9911796707
TMI Blog2004 (6) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... made on the ground of incorrect valuation of goods and clandestine manufacture and removal of the goods. 3. The valuation dispute is on account of two grounds. The first ground is that the appellant should have included charges attributable to Sound Delivery Charges in the assessable value of the goods. The second is that certain extra charges levied by the appellant for monogram printing, edge grinding etc. should form part of the assessable value of the glass products. 4. The duty demand on account of sound delivery charges works out to about Rs. 18.3 lakhs. On this demand, the contention of the appellant is that sale of the goods takes place on ex-factory basis. Sound delivery charges are in addition to the price of the glass and these are towards post removal costs like transport. Appellant has pointed out that the sales under DGS D rate contract stipulated separate amount towards price of the goods and sound delivery charge. The goods are examined and approved by the buyer at the factory and thereafter only they are removed on payment of duty. Learned Counsel for the appellants has submitted that it is well settled that post clearance expenditure cannot form part of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this ground works out to about Rs. 8.7 lakhs. 6. There is a duty demand of over Rs. 22 lakhs on account of the charge of clandestine removal. This allegation is mostly founded on a comparison of the quantity cleared by the appellant under Central Excise invoices and the quantity sold to the railways under commercial invoices. The finding has been reached based on the difference in quantity shown in the two sets of documents. Since the appellants have actually sold higher quantity as mentioned in the commercial invoices (than the quantity mentioned in the Central Excise invoices), it is being concluded that the differential quantity has been clandestinely produced and cleared. The defence of the appellant on this charge is two fold. One is that the calculation of area in the commercial invoice is done according to the formula agreed between the buyer and the seller, while in the excise document, actual area is entered. The learned Counsel for the appellant has pointed out that this problem is mainly in respect of the goods of irregular shapes like oval mirrors. According to the learned Counsel, the quantity difference is entirely notional in such cases inasmuch as both the invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot allege that it is the conduct of any particular officer which has led to short-levy of duty and he is personally responsible for the short-levy. 10. As against the above explanations and contention of the appellant, learned SDR has submitted that the entire duty demand is required to be confirmed inasmuch as evidence on record has established that the appellant had indulged in under-valuation and clandestine removal of the goods. With regard to the inclusion of sound delivery charges, the submission of the learned SDR is that, in terms of the contract, the appellant is required to hand over the glass in question at the destination and their responsibility will end only on intact delivery of the glass at the consignee s representatives. Learned SDR has contended that under these terms, it is clear that the sale takes place only upon safe delivery at destination and therefore, sale price at destination which include sound delivery charge should be taken as assessable value. With regard to the contention that demand on account of extra charges for monogram printing, edge grinding etc. has been raised beyond time limit, the learned SDR has pointed out that in the earlier proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Instead, the appellant is merely showing some purchases to account for their sales. Learned SDR has pointed out that the correlation sought to be made by the appellant would be disproved by many flaws. He has referred to large time gap between the purchases and re-supply. He has pointed out that time gap in several cases is more than one year. Learned SDR has submitted that such vast time gap between purchases and sales cannot be accepted, particularly since it is the appellant s explanation that they were purchasing these goods in emergent situations to fill the gap between their own production and their supply commitments. According to the learned SDR, if this explanation is correct, the time gap between purchases and sales would be very short. Another point taken by the SDR is that the purchases and sales do not correlate in regard to kind of goods dealt with. It is noticed that purchase was of plane glass of about 5 mm thickness, while sale to railways was silver glass (mirror). Learned SDR has referred to several sales bills in this correlation, one case being that Sale Bill No. 9715 for purchase from Jagdamba Glass. The goods purchased was plain glass, while the goods resold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to exclude these costs from the assessable values. On 5-6-95, the Superintendent of Central Excise wrote to the appellant pointing out the short-levy of excise duty on account of these charges. Thus, the facts were known to the jurisdictional authorities. Still Revenue authorities has failed to issue notice within the normal period. It is well settled that to such cases, proviso to Section 11A cannot apply. While the learned Counsel for the appellant has relied on the many decisions on the issue, we may read below the decision of the Apex Court in the case of Baidyanath Ayurved Bhavan Ltd. v. C.C.E., Allahabad - 2004 (165) E.L.T. 494 (S.C.) : We find that there are four issues involved in these appeals but that three hinge on this one question : Was the Show cause notice dated 27th February 1987 beyond time? The period in question is 28th August, 1982 to 28th February 1986. The notice would be in time if the Revenue could invoke the extended period under Section 11A on the ground that the assessee had been guilty or fraud, misrepresentation or wilful suppression. It is patent from the facts recorded by the Tribunal that there was no wilful suppression, let along fraud or misr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... himself without any check by Revenue as to correctness of description clearly come within the scope of clandestine removal. The duty demand in relation to such removals amounting to Rs. 5,87,595/- is clearly recoverable from the appellant by invoking the proviso to Section 11A. 16. We are also not able to accept the appellant s explanation relating to the purchases and sales of goods. Gaps and inconsistencies in the appellant s explanation are too many. To begin with, the appellant was to supply only his own produce under rate contract with the railways. Therefore, on the face of it this explanation has to be rejected. Further, there are no stock or sale ledger/registers which would facilitate the meaningful correlation of purchases and sales chronologically. The contention has been raised based merely on some purchases and payment for the same. These do not correlate for many reasons. The time gap between purchases and sales is very vast, more than a year in many cases. Similarly, the purchased goods do not tally with the goods sold, while purchases were of plain glass, the items sold are mirrors. During the hearing, a faint explanation was ventured by the learned Counsel by sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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