HIRUSHA ENTERPRISES Vs. CCE

JUDGEMENT

(1.) By this appeal the appellants M/s Hirusha Enterprises challenge the Order -in -Original No. 8/98, C.No. V/15/19/97 -CX.Adj -III dated 23.6.98 passed by the Commissioner of Central Excise, Chennai -III by which the Commissioner has confirmed a duty demand of Rs. 27,13,678 against Shri V.G. Hirusah, Proprietor of Hirusha Enterprises, the appellants herein on the goods viz. Lavanya Brand Talcum Powder/under Rule 9(2) read with proviso to Sub -section (1) of Section 11A of the CE Act, 1944, besides imposing a penalty of Rs 2,72,000 on the proprietor Shri V.G. Hirusah under Rule 173Q of the CE Rules.

(2.) Brief facts of the case are that M/s Hirusha Enterprises, a proprietory concern of which Shri V.G. Hirusah is the proprietor, are engaged in the manufacture of different varieties of talcum powder under the Brand name "Lavanya" and were availing the benefit of Notification No. 140/83 dated 5.5.83 as amended. On a visit to the concern by the officers of the HQ Preventive, on 8.11.90, it was found that they had resorted to clandestine removal of the goods of different varieties manufactured by them by suppressing the facts right from raw material stage during the period from 1986 -87 to 1990 -91. As a follow up action, proceedings were initiated by issue of show cause notice calling upon the appellants as to why differential duty of Rs. 91,52,481 should not be demanded under Rule 9(2) read with proviso to Section 11A(1) of the Act and the proceedings culminated in the order of adjudication bearing Order -in -original No. 31/92 passed by the then Collector of Central Excise, Madras restricting the demand of duty to Rs. 27,13,678 and imposing personal penalty of Rs. 4 lakhs. Aggrieved by the said order, both the assessee and the department preferred appeal before CEGAT and CEGAT by order 2020 -2021/1996 dated 10.9.96 allowed the appeal of the assessee by remanding the matter to the lower authority for de novo adjudication. The departmental appeal was also disposed of by the Tribunal by the said order. The present appeal is against the de novo order passed by the Commissioner. Thus, this is the second round of litigation before the Tribunal.

(3.) Shri V. Lakshmikumaran, learned Counsel appeared for the appellants and submitted a synopsis of the case wherein inter alia it is stated that while remanding the matter, the Tribunal had set out of terms of remand as under: (a) The consignor i.e. the lorry owners of the lorry are independent persons and in the facts and circumstances of the case the consignment weight can be taken as a basis for the demand. On the basis of these consignment weight relief should be given to the appellants. The actual weight of the tins should be arrived by taking into consideration the weight of the cartons used and the weight of the tins used for packing the powder. (b) Wherever, the appellants are able to produce verifiable evidence then the benefit should be given to the appellants. However, if the appellants are not able to produce such verifiable evidences then the basis established by the department shall stand good as we are convinced that there has been clandestine removal by the appellants in this case by manipulating records. (c) Therefore, in such circumstances we are of the view that this benefit as mentioned in para 6 supra should be given to the appellants wherever they satisfy the adjudicating authority in this regard. As far as the departmental appeal is concerned we find that the same is covered by our said reasoning as we have already indicated the basis on which the adjudicating authority should proceed in this case in the de novo adjudication proceedings. He also dropped the matter only wherein such consignments way bills are not available. Therefore, the appeal filed by the department is disposed of on the above lines. In the light of our above observations we allow the appeal of the appellants by way of remand for de novo adjudication by the adjudicating authority in the light of our above observations............" It is also stated in the synopsis that in the de novo order passed by the Commissioner, the terms set out by the Tribunal has not been considered and that the Commissioner has proceeded to justify the weight taken in the show cause notice and in the earlier order. It was argued that on this score along the impugned order is liable to be set aside, argued the learned Counsel. He has further pleaded that the Commissioner has nowhere indicated as to why the weight ascertained at Tirunelveli in the presence of the two independent witnesses and in respect of consignment despatched by the appellant and received by the customer and relied upon as evidence in the show cause notice could not be taken as verifiable evidence, for extending the benefit to the appellants as ordered by the Tribunal and so long as it is a verifiable evidence he ought to have proceeded on the basis, in terms of the remand order. He has also submitted that the appellant has worked out the duty liability by excluding the weight of master carton (taken at 1.5 kg) as well. In this case the revised duty liability works out to Rs. 4,03,433.82. However, if the master carton weight is also taken and the total weight is computed based on Tirunelveli weight/the revised duty liability could not be Rs. 1,42,442.82. He has also submitted that the difference between the alleged duty of Rs. 27,13,678 and the revised liability is only because small scale exemption has been denied on the ground that the value of clearances had exceeded the eligibility limits. He has also submitted that so far as the verification results are concerned, the verification at Tirunelveli. was with reference to an actual consignment despatched by lorry. On the other hand the verification at Kancheepuram was on a sample and not from any consignment ready for despatch as such and hence the verification done at Tirunelveli should be accepted. He has also pleaded that the SSI exemption has been denied to the appellants on the ground that the value of clearances has exceeded the prescribed limit and that the denial had the effect of not extending the duty free clearances, denial of slab rate of duty etc. He has also relied upon the decision of the Tribunal in the case of C.L. Jain Woollen Mills v. Collector of Customs, Delhi, 1997 (96) ELT 599 wherein it was held that when there are two tests reports, the test report in favour of exporter -appellant is to be accepted. This decision had relied upon the decision in the case of Madhu Wool Spinning Mills v. UOI, 1983 (14) ELT 2200.