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TMI Blog2010 (12) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Customs & Central Excise, Visakhapatnam. M/s. Deccan Veneers Pvt. Ltd. Order-in-Original No. 81(10)/2002- 03-SCC, dated 17-5-2002 E/4132/2003 The Commissioner of Customs & Central Excise, Visakhapatnam. M/s. Alphine Panels Order-in-Original No. 13/2002- SCC (84), dated 5-6-2002 The issue arising in all these appeals is common and interlinked and hence, all relevant facts which are herein below noted will apply to these appeals commonly. 2. M/s. Deccan Veneers Pvt. Ltd. (hereinafter referred to as DVPL) and M/s. Alpine Panels (AP) are the assessee-appellants and are manufacturers of wood veneer falling under the Tariff sub-heading No.4408.90 of the Schedule to the Central Excise Tariff Act, 1985. The said veneer is used in the manufacture of plywood and the appellants are discharging the duty liability on the said veneer. Basing on an intelligence, that both the asssessee-appellants were suppressing quantity of the production by suppressing the quantity of logs received in their factories, investigations were carried out in the factory premises and residence of Shri Sanjiv Agarwal, Director of DVPL (Appellant in Appeal No. E/3110/2002) was conducted. Statements of v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and clandestinely cleared out all the unaccounted logs received in their unit. (ii) I drop the proceedings on dummy nature of M/s. Maxworth Plywood Ltd., M/s. Alpine Panel and M/s. Truewood Pvt. Ltd. holding them that they are independent units in their own right. (iii) I confirm duty of Rs. 1,02,277/- on the goods cleared from DVPL to Truewood without payment of duty and without explanation for the nature of the goods. (iv) I drop the duty demanded for removal of veneer manufactured by M/s. DVPL through M/s. Maxworth cleared on commercial challans of M/s. Maxworth. (v) I hold that there is no convincing proof of duty paid nature of the goods cleared in the lorry receipts from M/s. Maxworth, however I do not find any documentary evidence to hold the said goods to have been cleared from DVPL therefore, I drop the charge against M/s. DVPL. However, I would like to confirm the said against M/s. Maxworth in the respective order. (vi) Against shortage and excess stock of excisable goods found on physical stock taking, I ordered confiscation of goods and give the option to the party to redeem the seized goods on payment of redemption fine of Rs. 5,000/-. (vii) I drop the charge o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., all indicate that the appellants herein were never importers, there was an apparent error in the survey report indicating the appellants name as importers. He would submit and draw our attention to the statement of surveyor wherein he has stated that the particulars so entered were not true and the particulars were only for the purposes of raising bills on the CHA who had engaged the surveyor. It is his further submission that the show cause notice has relied upon certain forest transport permits and delivery challans in respect of the same vessel M.V. Grand Noble but the appellants had proved to the Adjudicating Authority with documentary evidence that whenever the forest transport permits were issued in the appellant's name, they had received the cargo and accounted the same for in their books. As an example, he would draw our attention to the very same example of imports of logs through M.V. Grand Noble wherein in respect of 290 logs imported were shown as the appellant DVPL and the said logs were properly accounted in their log register and it is the submission that the Commissioner was confused with this argument and he had dropped the demands arising out of demands rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is his further submission that the authorities recorded statements from M/s. NCC and M/s. Rekung, wherein there was no admission or implication of the appellant by the said parties, that they had sold unaccounted timber logs to the appellants. It is his submission that the revenue had on identical set of facts and allegations of clandestine removal confirmed demands against M/s. Shri Bajrang Ispat & Plywood Ltd. Vs. CCE, which was set aside by the Tribunal as per Final Order No.711-712/2005 dated 2.5.2005 as well as in the case of M/s. Evergreen Veneers Pvt. Ltd. Vs. CCE - 2007 (220) ELT 319. It is his submission that the various demands confirmed by the learned Adjudicating Authority are on the ground of the clearance of goods by the appellant without payment of duty to M/s. Truwood, which is incorrect. 4. The learned departmental representative on the other hand would submit that M/s. Bothra Shipping Services themselves imported consignment of wooden logs and before arrival of ships they sold logs on high sea sales to M/s. Rekung Timber Traders and Century Panels, etc. It is her submission that when the ship entered the port of Visakhapatnam, M/s. Bothra had engaged the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices who were original importers of the goods had engaged surveyor M/s. Marine Consultant and Surveyors Pvt. Ltd. It is her submission that the final survey report will be prepared after dispatch of the consignment to the parties as mentioned in the survey report and during the course of discharge of the goods, surveyor are posted continuously for tallying the cargo and noting the individual marks and other details of the logs. It is her further submission that the high sea sales entered by the parties for import in some case indicate the consideration which is very low, while in some cases the consideration is not written at all, which would indicate that this high sea sale agreement were made only to create paper transactions. It is her submission that the high sea sales agreement between M/s. Bothra and M/s. Rekung and M/s. NCC and others had no consideration and hence, the final conclusion would be that the logs so purchased and sold were delivered to DVPL or AP. It is her submission that the entire evidence indicates that the logs were dispatched to DVPL as delivery challans of M/s. Bothra Services indicates the consignee as DVPL. It is her submission that the learned Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessees is interlinked even if there is existence. It is her submission that Adjudicating Authority has not considered the evidence in show cause notice in proper prospective. She would rely upon the following case laws for this submission. (i) M/s. Industrial Supplies and Services Vs. Collector of Central Excise, Udaipur 2001 (128) ELT 175 (Tri.