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vairrr 079 -96:105065 tTh71- : 079 - 26305136

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1:574-F : File No : V2(84)115 /Ahd-(/2011

Stay App.:NA

31-TkVI ,t-kszii Order-In-Appeal No.22/2012(Ahd-1)CE/MM/Commr$A)/Ahd

F4-9-1 Date : 14.03.2012 cfro) 4 Mt1R3C Date of Issue ) C j 0 9) IQ° I et-

1f0- 4-1R,rict)i (3TtrF-V) u-Fr Passed by Smt. Mallika Mahajan, Commissioner (Appeal-V)

TT 3117ff, *414 \3c -Lii< 34--EffqKr4-1 3Trzlwri -Ftf gru

31-FtT

Arising out of Order-in-Original No.12/Additional Comm./2011 Dated . 17-10-2011

Issued by: ADDL Commissioner,Central Excise, Ahmedabad-I.

3rd

.-11+4 Lc1 tic Name & Address of the Appellant / Respondent

Omega Elevators

Ahmedabad

ct) arWr 31T-47T 31-Tt4q- 31-141-q ct) c16 N-rkzr viz4 -421-Oult

Trq. TE&94 31-Rr0qt -0 3TLTI-F Trr Tarr T -,P-T ,(ict,c-II t Any person a aggrieved by this Order-In-Appeal may file an appeal or revision application, as

the one may be against such order, to the appropriate authority in the following way :

*Nct-)K 5T Euf 30-47 Revision application to Government of India :

(1)•---41zi 31-RiiZ111, 1994 Z-T7T al-6ff -4-dT7 TT7 GO ct)

AST ipta-Tur 3-11-kq-9 3rdTifta, tkci-)N, fa-- 111100,

-c4101- Iff -F, It-49 qc141-1--o--, : il000i 4 4 -r-41- wrIt-q I

(I) A revision application lies to the Under Secretary, to the Govt. of India, Revision Application Unit

Ministry of Finance, Department of Revenue, 4 th Floor, Jeevan Deep Building, Parliament Street, New

Delhi - 110 001 under Section 35EE of the CEA 1944 in respect of the following case, governed by first

proviso to sub-section (1) of Section-35 ibid :

(ii) 4116 4 Z-11: ■514 tTit ct) 4u---rrF 'Ea 3TR:i Irr

ITcri-TrR 4 4r-6 \Ai() Tyrri. A, TIT f+-R--Tt trr

corwi.) 4 f+---÷it 11-u--FrR TITF 4)7[9 t

(ii) In case of any loss of goods where the loss occur in transit from a factory to a warehouse or to

another factory or from one warehouse to another during the course of processing of the goods in a

warehouse or in storage whether in a factory or in a warehouse.

(r) ITrzff f+7Tt -TN zu R-4 # ZR TIT 4-110 f 4 1 uI wzt

4116 izi7 .3o-uq-r TITIT ,51) #R-ff f+--R-Tt TIT vk-zr

\1

•

(b) In case of rebate of duty of excise on goods exported to any country or territory outside India of on excisable material used in

the manufacture of the goods which are exported to any country or territory outside India.

(Tr) zrft f4-qr 1TRu Rre zrr 11-e-rff col) fkzri - ft-zrr Trzfr 9 1r1 I (c) In case of goods

exported outside India export to Nepal or Bhutan, without payment of duty. 3i-PdTr umr-<-- \ic-4 ► q.-1 Ire Ter 31 tR)- 3Trkvr UHT 7-4 3TTOTr, 311M- 5N1 1711ftd q4 fl 1-14 17H 41 EIN ctT 3Tiff4ZFE M.2) 1998 EMT 109 5H1 fkzIWI f+-7 Trq.

(d) Credit of any duty allowed to be utilized towards payment of excise duty on final products under the provisions of

this Act or the Rules made there under and such order is passed by the Commissioner (Appeals) on or after, the date appointed under Sec.109 of the Finance (No.2) Act, 1998.

(1) *-4rZf 3-0:fg-q (3 ) -1441:11, 2001 fi-417 9 3T ciiftrgffts 5141 T OR14 14, P-8 1 t rf is 31-rkzr &TtrIta ft-4T T)- c11-1 40-3rrkzr V 3111a . 3Tr--vr ed-zr1 3Tru 9-Ltd- 31* 49' ltzrr \l 3Trar w-d-r licq-ertf EITRT ii

35-1 14 fibtb`t Tr-d-F 3T-v- 3Tr2r fr3TH-6 tilei1.1 4 qfo- qit eft -rl'87 I

The above application shall be made in duplicate in Form No. EA-8 hs specified under Rule,

9 of Central Excise (Appeals) Rules, 2001 within 3 months from the date on which the order sought to be appealed

against is communicated and shall be accompanied by two copies each of the 010 and Order-In-Appeal. It should also be accompanied by a copy of TR-6 Challan evidencing payment of

prescribed fee as prescribed under Section 35-EE of CEA, 1944, under Major Head of Account.

