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TMI Blog2019 (6) TMI 1350X X X X Extracts X X X X X X X X Extracts X X X X ..... money having been received by the appellant from any of the tile manufacturers was found. The main plank of investigation was that the excess amount was routed through shroffs, angadias and dealers of tile manufacturers. However, no instance of any money having been received through these agencies have been cited in the show cause notice. Admittedly no evidence of the appellant having received the huge amount in unaccounted manner from more than 26 customers to whom frit was sold from February 2005 to February 2010 was found. Even the cross examination of persons whose statements has been relied upon to allege undervaluation was not provided. Not a single insistence of cash receipt at Appellant s end is on record. In such case when the allegation is based upon the statements of buyers which is not supported by even a single evidence and in the light of the fact that no cross examination of such persons whose statements were relied upon was allowed, thus the demand does not sustain. Also the Appellant has adequately justified the increase in prices in subsequent years due to increase in prices of raw material and change in machinery. We find that no adverse reasoning has been given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 81,874/-. It was also alleged that the appellant has consumed more gas than required and thereby has suppressed the production and cleared the said quantity without payment of duty. The demands were confirmed by the adjudicating authority vide impugned order dated 31.12.10. Aggrieved, the Appellant has filed the present appeal. 2. The Ld. counsel, Shri Deven Pareekh appearing for the Appellant submits that the demand have been made without corroboration of even single evidence. No amount was found to have been received by the Appellant in cash and no evidence either from the buyers of the goods or the Appellant's end has been found. They had requested for cross examination of the buyers of the goods whose statements have been relied upon. However the same was not allowed. In absence of cross examination, the demands cannot be made. Mere oral statements recorded at the back of Appellant without any corroborative evidence cannot be made basis for demand. Not even a single document has been found which can support the allegation of the show cause notice. He points out that all the statements of 26 buyers recorded on different dates are word to word same and the same cannot be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Lalji V. Patel of Swagat Ceramics in his statement dt. 28.02.2009 stated that actual price of frit was ₹ 21/- to ₹ 24/- per Kg; that differential amount was paid in cash and that cash payment was made sometimes through dealers and sometimes directly. However in statement dt. 15.01.2010 he stated that cash was paid to Shri Hitesh Parekh. He points out same instances in case of buyersShri Arvind D Patel, Shri Savjibhai K Sanaria, Shri Hirenbhai J. Salvadiya and others. He submits that the statements of the buyers are not corroborated by a single physical evidence which clearly shows that the statements were given as per dictates of investigating officers. 3. He submits that in his statement Shri Hiteshbhai Parekh who has been stated by various buyers to have collected cash, has refused to comment upon the statements of the buyers. Further the proprietor of Appellant Unit, Shri Samir Parekh in his statements has refused the allegations. The show cause notice has relied upon instance of ₹ 19,49,200/- having been transferred from Morbi to factory for payment of salary and other expenses. Shri Hitesh Parekh in his statement dt. 23.02.2010 has clearly stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other buyers cannot be compared due to difference in quality. That even otherwise in absence of any evidence of additional consideration the allegation of undervaluation is not sustainable. 4. As regard demand based on consumption of natural gas, he submits that it is not the case of the department that the Appellant has purchased any raw material required for huge production of frit on which duty has been demanded. The demand is based upon formula evolved at the time of panchnama of factory. The consumption of gas depends upon various factors. That the demand is based upon assumption and presumptions. He relies upon judgments in case of Oudh Sugar Mills 1978 ELT J172, Amar Ispat 2009 (235) ELT 487 (TRI), Southern Ispat Ltd. 2009 (248) ELT 270 (TRI). He submits that no evidence of illicit manufacturing of goods, procurement of raw material, use of labour, transportation of goods and no buyer of goods was found and hence the allegation is not sustainable. 5. As regard demand of ₹ 81874/- based upon alleged parallel invoice alleged to have been issued in 2004 - 05, he submits that the invoice no. 92 dt. 16.03.2005 has been relied upon alleging that the same was issued to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld by the Hon'ble High Court. Their case stands even on better footing from other cases as not a single evidence of clandestine removal or undervaluation has been found. 8. Shri A. Mishra appearing for the revenue submits that demands are sustainable as the goods were undervalued and 26 buyers have accepted the same. He also submits that the demand based upon consumption of gas is also sustainable as the same was used for manufacture of frit which was cleared clandestinely by the Appellant. He reiterates and supports the findings of the impugned order. 9. Heard both the sides and perused the records. We find that investigations were initiated against majority of frit manufacturers of Morbi region and the show cause notices were issued on identical grounds alleging undervaluation of goods, taking basis of consumption of fuel, increase in price of goods after initiation of investigation etc. In the present case we find that demand of ₹ 3,28,68,656/- has been made on the ground that the Appellant had undervalued the goods. Such demand is based upon the statement of the buyers of the goods. However we find that except the statements of some buyers no evidence has been put on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her rate. The Appellant has contended that the prices were based upon the quality of frit and the frit supplied to M/s Surani Ceramics and other buyers who were manufacturing Tiles for M/s H & R Johnson or other reputed concerns was of high quality. We find substance in the contention of the Appellant as the price of the frit would depend on quality of frit. It is obvious that the reputed manufacturer with International brand would have high quality raw material to be used whereas the local manufacturer whose product commands low prices would not use high quality and high rate raw material. The prices to different buyers based upon quality of goods cannot be made basis to allege undervaluation. Also the Appellant has adequately justified the increase in prices in subsequent years due to increase in prices of raw material and change in machinery. We find that no adverse reasoning has been given against such contention of Appellant. Even otherwise the allegation of undervaluation of goods is based merely upon statements and not any evidence. We are thus of the view that the demands on account of undervaluation which is based merely upon the statement of some buyers are not sustainabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation. The demands in case of other manufacturers were also confirmed and they approached the Tribunal. The Tribunal vide Final Order No. 10541- 10571/2015, dated 12-5-2015 in case of Belgium Glass & Ceramics Pvt. Ltd. v. Commissioner set aside the demands. The revenue filed appeal before the Hon'ble High Court of Gujarat who dismissed the appeals filed by the revenue as reported in Commissioner v. Belgium Glass & Ceramics Pvt. Ltd. - 2017 (356) E.L.T. A46 (Guj.)]. Even otherwise we find that in present case the demands are merely based upon assumption and surmises. There is no evidence of any excess purchase of raw materials or excess consumption, no excess raw material was found at premises, no finished goods alleged to have been cleared clandestinely was seized, no evidence of transportation of any clandestinely removed goods was found. Further no evidence in the form of statement or record of any transporter, payment of unaccounted freight, statement of any labour receipt of consideration in cash was found either through Angadia or any person. The evidence in the form of books of accounts or any documents showing such undervalued consideration or clandestinely removed goods ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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