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TMI Blog2024 (7) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... s mentioned in the challans have been supplied to established units, whose addresses are available. The Department could have conducted verification at the end of the recipients and easily ascertained what type of activities were undertaken by the appellant for them. The appellant has submitted that the above said three SSI units have sent inputs under the job challans for processing and the semi-finished goods were returned to the respective companies under the appellant s job challans and the appellant raised the bills on the said companies for the 'job charges' giving reference of both the challans. The only job work which the appellant undertook for these companies was 'printing' of the boards sent and returned the same. The activities undertaken by the appellant to these companies does not amount to 'manufacture' as defined under Section 2 (f) of the Central Excise Act, 1944. On receipt of the semi-finished goods, the respective units undertook further processing and the final product chargeable to duty emerge only at the premises of the respective units - the Department has not brought in any evidence to counter these submissions made by the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch as printed cartons, corrugated boxes, labels, stickers, etc., falling under heading no. 48192020, 48211020 4707900 of the of the Central Excise Tariff. During the period from 26.06.2007 to 11.08.2009, the appellant manufactured and cleared finished excisable goods from their factory for sale to customers under cover of central excise invoices on payment of appropriate central excise duty. The appellant also undertook job work to various customers on receipt of job charges, on which they have not paid central excise duty. The appellant filed monthly statutory returns declaring the information as required therein with the jurisdictional Central Excise authorities. 2.1. In the years 2007-08, 2008-09 and 2009-10, the gross sales (excluding excise duty) of the appellant were Rs. 328.25 lakhs, Rs. 635.10 lakhs and Rs. 1078.81 lakhs. During the said period the appellant cleared excisable goods under excise invoices and on payment of duty of excise as under- Period No. of Excise Invoices issued Assessable Value of the goods cleared (in Rs.) Excise duty paid including Ed. Cess (in Rs.) 01..6.07 to 31.3.08 1083 2,77,03,830 30,10,683 1.4.08 to 31.3.09 3271 6,68,63,565 68,75,539 1.4.09 to 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicated by the Commissioner and the impugned order was passed. 3. The impugned order has been passed mainly on the basis of the following findings of the ld. adjudicating authority: - (i) The appellant claimed that they undertook job work on behalf of other principal manufacturers, such as, M/s. Future Educare, M/s. U.V. Coaters (P) Ltd., M/s. U. Like Carton Manufacturing Co., M/s. Carton Corporation, etc. However, in his findings, the ld. adjudicating authority observed that there was no manufacturing unit that existed in the name and style of M/s U. Like Carton Manufacturing Company. He also observed that there was no infrastructure to undertake any processing/manufacture of excisable goods in the units such as M/s. U.V. Coaters (P) Ltd., M/s. Carton Corporation and M/s. U Like Carton Manufacturing Company. (ii) All the above three companies were floated by Shri Milan Kumar Mehra, Director of the appellant-company (Appellant No. 2 herein) to avail SSI exemption under Notification No. 8/2003-CE dated 01.03.2003, separately for each company. The appellant-company was involved in removing finished goods from their factory gate using the names of the aforesaid three fictitious compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying on independent business on principal-to-principal basis with all concerned, including the appellant. Thus, the appellants submit that the conclusion of the Ld. Commissioner in the impugned order about the non-existence of the said three companies is based on mere assumptions and presumptions and, hence, untenable and unsustainable. 4.2. It is further submitted that the entire duty demand of Rs. 1,62,71,224/- has been confirmed in the impugned order on the basis of Annexures D/1 to D/8 to the Show Cause Notice; the demand of duty of Rs. 38.23 lakhs and Rs. 7.14 lakhs have been confirmed on the basis of delivery challans mentioned in Annexures D/4 , D/5 , D/6 and D/7 ; the above duty liability has been cast upon the appellant on the alleged premises of non-existence of the said three companies who sent the material to the appellant on job work; the delivery challans referred to under Annexure D/4 to D/6 and D/7 were issued by the said three companies for delivery of goods from their respective premises to their buyers. They also submit that none of the said challans were issued by the appellant and no evidence to the contrary has been disclosed either in the Show Cause Notice or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercise books/registers which are exempted from duty under Notification No. 4/2006-CE dated March 1, 2006. In addition, they submit that during the relevant period, the printing job carried out by the appellant was exempted from Service Tax as per Notification No. 14/2004-ST dated September 10, 2004; as such this purported demand of Rs. 16.23 lakhs is, on the face of it, illegal, invalid, untenable and unsustainable. 4.4. It is further submitted that during the said period, the appellant also manufactured and cleared excisable goods on their own, under central excise invoices on payment of excise duty payable; they procured various raw materials/inputs such as duplex board and self-adhesive paper, printing ink, craft paper, stamping foil, film, varnish, etc., and used them in manufacture of the excisable goods in its factory; in addition to their own manufacturing activity, the appellant undertook job work on behalf of several principal manufacturers, including the said companies, upon due intimation in this respect to the jurisdictional Central Excise authorities by its letter dated April 2, 2007. The job work carried out by the appellant involved mainly 'printing'. They ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have been issued for clearance of semi-finished printed sheets customer specific. Where unit of measurement is in sheets, the items has been considered as semi-finished goods in as much as unit of Measurement of finished goods is always in 'pieces'. ii) In many cases, delivery challans have been issued for clearance of finished goods, but description of goods in delivery challans are different from description of goods mentioned in these annexures. iii) In many cases, delivery challans have been issued for finished goods, but description of the goods as mentioned in the Annexures is different from description of the goods as mentioned in documents which have been referred in the Annexures, on the basis of which goods have been valued and duty demanded. iv) In many cases, finished goods namely labels have been cleared under delivery challans, but valuation of these items have been done assuming the items as cartons whose price is about 15 to 20 times higher depending upon the specification. v) In case of valuation of Cartons, i.e., finished goods, many factors for pricing of the goods such as lamination, quality of board printing (whether single or four colour) was not tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly, the appellants prayed for setting aside the demands of duty confirmed and penalties imposed in the impugned order. 