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TMI Blog2019 (10) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture. Once it is not in dispute that the matter was transferred to Call Book awaiting the aforesaid decision of the Hon ble Supreme Court, the Adjudicating Authority was in error in ignoring the ratio laid down by the Hon ble Supreme Court. Valuation - inclusion of amount towards assessable value of goods - HELD THAT:- To include any amount towards assessable value of goods, there must first be manufacture to attract the charging section of the Central Excise Act and only then the valuation of goods under section 4 will have to be looked into - In the present case, since the activity of cutting/slitting and printing of PVC sheets does not amount to manufacture, the question of including any charges towards printing in the assessable value will not arise. In the present case as well the evidence relied upon in the form of price lists have been resumed from the residence of Mr. Omprakash who as per Appellant was never employed with them. Apart from that, the fact that cross examinations could not be conducted due to delay in adjudication cannot be overlooked - the price list and statements cannot be relied upon without being supported by direct evidence showing under valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow cause notice was issued to the Thane unit proposing to recover central excise duty of ₹ 5,35,74,360/- on certain cash amount purported to have been recovered towards printing charges. The Commissioner of Central Excise, Mumbai IV vide Order in Original dated 04.12.1998 noted that since the issue was in relation to the Daman unit, the show cause notice issued by the Thane unit was without jurisdiction. Accordingly, a fresh show cause notice was issued on 12.01.1999 to the appellant herein for recovery of ₹ 5,20,18,003/- . 1.4 The show cause notice culminated into OIO No. 2/MP/Vapi/2000 dated 11.09.2000 by which the duty sought to be recovered was confirmed alongwith interest and penalty. Appeal filed before this Tribunal against the said OIO was decided vide Order No. C-1/1569-1570/WZB/2001 dated 19.05.2001 when the appeal of the appellant was allowed by way of remand and the adjudication authority was directed to pass fresh orders after deciding plea of the appellant seeking cross-examination of various witnesses. The operative part of the order is reproduced herein. We therefore allow this appeal and set aside the Commissioner s order. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he adjudicating authority and the authorised representative of the appellant for obtaining the copy of SCN and relied upon documents as has been mentioned the Impugned order. Copy of the SCN was thereafter given to the appellant. Since, the Witnesses did not appear for cross examination, the appellant requested the adjudicating authority to proceed with the hearing of the show cause notice as the same was pending for over 20 years. 1.10 The impugned order thereafter came to be passed by the adjudicating authority which has been challenged by way of the captioned appeal. 2. Shri Jitendra Motwani, Ld Counsel appearing on behalf of the Appellant made following submissions: - Activities carried out at Daman unit did not amount to manufacture and therefore, even if the allegations mentioned in the show cause notice are assumed to be correct, no duty can be demanded. Heavy reliance was placed on the decision of this Tribunal in M/s. Bombay Kunststoff Pharma Supplies P. Ltd v. CCE S.T. Daman [Final Order No. A/11571-11578/2018-CESTAT, Ahmedabad] wherein after placing reliance on the decision of Supreme Court in Caprihans India Ltd., v. Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubes v. CCE reported at 2000 (115) ELT 32(SC)wherein it is held that even where the process was not amounting to manufacture the expenditure incurred upto the factory gate clearances were includible in the assessable value is not correct inasmuch as the Hon ble Supreme Court in later decision viz., Maruti Suzuki India Ltd., v. Commissioner of Central Excise, New Delhi has held that to invoke the valuation provisions under Section 4, there must be manufacture under Section 3. He further submitted that the decision in Siddhartha Tubes (supra) cannot be applied to the present case as facts are completely different therein in as much as in that case the pipes were manufactured and activity of galvanisation was carried out in the same factory whereas in the present case the activity of cutting/slitting and printing of already manufactured PVC sheets was carried out at Daman factory and since the same did not amount to manufacture, Daman unit was not required to obtain central excise registration under law. - It was submitted that the show cause notice was issued demanding duty on cash purported to have been received on basis of documents seized from third party and statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PVC films/sheets, cutting/slitting, printing and packing jumbo rolls into smaller rolls. The said fact is clear from the Show Cause Notice dated 12.01.1999 issued to the Appellant. Even the impugned order has confirmed the demand against the Appellant after holding that the aforesaid activity of printing carried out at Daman unit amounted to manufacture. 