented that even the godown of M/s. Promain Ltd. was situated within the four walls of the premises of M/s. Indian Aluminium Cables Ltd. having a common exit under the exclusive control of the assessee and no. D-3 was given to the department and no statutory records were maintained. Therefore, they came to the conclusion that M/s. Indian Aluminium Cables Ltd. had unauthorisedly manufactured and deliberately cleared with the intent to evade payment of duty on ACSR Conductors (Panther) weighing 52.772 MT valuing Rs. 8,97,124 involving Central Excise duty of Rs. 89,712.40 as Basic Excise duty and Rs. 4,485.62 as State Excise Duty in the guise of scrap without making entries in the statutory records and without payment of duty leviable thereon. In this was included a quantity of 14.842 MT seized on 14-7-1981 and 20-7-1982. Consequent upon the seizure made on 14-7-1981 the Central Excise authorities visited on 4-11-1981 the factory premises of M/s. Indian Aluminium Cables Ltd. and found that the assessee-company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely. It was observed that a large quantity of exciseable goods had been sold by the party under the description of aluminium scrap and it was found that the goods were exciseable falling under tariff item 33B of the Central Excise Tariff and not aluminium scrap as declared by the assessee. The assessee had also failed to produce any evidence to the effect that the permission/supervision of the Central Excise Officers was ever taken for the conversion of ACSR Conductors into pieces of less than 12 " and converting them into jumbled form so as to make them as scrap and unfit for sale/use as ACSR Conductors. Accordingly a show-cause notice was given to the assessee wherein the assessee was called upon to explain the facts as found during the course of investigation by the Central Excise and Customs authorities. The assessee in its reply has contended that the present management took over another company M/s. Promain Ltd., situated adjacent to the factory premises of M/s. Indian Aluminium Cables Ltd. at Faridabad having common address. Prior to the take-over, M/s. Indian Aluminium Cables Ltd. had a central warehouse at the premises of M/s. Davis and White (India) Pvt. Ltd. at 15/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) could fetch a price of Rs. 17,000 per MT, when they effected its sale vide Invoice No. 1339 dated 7-7-1981 issued in favour of M/s. Shrigopal Electric Stores. On the basis of this the Assessing Officer requested the assessee to file details of scrap and produce parties. According to him, the assessee could not produce any such party. On this information the Assessing Officer found that there is overwhelming evidence brought on record in support of the fact that the assessee-company had cleared ACSR Conductors under the garb of scrap and had also suppressed production which was found unaccounted in the books of the assessee company. Therefore invoking the provisions of section 145(2) he had estimated the income on the basis that during the accounting year under consideration the assessee has shown sale of scrap of aluminium weighing 191.098 for Rs. 19,98,742 on an uniform price of Rs. 10,000 per MT as against the market price of Rs. 17,000 per M.T. Therefore, adopting the market rate of these conductors @ Rs. 17,000 per M.T. at which rate the sale price of 191.908 MT, he worked out the sale of Rs. 32,62,436 and after deducting the sale price disclosed by the assessee-company at Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firmed having received the goods from the appellant at the rate at which the scrap is sold. In this respect, it is further found that while the appellant sold the aluminium @ Rs. 10,000 per MT, steel was sold at Rs. 3,000 per MT to M/s. Sapna Enterprises. M/s. Sapna Enterprises, in turn, sold the goods at Rs. 8 per kg. In respect of 5 drums they made a profit of about Rs. 14,000. In case the version of the IAC(A) is to be believed that the goods were not scrap but good ACSR Conductors then M/s. Sapna Enterprises would have made a profit of about Rs. 90,000 as against Rs. 14,000. This is reflected in their bills and confirmed before the IAC(A). There is no evidence to the effect that the sale bills raised by M/s. Sapna Enterprises were not genuine. As regards the objection that the drums did not contain the mark number as indicated in the despatch list, I find that the same is not correct. The appellant has furnished complete information showing that the drums sold were the ones which were available in the despatch list furnished to the Excise Authorities somewhere in 1977. Except for a difference of 0.002 MT in respect of challan number 516, no other difference is found. Here I als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se Authorities. This was as under :---- Bill Name of the party Qty. Amount No. 94 M/s. Navjeevan