Shri Jayesh Mehta, Customer vs Cce, Jaipur

Excise Appeal No. 3662 of 2006, 3672-3673 of 2006 with Misc. Application No. 51702-51703 of 2014, 3676 and 3678 of 2006 and 3679 of 2006 with Misc. Application No. 51701 of 2014

[Arising out of the Order-in-Original No. 19/2006 dated 08.06.2006 passed by The Commissioner, Central Excise, Jaipur.]

For Approval and signature :

Honble Shri Rakesh Kumar, Member (Technical)

Honble Shri Ashok Jindal, Member (Judicial)

1. Whether Press Reporters may be allowed to see :

the Order for publication as per Rule 27 of the

CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of :

the CESTAT (Procedure) Rules, 1982 for

publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair :

copy of the order?

4. Whether order is to be circulated to the :

Department Authorities?

Shri Kushal Raj Jain, Customer ]

Shri Dilip Shah, Employee ]

Shri Sripal Chaudhary, Director ]

Shri Jayesh Mehta, Customer ] Appellants

Shri Sanjay Punjwani, Customer ]

M/s Emgee Cables & Communication Ltd.]

Versus

CCE, Jaipur Respondent

Appearance

Shri Bipin Garg, Advocate  for the Appellant.

Shri Yashpal Sharma, Authorized Representative (DR)  for the Respondent.

CORAM : Honble Shri Rakesh Kumar, Member (Technical)

Honble Shri Ashok Jindal, Member (Judicial)

Final Order No. 50487-50492/2015 Dated : 20/02/2015

Per. Ashok Jindal :-

The appellant namely M/s Emgee Cables & Communication Ltd. alongwith co-appellants have filed these appeals against the impugned order.

2. The facts of the case are that an income tax raid was conducted at the factory premises of M/s Emgee Cables as well as at the premises of Shri Dilip Shah, an employee. Nothing incriminating was found at the factory of M/s Emgee Cables but some computer floppies were found from the custody of Shri Dilip Shah, on the basis of those floppies, prints were taken out and same were converted into CD which were handed over to the Central Excise Department. On the basis of these documents, a show cause notice was issued to the appellants to demand duty on the allegation that the appellant M/s Emgee Cables has under valued the goods or removed the goods clandestinely without payment of duty therefore duty is payable by M/s Emgee Cables alongwith interest and penalty is also imposable on all the appellants before us. The show cause notice was adjudicated which was converted into the impugned demands. Aggrieved from the said orders, appellants are before us.

3. The learned Counsel for the appellant submits that in this case entire case has been booked on the basis of the documents recovered from the custody of Shri Dilip Shah which shows that Shri Dilip Shah has affected certain transactions in the name of M/s Emgee Cables and Communication and the buyers of the goods have paid certain amount in cash over and above the invoice value, but there is no link of the sales affected by Shri Dilip Shah with M/s Emgee Cables. He further submits that Shri Dilip Shah has gone to the Settlement Commission (Income Tax Department) to settle the case booked by the Income Tax Department against Shri Dilip Shah. In these circumstances, the demands against M/s Emgee Cables is not sustainable as excise duty is demandable from the manufacturer/producer of the goods, but from the documents it is not evident that M/s Emgee Cables has cleared the goods without payment of duty through Shri Dilip Shah, therefore, impugned order is required to be set aside. Consequently, the penalties on all the appellants are not imposable.

4. On the other hand, learned AR reiterated the findings of the impugned order.

5. Heard the parties and considered the submissions.

6. On perusal of the records, we find that in whole of the adjudication, it is not coming out from the cords recovered from the possession of Shri Dilip Shah, whether those goods cleared in the name of M/s Emgee Cables and Communication have been manufactured by M/s Emgee Cables or not. Admittedly, the excise duty is payable or recoverable from the manufacturer/ producer of the goods. From the documents recovered from the custody of Shri Dilip Shah, it is not proved that who is the manufacturer/producer of goods. The only presumption can be made out that the goods are traded goods. Therefore, we find that show cause notice has been issued only on the basis of Income Tax Department, and without any investigation done by the Central Excise Department.

7. In view of these observations, the demands against M/s Emgee Cables and Communication on the charge of under valuation of the goods and clandestine removal of goods are quashed. Consequently, the impugned order is set aside. Appeals are allowed with consequential relief to the appellants.

(Dictated and pronounced in open court.)

(Rakesh Kumar)

Member (Technical)

(Ashok Jindal)

Member (Judicial)

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