9911796707
TMI Blog2003 (3) TMI 392X X X X Extracts X X X X X X X X Extracts X X X X ..... - GPF HS N 650 29200/- 29200/- SRF N - 774 29200/- 29200/- SRF LS - 762 29200/- 29200/- ISAF - HM - N220 34200/- 34200/- HAF - HS - N 347 33600/- 33600/- HAF - HS - N339 33500/- 33500/- Off Grade 11000/- 11000/- Floor Sweep 9000/- 9000/- Since the goods were liable to duty on ad valorem basis they discharge their duty liabilities also on the basis of the sale price for the relevant grade. 2. The impugned order has held that the appellant was misclassifying regular grade goods as Off Grade - HAF N - 330 Grade and this has led to short-payment of duty in respect of that Grade. Consequently, duty demand of over Rs. 21 lakhs has been made against the appellants under proviso to Section 11A of the Central Excise Act, 1944. There is also confiscation of 9 tonnes of carbon black, demand for interest and imposition of penalties on the appellants officers. The present appeals challenge this order. 3. The main evidence supporting the finding in the impugned order is that a consignm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... important for determining for what product a particular carbon black is suitable. Therefore, sale and purchase of carbon black takes place based on the grade. 5. The appellants have also pointed out that the adjudicating authority has clearly misunderstood the evidence on record. The impugned order has noted in para 5.2 as under : Equally undeniable is the confessional statement tendered under Section 14 of Central Excise Act, 1944 by the consignee wherein Shri Ramakant Maheswari admitted receipt of HAF N330 grade carbon black . During the hearing of the case, the learned Counsel referred to the statement dated 11-3-1999 of Shri Ramakant Maheswari, managing partner of the consignment Agency, wherein it was stated that they had not received higher grade carbon black as Off Grade and submitted that the finding of the Commissioner is clearly contrary to the evidence on record. 6. We have perused the records and have heard the learned SDR who highlighted the fact that goods with different label on the packing than their description in the corresponding invoice showed that goods were being misclassified. 7. The finding in the impugned order is that all the carbon black c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... production. The quality of carbon black is checked during production for control. However, often due to variation in one of the parameter the quality level of carbon black under production changes and by the time this is detected certain quantity has already been produced. Such non-uniform and inconsistence product quantity of carbon black cannot be graded into a specified grade. Obviously then this quantity has to be made off-grade . Effect on Processing Product Properties Major organised rubber products manufacturing companies like Auto Tyre units have their own specification and will not accept any material which deviate their specification. Such companies will not accept any material which is not standard and passes through their Quality Control test. So, off-grade material cannot be marketed to organised companies. Off-grade carbon black, if used normally in the manufacture of rubber products, will obviously have effect on the processing characteristics and finished product. For example, if carbon black contain high grit or the pelletes have high hardness it will result in poor dispersion in the compound leading to problems like puncture in case of a tube or surface ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have produced a statement showing the carbon black produced by them as for the year 1997-98 and 1998-99. According to this Table the position was under : Year Superior Grade Floor Sweep Off Grade 1997-98 15433.100 161.000 197.825 1998-99 16589.850 266.000 459.675 It is not the Revenue s case that quantity or percentage of Floor Sweep (1.54%) or Off Grade (2.65%) is abnormally high in respect of the appellant manufacturer and it is so because the appellant has been misclassifying the goods for the purpose of evading Central excise duty. Thus, no abnormality has been brought out on this score also. 10. Statement of the consignment Agency is also against the charge of misclassification of goods by the appellants. On 11-3-1999, the Superintendent, Central Excise, Hyderabad recorded a statement from Shri Ramakant, Managing Director to Maheshwari Enterprises (Consignment Agent of the appellant), for whom the consignment under seizure had been despatched. The following questions and answers are relevant : Q.7. Please see the invoice No. 1913 dated 3-3-1999 issued by M/s. Ralson Carbon Black Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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