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TMI Blog2013 (11) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification 27/92-CE (NT). As per this notification, the merchant manufacturer would authorize the person doing the manufacturing activity (the appellant) to comply with all central excise laws and pay excise duty applicable. The merchant manufacturer had to give information necessary for determination of value of the fabrics under section 4 of the Central Excise Act and also furnish information regarding the price at which the merchant manufacturer sold the goods. The merchant manufacturers were either buying grey fabrics from manufacturers of fabrics or they were buying yarn and getting it woven into fabrics by job-workers and then giving it the appellant. 2. Revenue conducted certain investigations and found that the prices of the grey ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... travention of any of the provisions of the said Central Excises and Salt Act or of the rules made thereunder with intent to evade payment of duty. 4. Revenue was of the view that there was suppression in value of the processed fabrics by the appellant and hence the first appellant was not eligible for the deemed credit under the above notification in view of the proviso extracted above. On such reasoning Modvat Credit amounting to Rs.12,80,328/- is denied under Rule 57I of erstwhile Central Excise Rules, 1944 and demand for such amount is from appellant No.1 is upheld in the impugned order. There is a penalty of Rs. 5,000/- imposed under Rule 57I which has also been upheld by the Commissioner (Appeal). Aggrieved by the two demands and pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l price. (vi) M/s Ashoka Distributors accepted the fact of wrong declaration and paid an amount of Rs. 1,00,000/- on behalf of the appellant vide TR-6 challan dated 31-03-1997. 7. A show cause notice issued based on such evidence proposing demand of excise duty short paid and also for denying the deemed Modvat credit availed was adjudicated resulting in confirmation of duty demand of Rs.4,54,000/- along with equal penalty under Rule 9(2), 52A, 173Q and 226 of the Central Excise Rules, 1944 and section 11AC of the Central Excise Act. Further Cenvat credit of Rs. 12,80,328/- was denied and the amount demanded and equal penalty imposed u/r 57I(4) on appellant No.1. Penalty of Rs.25,000/- was imposed on appellant No.2 under Rule 209A. 8. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d were more than the actual cost. The department took only cases were prices were lower. None of the merchant manufactures stated that the appellant was aware of any mis-declaration in value. He submits that all duty payments were made based on approved price list and therefore extended period of time for demanding any short levy is not sustainable unless any suppression of information on the part of the appellant is proved and no such suppression is proved in this case. In the absence of any suppression, collusion or fraud on the part of the appellant it is not justifiable to invoke the extended period of time for demand and also for imposing any penalty on the appellant. He relies on the following decisions: 1) CCE Vs. Lajya Dyeing &Blea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. Advocate for the appellant. We note that knowledge on the part of the appellant about under-declaration of price is not coming out very clearly from records. The only evidence in this regard is the blank signed forms found from the possession of the appellant. These forms were to be signed by both the parties and filed with the Central Excise Authorities. It appears that these forms were given by merchant exporters for their convenience but data was filled in based on data furnished by merchant manufacturers. At any rate, the offence of giving a blank signed form is on the merchant manufacturer and not the first appellant. 13. We note that the differential duty of Rs.1,00,000/- was made by M/s Ashoka Traders, the merchant manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department has not considered wastages of yarn to the extent of 8% to 10% in the processes like bleaching and dyeing. If such wastages are taken in to account the value declared was correct. Further, they plead that they were not aware of all the Central Excise law and it was for the manufacturer to comply with the laws. They also pleaded that this case is of ignorance of law rather than attempt at evading duties. They plead that the penalty may be set aside because there was no wilful attempt to evade duties. 16. We have considered submissions of the second appellant. While complying with law was the responsibility of the first appellant it was the responsibility of the first appellant to give correct value. Perusal of records shows that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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