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TMI Blog2000 (7) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... ey found that some VCRCs after clearance on payment of duty from their factory were brought to the duty paid godown and were fitted with kraft pockets in their trays but were not packed. On further investigation and on recording of the statements of the concerned officials of the company, it was learnt that after fitment with kraft pockets the VCRCs were packed and dispatched. The Central Excise officers seized the VCRCs, other materials and records found in the duty paid godown. 2. A show cause notice dated 24-2-86 was issued to the party by the Collector of Central Excise, Indore in which it is alleged that the VCRCs are incomplete and are of no use unless fitted with kraft pocket of suitable size and specification and required number f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent sizes had generally been sold by the party from their branches at a much higher price than that approved by the department from time to time. It is alleged that they evaded Central Excise duty amounting to Rs. 49,33,270.30 from January, 1981 to October, 1985 by way of mis-declaring the description of VCRCs which were finally and fully manufactured in their duty paid godown and branch fraudulently and Rs. 44,547.19 on account of sale of PBCs at a price higher than the approved price from their branches during the same period. They have, therefore, been called upon to show cause why the duty amounting to Rs. 49,77,817.86 should not be recovered from them and why penalty should not be imposed upon them. 3. Another show cause notice date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e imposed on them for their active involvement in evasion of duty on that part of the value which represents the value of kraft pockets which are essential and integral part of VCRCs cleared to the buyers. 4. In respect of both the aforementioned show cause notices, the Commissioner of Central Excise, Indore has passed a combined order being the Adjudication Order Nos. 27-28/Commr./CEX/IND/99, dated 19-4-99. In this order the Commissioner has ordered the recovery of Rs. 49,33,270.00 and Rs. 8,83,l54/- as duty payable on assessable value of kraft pockets filled in VCRCs against the aforementioned two show cause notices. He has further imposed a penalty of Rs. 50 lacs under Rule 173Q of Central Excise Rules, 1944 on M/s. Methodex Systems (P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er or it gets classified as part of card index cabinet. There is no doubt that the kraft card holder is made of kraft paper. In order to be a part of the index card cabinet, its function should be such without which the index card cabinet cannot function. In this case, the kraft card holder is not an integral part of the cabinet without which the cabinet cannot function. So, it cannot be termed as the part of the cabinet. 4. The noticee has produced before me sufficient evidence to show that this visadex card has been used by them in places other than in the cabinet. These have been used in the files, on the working table, in simple cabinets, which goes to show that it is a product, itself independent of the index cabinet. Therefore, kr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) PSI data systems Ltd. v. CCE - 1997 (89) E.L.T. 3 (S.C.). (v) O.R.G. Systems v. Collector of Central Excise, Vadodara - 1998 (102) E.L.T. 3 (S.C.). In support of the argument against application of extended period of time for the purpose of demand of duty, the appellant has relied on the following judgments : (i) Tamil Nadu Housing Board v. Collector of Central Excise, Madras - 1994 (74) E.L.T. 9 (S.C.). (ii) Collector of Central Excise v. Chemphar Drugs Leniments - 1989 (40) E.L.T. 276 (S.C.). 7. Shri S.P. Rao, JDR speaking for the Revenue submitted that intrinsic value of the whole item for the purpose of levy of duty is to be taken into consideration. He stated that with regard to the other manufacturers cit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ratio of the decision in case of M/s Godrej Boyce Mft. Co. v. CCE, Bombay will also not be applicable as in that case decision has been delivered on limitation aspect. 9. The Commissioner in his order has further extracted in extenso from the statements recorded from the officials of the company but has not stated as to what conclusion is drawn from these statements. The Commissioner in his order has made no reference to the detailed submissions made by the noticee parties before him, much less he has analysed them in any objective matter. This is evident from the concluding paras of his order which are given below :- Their contention that no duty is leviable, practice of fixing of kraft pockets being not prevalent before Novembe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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