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TMI Blog2024 (10) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... ly such invoices issued contain particulars of buyers. The actual buyers of PTY are identified, thereafter through brokers and ultimate price realization on such consignments sold from godowns are at much higher price than the ex-factory price. The Show cause notice dated 01.02.2001 was issued to the respondents based on statements of transporters of the respondent, statements of yarn brokers, statements of Managing Director of respondent, bank stock statement, etc.. In the show cause notice demand of duty was computed on the basis of the sale value declared to the bank for the purpose of loan and the value declared in the monthly Excise returns. The Adjudicating Authority while adjudication of the show cause notice dropped the proceedings, placing reliance on the judgment of the Hon'ble Apex Court in the case of M/s Kayem Synthetics Pvt and M/s. Synfab Sales. Therefore, the Revenue filed the present appeals. 2. Shri Rajesh Nathan, Learned Assistant Commissioner (AR) appearing on behalf of the Revenue /Appellant submits that the adjudicating authority has dripped the proceeding, merely placing reliance on the Supreme Court judgment in the case of M/s Kayem Synthetics Pvt and M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been finally settled in favour of the assessee in the case of Commissioner of Central Excise, Vapi Vs. Synfab Sales (Supra). The said judgment is reproduced below:- "The present appeal has been preferred by the Revenue against the judgment and order dated 13-8-2003 passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Northern Bench, New Delhi [2003 (158) E.L.T. 180 (Tri.-Del.). 2. The factual matrix lies in a narrow compass. The respondent-assessee is engaged in the manufacture of PTY Twisted Yarn falling under Chapter sub-heading 54.02 of the Central Excise Tariff Act, 1985 (for brevity, 'the Act'). On the basis of intelligence received by the officers of Anti Evasion directorate that the assessee was indulged in evasion of central excise duty by resorting to undervaluation and clandestine clearances of PTY as it was clearing PTY from its factory gate at a very low value in the name of non-existing firms, while the goods were actually being cleared to godown at Bhiwandi (Maharashtra) and Surat (Gujarat) from where they are subsequently being sold through brokers to actual buyers at a higher value. The search and seizure was conducted and on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has correctly held that only in those cases where it can be demonstrated that the provisions of Section 4(1)(a) are inapplicable, recourse to Valuation Rules can be taken as provided under Section 4(1)(b). Learned Commissioner has correctly pointed out that if, according to the Revenue there is a sale at the depot, sale price at depot could have been ascertained. Therefore, there is no justification to resort to valuation under Section 4(1)(b) and the Valuation Rules. The Commissioner points out that even though the Department had knowledge about the ultimate actual buyers no effort is seen taken to get information from them as to whether the sale was at a price higher than that was shown in the invoice. According to us the view taken by the Commissioner was correct. So also we find that the adjudicating authority was fully justified in holding that the show cause notice has erred in demanding duty on the entire quantity of goods cleared from the factory including quantity sold to the buyers other than Bhiwandi buyers." 6. Thereafter, the Tribunal noted the contentions of the assessee and placed reliance on Punjab Oil & Silicate Mills v. C.C.E. [1993 (65) E.L.T. 268] and on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain cases, another Commissioner had accepted the similar submissions raised by the assessee as in the case of Beekaylon Synthetics v. Commissioner of C.Ex., Surat/Mumbai [2003 (158) E.L.T. 307]. The said order was assailed by the Revenue before the Tribunal and the Tribunal, on the basis of the reasoning which have been reproduced above, dismissed the appeal of the Revenue. 8. We have heard Mr. A.K. Panda, learned Senior Counsel along with Mr. Arijit Prasad for the Revenue and Mr. V. Sridharan, learned Senior Counsel for the respondent. 9. On a perusal of the order passed by the Commissioner and that of the Tribunal, it is luminescent that the assessee used to sell the PTY Twisted Yarn, the manufactured item to number of buyers as has been found by the Department. Some buyers were taking directly and some sales were made through the brokers. However, the invoices used to be raised in the name of certain buyers. This practice was prevalent since long even when the Excise was not leviable. That apart, it is noticeable that there is no finding that the price that was collected in respect of the items, whatever grade or size may be, from the genuine buyers or the broker, were diff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as agreed with the view taken by the Customs, Excise and Service Tax Appellate Tribunal (for short, 'the Tribunal') that there had been no clandestine removal of Polyester Texturised Yarn (PTY). The said conclusion has been arrived at on the ground that the revenue had not produced any evidence except the statement of the authorized officer of the assessee. 4. We have heard Mr. P.S. Patwalia, learned Additional Solicitor General for the appellant and Mr. Jay Savla, learned counsel for the respondents. 