9911796707
TMI Blog2000 (8) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Sanjeev Srivastava, ld. JDR for the Revenue and S/Shri V. Lakshmi Kumaran, A.R. Madhav Rao and Pragyan Sharma, advocates for the assessee. 4. Since the appeals relate to the same issue and facts, they were heard together and are being disposed of by this common order. We take up the Revenue appeal first. Facts leading to the appeal are as under :- The premises belonging to M/s. Harbans Lal Malhotra and Sons (hereinafter referred to as HLM), manufacturers of various kinds of steel blades and shaving system were searched by the Anti Evasion Directorate Officers on 21-7-1987 and various documents were resumed. On the basis of further investigations, they were issued a show cause notice dated 16-12-1987. The show cause notice contained allegations about clandestine removal of dutiable goods apart from demanding inclusion of expenditure incurred on advertisement in the assessable value of the appellants products. The allegation of clandestine removal was based on the seizure of blades from the premises of the respondents at New CIT Road, Calcutta and at RKK Street, Belur. The other ground for alleging clandestine removal was based on excess production arrived at on the basis pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the charge of production had categorically stated that there was no wastage at the stage of cellophoning and cartoning. The adjudicating authority had also wrongly accepted the defence plea that the production during the period 1983-84 was well within the production norms as stated by the Production Manager of the assessee and that there was no norm fixed in terms of Rule 173E in their case and therefore there was no basis for arriving at any conclusion regarding clandestine production or removal. The Department contends that the conclusion of the adjudicating authority was sweeping and made without appreciation of evidence on record, especially when it is realised that the norm of production was given by the Manager responsible for the production and quality control. Another conclusion drawn by the adjudicating authority, namely, that the quantity of goods released provisionally on open delivery tallied with the duty payments was also incorrect, according to the Department. It is contended by the Departmental Representative that the goods under seizure bore identification marks. Scrutiny of delivery challans and godowns register maintained by the assessee when ascertained show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries made in the search list memo prepared by the DRI officers as to the quantity as well as marks and numbers of the cases. Accordingly the Collector was requested by the appellants to allow open delivery of the seized goods at the time of taking provisional release of the goods and after executing the necessary Bond and Bank guarantee. Pursuant to the request, assessees were given open delivery of the goods seized earlier and recorded in the Panchnama. The details of the goods released on open delivery, when compared with the details of stock as reflected in their books, tallied 100% with the goods released on open delivery. This clearly showed that the goods which were seized on 21/22-7-1987 from the Registered office of the assessee were fully duty paid and the seizure was not warranted and the allegation of clandestine removal was without basis. The discrepancy in the search list memo was clearly brought out by the factual position and confirmed at the stage of verification while giving open delivery. Ld. Counsel submitted that this clearly showed that the basis of the allegation of clandestine removal of the goods seized at the assessee s registered office and godown was w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mined by the adjudicating authority and the conclusions drawn by him for rejecting the Department s allegations were based on evidence produced before the adjudicating authority. As regards the seizure of the goods from CIT Road office, Commissioner had given a clear finding that the goods originally seized fully tallied with the duty paying documents under which the goods were originally cleared from the factory and this was proved by the examination of the documents and the goods at the time of open delivery. The Commissioner had observed that the goods were kept in the Central Excise godown after their seizure and there was no possibility of any manipulation by the assessee during the time. As regards the seizure of the stocks found at RKK Street Belur, the Commissioner had found that over a period of time in respect of goods despatched from RKK Street godown to various customers, there were some instances of short supply. Correspondence submitted at the time of adjudication proceedings in this regard proved the correctness of the assessee s claim. Even at the time of seizure on 21-7-1987, the representative of the assessee had stated that the excess goods found in the adjoining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing stage. Ld. Counsel explained that after the stage of cellophaning and cartoning, the cartons containing the blades need to be put in polybags manually by girls. At this stage of handpacking considerable quantity of the cartons and tucks get damaged and these are sent back/withdrawn for re-wrapping, re-cartoning or re-cellophaning, as the case may be. This quantity which is withdrawn is to be deducted from the output of the cartoning and cellophaning machines to arrive at the RG I production. No doubt there was no loss or damage of blades as such. At the time of hearing before us, ld. Counsel had sought to substantiate this point by referring to the chart given at page 3296 of the Appeal Papers showing that there were pluses and minuses in relation to the numbers shown against RG I production and the figures shown at the pre-tucking stage after wrapping, cellophaning and cartoning which showed that at the time of tucking/cellophaning/cartoning cartons are withdrawn for recycling. Production wastes were daily recorded and were duly checked by the Chartered Accountant. The Commissioner had gone into this aspect in detail before coming to the conclusion that there was no substance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers at page 2981. On a perusal of the said record, we find that the seized goods and the delivery challans are co-relatable and the corresponding numbers and particulars tallied with each other. On the charge of shortage of production in terms of production norm of 1000 blades for every 1 kg. of steel strips, the appellants have argued that the Department had relied on the statement given by Shri Sengupta of Belur factory by completely ignoring another statement given by Shri S. Dey, Factory Manager who had stated that in case of carbon steel 800 blades can be produced from 1 kg. of carbon steel. When the production is calculated on the basis of 800 blades per kg. of carbon steel and 1000 blades per kg. of stainless steel, there was no scope of any shortage/excess. The Commissioner had accepted the above explanation given by the appellants while the Department has in ground G of the application before us contested the finding of the Commissioner without adducing any evidence to controvert the separate production norms applicable to carbon steel strips and stainless steel strips. We therefore, find that the ground taken by the Revenue is devoid of merit and cannot be accepted as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing incentives to workers on the basis of higher production and loss of such incentive to workers producing less number. The production figures were therefore closely watched by the workers and their Unions and it was impossible for any manufacturer to indulge in any clandestine production/removal by manipulating the said records. The Commissioner in the impugned order had gone into this aspect and had accepted the above explanation given by the appellants. On a perusal of the record, and on consideration of the submissions made by the appellants, we are unable to find any infirmity in the view taken by the Commissioner. The contentions raised by the Revenue before us on this behalf are therefore found to be lacking in merit. 12. The other allegation against the appellants is that they should have added the expenditure on advertising at the rate of 4% of the sales price. On behalf of the respondents, it had been argued that they had about 1400 stockists spread through out the country out of whom only 482 stockists incur advertising expenditure through Bharat Advertising Company, a company under the direct control and supervision of the respondents. Even the stockists who had giv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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