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TMI Blog2007 (2) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... i and Sri Devi, with Sri Vasavi having highest price and Sri Devi having the lowest price. 2. Intelligence gathered by the officers of Central Excise, Anti-Evasion, Headquarters, Visakhapatnam (hereinafter referred to as the officers ) indicated that the assessee is indulging in certain malpractices by manipulating brands and thereby evading Central Excise duty. Based on the above intelligence, on 15-6-04 the officers have visited the factory premises of the assessee at Rajam and conducted verification of the records. The books of the accounts of the assessee are maintained in their computer system using QuickBooks Pro accounting software and the officers found that the computer system also, contains, the complete accounts of M/s. Sri Vasavi Agencies (hereinafter referred to as M/s. Vasavi Agencies ), their marketing agency for sale of PVC pipes having branches at Rajam, Visakhapatnam, Vijayawada and Nellore. Preliminary verification of the records and the computerized books of accounts of the assessee and of M/s. Vasavi Agencies revealed that the assessee is clearing the superior branded PVC pipes ( Sri Vasavi brand) in the guise of inferior branded PVC pipes ( Sri Devi br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted at these branches no PVC pipes with Sri Devi brand were found. It was stated by Branch In-charges of the respective branches that they have never received Sri Devi brand PVC pipes though the invoice indicates the sale of Sri Devi Brand Pipes and that along with the invoice they were receiving a slip from M/s. Vasavi Polymers indicating the actual brands received which will be teared off after unloading the stock. The verification of the Daily Stock Register maintained at these branches also confirms that they never received nor sold Sri Devi brand PVC pipes. 5. A statement of Sri M. V. V.L.N. Murthy, Branch In-charge of M/s. Vasavi Agencies, Visakhapatnam was recorded under summons on 16-06-2004 wherein he deposed, inter alia, that : (i) M/s. Sri Vasavi Agencies is a registered partnership consisting of four partners, viz., B. Krishna Murthy, G. Suguna, B. Rama Rao and M. Prakasha Rao; (ii) They are engaged in the purchase and distribution/sale of PVC/HDPC/ Blue threaded pipes and pipe fittings; (iii) They purchase and sell PVC pipes of 20mmf to 200mmf of Sri Vasavi, Sri Kanya, Sri Durga and Sri Parameswari brands manufactured by M/s. Sri Vasavi Pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade brand wise; (vi) Payment to the supplier is made for the actual value of other branded PVC pipes, which are actually received; (vii) The sale bills from M/s. Vasavi Agencies are prepared with Sri Devi brand but are billed with the actual prices of their actual brand of the pipes sold; (viii) The hard disk of their CPU was damaged due to power fluctuations/virus and thus their CPU was sent their Head Office, Rajam for repair; and (ix) They are following this practice as per the oral directions of their Managing Partner. 7. The officers have visited factory premises of M/s. Vasavi Polymers again on 19-6-04 and obtained certain other documents needed in the investigation vide their letter dated 19-6-04. They have also detained the stock of PVC pipes valued at Rs. 31,01,104/- vide Detention Memo dated 19-6-04 on reasonable belief that that the same are likely to be undervalued by clearing in the guise of inferior quality Sri Devi brand PVC pipes. The assessee vide their letter dated 21-6-04 has requested for release of the detained goods. The assessee has vide letter dated 28-6-04 has undertaken to clear the released goods with their actual brand names and to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee are maintained in their computer system using QuickSooks Pro accounting software and the officers also found that the computer system, contains the complete books of accounts of M/s. Sri Vasavi Agencies (hereinafter referred to as M/s. Vasavi Agencies ), their marketing agency for sale of PVC pipes having branches at Rajam, Visakhapatnam, Vijayawada and Nellore. Preliminary verification of the records and the computerized books of accounts of the assessee and of M/s. Vasavi Agencies revealed that the assessee is clearing the superior branded PVC pipes ( Sri Vasavi brand) in the guise of inferior branded PVC pipes ( Sri Devi brand) to their marketing agency and thereby evading Central Excise duty. On reasonable belief that the information contained in the computer system of the assessee is relevant for the purpose of investigation the officers have recovered the CPU of the computer system along with certain records under Panchanama dated 15-6-04. 3. In follow up action, based on the above intelligence, on 16-6-04 the officers along with the officers of Central Excise, Nellore Division, Vijayawada Division and Vizianagaram Division conducted simultaneous search o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri Devi brand PVC pipes. 5. A statement of Sri M. V. V.L.N. Murthy, Branch in-charge of M/s. Vasavi Agencies, Visakhapatnam was recorded under summons on 16-6-2004 wherein he deposed, inter alia, that : (i) M/s. Sri Vasavi Agencies is a registered partnership consisting of four partners, viz., B. Krishna Murthy, G. Suguna, B. Rama Rao and M. Prakasha Rao; (ii) They are engaged in the purchase and distribution/sale of PVC/HDPC/ Blue threaded pipes and pipe fittings; (iii) They purchase and sell PVC pipes of 20mmf to 200mmf of Sri Vasavi, Sri Kanya, Sri Durga and Sri Parameswari brands manufactured by M/s. Sri Vasavi Polymers Pvt. Ltd., Rajam and other than these four brands they have never received any other brands; (iv) They maintain a day-wise stock register for recording the receipts and issues of various goods; (v) To a specific question asking to explain how the entries are made in the stock register, by randomly selecting any one purchase invoice, he has narrated recording of receipts through invoice number 262, dated 4-6-04 issued by M/s. Vasavi Polymers entered at page number 394 of the Stock Register. The invoice indicates receipt of Sri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. The officers have visited factory premises of M/s. Vasavi Polymers again on 19-6-04 and obtained certain other documents needed in the investigation vide their letter dated 19-6-04. They have also detained the stock of PVC pipes valued at Rs. 31,01,104/- vide Detention Memo dated 19-6-04 on reasonable belief that that the same are likely to be undervalued by clearing in the guise of inferior quality Sri Devi brand PVC pipes. The assessee vide their letter dated 21-6-04 has requested for release of the detained goods. The assessee has vide letter dated 28-6-04 has undertaken to clear the released goods with their actual brand names and to pay rupees two lakhs, under protest, as advance deposit towards differential duty pending investigation of the case. The Commissioner, Central Excise, Visakhapatnam-I vide letter dated 29-6-04 has allowed the release of the detained goods subject to the condition that the goods released are cleared with their actual brand names and that the assessee invariably records their production and clearances brand-wise and size-wise in their Daily Stock Register. However, the assessee vide their Letter dated 7-7-04 stated that it is not practically pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppression of facts and the demands were not required to be confirmed for the larger period, in the present case. He points out that in Order-in-Original No. 31/2005 dated 22-12-2005, the Commissioner has accepted the transaction value and therefore, he should not have taken a different view to confirm demands in the impugned order. The Order-in-Original No. 31/2005 dated 22-12-2005 has not been contested by the Revenue and it has reached finality. The learned Counsel relied on the Apex Court judgment rendered in the case of Nizam Sugar Factory v. CCE as reported in 2006 (197) E.L.T. 465 (S.C.) wherein the Apex Court has held that when all the relevant facts are in knowledge of the authorities when first show cause notice was issued, then while issuing subsequent show cause notices on the same/similar facts, the department cannot allege suppression of facts on the part of the assessee. The Apex Court has held that in such circumstances, the demands are required to be held as barred by time. 3. The learned JDR very efficiently defended the matter and prayed for upholding the invokation of larger period and to decide the case on merits. 4. On a careful consideration, we notice tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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