The Dy.Commissioner of Income Tax ,Sabarkantha Circle, Sabarkantha V. M/s. Supreme Galaze Pvt. Ltd., Himatnagar

ITA 845/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5849 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 05-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA NO. 845/AHD/2016 (ASSESSMENT YEAR : 2007-08) THE DEPUTY COMMISSIONER OF INCOME-TAX, SABARKANTHA CIRCLE, HIMATNAGAR APPEL LANT VS. M/S. SUPREME GLAZE PVT. LTD., AKASHGANGA COMPLEX, NEAR S. T. STAND, HIMATNAGAR - 383001 RESPONDENT PAN: AAHCS8041F / BY REVENUE : SHRI MUDIT NAGPAL, SR. D.R. / BY ASSESSEE : NONE /DATE OF HEARING : 14.03.2018 /DATE OF PRONOUNCEMENT : 16.03.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2007-08 A RISES FROM THE CIT(A)- 2, AHMEDABADS ORDER DATED 22.01.2016 IN CASE NO. C IT(A)-VIII/123/DC SK CIR.HMT/2014-15 NOW AS CIT(A)-2/197/DC. S.K. CIR.HM T/2014-15, REVERSING ASSESSING OFFICERS ACTION MAKING ADDITION OF RS.41 ,38,760/- ON ACCOUNT OF SUPPRESSION OF SALES BY ADOPTING GP RATE @ 15% ON U NACCOUNTED SALES OF RS.2,75,91,738/-, IN PROCEEDINGS U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. ITA NO. 845/AHD/16 [DCIT VS. M/S. SUPREME GLAZE PVT . LTD.) A.Y. 2007-08 - 2 - 2. CASE CALLED TWICE. NONE APPEARS AT ASSESSEES B EHEST. THE REGISTRY HAS ALREADY SENT IT AN RPAD NOTICE DATED 22.02.2018. T HE SAME HAS BEEN RECEIVED BACK UNSERVED. WE THUS PROCEED EX PARTE AGAINST TH E RESPONDENT ASSESSEE IN THE INSTANT CASE. 3. WE NOTICE AT THE OUTSET THAT THE CIT(A) HAS DELE TED THE ABOVESTATED ADDITION MADE BY THE ASSESSING OFFICER WITH FOLLOWING DETAIL ED REASONING: 3.3. DECISION: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE CONTENTION OF THE APPELLANT. THE AO HAS MADE TH E ADDITION OF G.P. @15% OF THE SALE VALUE OF RS.2,75,91,738/- ON THE BASIS OF THE INVESTIGATIONS CARRIED OUT AND THE SEARCH AND SEIZURE PROCEEDINGS CARRIED OUT BY THE D GCEI. IT WAS HELD BY THE AO THAT THE APPELLANT WAS INDULGED IN UNDER VALUATION OF ITS SALE BILLS AND CLANDESTINE REMOVAL OF GOODS PRODUCED WHICH WAS SUBSEQUENTLY SO LD OUT OF BOOKS. ON THE BASIS OF THE MODUS OPERANDI OF THE APPELLANT THE BOOK RES ULT OF THE APPELLANT COULD NOT BE RELIED UPON AND THEREAFTER HE APPLIED THE G.P. RATE OF 15% AND MADE THE TOTAL ADDITION OF RS.41,38,760/-. THE DETAILED DISCUSSION HAS BEEN MADE IN THE ASSESSMENT ORDER WHICH HAS BEEN REPRODUCED IN THE P RECEDING PARAS. 3.4. ON THE OTHER SIDE, THE APPELLANT HAS CLAIMED T HAT THE AO HAS MADE THE ADDITION ON THE BASIS OF THE OUTCOME OF THE INQUIRE S CARRIED OUT BY THE DGCEI AND HE HAS NOT INDEPENDENTLY POINTED OUT ANY DEFECTS IN THE BOOKS OF ACCOUNT WARRANTING THE ADDITION IN THE HANDS OF THE APPELLA NT. THE AO HAS NOT GIVEN ANY FINDING THAT PROFIT COULD NOT BE DEDUCED FROM, THE BOOKS OF ACCOUNT OF THE APPELLANT AND UNDER THESE FACTS THE ESTIMATION OF THE G.P. WA S NOT JUSTIFIED. THERE WAS NO SEIZED MATERIAL/DETAILS WHICH COULD PROVE THE ALLEG ATION ABOUT THE UNDER VALUATION OF THE INVOICES AND REMOVAL OF GOODS WITHOUT THE SA LE INVOICES. SUBSEQUENTLY, THE APPELLANT ALSO SUBMITTED THAT AGAINST THE SHOW CAUS E NOTICE, THE APPELLANT HAD PREFERRED THE APPEAL BEFORE THE CENTRAL EXCISE AND CUSTOM TRIBUNAL, WEST ZONAL BENCH AHMEDABAD VIDE APPEAL NO.E/1926/2010 DTD. 24. 