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TMI Blog2013 (9) TMI 1007X X X X Extracts X X X X X X X X Extracts X X X X ..... Archana Wadhwa, Member (J) and Shri Mathew John, Member (T) Third Member on Reference : Shri D.N. Panda, Member (J) Shri Bipin Garg, Advocate, for the Appellant. Shri R.K. Varma, DR, for the Respondent. ORDER [Order per : Archana Wadhwa, Member (J)] . Vide his impugned order in de novo proceedings, Commissioner (Appeals) has confirmed demand of duty of ₹ 1,73,36,275/- against M/s. Pawan Exports P. Ltd. along with imposition of penalty of identical amount u/s 11AC of the Act. In addition, penalty of ₹ 1 crore stands imposed on Shri G.L. Nosaria, Managing Director of the appellants firm in terms of provisions of Rule 209A of Central Excise Rules. As the appellants have deposited an amount of ₹ 19,08,321/-, the prayer is to dispense with the condition of pre-deposit of balance amount of duty and entire amount of penalty imposed upon both the applicants. 2. As per the facts on record, M/s. Pawan Exports P. Ltd. is engaged in the manufacture of processed fabrics. The processing was being done by them on job work basis on the grey fabrics supplied by the customers. They were undertaking the processing of unembroidered fabrics as also embroidered fabrics. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their fabric order worksheet revealed that the different types of processed fabrics were being delivered to the appellants though the invoices were being issued by them showing the fabric as processed embroidered fabric. (iv) Shri Virender Uppal partner of M/s. Richa & Co. accepted the above fact in his statement. (v) M/s. Kish Exports P. Ltd. and its Director also accepted the fact that as per fabric control register, the fabric sent to appellants was other than the embroidered fabric. At this prima facie stage, we do not feel the need to look into each and every buyer's statement and suffice it to observe that either the record maintained at the buyers end or the statement of their authorized representative are to the effect that the fabric sent to the appellants was actually other than the embroidered fabric though the invoices received by them mentioned embroidered fabric. The said statements stands discussed one by one in the impugned order of the Commissioner. 6. Apart from the statements and records maintained by the buyers, it is also seen that Shri P.C. Arora, Manager of the appellants company in his statement dated 18-1-1999 has admitted that their customers hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact of the appellants indulging in clandestine activities and clearance of processed fabrics under the guise of processed embroidered fabrics stands fully established against them and they should be directed to deposit entire amount of duty. 10. After appreciating the submissions made by both the sides, we find that almost all the documents (except one or two) stands supplied to the appellants as recorded in the impugned order of the Commissioner. As regards cross-examination, at this prima facie stage, we have to examine as to whether there is enough material to hold against the appellants or not. The buyers of the appellants have clearly deposed against them indicating that though the grey fabrics sent to the appellants were other than embroidered fabric, the appellants were issuing duty free invoices by mentioning processed embroidered fabrics. During the course of arguments, it came to notice that most of the buyers of the appellants were exporters and were ultimately exporting fabric processed by the appellants either as such or after converting the same into apparel. The declarations made by them to the customs authorities for the purposes of export would establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and documents referred to in these annexures, to the show cause notice which the applicants were requesting for. Annexure-C1 is the EDF series invoices surrendered by the accountant of the appellants. Annexures C-2 to C-20 are records recovered from the end of the customers of the appellants. 15. I find that the documents covered by the above annexures were very critical documents for furnishing defence reply. These are documents which should have been supplied along with show cause notice. The applicants had to litigate once before the Tribunal in appeal No. E/2937/02/NBC and twice before the Hon'ble High Court of Allahabad in W.P. No. 230 of 2007 to get these annexures and other documents. The delay in furnishing these is intriguing. Finally the annexures were furnished on 9-9-2009. Since the applicant has a defence that such goods were exported finally, the delay in furnishing such documents would have made it very difficult to the applicants to collect required evidence in his defence. Considering such delay, the fact that the appellants have not submitted such defence as observed by Member (Judicial) in Para 10 above cannot be given much importance in such context. The c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntelligence of DGCEI. It is to be noted that the SCN issued in respect of the goods seized on the date of such surprise check was dropped. In the absence of any material evidence this case is made out on the basis of records seized and statements recorded. These evidences also appear to be very weak and the demand appears to be highly exaggerated as explained in following paragraphs. 18. The show cause notice states that customers of the applicants were exporters or dealers. If the goods were for export, there was no reason for the applicants to evade Excise duty in any clandestine manner because there are legal means by which relief from such Excise duty can be got on goods exported. There is no investigation done to find out how much of these goods were cleared to exporters and how much to dealers clearing goods to local market. The duty liability is critically dependent on this factor. There is a claim by, in the appeal that the goods were ultimately exported and drawback claimed, though such claim is not supported by documents. 19. I find that the case is made heavily relying on the statements of the following persons, - (a) Shri G.L. Nausaria, the Managing Directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it is harmless to them. The calculation adopted and the documents relied upon in the SCN were hidden from the appellants for many years and when disclosed it turned out to be sketchy and bald. The applicants have already deposited an amount of ₹ 19,08,321/-. In my assessment asking for any further pre-deposit based on such sketchy calculation and no reliable evidence will cause serious prejudice to the appellant. So in my view the amount already deposited is adequate to hear the appeal filed and hence further pre-deposit should be waived for admission of appeal and its collection stayed during the pendency of the appeal. Sd/- (Mathew John) Member (Technical) POINTS OF DIFFERENCE OF OPINION 25. In the facts and circumstances of the case, - Whether further pre-deposit of ₹ 50 lakhs out of the duty demanded amounting to ₹ 1,73,36,275.10 and penalties is to be called for admission of appeal as recorded by Member (Judicial); OR Whether the deposit already made of ₹ 19,08,321/- is sufficient for admission of appeal and further pre-deposit should be waived for admission of the appeal. (Pronounced in open Court on ___________) Sd/- (Mathew John) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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