Full Text
Date of Decision: 10.03.2014
DL NAGPAL, PARTNER, M/S PARAGON CABLE COMPANY ..... Petitioner
PARAGON CABLE CORPORATION ..... Petitioner
PARAGON CABLE COMPANY ..... Petitioner
PARAGON CABLE COMPANY ..... Petitioner
2014:DHC:1318-DB CEAC 11-19/2014 Page 2
VIPUL NAGPAL, PARTNER, PARAGON CABLE CORPORATION ..... Petitioner
SUDHIR NAGPAL, DIRECTOR, M/S PARAGON POWER CABLE LTD ..... Petitioner
PARAGON POWER CABLE LIMITED ..... Petitioner
PARAGON ENTERPRISES (INDIA) ..... Petitioner
DL NAGPAL, PARTNER, ROXY ELECTRICALS..... Petitioner
SOMNATH NAGPAL ..... Petitioner
Appearance: Mr. M.P. Devnath with Mr. Aditya Bhattacharya, Advocates for petitioners in all cases.
Mr. Satish Kumar, Sr. Standing Counsel for the respondents in all cases.
HON'BLE MR. JUSTICE R.V. EASWAR MR. JUSTICE S.RAVINDRA BHAT (OPEN COURT)
JUDGMENT
1. These appeals impugn a common order of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) made on 8.8.213 in appeals filed on behalf of the manufacturers (hereafter collectively be known as the appellants - Paragon Group) along with their partners and Directors. The substantial question of law sought to be urged is as to the method adopted by the Revenue - respondent in valuing the seized goods; especially as to the weight of the copper cables recovered from the wooden drums.
2. Briefly, the facts are that the excise authorities on 21.02.2002 carried on search and seizure operations in the premises of the appellants. This was on the basis that manufacturers of wires and cables falling under chapter H.85.44 CEAC 11-19/2014 Page 4 of the schedule to the Central Excise Tariff Act, 1985 were resorting to evasion of duty on different units owned by them or their job workers by claiming Small Scale Industries (SSI) exemption in respect of such units even though they were ineligible. It was alleged that after the search and seizure operations the Paragon Group has suppressed more than 50% of the actual quantity and value of clearances and made false declarations describing the size of wires and cables in the invoices and further understated the weight of the goods.
3. A show cause notice was issued on 13.08.2002 by the Commissioner of Central Excise. After the reply was furnished, an oral hearing was granted and after considering the material on record, the order in original was made on 29.10.2004 by the Commissioner confirming the demand and recovering duties, penalty upon the ten appellants including their Directors and partners. Individual penalty orders were also levied in respect of such partners and Directors. Aggrieved, the appellants approached the CESTAT which by the impugned order dismissed the same.
4. It is contended on behalf of the appellants that both the order in original as well as CESTAT’s order suffer from an important omission with respect to the actual quantity. Learned counsel contended that the method of arriving at the weight (core x sq. mtrs.) was fallacious and submitted that this aspect was highlighted as early as the time when the hearing before the CEAC 11-19/2014 Page 5 Commissioner took place during the show cause notice proceedings. Counsel urged that this aspect was not addressed much less appreciated in its correct perspective. This has led to over estimation of the seized goods.
5. Learned counsel highlighted that the simpler method of subtracting the weight of the goods instead of adopting a different method in arriving the weight of each length of cable could have been adopted to reach a more just solution. It was submitted that this aspect was highlighted before the Tribunal in the hearing. Counsel relied upon the following submissions made in a written note said to have been handed over after making oral submissions to the Tribunal: - “8.2.[3] Submissions:
(i) Allegations are based on assumptions and presumptions.
(ii) The demands has been worked out on the basis of a formula (Wt. Km.). There is no other evidence.
(iii) The difference in weight is because of variation in weight of wooden drums as stated by S/Shri D.L. Nagpal, Sunil Nagpal, Sudhir Nagpal and Vikas Nagpal in their statements dt.25.7.2002.
(iv) No weighment of seized goods got done as to certain exact tare and net weight. Notion weight has been adopted.
(v) Weight is mentioned by transporters in LRs/GRs and is not declared by manufacturers who never bothered CEAC 11-19/2014 Page 6 about the weight in LR/GR as freight was to be paid by the consignees.
(vi) There is no confession in statements of
Partners/Director regarding clandestine removal of excess quantity in the past except the statement dt. 29.4.2002 of Sudhir Nagpal of Paragon Power Cables Ltd., which he changed in his subsequent statement dt. 25.7.2002. Moreover, as stead by partners, directors and buyers all payments have been received by cheque/ bank draft and there is no evidence of cash payment for alleged excess quantity.
(vii) The buyer at Chennai has denied having purchased alleged excess quantity (statement dt. 3.5.2002) in past.
(viii) Value is to be taken as cum duty for calculating demand
(ix) Interest under Section IIAB is not leviable as
6. The Revenue resists the submissions and contends that full opportunity was given and that the finding as to the question of true weight or the method adopted is a factual one which do not warrant interference by this Court, which exercises jurisdiction exclusively when there is a substantial question of law. It was also submitted that the manufacturers in this case did not appear to have in fact urged this aspect before the Tribunal during the hearing and that the note submitted on this score does not even bear the date. CEAC 11-19/2014 Page 7
7. This Court has considered the submissions and material on record.
8. In this regard the Court notes that during the course of the order in original, the Commissioner observed as follows: -
9. In view of the above, ordinarily the matter ought to have ended there; we, however, notice that the learned counsel stressed that the aspect was highlighted during the course of hearing. Now, the grounds of appeal before the Tribunal are not very specific on this aspect even though a general grievance is made about the question of valuation. However, this specific point appears to have been made in the written submissions said to have been handed over to the Tribunal. The Tribunal did not make its order contemporaneously or within a month of the date of hearing; in this case it rendered its order and published it after about five months. In these circumstances, without any explanation as to whether the written submissions were handed over, particularly since they do not bear any date, it would be hazardous for this Court to conclude that the argument on this CEAC 11-19/2014 Page 11 aspect was made before the Tribunal which failed to apply its mind. We have deemed it appropriate to discuss this aspect since the appellant’s counsel repeatedly submitted that this had a direct bearing on the question of valuation and that the Tribunal ought to have taken care to address the issue. The affidavit in support of the appeal no doubt states that the copies placed on the record are true copies, yet significantly there is no date attributed to the written submissions in any of the pleadings. In this background of the matter, this Court is of the opinion that no substantial question of law arises for consideration.
10. The appeals are accordingly dismissed, along with all the pending applications.
S. RAVINDRA BHAT (JUDGE) R.V. EASWAR (JUDGE) MARCH 10, 2014 /vks/