4.1 Keeping the above fact in mind, the moot question that needs to be decided is whether the activity carried out in the Daman factory of cutting/slitting of jumbo rolls of plain PVC Sheets into smaller rolls and printing of the same amounts to manufacture or otherwise. 4.2 We find that this Tribunal in the case of Bombay Kunststoff Pharma Supplies Pvt. Ltd v. CCE final order no. A/11571/11578/2018 dated 30.07.2018 has decided a similar issue where it is held as under: On similar issue many more judgments cited by the Ld. Counsel, wherein the same view has been taken. As regard, the Ld. AR s submission that since the printed sheet has a different use and marketability, the same is distinct product. This submission stand negated in view of all the above judgments of the Hon ble Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Industries 1998 (97) ELT 5 (SC) e. UOI vs Alembic Glass Industries Ltd. 2010 (259) ELT 8 (SC) 4.4 Apart from the above, it would be important to reproduce the observation of the Adjudicating Authority in Para V, Internal Page 9 of the OIO: (V) On 09.12.2004, the impugned show cause notice was transferred to the Call Book Register citing the case of M/s. Rajpurohit GMP (I) Ltd. Silvassa and Others v. CCE Surat which was pending before the Hon ble Apex Court for decision on the issue as to whether cutting and slitting of jumbo roll amount of manufacture or not. The impugned show cause notice was retrieved from the Call Book Register on 06.2.2018. A fresh personal hearing was granted on 18.06.2018 and a copy of PH letter was also sent to assessee s Mumbai address besides Daman address. In response, M/s. Economic Laws Practice vide their No. ELP/JHM/VSC/44/2018 dated 15.06.2016, on behalf of the assesse sought adjournment in the matter. 4.5 It is clear from the above that the show cause notice was transferred to the Call Book Register citing the case of M/s. Raj Purohit GMP India Limited v. Commissioner of Central Excise. We have p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia Ltd. (supra) was identical to the case in hand. Similar issue was favourably decided by the Andhra Pradesh High court in the case of CCE C, Hyderabad -IV V.s Rasmi Wax Coated Paper Printing Industry reported in 2015 (325) E.L.T. 292 (A.P.). 4.7 The Adjudicating Authority in the impugned Order has held that the activity of printing amounts to manufacture by placing reliance on the decision of the Hon ble Supreme Court in the case of Laminated Packaging v. CCE [1990 (49) ELT 326 (S.C.). On perusing the said decision we are of the view that the same will not be applicable to the facts of the present case. In Laminated packaging (supra) the activity of lamination of papers was held to be amounting to manufacture on the basis of the evidence led in support of the submission that plain kraft paper and laminated kraft paper are distinct and separate products known in the market. whereas in the present case, after the activity of cutting/printing carried out on already manufactured PVC sheets does not bring about any new product in existence as PVC sheets remain PVC sheets only. The SCN has not even alleged that a new commodity comes into existence after the activity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory/unit i.e. at Daman. The Daman unit receive already manufactured PVC sheets. In view thereof once it is held that PVC sheets cleared by Thane unit was a final product and activity of cutting/slitting and printing carried out at Daman unit did not amount to manufacture, then question of paying duty on printing charges by the Appellant did not arise. 4.10 Apart from the above we note that the Hon ble Supreme Court in the case of Maruti Suzuki India Ltd., v. Commissioner of Central Excise, New Delhi reported in 2015(318) ELT 353 (SC) has held as under: 19. Shri Guru Krishna Kumar, learned senior counsel, then cited Siddhartha Tubes Ltd. v. Commissioner of Customs Central Excise, Indore (M.P.) [(2005) 13 SCC 559 = 2006 (193) E.L.T. 6 (S.C.)]. This case again concerned manufacture of galvanised pipes. This Court, in a very significant passage, stated : At the outset, we may state that value is the function of price under Section 4(4)(d)(i) of the Act. The concept of valuation is different from the concept of manufacture . Under Section 3 of the Act, the levy is on the manufacture of the goods. However, the measure of the levy is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice records that the demand is sought to be confirmed based on certain records which were seized from the residence of one Mr. Om Prakash who was working with the Auditors of Star Industries, Thane. Internal page 8 and 9 of the SCN reads as under: The demand is worked out on the basis of records/files no. 2 5 seized under panchanama on 11.7.96 from the residence of Shri. Om Prakash S. in the said files the assessee have maintained information of receipt of F/FF for the year 1993-94, 1994-95, 1995-96 1996-97 (till June 96 ). Shri Om Prakash S, employee of Auditor of M/s Star Industries Ltd . in his statement recorded under section 14 of Central Excise Act, 1944 on 5.12.96 (Annexure III(xvi)) has stated that file no. 2 5 are seized from his residence on 11.7.96 contains information of F/FF transactions and monthwise calculation in respect of M/s Star Industries Ltd. Shri Om Prakash has signed all the papers of these files in a token of custodian of the record and attached a note in each file. 4.13 Apart from the above statements of employees of Star Industries, Thane viz., Shri K.M. Mathew, Sales Manager, Star Industries Limited. