M\/s Golden Tobacco Ltd., M\/s Chinar Cigarettes (P) Ltd. Versus CGST, Delhi
Central Excise
2018 (5) TMI 1300 – CESTAT NEW DELHI – 2019 (370) E.L.T. 1036 (Tri. – Del.)
CESTAT NEW DELHI – AT
Dated:- 21-5-2018
Excise Appeal Nos. 3396, 3935 & 3965 of 2010 – Final Order No. 51920-51922\/2018
Central Excise
Satish Chandra, President And Bijay Kumar, Member ( Technical )
\nFor the Petitioner : Sh. V.K. Bindal, CA
\nFor the Respondent : Sh. R. K. Mishra, DR
\nORDER
\nPer Bijay Kumar
\nAll the present appeals are filed by the assessee-Appellants against the Order-in-Appeal No. 16-21\/CE\/PKJ\/CCE\/ADJ\/2010 dated 09.07.2010 passed by the Commissioner (Appeals) Central Excise, Delhi.
\n2. This is the second round of litigation before the Tribunal. Earlier the Tribunal vide Final Order dated 10.04.2002 had remanded the matter to the original authority for deciding the issue afresh. In compliance with the directions, the impugned order has been passed where duty has been demanded and penal<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n However, on verification of the said records, it was found that there were duplicate invoices and somewhere duplicate entries were also made in the books. In some cases, for the invoices bearing same serial number, the bill amounts were different. In the case of two invoices of the identical serial number, first original invoice was supported by the original gate pass and the other original invoice of the identical serial number was supported by the photocopy of the same Central Excise gate pass and both these invoices were discounted by the franchise units from their respective banks. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n he cigarettes factories, no irregularity was noticed pertaining to the assessee-Appellants even on their surprise visits. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n GTC as a financing arrangement, which, on the due date i.e. three months from the date of discounting were paid by GTC to the discounting bank of the franchisee units by honouring its Hundis of the accommodation bills. Thus, in this manner, three months were availed by GTC from the banks of the franchisee units on the basis of its Hundis\/accommodation bills\/bills of exchanges etc. without giving any guarantee or assets as security to the banks of the franchisee units. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n v) Leather Chemicals & Industries Ltd., Calcutta vs CCE, Calcutta, 1984 (15) ELT 451 (T); = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n s not physically dealt with the goods liable for confiscation. For the purpose, he relied upon the following case laws : = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ce of the show cause notice and is contrary to the evidence of the officers of the Bank who were concerned with discounting of bills. It is also seen that the statements of the Bank Officers that they were not concerned with physical verification of movement of goods have been mis-interpreted by the noticees to give the impression that discounting could be done without the movement of goods in spite of endorsement on the documents by GTC of receipt of cigarettes. During the course of arguments, the learned DR read out para 97 of the impugned order wherein it is stated that manufacture of cigarettes is subject to physical control and the Department has also prescribed a detailed Cigarette Manual which regulates every activity in connection with the manufacture of cigarettes. It was also contended that demands on the basis of clandestine removal cannot be made and established in cases where there is physical control except through unimpeachable evidence of clandestine clearance. Accordin<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ture of cigarettes is subject to physical control and the Department has also prescribed a detailed Cigarette Manual which regulates every activity in connection with the manufacture of cigarettes. It was also contended that demands on the basis of clandestine removal cannot be made and established in cases where there is physical control except through unimpeachable evidence of clandestine clearance without knowledge of the departmental officers and in violation of the guidelines issued. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n e duty is paid thereupon and original excise gate pass, is self-supporting evidence for despatch of the goods. The buyer acknowledges the receipt of the goods on the bill confirming that the goods have been received. But in case of duplicate\/accommodation bills, the goods were not received but only for the purpose of discounting, the receipt is acknowledge with no corresponding evidence of actual movement of the goods. These documents in original along with a Hundi accepted by buyer and were presented to their bank by the franchisee units for bill discounting. The amount of the bill after deducting charges and interest for the period of bill (normal 90 days) is credited in the bank account of the franchisee units at the time of discounting the bill by the bank. The same is paid by the buyer on the due date of bill. In this manner, the buyer avails a credit facility of 90 days to make the payment of his purchases whereas the seller gets the sale proceeds immediately on presentation of t<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ed on the basis of physical verification of goods, but the bank would go by the document representing the title of the goods. Another bank official, Mr. Venkatraman Iyer, in cross-examination has stated that the bank was dealing in the documents of title of the goods and physical movement of the goods was not within their purview. Similarly, Mr. Pramod Kumar, another official of the Bank, also confirmed during cross-examination that the banks were not physically verifying the transactions and that bill discounting may have been done on the basis of Xerox copies of the invoices. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" M\/s Golden Tobacco Ltd., M\/s Chinar Cigarettes (P) Ltd. Versus CGST, DelhiCentral Excise2018 (5) TMI 1300 – CESTAT NEW DELHI – 2019 (370) E.L.T. 1036 (Tri. – Del.)CESTAT NEW DELHI – ATDated:- 21-5-2018Excise Appeal Nos. 3396, 3935 & 3965 of 2010 – Final Order No. 51920-51922\/2018Central ExciseSatish Chandra, President And Bijay Kumar, Member ( Technical … Continue reading “M\/s Golden Tobacco Ltd., M\/s Chinar Cigarettes (P) Ltd. Versus CGST, Delhi”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-11882","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/11882","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11882"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/11882\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11882"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11882"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11882"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n5. According to the assessee-Appellants, this exercise was done intentionally to obtain the bank loans from the different banks. But the Department has refused the plea and demanded the duty on all duplicate bills also and entries made. The Department has also imposed penalties. Being aggrieved, the assessee-Appellants have filed the present appeals.
