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TMI Blog2017 (8) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... re is much undervaluation by not mentioning the size and thickness of the bags. The appellants have mentioned the quantity of the bags in numbers and have applied the rate for number of bags thereby showing a lesser value for the bags cleared by them. It is also brought out from the evidence from dealers / purchasers like Jegan and MR Plastics that the appellants have cleared plastic bags by issuing chits only and not issuing any invoice or cash bills at all. Such clandestine removal of finished product is unearthed from the evidence collected at the end of transporters also. Thus, we have to say that the department has been able to establish clandestine clearance on the part of the appellants. Quantification of clearances - Held that: - the demand is confirmed for the period 2003 04 to 2004 05 (upto 1.11.2005) when the value of clearances exceeded one crore. Therefore, we do not find any ground to doubt or interfere with the quantification of duty also. Extended period of limitation - Held that: - The facts and evidence establish that appellants have indulged in undervaluation and unaccounted clearances with an intention to evade payment of duty. The same would not have com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) the appellant manufactured plastic bags and did not account the actual quantity manufactured in the stock register of finished goods maintained by them. (ii) The actual issue of raw materials and actual production was recorded in their private records. (iii) Plastic bags were cleared to the customers under cover of chits without issuing invoices. Plastic bags were also cleared by way of cash bills without invoices. (iv) The notebooks which contained the details of order placed indicated that the customers had placed orders basing on the weight, size of the plastic bags and the value was mentioned on the basis of size, thickness etc. However, while issuing invoices, the appellant indicated the number of bags instead of weight and size of the bags. The value was mentioned in the invoice on the basis of number of bags without mentioning the size, thickness etc. Thus, they deliberately indicated lesser value of the goods cleared for the purpose of availing exemption benefit. (v) The chits recovered showed that the orders placed were on the basis of sizes, weight and the quantity was mentioned in kilograms as well as their rate per kilogram. Whereas the invoices di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the period covered in the show cause notice are much below Rs. One crore and therefore the appellant has rightly availed the SSI benefit of exemption as per Notification No. 8/2000. 6.2 That search was conducted on 21.6.2004 and stock register was seized. This stock register would show the raw material account from 17.4.2003 to 31.3.2004 only and that such evidence cannot be made the basis of demand of clandestine removal for the entire period. 6.3 The appellant manufactures plastic bags of various sizes according to the requirement of the customers. The orders are placed basing upon the weight, size etc. of the bags and such specifications are noted on chits; but when the finished products are cleared, the appellant raises invoices showing the quantity in numbers. The handwritten chits recovered from the sales office were merely orders received from customers and cannot be made the basis for ascertaining the value of clearances of finished products. 6.4 The cash bills were raised for over the counter sales which was accounted by the appellant in their sales tax returns. 6.5 The computation of duty is highly erroneous. 6.6. For ascertaining the value of plastic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lastic bags weighing 105959 Kgs. valued at ₹ 88,34,702/-. The department has not considered this affidavit also. These affidavits would show that the basis of arriving the value of clearances and computations of duty is entirely wrong. 6.11 That the entire investigation was done basing upon the records for the year 2003 04 but the invoices have been taken for compare for year from 2001 05. That no documents were received for the period 2004 05. 6.12 The entire case is thus made out on the basis of value of clearances ascertained by assumptions and that there is no corroborative evidence for the duty demanded except the private documents recovered such as notebooks, chits etc. That the appellant has refuted these documents and explained these documents. They also furnished the affidavit of the above persons which have not been taken into consideration. He pleaded that the demand may be set aside and the appeal may be allowed. 7. Against this, learned AR Shri B. Balamurugan reiterated the findings in the impugned order. He submitted that the appellant was maintaining private records for the purpose of noting down the value of unaccounted raw materials used as well as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce shown in the Stock Register maintained by appellant there was much variance. For example, the quantity of raw material issued for production on 1.12.2003 as per note book Sl. No. 23 is 675. The production and clearance as per Sl. No. 26 on the same date is 482.700; whereas the production and dispatch shown in the stock register (C2) is nil. Shri Valliappan, the manager cum accountant and partner Shri S. Chockalingam has stated that as per practice, in their unit, the quantity of PP bags dispatched in a day is the quantity of plastic bags manufactured on that particular day and no finished products are left over in the unit. There is a suppression of quantity of 482.700 for the entire disputed period and on almost all days, there is such variation. Again, out of the total production of 101329.390 Kgs. of plastic bags as per note book No.26, during the period from 11/2003 to 3/2004, the appellant has accounted only 42,528 Kgs. in their Stock Register. Thus, a production of 58,801.390 Kgs. of plastic bags has been suppressed. 