ORDER
Shri Krishna Kumar, M(J)
1. Heard both sides.
2. The ld. Counsel appearing for the appellant interalia submitted that disputes relates to valuation of the goods; on the ground that the raw material viz. grey fabrics was mis-declared. Therefore, the department has taken into consideration the price of the yarn used in the manufacture of such grey fabrics. Since different varieties of yarns were used in the manufacture of the different types of grey fabrics processed by the appellants, the average price of a particular variety of yarn over a period of time was considered as the price of such yarn used in the manufacture of grey fabrics to arrive at the cost of grey fabrics. He submitted that the price of the yarn was held to be incorrect by the CEGAT and was not relevant. He referred to paras 8 and 9 of the CEGAT order dated 04.8.1998, which are reproduced as under:-
8. We find lot of force in the above contentions of the appellants as urged before us by the learned counsel, and we are of the view that the differential duty has to be determined based on reasonably acceptable and relevant material, and could not be based on selected purchase invoices as has been adopted in the impugned order. Therefore, we hold that duty demand in this case needs to be re-determined by taking into consideration purchase bills which are relevant to the material period, taking into consideration for the relevant variety of fabrics the relevant variety of yarn price. TECOYA Trend prices of yarn for the relevant variety and period could also be reasonably taken into consideration in the re-computation of the demand.
9. On the issue of mis-declaration of the weight and value of the fabric, the statement of the authorized signatory and manager of the appellants, Shri S.N. Ankolawala, on 15.02.1989, contains an admission that the fabrics were undervalued by declaring less value to the Central Excise Department. The fact also remains that on such admission differential duty on the fabrics seized on 15.02.1989 from their factory has also been duly paid. The admitted practice of the appellants of keeping signed and stamped blank declaration forms of their customers’ merchant manufacturers and the claim that particulars were filled in on receipt of information over telephone or through employees, also leaves much to be desired. Therefore it is held that the appellants are liable to pay the differential duty, but, the basis for its quantification has to be on a firmer footing on consideration of relevant and reasonably acceptable material, and this has been already indicated supra.”
Thus the CEGAT has rejected the only basis adopted in the show cause and remitted the matter to the Commissioner for re-determination of the demand based on reasonably acceptable and relevant material. The CEGAT held that differential duty cannot be determined based on selective purchase invoice as has been adopted in the order. It was also held by the CEGAT that the duty demand in this case was to be re-determined by taking into consideration purchase bills which are relevant to the material period and also taking into consideration the relevant variety of fabrics and the yarn price of relevant variety. He emphatically submitted that the Commissioner has failed to reconsider the directions of the CEGAT and he has relied on the very same documents to confirm the demand. Purchase bill of the relevant period have not been taken into consideration. No reasons have been given by the Commissioner for non-consideration of the invoices of the relevant period. The impugned order was already set aside by the Tribunal in their earlier order as referred above. Besides he submitted that the appellant was not supplied the documents as mentioned in para 21 of the impugned order. The factory is closed and the appellant is facing great financial hardship. Therefore the appellant may not be put any condition of pre-deposit which will cause undue hardship to the appellant.
3. The ld. DR appearing for the Revenue reiterated the impugned order and drew our attention to paras 8 to 10 of the earlier order of CEGAT dated 04.8.1998 and submitted that the re-determination has been made by the Commissioner taking into the directions given in the said paras and which are duly considered in paras 15 to 19 and 20 of the impugned order. Therefore, it is incorrect to say that the directions of the Tribunal have not been complied with. He also submitted that the Department has gone by the lowest duty and as such the appellant should be put to condition of pre-deposit.
5. After hearing both sides and perusal of the records, we find that it is evident from the yarn purchase bills of Merchant manufacturers that they have purchased the yarn at higher prices than the published prices. The Department has taken the lowest price for computing the duty. Therefore, once the Department has taken the lowest price for computation of the duty, there should hardly be any grievance to the appellant. Even the average price works out to be on the higher side. Therefore, in our opinion it would be reasonable that the appellant are to put condition of pre-deposit as the case is very old. It will not be possible for us to appreciate the facts and law involved in the case in great detail at this juncture. It will be possible only at the time of final hearing. We, therefore, direct the appellant to make a pre-deposit of Rs. 40 lakhs (Forty Lakhs) towards the duty amount by 30.04.2005. On such pre-deposit being made, we dispense with the pre-deposit of the balance amount of duty and the entire amount of penalty. Compliance is to be reported on 05.05.2005. It is made clear that failure to report for compliance will result in dismissal of the appeal without any further notice to the appellant.
(Pronounced in Court on )