\n6. With this background, we have heard Shri V.K. Bin<\/p>\n
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\n8. It is the submission of the learned Chartered Accountant that some additional evidence came to the notice of the Department in the searches conducted in the year 1995 subsequent to the issuance of the show cause notice in the instant case. The original search was conducted in the year 1993. The adjudicating authority has accepted the additional evidence holding that the allegation of unaccounted receipt of material and clandestine removal of cigarettes were already levelled against the noticees in the show cause notices and no new allegations are sought to be added by additional evidences nor any additional liability is demanded. It is the further submission of the learned Chartered Accountant that the records seized from the premises of the assessee-Appellants or its franchise units did not show iota of evidence to prove clandestine removal of the cigarettes. N<\/p>\n
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\n9. The learned Chartered Accountant further submits that the assessee-Appellants and franchisee units were, during the period under dispute i.e. February, 1989 to March, 1992, under the strict physical control and supervision of the Excise Officer who supervised the manufacturing activities very closely. For this purpose, records were maintained by the Excise Officers posted there in the diary XT-1 for movement of the goods. The Departmental Officers having been constantly present and closely supervising all the activit<\/p>\n
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\n (vi) Kale Khan Mohd. Hanif vs CCE, Nagpur, 2001 (132) ELT 374 (T-Mum);
\n (vii) Norton Intec Rubbers (P) Ltd. vs CCE, Madras, 2004 (164) ELT 5 (Mad); and
\n (viii) New Tobacco Ltd. vs CCE, Visakhapatnam-II, 2007 (208) ELT 257 (T-Bang.).
\n11. The learned Chartered Accountant further submits that no action of any nature whatsoever has been taken against the Excise Officers in all the cigarettes supplying manufacturing units located all over the country, so allegation of clandestine removal cannot be sustained. He also submits that duplicate bills were merely an accommodation bills and there was no actual physical movement of the goods. All the transactions were duly recorded in the books of accounts of both the parties. He also informed that ITAT has deleted the additions made on this ground under the Income Tax Act for the assessment year 1992-93, so similar treatment may be given in the present ca<\/p>\n
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\n (i) Rakesh Kumar Garg vs CCE, 2016 (331) ELT 321 (Del-HC);
\n (ii) CCE vs Bansal Steel Corporation & Ors. (HC-Mum), dated 12.09.2017 www. taxscan.in
\n (iii) MEK Slotted Angles (I) Ltd. vs CCE, Belapur, (2009) 247 ELT 364 (Mumbai-CESTAT);
\n (iv) Broadway Textiles Ltd. vs CCE, Kanpur, (1999) taxmann.com 385 (CESTAT-New Delhi); and
\n (v) Sujana Metal Products Ltd., 2016 (335) ELT 218 (Madras)
\n13. Lastly, he made a request that the impugned order may kindly be set aside.
\n14. On the other hand, the learned DR for the Department, heavily relied upon the impugned order as also the show cause notice. It is his submission that the goods were discounted by the Bank only when the receipt of the goods were duly acknowledged by the GTC on the duplicate bills. This shows that there was actual movement of goods on duplicate bills without payment of excise duty. According to the <\/p>\n
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\n18. As per the ratio laid down by the Hon'ble Supreme Court in the case of Audh Sugar Mills, 1978 (2) ELT J172, it was held that in the case of physical control units, cannot be held that there was suppression of facts and the assessee clandestinely manufactured and removed the goods so as to invoke the extended period of limitation.
\n19. Undoubtedly, in the instant case, during the period February, 1989 to March, 1992, all the franchisee units were under the strict physical control and supervision o<\/p>\n
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\n23. From the record it appears that, all the transactions of the bill discounting were duly recorded in the books of account of both the parties.
\n24. In view of the above, we are of the opinion that the assessee-Appellants has committed a fraud with the Banks by raising the duplicate bills. For this financial irregularity, Department will be at liberty to initiate appropriate proceedings under the relevant law<\/p>\n
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