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TMI Blog1996 (4) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... f intelligence, the Central Excise Officers searched simultaneously, Building No. III/103 owned by Shri K. Kuruvilla Varghese, partner of M/s. Shalimar Rubber Industries and the residence of Shri Thomas Varghese, Managing Director on 25-11-86. When Shri K. Kuruvilla Varghese was requested to open the room attached to the shop Apsara Stores stated that he did not have the key as it is with his sons. When nobody turned up to 8 pm, the room was opened with the help of a blacksmith in the presence of village officer, Shri Kuruvilla Varghese and independent witnesses. As a result of search, 7 rolls of tread rubber weighing 229.500 kgs. packed in sack with the label Shalimar Rubber Industries, Vengola were found. As Shri K. Kuruvilla Varghese could not produce any proper documents, the tread rubber was seized. On search of the residence of Shri Thomas Varghese, registers/documents relating to the clearance of the tread rubber and purchase of raw material by M/s. Shalimar Rubber Industries were seized. The statement of Shri Thomas Varghese was recorded on 27-11-86 wherein he stated that he is the brother of Shri K. Kuriakose and was looking after the affairs of the company; that Sh. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res and 7 rolls of tread rubbers were found in the next shop there. He admitted that the seized tread rubber was brought from M/s. Shalimar Rubber Indus. 4. Shri Boban P. Alias in his statement recorded on 26-11-86 deposed that he was a student; that the owner of M/s. Shalimar Indus. was his relative; that actually, there was no firm by name of Nicky Rubber and Chemicals; that tread rubber was kept illegally in a room attached to the shop run by his uncle, Shri K.K. Varghese; that the details of the business were known to Shri Thomas Varghese and Kuriakose only; that in the accounts from 6-11-86 to 24-11-86, local sales of tread rubber were shown by M/s. Nicky Rubber and Chemicals; that they were actual sales of M/s. Shalimar Rubber Indus. He further deposed that the usual procedure was to show that the tread rubber was sold from M/s. Shalimar Rubber Indus. to M/s. Nicky Rubber and Chemicals and the records were manipulated as second sales; that he had not received any remuneration from the said firm Nicky; that he consented to be the owner of such a false company as per their request since they were his relatives. 5. Shri T.A. Koya, in his statement recorded on 11-1-86 deposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he used to get the tread rubber at a price of Rs. 27.50 per kg. excluding duty; that some time, cash payments were made; that an average of 450 kgs. of tread rubber was purchased from. M/s. Shalimar Rubber Indus., till July, 1986; that he sometimes used to get tread rubber from the said factory without gate passes. 8. Shri A.N. Chandy, in his statement recorded on 9-7-87 deposed that he was the managing partner of M/s. Sakthy Tyres; that the firm started buying tread rubber from M/s. Shalimar Rubber Industries; that tread rubber was usually supplied by Shri Baby or Shri Kuriakose; that he used to pay Rs. 27.50 per kg. always in cash; that only few invoices and gate passes were given to him for the above purchases. 9. Similar statements were given by Shri R. Gopalan, a trader in tread rubber, Shri K.K. Nazurdeen, Manager of Universal Tyres, Shri O.M. Jacob, a proprietor of J.G. Tyres and Shri K.V. Antony of M/s. Hindustan Tyre Retreading Works. 10. According to the accounts in RG-1, the total production of the factory from September, 1985 to March, 1986 was 33,009 kgs. and the quantity cleared was also 33,009 kgs. According to the statements given by the partners of the firms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hased 49,850 kgs. of carbon black is not supported by any concrete evidence; that the statement of Shri Sunny P. Kunnath, Manager of Universal Agencies who had handed over 62 disputed invoices was not recorded; that his unrecorded statement to the Inspector has no evidentiary value; that a specific request was made to adjudicating Authority for Shri Sunny P. Kunnath s cross-examination which was not acceded to nor any reasons assigned for not summoning him for cross-examination; that since Shri Sunny was not summoned for cross-examination, his letter dated 22-6-87 should have been accepted as true in which it was explained that the carbon black under the disputed 62 invoices was not sold to M/s. Shalimar Rubber Indust. 15. On the above submissions, the Department submitted that letter dated 22-6-87 from M/s. Universal Agencies to M/s. Shalimar Rubber Indust. was in accordance with the names given in the invoices. However, the Department had verified from the authorities and it was found that these invoices were in the name of fictitious persons. The Department also argued that in the recovery memo., it was clearly stated and endorsed by Shri Sunny P. Kunnath that these invoices w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was also argued by the learned Counsel that the case was made out against the appellants in a big way only to attract higher reward. We find that looking to the facts of the case namely, the statement of the labourers, the statement of the customers purchasing tread rubber, the recovery of invoices in fictitious names showing purchases of carbon black, etc., we find that the case was built up not only on the basis of statements but also on the basis of documents. The allegation can therefore, not be termed that a big case was made out of nothing only for getting a reward. It was also argued before us that the product was spread over in three years and duty has been calculated by applying the rate in force on the date of order; that this method was violative of Rule 9A(5). We observe that Rule 9A(5) reads : (5) In all other cases, the rate of duty and tariff valuation, if any, applicable to excisable goods shall be the rate and valuation in force on the date on which the notice for demand of duty is issued or on the date on which duty is paid, whichever is earlier. We find that the Collector had relied on the judgment of this Tribunal in the case of Bliss Pack, Bombay v. CCE, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Chemicals were removed on payment of duty, Shri Boban P. Alias, in his statement admitted that the goods were brought from M/s. Shalimar Rubber Industries and no duty paying document was issued by the manufacturer. The Collector s finding is However, I find that during the years 1983-84, 1984-85 and 1985-86, the rate of duty taken was Rs. 8/- per kg. The duty should be calculated in terms of Notification No. 130/87 as fol1ows : The total unaccounted production and clearance from 1983-84 to 1985-86 - 161,122.310 kgs. (i) Duty @ Rs. 4/- per kg. for the first clearance of 50 Mts. - 2,00,000.00 (ii) Duty @ Rs. 8/- per kg. for the next 100 Mts. - 8,00,000.00 (iii) Duty @ Rs. 12/- per kg. for the clearance exceeding 150 Mts. - 1,33,457.72 Total 11,33,457.72 We agree with the above calculation. We also agree with the above observation of the Collector, Central Excise that this is a case of clandestine removal of goods without payment of duty, it is therefore, unimaginable that evidences particularly in the form of documents would be available to prove the entire case or qu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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