(2) 311tcff -UM \-10 '“b 4-1 -) aTT4 TfT cb 41 fi a1Wciti 200/— irffrff

AO *1. 0 4 -1 tic kTT \refiql cil 1000/- 4 it-Tr .1-Tr-d-rq c i ullq i

The revision application shall be accompanied by a fee of Rs.200/- where the amount involved is Rupees One Lac

or less and Rs.1,000/- where the amount involved is more than Rupees One Lac.

AT 40114-E 7-4 '4)cil(fr1 3P-Trtzf -Trzrrrqm--Rur git Appeal to Custom, Excise, & Service Tax Appellate Tribunal.

(1) *---414 \30-11<-1 3114ftZ71, 1944 4 z-TRT 35—t1/35—.*- 3t–d7f-U:— Under Section 35B/ 35E of CEA, 1944 an appeal lies to :- Upilvoll 4.teict).-1 34-4Rrff Tit TrrIT err *-4)71 zrEfr -stzr :rrzrrftwRT m`l f Irfawr \z-c 3. 31TV. FR, ft--At chl

(a) the special bench of Custom, Excise & Service Tax Appellate Tribuna) s of West Block No.2 R.K. Puram, New Delhi-1 in all matters relating to classification valuation and. \04ER (.4k

3

(U) ∎340 % 1:11t4q 2 (1 ) Val`g 317-R t 3TFT-4T (4) Nita., &OA. MITA #1-9-r th--4t4

, c4icr) , 30)-A-zr () 4 1:11:tqli r 11124n1, 31-g1T-q41q 31)--20,

51R-11 8 ci 4A-111‘1u, #ER1 1) 31-611-q41-q-380016 .

(b) To the west regional bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) at 0-20, New Metal Hospital Compound, Meghani Nagar, Ahmedabad : 380 016. in case of

appeals other than as mentioned in para-2(i) (a) above.

(2) —41-Z1 \30-11q (3-71)A cAl, 2001 4 ti-TRT 6 .4'i3Tc ci AC1- # argiR

3Tt-Azi -1-RrrRnRi4 it7 3114zr mpt 11 ed-zti Tiftu qer ~i c41

4 3147 d'Iki I 7TZ1T TI191 W:N 5 cTUI ZIT 11.t) M 41 c161 " --CN 1000 / the NT

#-At tt I 6fd c111q 411 4 1 31)-R. (1 4 1R11 +RI 1 Tir-qT 7 5 al- f ZIT 50 car

4.) TETR 5000 / 'eft 1 \116I \3c111q 4 +1 i'1, vT cTl 91'T 3147 (1 4 11LII TMT

• 117 50 ZIT \i'M \TLIN1 46i 10000 ITT{ 1)--- 1) tiff 1 cbr) 1q4)

•11 4-1 114d 44, TEF ,1/4,) ,4 A T4-4u 4 -p)l 6‘3fl ft#t ,01 4„Aci, a)7

cam' 1 muT 61 qT1- ct ~ ur t t l f=a- 3T1- 9-- ;{

boo/— tbeNT ert I

The appeal to the Appellate Tribunal shall be filed in quadruplicate in form EA-3 as prescribed under Rule 6 of Central Excise(Appeal) Rules, 2001 and shall be accompanied against (one which at least should be accompanied by a fee of Rs.1,000/-, Rs.5,000/- and Rs.10,000/- where amount of duty / penalty / demand / refund is upto 5 Lac, 5 Lac to 50 Lac and above 50 Lac respectively in the form of crossed bank drift in favour of Asstt. Registar of a branch of any nominate public sector bank of the place where the bench of any nominate public sector bank of the place where the bench of the Tribunal is situated. Application made for grant of stay shall

be accompanied by a fee of Rs.500/-.

ti 3Trku (.4-) 31-14714 Th-T .3-11TftT 61 d I v-J)t 314 431f'd7 tbeRT Tr •ra17 31:1-0ff

War --Fr qTr87 uut 61c'f f''vrfr trth m-r4 faR -421-rftuft 3ieft-J'Rr

.-q1L1I cfroi ct, 3T4t-F /IT m'--41-zr , -Nct>i ,z War v11c1I * I

In case of the order covers a number of order-in-Original, fee for each O.I.O. should be paid in the aforesaid manner not withstanding the fact that the one appeal to the Appellant Tribunal or the one application to the Central Govt. As the case may be, is filled to avoid scriptoria work if

excising Rs. 1 lacs fee of Rs.100/- for each.

