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TMI Blog2011 (1) TMI 758X X X X Extracts X X X X X X X X Extracts X X X X ..... or Appellants Shri N.A. Sayyed, JDR for Respondent Per: Shri Ashok Jindal, Member (Judicial) These appeals are filed by the appellants namely M/s Manmade Spinners (I) Ltd., who is the main appellant against the confirmation of demand, interest and penalty and the remaining appeals by co-appellants against the confirmation of penalties under Section 209A of the Central Excise Rules, 1944. The goods were also confiscated in this case. 2. Facts of the case: - M/s Manmade Spinners (I) Ltd. (in short MMSL) are engaged in manufacture of excisable goods i.e. Polyester Viscose Yarn (PVY) of different verities. They also availed CENVAT credit on duty paid inputs and on capital goods. The appellants namely M/s Amit Weaving Mills, Ashish Textile Mills, Mohatta Textile Mills, Neela Giriraj Mohatta, R.K.A. Mohatta, Sulochana R. Mohatta, Jyoti R. Mohatta, Radhadevi M. Mohatta are the family firm of M/s MMSL. The other appellants, namely M/s Nirmal Transport and M/s Nirmal Warehouse are a transporter and godown keeper in this case. 2.1 The Anti Evasion Officers intercepted a truck on 14.7.99 and preliminary enquiries were made, which revealed that the truck was carrying 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the goods. As regards sales in Mumbai market, the goods are exclusively transported through M/s Nirmal Transport and stored subsequently in the godown/warehouse of M/s Nirmal Warehouse at Bhiwandi from where final deliveries to the customers in Mumbai/Bhiwandi market are affected. A customer from Mumbai or Bhiwandi market has to approach MMSL, Mumbai office and has to get a document called delivery order. At the time of taking delivery of the goods from M/s Nirmal Warehouse, customer has to produce this delivery order issued by MMSL and before giving delivery, M/s Nirmal Transports or M/s Nirmal Warehouse recover from each individual customer an amount of Rs.32/- per bag towards transportation charges and an additional amount of Rs.12/- per bag towards warehousing charges. This amount is always received in cash and kept with them by M/s Nirmal Transports/Nirmal Warehouse, and because of this collection they do not charge anything to MMSL for transportation from Ichalkaranji to Bhiwandi and for warehousing of goods at Bhiwandi. These transactions are recorded in a Daily Record Book and the same is sent subsequently to MMSL. 2.2 Apart from these, the goods were cleared in local ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.7,06,860/- should not be confiscated under Rule 9(2) read with Rule 173Q(1). (ii) The vehicle having Registration No. MH-4P 505 valued at Rs.3,50,000/- seized on 15.7.99 and subsequently released provisionally should not be confiscated under Section 115(2) of the Customs Act, 1962 read with M.F.(D.R.) Notfn. No. 68/63 dated 4.5.63 issued under Section 12 of the Central Excise Act, 1944. (iii) Central Excise duty amounting to Rs.79,12,258/- should not be demanded and recovered from them under the provisions of Section 11A(1) along with interest thereon under Section 11AB and penalty equal to duty under Section 11AC of Central Excise Act, 1944. (iv) The plant, machinery, land, building equipments etc. used for the manufacture of the clandestinely removed goods should not be confiscated under Rule 173Q(2). 2.3 The matter was adjudicated and after duly adjudication, Central Excise duty of Rs.71,68,654/- was confirmed against M/s MMSL along with interest at applicable rates and a penalty of equivalent amount was also imposed under Section 11AC. Vehicle No. MH-04 P 505 was confiscated but allowed to redeem the same on payment of fine of Rs.1 lakh. The goods valued at R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s) of PV yarn of 2/40 counts. The actual stock was 12912.250 Kgs (i.e. 215 bags x 60 Kgs). Thus, after deducting the physical stock 1560 kgs of PV yarn of 2/40 counts on 31.7.99 from the actual stock mentioned in the RG-1 register. The shortages of 11352.250 kgs are imaginary. (d) Assuming without admitting for the sake of arguments only the said shortage to be correct. The said short quantity of 35955 kgs. includes the quantity of PV yarn contained in 156 bags seized on 14.7.99 for which duty has been separately demanded. While the Commissioner has allowed the appellant s claim for set off between the demands made as against the demand raised in respect of 25 bags of 2/40 count of PV yarn, 71 bags of 40s count of PV yarn, he has not allowed the appellant s claim in respect of 45 bags of 30s count and 15 bags of 45s count of PV yarn. If the above claim is considered the short quantity would stand reduced to 23995 kgs and this shortage has to be further reduced by adjusting this against 30s count and 2/40s count of PV yarn for the period 1999-2000. (e) The demand of Rs.24,94,186/- was raised on account of clandestinely cleared 2175 bags of PV yarn of different counts through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough family firms were not properly investigated and no enquiry was made with regard to the purchase by these family firms. The sale prices of the appellants were uniform to all their customers. Hence, no charge of under-valuation is sustainable. With these submissions he prayed that matter be sent back to the adjudicating authority for fresh adjudication after re-verification of the records in the presence of the appellants and the impugned order be set aside. 5. On the other hand, learned DR submitted that it is a clear-cut case of clearance of the goods without duty paid documents and the same has been admitted by the appellants that they have not paid any duty at the time of clearance of their goods. He further submitted that during the process of adjudication, the appellants raised objection about the quantification of duty demand. The demands are confirmed after obtaining the examination report of their seized records. The statements showing the workings of the demanded amounts were got verified from the concerned Central Excise officers and wherever acceptable mistakes were noticed, the benefit was given to the appellants. He further submitted that now the appellants h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded on 5.1.2000 also expressed his inability to give any explanation regarding excess sales by the family firms. Also the assessees, in their reply have not produced any concrete documentary evidence to prove that the goods in question had been purchased by these Mohatta family firms either from some other manufacturers or from the open market. We also find that during the investigation, it was also stated that these family firm, also purchased some quantity of the yarn from the open local market under the cover of commercial/Excise paid invoices. The adjudicating authority has not examined the said invoices against which the family firms had purchased from the local market. During the course of arguments, the ld. advocate has been able to produce some of the such invoices before us. We find that the matter needs examination by the adjudicating authority on this accounts to correlate the quantity of sales and purchases after going through the invoices, thereafter to arrive at the proper conclusion. So, the demand confirmed on account of clearances through family firms is set aside for requantification. 8. With regard to the under-valuation, the appellants contention th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay less price but the buyer who takes delivery at M/s. Nirmal Warehouse has to pay higher price. Accordingly, the demand raised on account of under-valuation is confirmed. 9. In sum and substance, we do agree with the contention of the learned Advocate with regard to quantification of demand on account of re-verification of the lorry receipts and stock verification done during the course of investigation and for that purpose also, we remand back the matter to the adjudicating authority for re-quantification of demand. The demand on account of under-valuation is confirmed. 10. In view of the above discussion, the appeals filed by the main party (MMSL) and family firms above namely Amit Weaving Mills, Ashish Textile Mills, Mohatta Textile Mills, Neelu Giriraj Mohatta, Radhadevi M. Mohatta, Jyoti R. Mohatta, Rajendrakumar A. Mohatta and Sulochana R. Mohatta are remanded as directed. 10. Now we come to the appeals of M/s Nirmal Transport and Nirmal Warehouse. 10.1 After hearing both sides, we have gone through the statements of Shri M.L. Nakate, who was the owner of M/s Nirmal Transports. Pertinent observations on the statements in the order, the statements are as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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