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TMI Blog2010 (2) TMI 1046X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner demanded Rs. 6,14,49,922/- under Section 3(1)(ii) read with proviso to Section 11A of the Central Excise Act, 1944 (the Act) being the duty due on the goods cleared between 9/04 and 10/2006 and imposed equal amount of penalty under Section 11AC of the Act and Rule 25 of Central Excise Rules, 2002. Applicable interest was also demanded under Section 11AB of the Act. 2. Facts of the case are that two documents recovered from the premises of HG showed particulars including the vehicle number of carriers used for actual clearances effected by HG in 4/06 5/06. No invoices were raised for most of these clearances. For example, the total quantities of granite and marble slabs cleared by HG during the month of April, 2006 were 1203 and 2155 pieces respectively. As per their calculations listed in Annexure C-13, to the show cause notice, at page 3, the total slabs thus cleared was 3358 numbers which worked out to 201480 sq. ft. However, the quantity of the said goods accounted and cleared on payment of duty was only 23283 sq. ft. as per the DTA register and the ledger extracts. From the said page 3 of Anenxure C-13, it was observed that the accounted clearances were a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1985, by Finance Bill, 2006; (iii) Valuation of the goods had to be determined in accordance with the provisions in the Customs Act, 1962 and the Customs Valuation Rules framed there-under, and not under the provisions of the Act or the Valuation Rules framed there-under; (iv) Computer print outs did not have any evidentiary value, unless the provisions of Section 36B of the Central Excise Act, 1944 were complied with; (v) No evidence cited in the show cause notice in respect of the allegation relating to suppression of production and clandestine clearance; (vi) No evidence found in the show cause notice providing any clue that the goods allegedly sold at rates higher than invoiced by HMG were produced by HG, the appellant; (vii) No proof let in to show that the records said to incriminate HG really pertained to HG (the appellant) (viii) No evidence let in, in support of flow back of any money to HG (the appellant); (ix) No evidence found in the show cause notice of any abnormal purchase/consumption of essential raw materials, including power; (x) No evidence by way of transport documents or any accounts for the alleged clandestine clearance had been cited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions involved are clandestine clearances and clearances involving the finished goods with intent to evade payment of duty. From the show cause notice, and the order-in-original, we do not find that the proceedings concerned any violation by the EOU as regards its statutory obligations monitored by the Development Commissioner. We find that such transgressions have to be adjudicated by the Customs authorities and do not need clearance from the Development Commissioner. We find that in the various case laws relied on by the appellants, the violations involved were of the nature which required consultation with the Development Commissioner as envisaged in the circulars of the CBEC. 8. HG submitted that in the light of the Apex Court judgment in the case of M/s. Aman Marble Industries Pvt. Ltd. v. CCE, Jaipur [(2003 (157) E.L.T. 393 S.C.)], mere cutting and polishing of granite/marble blocks did not amount to manufacture. We find that in the judgment cited, the Apex Court had held that cutting of marble blocks into slabs did not bring into existence any new substance. In its judgment in the case of Income Tax Officer, Udaipur v. Arihant Tiles and Marbles (P) Ltd. [2010 (249) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods after their receipt from HG. HMG was treated as related person. The concept of related person in the Act was not the same as in the Customs Act. Valuation provisions under the Customs Act, in Rule 8(2)(i) of the CVR prohibited adoption of the sale price of the goods in India. Thus it was not a mere case of quoting a wrong rule but involved a totally different legal question. The adjudicating authority had gone beyond the show cause notice and arrived at a conclusion which was not permitted in law. The assessee relied on Otis Elevator Company (India) Ltd. v. CCE, Bangalore [2008 (229) E.L.T. 568 (Tri-Bang)J wherein the Tribunal had allowed the appeal of the assessee ruling that serious violation of principles of natural justice was committed if the appellant was not put on notice of the method adopted for valuation. 11. We find that the proposal in the show cause notice was to determine the value for assessment of the goods cleared in terms of Rule 11 of the Central Excise Valuation Rules, 2000. This rule provided for adopting reasonable method consistent with the principles and general provisions of the Valuation Rules and sub-section 1 of Section 4 of the Act. Section 4 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in the case of Tata Coffee Ltd. case (supra), it has been clearly held that FOB value of exported goods should be taken as assessable value when there are no imports of identical or similar goods. In the present case also, the FOB value of similar goods had been taken and it has also been demonstrated that the relation between the buyer and seller has not influenced the value by means of SVB Circular. In any case, the department does not have sufficient evidence to show that such a relationship has influenced the price. In these circumstances, we do not find that the valuation adopted by the appellants is not legal. It is in consonance with the Board circular. Even in terms of Customs Valuation Rules, the domestic selling price cannot be the basis for valuation of goods under the Customs Act and Customs Valuation Rules. This is also very clear from the decision of the Mumbai Bench in the case of CCE, Raigad v. I.G. Petrochemicals - 2006 (201) E.L.T. 294 (Tri.-Mumbai) which the learned SDR relied on. In Para 3 of the cited judgment, it is clearly stated that the sale price charged to customer in India cannot be considered as a price in the course of international trade as provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the calculation sheet. Shri Shyam Sunder s statement given in November 2007 was reiterated by his statement dated 3rd March, 2008. His deposition has not been retracted. It has to be held that his statement reflects the true state of affairs. This document cannot be ignored as not authentic. 15. There is no challenge to its legal recovery from the appellants. The assessee has not explained why this document could not be relied on to find evasion by it. The appeal does not explain how the particulars contained in this document are incorrect and do not reflect clearances made by the appellant without payment of duty. Only semblance of a denial is contained in a vague suggestion about the competence of Shri Shyam Sundar to make the depositions as regards the document. There is no explanation as to how this record came to be maintained if it was not representing day to day transactions actually made. We find it difficult to accept that the person who managed the day to day affairs of the appellant firm was ignorant of the clearances of its finished goods systematically recorded with details of date, quantity, consideration, transport etc. if the assessee had a case that his depos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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