(4) -Li I d 3Ti4f4Z17 1970 ei211. 3fZ1414-d Th4 3171ft-1 ft7 31-JR-TR 3-41 311-kq9 TIT

41,c4 3T1- 7T TiqTRV-Ti ATIOThit 311-47T 1471 u l 1;A tYR-4- MT RI I e-14

FdTh- 61.11 -TftR I

One copy of application or O.I.O. as the case may be, and the order of the adjournment

authority shall beer a court fee stamp of Rs.6.50 paise as prescribed under scheduled-I item of

the court fee Act, 1975 as amended.

3147 TI-Of4u Ar96 f4ztqur cnc) f4zrAl 4 311 41)- wr9- 31-r -ika• War t A)Ar ,

\30-11q ct)) 3IIITART 11-tITPUT3uT ( -171if41) fiZ1 14, 1982 -I2.ft-d't

Attention in invited to the rules covering these and other related matter contended in_ ie

Customs, Excise & Service Tax Appellate Tribunal (Procedure) Rules, 1982. ■ APp

(3 )

(5)

4

F.NO.V2[52] 1 15/Ahd-I/201 1

ORDER-IN-APPEAL

M/s. Omega Elevators, 5-C , Archna Industrial Estate, Rakhial

Road,Ahmedabad [ Here-in- after referred to as " the appellant " for the sake of brevity I

have filed an appeal against the Order-in-Original No.12/Additiorial Commissioner/2011

dated 17.10.2011 [ here-in-after referred to as " the impugned Order " for the sake of

brevity j, issued by the Additional Commissioner, Central Excise, Ahmedabad

Commissionerate-I [ here-in-after referred to as " the adjudicating authority " for the sake of

brevity j.

2. The facts of the case in brief are that the appellant is engaged in the

manufacture of lift and machinery parts thereof falling under Chapter Heading No.84 of the

First Schedule to the Central Excise Tariff Act,1985. During the course of audit it was noticed

variation to the extent of Rs.83,91,804/- in pursuance to reconciliation of sales declared by

the appellant in the Balance Sheet for F.Y.2008-09 with the clearance value of excisable

goods shown in ER-1 filed by the appellant. Therefore, on detail scrutiny of the records the

auditors apparently noticed that the appellant had cleared lift and parts valued at

Rs.72,09,018/- without accounting for the same in their records under cover of commercial

invoice and even in some case the clearance was effected without any kind of invoice.

3. In pursuance to objection by the auditors it was submitted by the appellant

vide Letter dtd.24.03.2010 that such discrepancies was due to requirement of immediate

delivery of goods at the site and communication gap between their excise and account

section and the appellant interalia admitted the facts of clearance of goods without

discharging Central Excise duty and paid Central Excise duty of Rs.9,71,505/- and interest of

Rs.2,41,448/- through E-payment on 24.03.2010 in terms of Section 11 A[2131 of the Central

Excise Act,1944. A statement of Shri Kumarbhai Manharlal Desai, proprietor was also

recorded under Section 14 of the Central Excise Act,1944, wherein he interalia admitted that

the clearance of excisable goods under commercial invoices was never disclosed to the

department by them and they have not included in the value shown in their periodical returns.

.skoNFR

F.NO.V2[521115/Ahd -1/2011

4. Thereafter, the appellant was issued Show Cause Notice bearing No. V 84/15-

34/Omega/OA-I/10-11 dtd.2.12.2010 for recovery of Central Excise duty amounting to

Rs.9,71,505/ - under Section 11 A of the Central Excise Act,1944, and interest of Rs.

Rs.2,41,448/ - under Section 11 AB of the Central Excise Act,1944, and appropriation of duty

and interest paid by them as discussed here-in-above. It was also proposed in the Show

Cause Notice dtd.2.12.2010 for imposition of penalty under Section 11 AC of the Central

Excise Act,1944, and also the amount of Rs.242877/- paid by the appellant to be adjusted

against the penalty under Sectipn 11 AC of the Central Excise Act,1944, and confiscation of

goods cleared without payment of duty of excise under Rule 25[c] of the Central Excise

Rules,2002.

