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TMI Blog1994 (2) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... eshwari, Director of the company who in his statement dated 1-8-1989 stated that the appellants had not filed any declaration seeking exemption from licensing control. He also confirmed that the value of the goods cleared during 1988-89 was Rs. 93,36,912.89 and between 1-4-1989 to 31-7-1989 they had cleared goods valued at Rs. 35 lacs. Since no invoices in respect of sales made by the appellants from 1-4-1989 onwards were available, on the basis of the records of the sale proceeds of the goods obtained from the appellants bankers, the officers estimated that between 1-4-1989 to 31-7-1989 the appellants had manufactured and sold goods valued at Rs. 41,43,388.00. Having regard to the nature of the goods seized from the appellants factory and the available sales invoices, the officers concluded that the appellants were clearing only laminated printed films and pouches made from such films. After further investigations the appellants were served with a Show Cause Notice dated 29-1-1990 alleging that during the period February, 1989 and July, 1989 they had manufactured and cleared dutiable goods without obtaining Central Excise licence required under Rule 174 and without filing any cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A. They also filed a certificate from their Chartered Accountant certifying the figures of sales of various products. However, by the impugned order, the Collector rejected the appellants contention and held that during the relevant period there were no sales of non-laminated printed polyster films and only printed films were being subjected to lamination by the appellants. For this reason and having regard to the fact that only laminated films had been seized, the Collector held that the figures of evasion of Central Excise duty during the years 1988-89 and 1989-90 as indicated in Para 15 of the Show Cause Notice were correct. The Collector also held that the laminated printed films produced by the appellants not being products of Printing Industry were correctly classifiable under Headings 39.20 and 39.23 as the case may be. The Collector rejected the appellants contention that the goods could not be treated as marketable. The Collector also rejected the appellants contention that there was no deliberate attempt to evade Central Excise duty and it was not permissible for the Department to invoke the extended period under the proviso to Section 11A. On these grounds the Collect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants with the intention of evading duty. In support of his submission, he placed reliance on the following case law :- (1) Brakes India Limited Others v. Collector of Central Excise, Madras - 1987 (31) E.L.T. 1030 (Tribunal). (2) Padmini Products v. Collector of Central Excise - 1989 (43) E.L.T. 195 (S.C.). (3) Collector of Central Excise v. Chemphar Drugs Liniments - 1989 (40) E.L.T. 276 (S.C.). (4) Collector of Central Excise v. Indian Cardboard Industries Ltd. - 1989 (43) E.L.T. 75 (Tribunal). (5) Indian Oxygen Ltd. v. CCE - 1990 (47) E.L.T. 449 (Trib.). Shri Mandal further submitted that printed plastic films and printed plastic films laminated with other plastic films were made out of duty-paid base films, no duty was payable. In a number of judgments it has been held that printing is not a process of manufacture and even otherwise according to Note 10 to Chapter 39 unprinted and printed films fall under the same heading. He argued that under these circumstances any further recovery would amount to double taxation. In support of this contention he placed reliance on the following case law :- (1) Extrusion Process Pvt. Ltd. v. CCE - 1988 (36) E.L.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion. He contended that it would not be correct to say that even the Board entertained doubts about the classification of those goods. He added that the Collector had correctly held that the extended period under Section 11A was invokable since the appellants had deliberately not furnished complete information in the declaration filed by them under the provisions of Rule 174A. He contended that when duty-paid plain polyester film is used for printing and production of laminated printed film, the new item, being a different product, will be chargeable to duty even if the duty-paid base film and the printed laminated film are found to be classifiable under the same Tariff Heading. In support of his contention, he cited the following case law : (1) Laminated Packagings (P) Ltd. v. CCE - 1990 (49) E.L.T. 326 (S.C.); (2) Union of India v. Babubhai Nylchand Mehta - 1991 (51) E.L.T. 182 (S.C.); (3) Paper Products Ltd. v. Assistant Collector of Central Excise - 1993 (68) E.L.T. 731 (Mad). As regards the appellants contention that printed films/laminated films made to the requirements of particular customers and bearing their names could not be deemed as goods , Shri Bhansali c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficate issued by their Chartered Accountant giving the following details in regard to the quantum of printed films all sorts cleared from the appellants factory during the period February, 1988 to July, 1989 :- Period Value of Clearances February 1988 to March 1988 4,85,903.05Rs. April 1988 to March 1989 Rs. 32,80,847.44 April 1989 to 31-7-1989 Rs. 18,57,242.75 It is seen that the main considerations which weighed with the Collector while arriving at the finding that the appellants had not been manufacturing and clearing plain printed polyester films was that at the time of seizure only printed laminated films were found and no unlaminated printed films were found to have been manufactured. The claim made by Shri Sanjeev Kumar Maheshwari, Director of the Company, in his statement dated 1-8-1989, that they had manufactured unlaminated polyester printed films during the year 1982-89 (upto March 1989) for sale to their sister concern M/s. Agarwal Products was not accepted by the Collector on the grounds that there was no evidence in the form of samples or bills evidencing manufacture and sale of unlaminated printed po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s statement makes a distinction between laminated rolls (all sorts) and printed films (all sorts) implying that rolls are different from films. In view of the aforesaid facts there is no clear correlation between the data as furnished in the Chartered Accountant s statement and the data on the basis of which demand has been worked out in show cause notice and in view of the aforesaid contradictions, the said Chartered Accountant s statement cannot be accepted as conclusive evidence with regard to the quantum of production of laminated plastic materials in roll forms as well as in the form of pouches, in respect of which show cause notice has been issued. In paras 10 to 15 of the show cause notice details were furnished as to how duty was calculated and a chart in this regard was also enclosed as Annexure-X to the show cause notice. In their reply to show cause notice M/s. Ess Bee Packagers (P) Ltd. have not contested these calculations or furnished any reasons for disagreement with these figures. (It may be pointed out that various summons were issued to Shri S.K. Maheshwari by the officers of Directorate General of Anti-Evasion and sufficient opportunity was given to him to exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Chartered Accountant s certificate on flimsy and baseless considerations without making any effort to verify its contents since the only reason given for the rejection of the certificate was that it did not explain the reasons for arriving at conclusions different from the allegations contained in the show cause notice. In this regard, the learned Consultant on behalf of the appellants has submitted that the Chartered Accountant s certificate filed by the appellants before the Collector was based on the relevant records which were placed before him and if the Collector had asked for the relevant records, they would have been placed before her. 8. We find considerable force in the appellants contention that no serious effort was made by the adjudicating authority to verify the details given in the Chartered Accountant s certificate regarding the quantum of plain printed polyster films manufactured and cleared by the appellants during the relevant period. For this reason we find that the impugned order is not a reasoned and speaking order and has been passed without proper application of mind. It is seen that the answer to the question whether the appellants were actually pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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