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Hon ble Gujarat High court in the case of Commissioner v. Saakeen Alloys Pvt. Ltd. - 2014 (308) E.L.T. 655 (Guj.) wherein it is held as under: 7 In absence of any material reflecting the purchase of excessive raw material, shortage of finished goods, excess consumption of power like electricity, seizure of cash, etc., the Tribunal noted and held that there was nothing to bank upon except the bare confessional statements of the proprietor and of some of the persons connected with the manufacturing activities and such statements were retracted within no time of their recording. The Tribunal also noted the fact that the requisite opportunity of cross examination was also not made available so as to bring to the fore the true picture and therefore, it concluded against the Revenue observing that not permitting the cross-examination of a person in-charge of records of M/s. Sunrise Enterprises and absence of other cogent and positive evidences, would not permit it to sustain the demand of ₹ 1.85 Crores raised in the Demand notice and confirmed by both the authorities below. 4.15 The aforesaid decision has been upheld by the Hon ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e demand confirmed against the Appellant in any event is required to be set aside as the activity carried out at daman factory did not amount to manufacture. 4.18 Learned Advocate appearing on behalf of the Appellant further assailed the impugned order on the ground of delay. He has placed strong reliance on the decisions of Hon ble Bombay High court in the case of Premier Limited (supra) which has been upheld by the Hon ble Supreme Court. It is his submission that the Adjudicating Authority has wrongly held that the delay in passing the impugned order is because of the Appellant and drew our attention to a chart forming part of his written submission to state that there was no delay on the part of the Appellants. Admittedly in the present case a show cause notice was issued on 12.01.1999 and the same was adjudicated by the impugned order dated 05.02.2019 i.e. more than 20 years later. In between in first round of litigation an OIO was passed on 11.09.2000 which was set aside by this Tribunal in May 2001 when the matter was remanded for de novo adjudication. Though the Remand Order was passed in 2001, de novo hearing was held after 2 years viz., on 12.06.2003. In betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings. They do not wish to keep the proceedings lingering for they would want to concentrate on their business and not legal proceedings. It is a waste of their time as well. If an adjudication order is passed with reasonable expediency, even the assessees would arrange their affairs and in the event they are aggrieved, they would avail of the further remedies. Therefore, this is a power coupled with a duty and which the Revenue officials must realise. The earlier it is the better it would be for all concerned. 10 . The second aspect which requires elaboration is, if the understanding of the Revenue is that it has to wait endlessly for the assessee to appear and make submissions, it is not the assessee s right to delay the matter. There is no vested right in prolonging the proceedings and none can claim that the law permits this course. Adjournments may be sought frequently but they are not to be granted liberally. That gives impression that the Revenue is not interested in proceeding with the matter, or rather has a vested interest in assisting the assessee. In the case of Sangram Singh v. Election Tribunal, Kotah and Another, reported in AIR 1955 SC 425, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng/ printing of PVC Sheet carried out at Daman unit did not amount to manufacture and the evidence relied upon by the department in show cause notice is not conclusive to prove receipt of cash and or charge of undervaluation against the Appellant. 6. On the issue of limitation also we find considerable force in the submission of the Appellant that the facts were within the knowledge of the revenue inasmuch as the 19 notices issued to Thane unit for the period 1992 to 1999 were dropped on the basis of the report of the Daman Commissionerate to the effect that duty at ₹ 3 Per Kg is discharged on printing activity. It is not open for the revenue to claim ignorance of facts when the Thane unit was earlier issued an SCNs for undervaluation and the proposal of the Revenue was to include the value of printing charges in the assessable value of the plain PVC Sheets manufactured at Thane. The period in the present case is covered in the period for which 19 notices were issued to Thane. It is also a matter of fact that the demand raised in the said 19 show cause notices was ultimately set aside by this Tribunal vide order dated 10.04.2014 reported in 2014 (307) ELT 314 (Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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