5. Thereafter, on the following grounds as briefly stated here under, the

adjudicating authority vide above impugned Order confirmed and appropriated the Central

Excise duty amounting to Rs.9,71,505/- under Section 11 A of the Central Excise Act,1944,

and interest of Rs. Rs.2,41,448/ - under Section 11 AB of the Central Excise Act,1944; also

imposed equal amount of penalty of Rs.9,71,505/- under Section 11 AC of the Central Excise,

also ordered for appropriation of penalty amounting to Rs.2,42,877/- already paid by the

appellant ; however refrain from Order of confiscation of goods on the ground that since the

goods were neither seized nor available for confiscation. Also the adjudicating authority

dropped the proceedings as proposed in the above Show Cause Notice against Shri

Kumarbhai Manharlal Desai, proprietor of M/s.Omega Elevators.

5.1 With regard to the appellant's claim that they have made excess payment of

Rs.2,38,697/- on the ground that some commercial invoices were issued by them for bought

out items only and they did not require to pay duty of excise. The adjudicating authority

have also categorically held stated at Para 19.2 of above impugned Oder after close

examination that mere supply of bought out items without any supporting evidences is

nothing but after though on the part of the appellant and therefore it can not be accepted

their claim of excess payment of duty of excise amounting to Rs.2,38,697/-.

5.2 With regard to the appellant's claim that they have made excess payment of

Rs.4,96,455/- as per Annexure A to their Reply dtd.26.9.2011, the adjudicating authority

i have categorically held after aose observation at Para 19.3 of the above impugned Order

4e, .

that the appellant proved themselves proved confused state of mind as on one hand they , :

c,', -,' / 4, . , ,, _i,

,.- ,t•

, , -r-: - ,..../

6

F.NO.V2[52]115/Ahd-1/2011

have mentioned that commercial invoices were issued for accounting purpose on transfer of

ownership to customer however on other hand the difference in value is due to purchase of

materials from the open market and used for modification or alteration as per customer's

requirement and the appellant failed to produce documentary evidences to prove that the

commercial invoices issued for accounting purpose and duty of Central Excise was already

paid by them at the time of removal of goods under proper invoice.

5.3 Also at Para 19.4 of the above impugned Order the adjudicating authority

observed that the appellant has not produced any evidences to establish that the appellant

did work of modification or alteration for which there was requirement of bought out items

as per customer's demand since the appellant failed to produce neither any details of actual

modifications made by them in the work in progress claimed by them nor any details with

regard to bought out items.

5.4 With regard to appellant's claim that the lift cleared by them could not be

installed on account of various reasons viz.site may not be ready, non-availability of electric

supply , requisite approval from authority etc., the adjudicating authority at Para 19.4 of the

above impugned Order find that it seems very strange that how the orders for supply of lifts

are placed before the site is ready and also why the main materials are dispatched so early

even before the site is ready.

5.5 In view of findings the adjudicating authority at Para 20 of the above

impugned Order held that in order to justify the appellant's clandestine activity, the

appellant tried to all means to project the same into licit clIsarances, however the

contentions of the appellant are not acceptable as these are not backed by strong evidences

and are much like after thoughts.

6. Being aggrieved by the above impugned Order the appellant filed an appeal

on the following grounds which are briefly stated here in below :-

6.1 The appellant was not given sufficient time to understand the gravity of the

situation and the auditors simply gone through the sales registers and found that lifts and

parts thereof were cleared under cover of commercial invoices. If the commercial invoices as

tabular form by the audit officers would have been compared with th central excise invoices

then the auditors would have realized that there are absolutely no clandestine clearance.

—1(4 soAFR (App

A :^;

•••

• •

7

F.NO.V2[52]115/Ahd - I/2011

6.2 Based on arbitrary conclusion by the auditors that the sales shown in sales

registers is not reflected in ER-1 returns the demand raised confirmed under the above

impugned order which deserves to be quashed and set aside.

6.3 It was vehemently submitted before the adjudicating authority that not even

a single commercial invoices issued with a motto of clandestine removal of goods and the

adjudicating authority failed to appreciate the comparison or demonstration.

6.4 It is beyond doubt that the duty was regularly discharged under Central Excise

invoices and the same value was once again declared on the body of the commercial invoice.

6.5 It is evident from the fact that though the excise invoice issued at the time of

removal of lift in CKD condition from the factory and commercial invoices issued only after

the installation of the said lift and because of the said reason there is a difference in the date

of these invoices and corroboration would be established on perusing the name of the

buyer/consignee mentioned on the body of these invoices.

6.6 The appellant canvassed two alternative submissions, first when no excisable

goods cleared under commercial invoices the question of confirmation of demand along

with interest and imposition of penalty does not arise. Second that it is not case of issuance

of commercial invoices which are in isolation of excise invoices and it remained undisputed

that the appellant paid appropriate duty of excise on clearance of excisable goods on

transaction value declared in the excise invoice however subsequent to installation of lift at

buyers' premises the commercial invoices are issued. In other words there a reason to

believe that the value declared in commercial invoices on which excise duty ought to be paid

over and above the value declared in excise invoice and that excise duty liability discharged.