Jain Metal 4.110 MT A Wire Udyog, Faridabad. Scrap 75418.50 95 -do- 3.630 MT -do- 66610.50 107 -do- 5.545 MT -do- 101750.75 108 M/s. Rishi Metal Agency Gurgaon 5.050 MT -do- 93425.00 109 -do- 4.360 MT -do- 80660.00 110 -do- 3.540 MT -do- 65490.00 123 -do- 6.040 MT a wire scrap111740.00 124 -do- 0.550 MT -do- 10175.00 ------------ -------------------- 32.825 MT 605269.75 ------------ -------------------- 119 M/s. Vijsons Works, Delhi 7.045 MT S.Wire 27841.84 scrap 122 -do- 7.295 MT -do- 28829.84 125 -do- 7.255 MT -do- 28671.76 -------------- -------------------- 21.595 MT 85343.44 -------------- -------------------- Grand Total 54.420 MT 690613.19 -------------- -------------------- Weight of 26 drums 55.265 MT Shortage .845 MT Shortage due to destruction and passage of time. In view of this, the addition made at Rs. 4,42,617 is not sustainable and is deleted." The department is aggrieved. 5. The learned Departmental Representative Shri Tandon submitted that the matter before us was considered by the CEGAT, the highest fact finding body of the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsel for the assessee the opening stock production and disposal of scrap during the assessment year under appeal was as follows : (i) Opening stock in hand 015.827 MT (ii) Scrap produced during the year 143.498 MT (iii) Scrap produced on destruction of defective Panther Conductors 37.158 MT -------------------- 196.483 MT Less. Sale of scrap 191.908 MT ------------------- Closing st. 004.575 MT ------------------- It is pointed out that Cable. & Conductor Manufacturers' Association of India has given a certificate to the effect that normal loss/wastage of scrap generated by cable & conductor industries varies between 5 to 7%. The production of scrap in the case of the assessee is about 4.81% which was less than the usual rate of production of scrap. The revenue authorities pointed out that the entire quantity of scrap amounting to 191.908 MT has been treated by them as good conductors which is incorrect on the face of it because it would mean that in the manufacture of Panther conductor, no scrap at all is generated. He has pointed out that such an extreme view is contrary to the established manufacturing process. Whenever the assessee-company is required to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocess. The total weight of these 58 drums of ACSR Conductor sold was as follows :---- No. of drums Aluminium Steel Total scrap scrap 25 30.745 20.652 51.397 26 32.825 21.595 54.420 5 6.413 4.232 10.645 2 2.529 1.668 4.197 Out of these 58 drums, 25 drums were dismantled and only aluminium contents thereof was sold to various scrap dealers in the year under review. The assessee's Paper Book contains details of 58 drums at pp. 44 to 46. About 26 drums it is submitted that they were sold in the accounting year 1985-86 as per Collector of Central Excise (Appeals) order and as per destruction carried out by the Asstt. Collector of Central Excise and sold under as permitted by them from time to time. The details regarding 26 drums areas under : ------------------------------------------------------------------------------------------------------------------------------------------------- Drum as per destruction S.No. of S. No. of packing order of Asstt. Collector warehousing list dt. 8-11-77 register ------------------------------------------------------------------------------------------------------------------------------------------------- 1 2 3 -------------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold under the permission of Excise Department and the department has not objected to the sale. It is pointed out that this Court is a separate juristic personality. It could view the case after appreciating the facts and evidence brought on record. Since this factor had been pointed out, there is no bar to take a different view in the matter. It is pointed out that the Excise Department has looked the matter with a different angle of levying Excise Duty whereas this Court is not concerned with that matter. So this court can take a different view. The order of the CEGAT is not binding on this Court though it has a persuasive value. So in view of the facts pointed out the Court can take a different view. It is pointed out that after considering the IAC (Asst.)'s report and the submission made before, the CIT (Appeals), the CIT (A) came to the conclusion that whatever sold by the assessee was not good conductor but scrap and the Excise authorities gave the permission to sell the scrap. The CIT(Appeals) has also compared the position of scrap of about 26 drums and the report of the IAC (Asst.) and has deleted the addition. Therefore, there is no reason why the order of the CIT (Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit can be taken on this score. 