Page 239 - ELT_1_1st April 2020_Vol 372_Part

2020 ] SHRI KRISHNA INDUSTRIES v. COMMISSIONER OF C. EX. & S.T., VADODARA-II 125

crease in price and also increased price of US $, they also increased the value of
finished goods and hence, it cannot be said that due to investigations, the prices
increased. He also draws our attention to prices of other raw material Zirconium
Silicate wherein the prices had raised four folds i.e. from Rs. 8.9 per kg. to Rs.
56/- in October’ 2009. The prices of natural gas increased from Rs. 2850/- per
KM3 in April 2006 to Rs. 7422.51 per KM3 in February, 2008. That even the tech-
nology for manufacture of Frit was changed. Instead of Rotary Kiln being used
earlier, they installed continuous line kiln in 2007 and 2008 which not only in-
creased the cost of production but also quality of goods and therefore it was nat-
ural that the prices of frit were increased. He submits that the show cause notice
has relied upon the statement of Shri Rasikbhai Patel of M/s. Surani Ceramic to
allege that the goods were supplied to M/s. Surani Ceramics @ Rs. 25/- per kg.
as the said M/s. Surani Ceramics were selling their goods to established brands
like H & R Johnson where there was no scope of undervaluation and therefore
the prices charged by the appellant are actual price. He submits that on the basis
of prices charged to M/s. Surani Ceramics, it cannot be concluded that the appel-
lant were undervaluing their goods. M/s. Surani Ceramics and some other buy-
ers were buying good quality of frit as they were supplying goods to established
tiles manufacturers. The quality cannot be compared with other tile manufactur-
ers at Morbi as they are made of lower quality frit and other material. The prices
charged to M/s. Surani and other buyers cannot be compared due to difference
in quality. That even otherwise in absence of any evidence of additional consid-
eration the allegation of undervaluation is not sustainable.
4. As regard demand based on consumption of natural gas, he submits
that it is not the case of the department that the appellant has purchased any raw
material required for huge production of frit on which duty has been demanded.
The demand is based upon formula evolved at the time of panchnama of factory.
The consumption of gas depends upon various factors. That the demand is based
upon assumption and presumptions. He relies upon judgments in case of Oudh
Sugar Mills - 1978 (2) E.L.T. J172, Amar Ispat - 2009 (235) E.L.T. 487 (Tri.), Southern
Ispat Ltd. - 2009 (248) E.L.T. 270 (Tri.). He submits that no evidence of illicit man-
ufacturing of goods, procurement of raw material, use of labour, transportation
of goods and no buyer of goods was found and hence the allegation is not sus-
tainable.
5. As regard demand of Rs. 81,874/- based upon alleged parallel in-
voice alleged to have been issued in 2004-05, he submits that the invoice No. 92
dated 16-3-2005 has been relied upon alleging that the same was issued to M/s.
Swagat Ceramics.
6. He submits that statement of their employee Mukesh Patel was rec-
orded who refused to have issued such invoice. Even the format of invoice is dif-
ferent from their invoices issued by them. No payment was received from M/s.
Swagat Ceramics who has shown the issue of cheque against such purchase but
no such payment was received by the appellant. Even their accountant Shri
Vishalbhai Patel has refused to have received any payment against such alleged
parallel invoice. Even the perusal of transport voucher produced by M/s. Swagat
Ceramics shows that it does not contain name of any transporter. As regard other
invoices he submits that though Shri Mukesh Patel in respect of such invoices
has accepted issuance of such invoice but it is not clear as how such invoices
came to be prepared at later date. The buyers of goods and proprietor of appel-
lant unit has denied issuing such invoice. The alleged buyers shown in parallel
EXCISE LAW TIMES  1st April 2020  287