7.3 The notebook Serially numbered 21 contains the daily production account of HM products in respect of the appellant unit. This contains details for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of size 6 x 9 40 kg was despatched to Jagan for value ₹ 3,120/-. On scrutiny of the invoice for the above date, it is seen that Invoice No. 8392 dated 4.3.2004 is issued to Jegan S, Virudhachalam showing 6 x 9 x 80 grams 25,000 numbers 78 (Rate) ₹ 1,950/-. From the above, it is seen that though actual value of the plastic bags supplied to Jegan S, Virudhachalam on 4.3.2004 was ₹ 3,120/- the invoice was raised by appellant only for ₹ 1,950/-. Thus, in the invoice, the rate is computed and mentioned per 1000 numbers of plastic bags showing a lesser value. On comparison of the rate with per kg rate, shown in the corresponding chits, it is seen that per kg rate in the chits and rate per 1000 numbers of plastic bags in the invoice are same. 7.6 There are also instances where the appellant has cleared plastic bags without issuing invoices but only chits. For example, the chit dated 2.3.2004 found at Page 123 of the file serially numbered 7 shows that appellant cleared 166.140 Kgs. of plastic bags valued at ₹ 16,135/- to M/s. MR Plastics, Thanjavur. But on scrutiny of invoices, there is no corresponding invoice for the above quantity cleared by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.3758 dt.1.1.2004 despatched to Diamond Supermarket, Pattukottai. But no invoice was available for this. There were several such instances with Jyothi Van Service, M/s.A.K.R.Parcel Service and ABT Parcel Service. 7.10 From the evidences, it is clear that the contention of the appellants that the handwritten chits were merely orders placed by the customers is false and cannot be accepted. The modus adopted by the appellant has also been admitted by Shri S. Chockalingam, Shri Thirunavukarasu who are partners in the statement given by them. 7.11 The contention of the appellant that the computation done by the department is erroneous cannot be accepted. That the said formula applied by the department is an accepted formula in the industry and has also been stated so by the Managing Partner of the appellant. The value of the clearances made under invoices and cash bills wherever the size and thickness of plastic bags has been indicated is stated to be arrived by using the following formula:- Length (L) inch x width (W) inch x thickness Weight of 1000 Nos. (in guage) Of plastic bags 3600 The above method of arriving at the weight of the plastic bags was adopted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ser value on the basis of the quantity shown in numbers. Thus, the actual sale price was collected under cover of handwritten chits and the amount mentioned in the invoices by way of numbers was recorded in the statutory registers and other records furnished to the authorities. For some clearances, invoices were not issued at all. In some cases, size and thickness of plastic bags mentioned in the chits did not tally with the invoice issued to the party on the same date. It is the case of the department that the weight of plastic bags were deliberately not shown and the quantity of bags were cleared by showing the numbers only, to under value the finished products so as to keep the value of clearances less than one crore i.e., within the SSI limit. Investigations conducted by the department also revealed that the rate mentioned in the invoices is arrived after considering 1000 number of plastic bags as one kilogram irrespective of the size and thickness of the plastic bags. The sale proceeds in excess of invoice amount was collected in cash and the same was not accounted in their records maintained in regular course. 10. On perusal of records and after hearing the submissions mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngarajan have filed affidavit, on perusal of these documents, we are able to see that these documents are not affidavits. These documents are not attested. They are merely signed and verified by the parties. Such documents which are not attested cannot be accepted as affirmation of a party and therefore are not acceptable in evidence. They are, therefore, discarded in toto. 12. At the cost of repetition it is pertinent to mention that the appellants have not come forward with a plausible explanation as to why they have not mentioned the size and thickness of the plastic bags in the invoices/cash bills when they have mentioned the size and thickness of the bags in the chits. It is admitted by appellants that they were noting down the size and thickness and the corresponding value while orders are placed by the customers. Such chits have been recovered by the department from the sale office of appellant unit. These when compared with the invoice have brought to light that there is much undervaluation by not mentioning the size and thickness of the bags. The appellants have mentioned the quantity of the bags in numbers and have applied the rate for number of bags thereby showing a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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