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TMI Blog2004 (5) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... nal rate of Customs duty at the rate of 35% ad valorem in respect of Polyol and Iscocynate if the same are utilized in the manufacture of Polyurethane footwear soles subject to compliance of the conditions as mentioned in the said Notification. M/s. Jai Industries imported Polyol and Toluene Di-Isocynate (TDI) through Hyderabad and Mumbai at concessional rate during the periods from 1991-1992 to 1993-1994 and it was alleged that they have not utilised these goods for manufacture of Polyurethane foam footwear soles but manufactured polyurethane foam sheets. They obtained end-use certificate by collusion/forgery and claimed discharge of end-use obligation cast on them. The DRI conducted investigation and found that by not manufacturing the polyurethane footwear soles, M/s. Jai Industries have evaded customs duty of Rs. 1,45,80,497/- for the clearances of the imported polyol and Iscocynate from Mumbai and also evaded duty of Rs. 1,18,57,397/- for imports at Hyderabad. Therefore show cause notices were issued to them for recovery of duty short-paid i.e. Rs. 1,45,80,497/- for imports through Mumbai and Rs. 1,18,57,397/- for imports through Hyderabad. The entire duty demanded was confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing as to how the appellant had misutilised the above quantities of TDI and Polyol, the Commissioner erred in presuming that appellant had manufactured the above PU foam solely out of imported TDI and Polyol without taking into account the already existing stock of TDI and polyol with the appellants. He also pleaded that no procedure has been prescribed under Notification 72/91. Hence the Commissioner should have taken into account the private documents of the appellants which clearly establish utilisation of imported raw material in manufacture of PU soles. It was also pleaded that Order of the Commissioner goes beyond the charges made out in show cause notices. The Commissioner without properly understanding sales figure has misapplied the same to reach erroneous conclusion. He, therefore, pleaded that the Order of the Commissioner may be considered as a show cause notice and the matter may be remanded to him for readjudication of the case. 5. Shri M.K. Madhyastha, learned JDR appearing for the Revenue pleaded that figures of credits given on 22-1-1998 do not give either the name of the customer or its address, these figures of credits did not tally with the audited balance she ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been utilised for manufacture of PU footwear soles. He has not seen entries in this regard. Shri Saraschandra, Supdt. vide his statement dated 14-7-1994 denied the fact of having issued any end-use certificate. The end-use certificates said to have been signed by Shri Saraschandra, Supdt. were sent for examination by the Examiner of questioned documents who certified that the signature contained in the certificates did not tally with the signature of Shri Saraschandra, Supdt. The end-use certificates issued by Shri Tata, C.A were not produced before the customs authority for getting the end-use bonds cancelled. The same were obtained from the Chartered Accountant only on 20-6-1994 and these certificates were issued when all the records were under the custody of DRI officers and therefore the veracity of certificates itself is doubtful. The affidavits submitted by the appellants from the traders do not contain complete address of the deponent nor it gives any quantity or specific bill numbers under which footwear soles were purchased. These affidavits cannot be considered in the absence of any proper address. 7. The learned DR stated that PU foam sheets manufactured by M/s. Jai I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 72/91 the utilisation was scrutinised by the jurisdictional officers and on the basis of the scrutiny 25 certificates of consumption of the imported materials for specific purposes were issued by superintendent Shri Mangaiah. 7 certificates by Shri Saraschandra and four certificates by C.A. M/s. Ravikanth Tata Co., Hyderabad. 9. He also relied upon the decision of Bombay High Court, in case of Vasanji Ghela Co. v. Commissioner of Sales Tax, in Sales Tax Reference No. 50 of 1969, decided on 17-11-1975 wherein it was held that - In our view, when a conclusion adverse to a party is sought to be arrived at by the authority, there is generally speaking a duty cast on it to disclose to that party the materials sought to be relied on against him in the case before it. As we have already pointed out the question in the case before us relates to disallowance of certain sales in the assessment proceedings under the Bombay Sales Tax Act. The facts and circumstances, which we have referred to in some detail earlier, do not disclose any sufficient reason why the request of the applicants to be allowed to read Keshavji's letter could not have been complied with. In the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any of the affidavit, it was not possible either to summon the deponent for cross-examination or for getting it verified by any other means. Therefore, the Commissioner has correctly discarded these affidavits. 11. The appellants have also pleaded that the details of the manufacture and sale (cash credit) submitted before the Commissioner were rejected without further consideration and these details were culled out from the records which were recovered by the DRI during the search of the appellants premises and which were subsequently submitted to the DRI on 13-6-1994 and which were returned by the DRI on 25-4-1991 as unrelied upon documents. We find that the Commissioner in his finding has given reasons, in Para 12.1 of the impugned order wherein he has observed that - 12.1. ... On 22-1-1998, they were clearly told to prepare the details of each credit sale, and furnish the statement to DRI which they promised and yet they are withholding this information which proves the hollowness of the claim. ... We find that when a claim was made before the adjudicating authority, without giving the name and address of the customers, he could not have verified it. He could have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellants have also pleaded that the Commissioner has gone beyond the charges of show cause notice as has been discussed in Paragraphs 9.2, 10.2 to 10.4 and 13. We find that what has been discussed in the Commissioner s order are the figures submitted by the appellants during the personal hearing before the Commissioner and he has pointed out the reasons as to why these figures submitted by the appellants are not acceptable. Therefore, it cannot be said that the Commissioner has gone beyond show cause notice and there is violation of principles of natural justice. 15. It is pleaded that as per Panchnama dated 11-6-1994, a quantity of 13.5 MT of TDI and 11.25 MT of Polyol was found in stock. This has also been taken into account in the impugned order and duty has been demanded on the said quantity. We find that the quantity which was available in the factory as claimed is not the quantity out of the imports made in the Bills of Entry which are under dispute as the appellants had produced the utilisation certificate to the customs authority for the disputed Bills of Entry. The investigation was done for that quantity for which utilisation certificates were produced. Therefore d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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