12.2010. RECENTLY THE HON'BLE CE&SAT, AHMEDABAD VIDE ITS ORDER DTD. 12.5. 2015 HAS DECIDED THE APPEALS IN 31 CASES INCLUDING THE APPELLANT'S APPEA L WHEREBY THE ALLEGATIONS OF SUPPRESSION OF THE SALES AND CLANDESTINE REMOVAL OF HAVE BEEN REJECTED. IN OTHER WORDS, THE CE&SAT HAS DECIDED THE APPEAL IN FAVOUR OF THE APPELLANT AND OTHER APPELLANT'S WHICH CLEARLY PROVES THAT THE ADDITION MADE BY THE A.O SOLELY ON THE BASIS OF THE OUTCOME OF THE INQUIRIES OF THE DGCEI WERE NOT SUSTAINABLE AND HENCE THE ADDITION WAS TO BE DELETED. 3.5. HAVING CONSIDERED THE SUBMISSIONS OF THE APPEL LANT, IT IS NOTICED THAT THE SOLE BASIS OF THE ADDITION IN THE CASE OF THE APPEL LANT IN RESPECT OF G.P. RATE WAS UPON THE OUTCOME OF THE INVESTIGATION CARRIED OUT B Y THE DGCEI. THEREAFTER THE APPELLATE AUTHORITY I.E. CE& SAT VIDE ITS APPELLATE ORDER NO.A/10541 -10571/2015 DTD. 12.5.2015 HAS GRANTED THE RELIEF TO THE APPELL ANT AND OTHER PARTIES AGAINST THE SHOW CAUSE NOTICE ISSUED BY THE DGCEI. FOR READY RE FERENCE THE RELEVANT FINDINGS OF THE ORDER OF THE CE&SAT AS REFERRED ABOVE IS REP RODUCED AS UNDER:- ITA NO. 845/AHD/16 [DCIT VS. M/S. SUPREME GLAZE PVT . LTD.) A.Y. 2007-08 - 3 - 6. IN THESE PROCEEDINGS THE FOLLOWING ISSUES ARE R EQUIRED TO BE DELIBERATED UPON:- (I) WHETHER THE APPELLANTS MENTIONED IN PARA 5.1 AB OVE HAVE INDULGED IN CLANDESTINE MANUFACTURE AND CLEARANCE OF CERAMIC GL AZED MIXTURE (FRIT), IN VIEW OF THE ADJUDICATION ORDERS PASSED THE ADJUDICATING AUTHORITIES ON THE BASIS OF NATURAL GAS CONSUMPTION NORMS PER METRIC TON? (II) WHETHER THE APPELLANTS MENTIONED IN PARA 5.1 A ND 5.2 HAVE INDULGED IN UNDERVALUATION OF FRIT AND ALSO CLANDESTINELY CLEAR ED FRIT AS PER A PERSONAL LEDGERS RETRIEVED FROM A PEN-DRIVE RECOVERED FROM SANYO AND OTHER PERSONAL RECORDS AND PEN-DRIVES FROM THE CERAMIC TILE MANUFACTURERS READ WITH THEIR STATEMENTS? (IN) WHETHER THE ADJUDICATING AUTHORITIES WERE JUSTIFIED IN DENYING CROSS-EXAMINATION OF WITNESS UNDER THE PROVISIONS OF SECTION 9D OF TH E CENTRAL EXCISE ACT, 1944 READ WITH THE JUDICIAL PRONOUNCEMENTS ON THE ISSUE? 8.4 IN VIEW OF THE SETTLED PROPOSITION OF LAW LAID DOWN ABOVE, ESTIMATION OF QUANTITY OF GOODS MANUFACTURED AND CLANDESTINE REMO VAL OF GOODS BY THE APPELLANTS CANNOT BE SLAPPED ON THE BASIS OF AVERAG ES ARRIVED AND CALCULATED BASED ON NORMS OF GAS CONSUMPTION IN MANUFACTURE OF 1 MT OF FRIT. IT IS RIGHTLY CONTESTED BY THE APPELLANTS THAT FRIT MANUFACTURED IS NOT COVERED BY ANY NOTIFICATION ISSUED UNDER SECTION 3A OF THE CENTRAL EXCISE ACT, 1944 WHERE COMPOUNDED LEVY