-Del.) (ii) Calcutta Chromotype Ltd. Vs. Commissioner of Central Excise, Calcutta 1998 (99) ELT 202 (SC) (iii) Commissioner of Customs, Bangalore Vs. Vikram Jain 2009 (244) ELT 504 (Kar.) (iv) Commissioner of Customs, Madras and Others Vs. D. Bhoormull 1983 (13) ELT 1546 (SC) 7. The learned counsel while replying to the appeal filed by the revenue would submit that the main ground of the department regarding clubbing of clearances is ex-facie unsustainable. He would submit that there are various documentary evidences, which were filed along with reply to the show cause notice. The facts on record indicate that each of four units were independent entities, hence clearances of all the units cannot be clubbed. It is his submission that all the units were independent companies and cannot be clubbed as clarified by the board. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AP have been shown as consignee. We have perused the survey report given by the said M/s. Marine Consultants & Surveyors Pvt. Ltd. In order to ascertain the factual matrix of the submissions made by the learned counsel, we took up an example of import of logs through M.V. Grand Noble during March and April 1998. We perused the survey report which is annexed at page 326 - 336 of Volume-II in the paper-book. On perusal of the said survey report, we find that the surveyors had prepared the survey report for 142 and 39 logs and 290 logs. It is seen from the said report that the consignee has been shown as DVPL and another company known as M/s. Evergreen Veneers (P) Ltd. (EVPL). As regards the consignment of 290 logs, and the consignee company shown as DVPL in the survey report, there is no dispute as M/s. DVPL has shown and recorded the same in their books and accepted and admitted by the Adjudicating Authority in his impugned order and not challenged by the revenue. We perused the records to ascertain the factual matrix of the 142 and 39 logs. The survey report though mentioning the consignees as DVPL, the documents annexed in the said memorandum at page 337-338 and 346-347 in volume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TRADERS Date: 04.04.98 Place : VISAKHAPATNAM Consequent to such HSSA, M/s. Rekung have filed bills of entries which are annexed at page 339 and 348 of Volume - II of the paper-book. The same is reproduced herein below. It can be seen from the above recorded factual matrix that consignment 142 and 39 logs was unloaded by marine vessel M. V. Grand Noble at Visakhapatnam port. The surveyors M/s. Marine Consultants & Surveyors Pvt. Ltd. appointed by clearing agent had indicated consignee as DVPL while the evidence brought on record before the lower authorities as well as before us indicate that the imports were only made by M/s. Bothra, who by HSSA sold the same to M/s. Rekung. The bills of entry filed also indicate importer as M/s. Rekung. As against these evidences, the learned SDR submitted that the HSSA and the challans prepared by M/s. Bothra, clearing agent indicate the consignee as DVPL. It is her submission that HSSA agreement indicates different consideration for the consignments came from the same place. The Adjudicating Authority on this issue has recorded the following findings. (xxi) To summarise the facts, during period 98-99 and 99-00 it is found that goods have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has accepted the fact that the HSSA entered by various parties were genuine and there is no dispute as to that. This portion of the order is not challenged by the revenue in their appeal. In the absence of any findings that HSSA were improper or were made only for the purpose of misleading authorities, it has to be accepted and admitted that HSSA were genuine and there was high seas sales. We find from the records that in all the cases wherein the Adjudicating Authority has confirmed demands on the appellant, (wherein the appellant has not recorded the receipt of logs in the factory premises), there are evidences to show that there was HSSA between the parties and the importer was not the appellants DVPL or AP, as the case may be. In an example, which we took was of the same fact in all the cases wherein the Adjudicating Authority has confirmed the demand. We find that the entire argument of the revenue in the impugned order as well as before us revolves around the challans raised by M/s. Bothra as CHA, copies recovered from their office. On careful perusal of the said delivery challans and certificate issued by CHA, while transporting the logs from the port, the consignees name m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the absence of any such evidence or statements indicating that the logs which were imported and cleared by M/s. NCC and M/s. Rekung were in fact delivered to DVPL or AP, the conclusion reached by the Adjudicating Authority is incorrect. In the absence of any evidence indicating that the logs which were imported by M/s. NCC and M/s. Rekung were in fact delivered to DVPL, we find that the decision of this bench in the case