9911796707
TMI Blog1999 (6) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants are adjacent to each other. The brand name of tyres manufactured by M/s. Wearwell Tyres is Wearwell. M/s. Verma Tyres, Devi Tyres and S.K. Tyres are also manufacturing tyres with brand name Wearwell. During the visit of M/s. Verma Tyres, Devi Tyres and S.K. Tyres, the Central Excise officers found no stock of raw materials like drum, core cement, naptha liquid which are essential raw materials for tyres making. On earlier occasion in the year 1987 the stock of these raw materials was not found with these three appellants. Scrutiny of the records revealed that M/s. Wearwell Tyres supplied machinery, stores steam, hot water, man power, technical assistance, tools, diesel oil and moulds to other appellants. The officers also found from the project report that M/s. Verma Tyres, S.K. Tyres and Devi Tyres were receiving green tyres instead of tread rubber, beads and rubberised material with textile. The project report also revealed that all the raw material is indigenous, the major raw material which is green tyre will be supplied by M/s. Wearwell Tyres. The officers, therefore alleged that tyres manufactured in the unit of M/s. Wearwell Tyres are cleared as if manufactured by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read rubber and beads was admitted in this show cause notice; that in the present show cause notice a different stand has been taken by the Department which is totally contradictory. It was contended by M/s. Wearwell Tyres that they never cleared green tyres to M/s. Verma Tyres, S.K. Tyres and Devi Tyres but only supplied the raw materials like tread rubber, beads and compounds with textile. About technical report of Bank of India, it was contended by the appellants that in the report it has been mentioned that both units have plant and machinery required for manufacture of tyres right from stage of raw material to the finished goods; that the installed capacity of each unit was 10,000 tyres per annum. After considering the submissions made, the Commissioner confirmed the demand of duty amounting to Rs. 68,07,347.58 against M/s. Wearwell Tyres. A penalty of Rs. 17 lacs imposed on M/s. Wearwell Tyres. Modvat credit was disallowed to M/s. Verma Tyres, Devi Tyres and S.K. Tyres and the penalties o Rs. 2.7 lac, Rs. 1.9 lac and Rs. 1.8 lakh were imposed on M/s. Verma Tyres, Devi Tyres and S.K. Tyres respectively. Being aggrieved by this order the captioned appeals have been filed before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erised fabrics and beads from M/s. Wearwell Tyre; that this report has been partly relied upon by the Department. Ld. Counsel submits that the factory of the appellants was in physical control and that the officers were visiting their factory frequently and the goods were being examined before clearance; that all the documents necessary for clearance of the goods show that the goods cleared were tread rubber, rubber sheet with textile material and beads; that the correspondence exchanged between the Department clearly shows that the appellants (M/s. Wearwell Tyre Tubes) have been supplying tread rubber, rubber products and beads to the three remaining appellants; that the allegation of the Department regarding availability of 52 number BCL mark green tyres belonging to M/s. Verma Tyres is not correct inasmuch as BCL stand for Balice Central Lag and had nothing to do with the Big Chip brand of M/s. Verma Tyre. It was explained by the ld. Counsel that M/s. Wearwell Tyres were evolving new tyres; that materials used were having special marks made on them; that BCL did not represent the brand marking of M/s. Verma Tyre; that Shri Handa of M/s. Verma Tyre had never admitted that 52 nu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position now that where duty paid by the manufacturer is available to the customer it cannot be said that removal was with an intent to evade payment of duty by the manufacturer and in such a situation the longer period of limitation is not invokable. In support of this contention, ld. Counsel cites and relies upon the decision of this Tribunal in the case of SAIL [1985 (22) E.L.T. 487], in the case of Patson Transformers (P) Limited [1997 (93) E.L.T. 402 (Tribunal)]and in the case of Chloride Industries Limited [Final Order No. 1015/Cal/97, dated 13-8-1997] including the decision reported in 1997 (95) E.L.T. 568. He therefore prays that the entire demand of duty is time barred. 6. Summing up his arguments, ld. Counsel submits that in view of above submissions and the contention raised before the lower authorities and now reiterated the appellants have been able to make out a case on merits that the appeal may be allowed and also that the demand is hit by limitation. 7. Shri H.K. Sharan, ld. SDR countering the arguments of the ld. Counsel submits that the issues involved in the present case are clandestine removal of 1399 green tyres by M/s. Wearwell Tyres to M/s. Verma Tyre, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re allowed to be cleared after paying duty only as forged products under T.I. 26AA(ia). In the classification lists, which were approved by the Asstt. Collector and which situation continued even after the induction of T.I. 68, the goods were described by the appellants under the heading finished steel products as wheels and axles. The appellants are, therefore, justified in contending that the Asstt. Collectors, before according approval on the classification lists, were aware of this fact. Again, RT 12 returns duly accompanied by gate passes were being submitted by them. If the appellants entertained a bona fide belief that their goods were falling under T.I. 26AA (ia), which belief Department endorsed by going on to approve the classification lists, till as late as May, 1979, it does not lie in the mouth of the Department to even suggest that there was suppression on the part of the appellants, much less mis-statement, or that it was case of any clandestine removal. Therefore, there is absolutely, no justification in invoking or applying the extended period of limitation of 5 years for the demand of additional duty by reference to T.I. 68. 10. In the case of Chloride Industrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of M/s. Verma Tyre and subsequent follow up action at other premises. We note that during the year 1987 a show cause notice was issued to M/s. Wearwell Tyre alleging that the appellants had cleared tread rubber, beads, rubber sheets combined with textile material which were not declared. Thus the present allegation of clearing of green tyres in the garb of tread rubber, beads and rubber sheets combined with textile material is a contradiction. The only evidence available with the Department is presence of 52 green tyres marked BCL. There is no other evidence to prove that the actual green tyres were being cleared and in the duty paying documents, they were being shown as tread rubber, beads, rubber sheets combine with textile material. Some portion of the certain reports are being relied upon but the reports relied upon are to be read as a whole and if read as a whole contradiction come out clearly in those reports. It is settled law now that any allegation of clandestine removal must be proved to the hilt. In the instant case, except the availability of 52 numbers of green tyres marked BCL which is the trademark of M/s. Verma Tyre found in the premises of M/s. Wearwell Tyre lend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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