COMMISSIONER OF CENTRAL EXCISE Vs. VALAN BEEDI WORKS

JUDGEMENT

(1.) This appeal by revenue is directed against Order -in -Appeal No., 113/2001 (MDU) (GVN) dated 10.10.2001 by which the Id. Commissioner (Appeals) has set aside the Order -in -Original No. 18/2001 dated 18.4.2001 of Additional Commissioner who had confirmed an amount of Rs. 1,61,850/ - under provisions of Section 11A (1) of the CE Act and had also imposed penalty of equal amount under Section 1AC and had also asked to pay interest under Section 11AB at appropriate rate. Ld. Commissioner (Appeals) has not found any evidence that there is a clearance of beedies which are non -duty paid and therefore he has held that the order passed by the original authority on the appellant is not sustainable and has set aside the order of imposition of penalty on them.

(2.) Revenue has come in appeal against this impugned order on the ground that on the basis of the admission statement given by Shri Yesuvadiyan, Proprietor of M/s. VBW to the effect that the unaccounted 4980 kgs. of tobacco biris was used in the manufacture of biris and such biris were cleared without payment of duty and the buyer's statement to the effect that no bills/invoices were given by VBW for biris supplied to them or they did not have the invoices with them. The further grievance of the revenue is that the Id. Commissioner (Appeals) has failed to appreciate the correctness of the findings of the Addl. Commissioner that Shri Yesuvadiyan, Proprietor had retracted his admission statement given on 29.4.97 before Central Excise Officers only on 28.5.97, that is after lapse of a period of one month and therefore his belated retraction on account of his after -thought did not merit any consideration. In this connection they rely on the Apex Court judgment rendered in the case of Haroon Haji Abdulla Vs. State of Maharashtra as reported in 1999 (110) ELT 309 (SC). In view of cited decision of the Hon'ble Supreme Court, the admission statement given by Shri Yesuvadiyan is relevant and is direct evidence to establish the fact that 4980 kgs. of tobacco biris had been used in the manufacture of 2,49,00,000 Nos. of biris without bringing into statutory account and had cleared them clandestinely without payment of duty. They further submitted that the Commissioner (Appeals) has failed to take not of the fact that M/s. Kerala Transport Company had not mentioned anything about their mode of raising bills while furnishing the list showing the details of supply of tobacco biris to M/s. VBW vide their statement on 3.6.97 but it was only on 24.1.2000 i.e. after lapse of a period of 3 years, vide their letter that purchase is done on ready cash basis, they do not bother about the name and whereabouts of the company, but used to raise the bill for the consignment in the name of the company as told by the purchaser. Therefore, the Commissioner (Appeals) had erred in accepting such a belated explanation given by the supplier of tobacco biris especially when their statement dated 3.6.97 containing the details of supply of tobacco biris is the vital basis for the case. It is also one of the ground of the revenue that the Commissioner (Appeals) has failed to take not of the fact that M/s. Kerala Trading Company had raised a credit bill No. 121 dated 28.3.96 on M/s. Valan Beedi Works and the raw material covered under the said bill had been accounted in their form IV Register. Revenue further submitted that the Commissioner (Appeals) has ignored that fact that M/s. Kerala Trading Company themselves committed in the letter dated 24.1.2000 that they do not bother about name and where about of the purchasers as the sale is done on ready cash basis. In other words, if the sale is on credit basis, they could know the name and whereabouts of the purchaser company. Inasmuch as M/s. Kerala Trading Co. had raised a credit bill on M/s. VBW,they knew the identity of the person who represented M/s. VBW and therefore their version regarding mode of raising bill in respect of sale on ready cash basis and the defense of M/s. VBW that some other persons could have purchased tobacco biris from M/s. Kerala Trading Company in their name are not sustainable. In view of the above submission, revenue prayed that the Order -in -Appeal No. 113/2001 (MDU) (GVN) dated 10.102001 passed by Commissioner (Appeals) may be set aside and the order of the original authority confirming the demand of Rs. 1,61,850/ - along with appropriate interest may be sustained.

(3.) Appearing on behalf of the revenue DR Shri C. Mani has filed written submissions on behalf of the appellant -revenue along with a copy of a letter received from the Office of the Commissioner of Central Excise, Tirunelveli vide their letter No. C.No. IV/16/271/2003 -App. dated 20.11.2003. The written submission dated 27.1.2004 filed by the Id. DR on behalf of the appellant -revenue is extracted hereunder. WRITTEEN SUBMISSIONS FILED ON BEHALF OF THE APPELLANT