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TMI Blog2005 (8) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... having to being knowingly to have declared lower prices as declared to have vide notification 27/92 by the Trader when in the milieu of the law, MMF processing trades as understood then and commercial practice at that time was otherwise i.e. during the relevant period 1997-98 to 15-12-1998. We would therefore find no reasons or find ingredients exist to uphold the invocation of the larger period of demand in the facts herein. Duty demands and liabilities to confiscation therefore cannot be upheld. The plea on behalf of Nangellia group, made by ld. Advocate Sh. Bulachandani, that they are manufacturer and weavers of fabrics and the prime quality of Gray fabrics were sold and the declarations made for the fabrics sent for processing by them was more than the costing thereof and being defective not of saleable standard the valuation of such of Gray cannot be of comparable fabrics being sold in the market as of prime quality has force. In any case, the valuation is being composed with market sale price of Gray fabrics, without any evidence of similar quality being on record. The traders were required to and gave the cost plus declaration. Mixing of lots and other commercial considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Section 11 AC of Central Excise Act, 1944 as under : SR.NO. NAME OF PROCESSING UNIT DUTY AMOUNT (RS.) 1 M/s. Anjani Dyg Ptg Mills 5,76,124/- 2 M/s. Asian Dyg. Ptg Mills 3,16,122/- 3 M/s. Gomti Processors Ltd. 8,836/- 4 M/s. Mamta Dyg Ptg Mills 13,422/- 5 Nitharika Dyg Ptg Mills 61,236/- 6 Oriental Dyg Ptg Mills 12,832/- 7 Prakash Dyg Ptg Mills 5,042/- 8 Rajlaxmi Prints Pvt. Ltd. 56,36,843/- 9 Rupa Dyg Ptg Mills 95,769/- 10 Suntex Fabrics Pvt. Ltd. 47,63,841/- 11 Varun Dyg Ptg Mills 1,39,942/- (iii) I impose penalty on following Director/Partner/authorised signatory of the processing units as detailed in (i) above under Rule 209A of Central Excise Rules, 1944 as under : - SR.NO NAME OF DIRECTOR/PARTNER/ AUTHORISED SIGNATORY AMOUNT OF PENALTY (RS.) 1 Shri Shailendra Kumar K. Agarwal Director of M/s. Anjani Dyg Ptg Mills 30,000/- 2 Shri Harivadan Bhamcha Partner of M/s. Asian Dyg Ptg Mills 16,000/- 3 Shri Anil R. Agarwala Director of M/s. Gomti Processors Ltd. 500/- 4 Shri Suresh Kumar, H. Chag Director of M/s. Suntex Fabrics Pvt. Ltd. 2,38,000/- 5 Shri Rakesh Chandrabhan Goyal Director of Varun Dyg Ptg Mills 7,000/- 6 Shri Akshay Kumar, M. Juneja Director of M/s. Rajlaxmi Print ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,001- 1.2 Appellants at Sr. Nos 1, 3, 6, 8, 15, 18, 19, 20, 23 and 25 are processors of MMF and assessee under the Central Excise and duty has been determined and demanded from them on the grounds that the value of Gray fabrics, supplied to them by the Traders, the other appellants were lower than it ought to have been. Consequently the Nangalia Group of Companies at sr. nos 5, 7, 8, 11, 12 and 13, listed supra and others had knowingly aided and abetted in this undervaluation consequently duty and penalties have been arrived on the processors and the traders who had supplied the fabrics for processing along with penalties on employees and directors (listed at sr. nos 2, 4, 9, 16, 17, 21, 22, 24 of the test supra) have also been arrived. The common notice dated 22-5-1989 demands duty on fabrics processed and cleared between April, 1997 and December, 1998 involving the extended period of limitation under the proviso to Section 11A(1). 1.3 The processors case is that they had declared the valuation on each lot of Gray fabrics received with the declaration signed by the traders who had supplied the fabrics as required under notification 27/92 and it was not practicable for them to veri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bric, that price given by the trader must be accepted by the job worker for the purpose of payment of duty. The Excise authorities cannot go beyond that declared value. It would therefore appear that benefit of the decision in 2000 (122) E.L.T. 45 could be available to the assessee begin Larger Bench decision as the full implication of Notification 27/92 declaration came to be settled only by Larger Bench vide its order in 2002 (146) E.L.T. 455 LB on 30-9-2002. Thus benefit of doubt would go to the processors to have reasons to believe that one cannot go beyond the declarations as given by Traders under Notification 27/92. Even the departmental authorities were not clear about the status of such a declaration; That it was not sacrosanct, was not the belief to be entertained came to be settled by Larger Bench, this is also reinforced as they also did not take any action on RT12 s and other declarations filed by the assessees within the normal period of demands under Section 11A(1) by questioning these declarations in this case. When the department, almost all over India, and the jurisdictional officers of the processors herein, did not suspect and found any thing amiss in the declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. Mixing of lots and other commercial consideration went in the declaration made. The evidence similar grey quality receipts of M/s. Rupa was not on record. The proposed valuations cannot upheld. Different qualities of Gray are a commercial reality. That cannot be ignored by Revenue. We find force in the arguments and the grounds taken by the appellants in this appeal. No demands on merits can be arrived at. We find no mens rea or knowing concert with any alleged evasion and dealing with excisable goods knowingly that such goods excluded to confiscate is on record. We find no reason to visit them with Rule 209A penalties as arrived. (d) The imposition of penalty under Rule 173Q and Section 11AC as arrived cannot be upheld on facts herein and also the position in law not upholding of such joint read with penalties, following the decision in case of Jay Yuhshin Ltd. - 2002 (147) E.L.T. 743 (T); Agarwal Pharmaceuticals - 2002 (146) E.L.T. 190; Monica Electronics Ltd. - 2001 (134) E.L.T. 454; Punjab Recorder Ltd. - 2001 (132) E.L.T. 41. (e) Since no duty demand and or penalties or confiscation are being arrived at, the penalties under Rule 209A are not upheld in all cases as arrived ..... X X X X Extracts X X X X X X X X Extracts X X X X
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