6.7 With regard to difference in amount mentioned in Central Excise invoice and

that mentioned in commercial invoice is concerned, the same is for the reason that the

commercial invoices include in addition to the assessable value of the lift, the price of few

accessories / parts which were subsequently purchased by the appellant from the open

market and sold to the very same buyer upon his specific request/need/requirement.

6.8 When the construction work at buyer's site was completed, the buyer

instructed the appellant to install the said lift and at that time these commercial invoiCi

were issued besides excise invoices already issued and therefore the question of again

demanding excise excise duty relying upon the commercial invoice does not arise.

8

F.NO.V2[52]115/Ahd-1/2011

6.9 Even if it is assumed that the differential value being the difference of value

declared on the excise invoice and that declared on the commercial )hvoice in that case one

thing can not deny that duty of excise paid as per value declared on body of excise invoice is

concerned which is paid twice as per observation of the auditors which deserves to be

refunded.

7. Personal Hearing held on 31.1.2012 and the appellant' appeared and

reiterated the ground of appeal. The appellant requested for a week time to submit a chart

correlating the commercial invoices with the excise invoices. I have gone through the case

records, grounds of appeal, appellant's submission at the time of PH as well as case laws

submitted during PH and my findings are given below .

8 The appellant, at the time of personal hearing had requested for one week's time to

submit a chart showing a co-relation between the commercial invoices and central excise

invoices issued by them. Despite having waited till date for this chart s I find that the same is

not submitted by the appellant. In the absence of any documentary evidences it becomes

difficult for me to accept their argument that the commercial invoices which were

scrutinized by the Department during audit were the same for which excise invoices had

already been issued and on which central excise duty had already been paid.

8.1 The appellant has further pleaded that central excise invoices were issued at the time

of clearance of the lift in completely knocked down condition from the factory gate and the

commercial invoices were issued only after the installation of the said the lift and for this

reason they were differences in the dates of the two invoices but the corroboration could be

established on perusing the name of the buyer mentioned on the two invoices which is the

same. I do accept that this possibility can exist as mentioned by the Appellant, and more so

as it is not every day or even very frequently that a buyer purchases lifts/elevators. It is

capital expenditure and hence a Blue Moon purchase and hence it stands to reason that the

2 invoices could have different dates for the reason mentioned by the appellant provided

that the names appearing on the two invoices were of the same buyer and there were other

corroborative evidence also. But here again, I am unable to extend the benefit of doubt to

the Appellant for the reason that purchases of lifts being capital expense would most likely

be backed by a written contract. This was even stated by the appellant at the time of PH but

as I do not find that the appellant has submitte ch a contract/purchase svo Fi. (4,30

4

F.NO.V2[521115/Ahd-I/2 011

agreement, nor have they submitted other evidence to prove that they had paid, at least in

part, excise duty on the same goods, I can not accept the plea of the appellant.

8.2 The third argument of the appellant is that the commercial invoices included certain

accessories/parts which were purchased by them in the open market and sold to the buyer

upon a specific request/requirement and on this amount they were ready to pay the excise

duty. The appellant would definitely have to pay this duty, as after introduction of

• transaction value, value of all the tradable items etc would have to be included in the

assessable value. But as there is no proposal to demand any differential duty, either in the

SCN or the impugned order, I do not feel the need to say more on this issue.

8.3 In short since the arguments of the Appellant are not backed by corroborating

documentary evidence, I am unable to intercede with the impugned order and have no

other option but to confirm and uphold the same.

Order

9. In view of the above discussions and findings, I uphold the impugned order and reject

the appeal.

(MALLIKA MAHAJAN)

COMMISSIONER (APPEALS-

CENTRAL EXCISE, AHMEDABAD.

Date: /03/2012

ATTESTED B

[ . . a an}

Superintendent (Appeals-V)

Central Excise, Ahmedabad-1

To, M/s. Omega Elevators, 5-C , Archna Industrial Estate, Opp. Ajit Mill,

Rakhial Road,Ahmedabad

Copy to:

1. The Chief Commissioner, Central Excise, Ahmedabad.

2. The Commissioner, Central Excise, Ahmedabad - I.

3. The Assistant Commissioner of C. Excise, Div-I, Ahmedabad-I.

4. The Guard file -4,5,0YER (App,

4e he P. A. file.

i 94/ 7'A:)

rl :?

fk N210