5. On a perusal of the order passed by the Tribunal, we find that the Tribunal has been guided by the technical opinion of the chartered engineer submitted by the respondents who were the appellants before it. It has observed that the revenue has founded its case singularly on the basis of the statement of the authorized officer of the respondent. From the orders passed by the Tribunal and the High Court, it is clear that the revenue has really built its case on the base of the statement made by the authorized officer and, accordingly, there has been intervention by the Tribunal and the High Court. If the whole case is founded on the statement of the authorised officer of the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Original No. 50/01. Appeal E/2786/01 is also an appeal at the instance of the assessee directed against Order-in-Original No. 26/01, dated 21-8-2001. There is no appeal by the Revenue against Order-in-Original No. 26/01. E/1711/03 is at the instance of the Revenue challenging Order-in-Original No. 28/01, dated 30-8-2001. The same order is under challenge at the instance of the assessee in E/2788/01-A. E/1610/03 is filed by the Revenue challenging Order-in-Original No. 29/01, dated 31-8-2001. Same order is challenged by the assessee to the extent it is aggrieved by it in Appeal E/2788/01-A. Since issue involved in these cases is one and the same, we are disposing of these appeals by a common order. 2. Before we go into the contentions raised by the parties we may point out that another learned Commissioner had occasion to consider identical issues in a batch of adjudication orders where he has dropped the demand under show cause notice in toto. Appeals filed by the Revenue against those adjudication orders are dismissed by us separately under a common order. 3. The assessees are engaged in the manufacture of PTY Twisted Yarn falling under chapter sub-heading 54.02 of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see for the purpose of availing credit facility can be relied on for arriving at the assessable value. But, at the same time, he held that the basis of calculation taken in the show cause memo was not correct. Total RG 1 quantity was taken as clearance for home consumption without giving any allowance for captive consumption or direct sale at factory gate. The total quantity was multiplied by the unit value given in the bank statement to arrive at the total assessable value. This was compared every month with the total assessable value on which duty has been paid for the corresponding month. In those months where the total assessable value as per show cause memo was coming to less than the assessable value on which duty has been paid such figures were completely ignored for the purpose of duty calculation and for those months where monthly assessable value as per show cause memo method was in excess of the monthly assessable value on which duty has been paid, the differential value has been taken and differential duty has been calculated. Learned Commissioner took the view that if bank statement has to be taken as representing the market price, it should be so taken in every month. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no part delivery. Under these circumstances there was no justification for holding that the assessees were guilty of undervaluation. 6. On going through the orders impugned we find that the only basis on which the Commissioner has accepted the allegation of undervaluation is the bank statement. We are of the view that bank statements given by the assessee for the purpose of getting credit facilities cannot be the sole basis for arriving at a conclusion that there was undervaluation in the invoice. The extent to which such statements made by the assessee can be relied on against him in the matter of assessment has been the subject matter of earlier decisions of this Tribunal. 7. In Punjab Oil & Silicate Mills - 1993 (65) E.L.T. 268, the Department while alleging clandestine manufacture and removal of the goods relied on the figures furnished by the assessee to the Department of Industries or as admitted by the party in their affidavits filed before the Department for getting the coal. The Tribunal took the view that any information obtained from the Department of Industries is not sufficient proof to show that the goods were manufactured unless it was substantiated wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry for us to refer and consider in detail the contention raised in the appeals by the Revenue challenging the order of the Commissioner for the reason that he has not sustained the entire demand in the show cause notice. Since we are holding that the Revenue has not been successful in proving the allegation of undervaluation, we are not going into the correctness or otherwise of the contentions raised by the assessees that, as a matter of fact, sale to the Bhiwandi buyers took place at the factory gate and not at Bhiwandi. 8. In view of the above, we dismiss appeals E/2943-2945/02 and 2946/02, E/1711/03 and E/1610/03. Appeals filed by the assessee E/2786/01, 3091-92/02, E/2787-2788/02 and C.O./56/03 in E/1610/03 are allowed to the extent indicated above." 4.3 In view of the above judgments, it is clear that the present appeals as well as the above judgments are on identical issue and facts. Therefore, the ratio of the above judgments are directly applicable in the present case. It is also noteworthy that in the present cases, the show cause notices were kept in call book by the department awaiting the decision of Supreme Court in the cases cited above. This also shows that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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