C.N.B. Nair, Member (T)
1. Revenue is in appeal against adjudication Order No. 20-C.E./94, dated 25-2-1994 of the Collector of Central Excise, Chandigarh.
2. The impugned adjudication order was passed pursuant to an order of remand passed by this Tribunal vide its Final Order No. 373/92-A, dated 27-7-1992 wherein the Tribunal had directed the Collector to take on record fresh evidence produced by the respondents herein and adjudicate the allegation regarding clandestine production and removal of the goods which were supplied by the respondents to various Government authorities.
3. Based on certain inspection report of the purchasing Government Organisations, allegation had been made against the respondent that they had produced and cleared goods in excess of the quantity accounted in the Central Excise documents. The respondent’s submission was that the goods in question were mostly supplied to Government authorities and that the inspection reports related to goods manufactured in their factories at Chandigarh and Rajpura and the show cause notice had been issued on a mistaken impression that the inspection report covered only goods produced at the Chandigarh Factory. They had pointed out that this mistake is evident from the very fact that certain goods shown to have been inspected at Chandigarh are not being produced at the Chandigarh factory but are produced only at the Rajpura Factory. Taking note of this submission, the Tribunal had decided that, during remand, the evidence produced by the respondents regarding production and sale should be taken into account and a fresh order should be passed by the Commissioner. The Commissioner, in the adjudication proceedings, took into account the evidence produced, including the production entered in the RG 1 of both factories and came to the conclusion that when production from both the units are taken together and is tallied with the supplies made to the Government Departments, no excess production or clearance is observed. Accordingly, he held the allegations made by the Department to be not proved.
4. The present appeal of the Revenue makes a rather strange grievance about this finding of the Commissioner. The very first complaint is that the Collector had committed an error in holding that the inspection note cannot be considered as sacrosanct and that corroborative evidence are required. We are not able to appreciate this approach of Revenue. When there is allegation of clandestine production and removal the same should be adjudicated based on the totality of evidence. A particular document issued by a particular Department cannot be treated as conclusive or sacrosanct when its authority is challenged by several other credible materials. We are, therefore, not able to find any merit in this submission made in the appeal. Similarly, it has been submitted in the appeal that the Collector had allowed introduction of fresh evidence (RG 1) in the de novo adjudication. RG 1 registers are prescribed statutory Central Excise Records. They should have been considered at the investigation stage itself and notice should not have been issued without taking these statutory documents into account. Therefore, the Collector was not going beyond the norms when he allowed the RG-Is to be part of evidence. Further, he was acting under the direction of this Tribunal to allow fresh evidence to be brought on record. If the Revenue considered itself aggrieved by the Tribunal’s direction, the course open to it was to challenge that order in the appropriate forum rather than blame the Collector for performing de novo adjudication in compliance with the direction of the Tribunal.
5. On merits also, we are not able to find any substance in the appeal of the Revenue. Though the entire case is sought to be sustained by certain inspection note, the inspection note itself has not been made part of the appeal. In any event, this inspection note cannot independently prove a case when totality of the evidence shows that there is no difference between the quantity ordered, produced and delivered when both the units are taken together. In these facts of the case, we find no merit in the appeal on this count. Therefore, it is rejected.
6. Another ground taken in the appeal is that the Commissioner was in error in allowing deduction of sales tax paid while fixing the assessable value. The law is clear on this subject. Section 4(4)(d)(ii) of the Central Excise Act specifically provides for deduction of taxes payable while fixing assessable value. It is also the submission in this case that the respondent was actually paying sales tax, let alone the tax being merely payable. This ground also, therefore, has no merit and has to be rejected.
7. The third ground taken in the appeal is that the respondent was claiming deduction towards freight more than actuals. This objection is made based on certain quotations obtained by the Central Excise authorities regarding rate of transport. Those quotations showed Rs. 300 per trip, while respondent was paying Rs. 1050. Respondent had explained this in the adjudication proceedings, as the result of the special requirement of the goods and the contractual obligation, mainly, the pipes had to be supplied at the places where they were to be laid. Collector had taken note of this fact and had felt that the objection raised is not sustainable. We find no reason to fault this finding. So the appeal on this ground also is rejected.
8. In view of the discussions above, we find no merit in the appeal and the same is accordingly dismissed.