5. The Ld. Authorized Representative appearing for the Revenue submits that the appellant-company has undertaken complete manufacture of finished goods and cleared the same under the guise of job work without payment of duty. He submits that most of the SSI units for whom they have rendered the job work were not in existence and hence, the claim of job work by the appellant is only for the purpose of evading payment of central excise duty on the finished goods manufactured and cleared by them. Accordingly, he supported the impugned order confirming the demands of duty and imposing penalties on the appellants. 6. Heard both sides and perused the appeal documents. 7. We observe that the entire duty demand of Rs. 1,62,71,224/- confirmed in the impugned order has been arrived at on the basis of the Annexures D/1 to D/8 to the Show Cause Notice. In the impugned order, the ld. adjudicating authority concluded that the appellant have actually manufactured the finished goods and cleared the same under the guise of job challans. The appellant has submitted that they u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise duty of Rs. 1,62,71,224/-, which has been confirmed in the impugned order on the basis of Annexures D/1 to D/8 to the Notice. 7.4. We observe that a total duty demand of Rs. 101.07 lakhs has been confirmed as per the Annexures D/1 to D/3 to the Notice. A perusal of the Delivery Challans based on which these Annexures have been prepared, reveals that they have been issued for clearance of semi-finished printed sheets. These printed sheets are customer specific. The unit of measurement are in sheets and not in 'numbers' or 'pieces'. If the sheets on which the appellant has undertaken the job work has reached the stage of finished goods, then the unit of measurement would be in 'numbers' and not in sheets. This fortifies the contention of the appellant that they have supplied only semi-finished goods on which the principal has undertaken further processes and cleared from their factory. We observe that the investigation has simply concluded that the appellant has manufactured fully finished goods, without adducing any evidence to substantiate this allegation. A perusal of the impugned order indicates that nowhere it is mentioned as to what type of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of affirmative evidence and not on the basis of inferences. We agree with the submission of the appellant that clandestine removal must be proved and supported by sufficient evidence and the burden of proof in this regard is on the Department. Such onus to prove is required to be discharged by production of sufficient tangible and affirmative evidence, which we found to be absent in the instant case. Charge of clandestine removal cannot be made and confirmed against the appellant on the basis of assumptions, based on purported documents whose authenticity is disputed. We find that the Department has not brought in any evidence to substantiate the allegation that the appellant has actually manufactured the finished goods and cleared the same under the guise of job challans. Further, we observe that all the goods mentioned in the challans have been supplied to established units, whose addresses are available. The Department could have conducted verification at the end of the recipients and easily ascertained what type of activities were undertaken by the appellant for them. However, we find that no such verification has been done at the end of these customers to ascertain the genui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alleges that these units were not existing and hence they could not have sent the material for job work. However, the appellant submits that the three SSI units had independent existence and they had their own plant and machinery, who dealt with many other companies other than the appellant. 8.2. We observe that while confirming the duty demanded as per the delivery challans referred in Annexure D/4 to D/6 and D/7 , the ld. adjudicating authority has given his findings in paragraph 4.11 of the impugned order, which is reproduced below: - 4.11 On verification of the documents in respect of Annexure D-4 to D-7, It is noticed that the Noticee has cleared finished goods i.e. Melody 100 ml Single Piece Cartoon, Bindas 100 ml Single piece cartoon, Dulhan Kesh Kala Tel 100 ml black level, linc pacific hanger 600 pcs corrugated master cartoon and linccosmo gel 100 pcs corrugated inner which are made out of boards in the factory premises of the Noticee No. 1. These are all finished goods, but cleared under cover of challans of the Noticee No. 1, without coverage of invoices. All such clearances were found to have been effected under the guise of job work. Since they had cleared the finished ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these companies does not amount to 'manufacture' as defined under Section 2 (f) of the Central Excise Act, 1944. On receipt of the semi-finished goods, the respective units undertook further processing and the final product chargeable to duty emerge only at the premises of the respective units. We observe that the Department has not produced any evidence to substantiate the allegation that the activities / processing undertaken by the appellant in their unit amount to 'manufacture . Since, they have mainly undertaken the job of 'printing' which is an exempted activity and the process of 'printing' does not amount to manufacture, we hold that the demands confirmed on the basis of these Annexures D/4 , D/5 , D/6 and D/7 , is not sustainable. 9. Regarding the duty demand of Rs. 16.23 lakhs (including Education cess and SHE cess) confirmed in the impugned order as per Annexure D/8 , we observe that the delivery challans referred to therein were exclusively issued for return of goods after job work to Future Educare (P) Ltd., for which the appellant raised bills claiming 'job charges'. The goods cleared under these delivery challans are covers of exer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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