8. We have considered the rival submissions. The department has raised basically one objection that the finding given by the CEGAT which is the highest fact finding body of Customs, Excise & Gold (Control), has a binding force on this Tribunal. The CEGAT has given the finding that the goods seized at the time of raid at the Sales-tax barrier do not tally in details available on record and the drums received back by the assessee from State Electricity Board. The goods seized from the assessee were in running length whereas the goods received back from the U.P. State Electricity Board by the assessee are in short length. Regarding 26 drums the finding is that the marking given on the drums appeared to be of new origin and to give them old look foreign material like grease and dust was thrown on the painted marks. Serial numbers given on the drums and weight mentioned thereon did not tally with the particulars given on the original gate passes produced by the assessee. These are the findings of fact. Therefore, this Court cannot sit over the decision of the highest fact finding body of Customs, Excise & Gold (Control). In this connection, we would lik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut have a persuasive value. In view of the above provisions, it is clear that the order of the CEGAT is not binding but have a persuasive value. It is not the conclusive proof of the existence of certain facts. Therefore, this Court being a separate entity created by law is not bound to follow that order. However, it is a matter of unwritten convention that Court should be very slow to take a different view unless it is pointed out that certain facts were not considered by the earlier Tribunal. 10. Now we come to the facts of the present case. As per the details given above, it is clear that the dispute relates to 58 drums of ACSR conductors (Panther). Out of these 58 drums, 2 drums were seized at the time of ' Nakabandi ' on 14-7-1981, 5 drums were seized from various parties mentioned above, 25 drums were dismantled out of which 30.745 aluminium scrap was sold whereas 20.652 steel scrap was used in reprocessing. Regarding 26 drums the case of the department is that these drums were also sold as a good conductors where as they have been claimed as completely deteriorated and not fit for despatch and have been shown to have been sold as scrap. The Collector of Customs as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int in this connection is that the assessee vide letters dated 24-7-1985 and 31-7-1985 sought permission from the Superintendent, Central Excise, Range-VII, Faridabad and Range-IV, Sahibabad to seek clearance of aluminium scrap from the department and it has been certified by the Superintendent that these clearances had been issued under the physical supervision of the Central Excise Department. From these two certificates it is clear that the assessee sold scrap of 154.750 MT from its two factories at Faridabad and Sahibabad (Ghaziabad) under certificate issued by the Central Excise authorities even after the issue of the order of the Collector of Central Excise on 6-10-1973. It will be clear that at least these two lots were cleared after seeking permission from the Excise Department. It appears that above-mentioned two certificates were not considered by the Collector of Customs and the highest fact finding body CEGAT. Taking into consideration the certificate of Cable & Conductor Manufacturers' Association regarding percentage of scrap it generated usually and the certificate issued by the Central Excise authorities, it is amply clear that no addition at least to this scrap amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be presumed that the assessee had also sold 25 drums of good conductors in the garb of scrap of aluminium. 12. Regarding the seized material, the explanation of the assessee was that two drums cleared under challan No. 523 dated 14-7-1981 weighing 4.197 MT, tallies with the details under letter dated 30-7-1981. The details of these drums is given as under :---- ------------------------------------------------------------------------------------------------------------------------------------------------- S. No. Drum No. Gross Tare Net Length Excise gate pass ---------------------------- weight weight weight in No. date in Kgs. in Kgs. in Kgs. metre. ------------------------------------------------------------------------------------------------------------------------------------------------- 17 M-2564 2358 280 2078 2129 474 27-2-74 18 M-4535 2454 335 2119 2171 253 24-9-73 -------------------------------------------------------------------------------------------------------------------------------------------------- Similarly for 5 other drums seized under Challan No. 516 dated 13-6-1981 and Challan No. 520 dated 7-7-1981, the total quantity involved is 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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