of M/s. Shri Bajrang Ispat & Plywood Ltd. (supra) and M/s. Evergreen will squarely apply. We may reproduce the relevant paragraphs. M/s. Shri Bajrang Ispat & Plywood Ltd. Vs. CCE & vice versa (supra) 3. On a careful consideration, we notice that the appellants case pertains to 3 Bills of Entry, which are noted. The allegation is that the goods in terms of 3 Bills of Entry which numbers are noted supra, were imported by M/s. Shiv Timbers and M/s. Hemkung Timbers and they were diverted to the appellants factory. However, there is not a piece of evidence on record. The transporter has not been examined nor any person from M/s. Shiv Timbers and M/s. Hemkund Timbers has been examined. Practically there is no piece of evidence to show that the imported logs were di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eged in the Show Cause Notice and confirmed by the Adjudicating Authority at least there should at least few instances of seizure of such removals. What is clear from the adjudication order and the Show Cause Notice is that there have been irregularities in the maintenance of accounts. On account of this fact, one cannot jump to a conclusion that there has been clandestine removal. When the irregular maintenance of accounts leads to the suspicion that there has been clandestine production and removal, Revenue should have undertaken thorough investigation. The Departmental officers could not get the list of buyers who purchased the goods clandestinely removed from the appellants. They are not able to establish excess consumption of electricity. There is also no evidence of seizure of unaccounted sale proceeds. The Commissioner has thoroughly discussed the clubbing of clearance and has come to the conclusion that in the present case M/s. Tirumala Timbers and M/s. TVPL cannot be considered as dummy units. In his view, the evidences relied in the Show Cause Notice are not sufficient in the light of the decided case laws and Boards circular to club the clearances. In these circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he financial transaction is taking place through books. Debiting the clearance from the unit to another is made through invoices on debit of duty. Therefore even if they have common / joint decision making and they are all sister concerns, they are floated by the same family and they share telephone facilities, still as per above Tribunal judgments, they are not non-existent, dummy units. The facts of these cases do not match the facts of the case of Industrial Supplies and Services case cited above. (xviii) From the evidences produced by the party, it is seen that factually they are separate large manufacturing concerns and they have been purchasing their raw materials separately and Maxworth is also trading the raw materials on its own. They have produced documentary evidence that proportionate charges of telephone facilities were paid to DVPL by Maxworth and Alpine (Annexure T). Similarly, separate books of accounts have been maintained and each one of them have transactions with banks and other concerned authorities. (See Annexure WW and RR). Thus factually, they are not the units on papers only. The Adjudicating Authoritys above findings have been challenged by the revenue i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at, once it is found that the persons behind the units are the same, there is no bar on the authorities to lift the veil of the company to see whether the companies are not wearing that mask. Once it is found that the persons behind the units are the same, then regard being had to the common course of natural events, human conduct and public land private business, it can be presumed that they have interest direct and indirectly in the business of each other. 5.5 It may be seen that, all the 4 units i.e., M/s. Deccan Veneers, M/s. Maxworth Plywoods, M/s. Alpine Panels and M/s. Truwoods belong to the same family. It has also been admitted that M/s. Deccan Veneers, M/s. Maxworth Plywoods, M/s. Alpine Panels conduct their manufacturing activities from the same compound. It has also been admitted that M/s. Deccan Veneers, M/s. Maxworth Plywoods, M/s. Alpine Panels and M/s. Truwoods opeate from the same city office. It has also been admitted that, the other three units did not pay any amounts to M/s. Deccan Veneers for accommodation and telephones. It has also been admitted that, the staff of all the four units operate from the same city office and the staff work interchangeably for mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SC); H.T. Bhavnani Chemicals (P) Ltd. Vs. CCE, Baroda - 1997 (92) ELT 502 (Tribunal); Chemicals and Calcutta Chromotype Ltd. Vs. CCE, Calcutta - 1998 (99) ELT 202 (SC) to press home the point that the value of clearances needs to be clubbed. We note that in the case of Supreme Washers (P) Ltd. Vs. CCE (supra), there was an evidence to show that there was common procurement of raw materials, common stock accounting and common stock of raw materials and some finished goods. While in the case before us, it has been recorded by the Adjudicating Authority that all the units are large manufacturing units having their own factory premises and their own machineries. This particular finding has not been disputed by the revenue in the grounds of appeal or proceedings. In the absence of contrary evidence, other than case laws relied by the SDR would not carry the case of revenue any further inasmuch, as in all those cases there was an evidence to show that there was clubbing of clearances needed to be done. In the absence of any contrary evidence to indicate that the findings of the Adjudicating Authority that the factories were in existence and had their own procurement of raw materials and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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