HAS BEEN PRESCRIBED AND CAPACITY OF THE UNITS IS REQUIRED TO BE FIXED ON GAS CONSUMPTION BASIS, AS DONE BY THE REVE NUE. IT IS OBSERVED THAT REVENUE HAS ATTEMPTED TO ADOPT AN ESTIMATION METHOD FOR DEMANDING DUTY AND PROVING CLANDESTINE REMOVAL WHICH IS NOT PRESCRIBED BY LAW. 8.6 IN VIEW OF THE ABOVE OBSERVATIONS MADE BY THIS BENCH IT HAS ALREADY BEEN HELD THAT METHOD ADOPTED BY THE INVESTIGATION TO ES TIMATE CLANDESTINE REMOVAL OF FINISHED GOODS IS NOT SOUND AND HAS TO BE DISCARDED . HOWEVER, REVENUE WAS GIVEN AN OPPORTUNITY: TO STRENGTHEN. THEIR CASE BY CORROB ORATING EVIDENCE WITH SOME MORE FACTUAL DATA FROM ADDITIONAL STUDIES. NO APPEA L HAS BEEN FILED BY THE REVENUE AGAINST THE ABOVE ORDER PASSED BY THIS BENCH. IT IS ALSO OBSERVED FROM 3.2 OF THE REMAND ORDER THAT APPELLANT HAS MADE CERTAIN CHANGE S IN THE PLANT AND MACHINERY AND OTHER METHODOLOGIES TO REDUCE GAS CONSUMPTION. EVEN IN THE REMAND PROCEEDINGS ALSO ADJUDICATING AUTHORITY HAS NOT COU NTERED THE ARGUMENTS TAKEN BY THE APPELLANT AS TO WHY THE STEPS TAKEN BY THEM FRO M TIME TO TIME, DOES NOT EFFECT GAS CONSUMPTION. ON A SPECIFIC QUERY FROM THE BENCH , THE LEARNED SENIOR ADVOCATE ALSO ARGUED THAT SIMILAR MODERNIZATION IN PROCESSES OF MANUFACTURE, AS UNDERTAKEN BY M/S, WELLSUIT GLASS IN THE MANUFACTURE OF FRIT, HAVE ALSO BEEN UNDERTAKEN BY OTHER APPELLANTS IN COUNTERING THE CLAIMS OF THE AP PELLANTS, JUSTIFYING THE MODERNIZATION DONE TO REDUCE CONSUMPTION OF GAS FRO M TIME TO TIME. NO EXPERT ONION HAS BEEN OBTAINED BY THE REVENUE TO CHALLENGE THE GAS CONSUMPTION PATTERN ADOPTED BY THE APPELLANTS TO INDICATE THAT CLAIM OF THE APPELLANTS WAS WRONG. 8. IN VIEW OF THE ABOVE OBSERVATIONS AND JUDICIAL P RONOUNCEMENTS, METHODOLOGY ADOPTED BY THE ADJUDICATING AUTHORITIES IN ESTIMATING AND DEMANDING DUTY FROM THE APPELLANTS; BASED ON CONSUMPTION OF N ATURAL GAS, ELECTRICITY CONSUMED AND PACKING TIME TAKEN; IS NOT ACCEPTABLE AND IS REQUIRED TO BE REJECTED. 9. SO FAR AS POINTS MENTIONED AT PARA 6(II) AND 6(I I) ARE CONCERNED, IT HAS BEEN HELD BY THE ADJUDICATING AUTHORITIES THAT UNDE RVALUATION AND CLANDESTINE REMOVAL STAND PROVIDED IN VIEW OF THE PEN-DRIVES, ' AJTAKXYZ' OF SANYO, PERSONAL LEDGER OF COMET, PRIVATE DIARIES/ WRITING PADS AND THE STATEMENTS OF CERAMIC TILE MANUFACTURERS. APPELLANTS HAVE ARGUED THAT THE PRINT-OUT TAKEN FROM THE PEN-DRIVE 'AJTAK XYZ' ARE NOT ADMISSIBLE AS A P IECE OF EVIDENCE AS THE SAME ITA NO. 845/AHD/16 [DCIT VS. M/S. SUPREME GLAZE PVT . LTD.) A.Y. 2007-08 - 4 - ARE NOT THE DOCUMENTS ADMISSIBLE AS EVIDENCE UNDER THE RELEVANT SECTION OF THE CENTRAL EXCISE ACT, 1944. IT WAS ALSO ARGUED BY THE APPELLANTS THAT THE NUMBER OF PANCHNAMAS RECORDED AND THE OPENING OF THE SAID PEN -DRIVE CLEARLY SUGGEST THAT THE DATE RECOVERED FROM THE PEN-DRIVE IS HIGHLY OBJ ECTIONABLE, SUSPICIOUS AND NOT ACCEPTABLE. IT IS OBSERVED FROM THE CASE RECORDS OF WELLSUIT GLASS & CERAMIC PVT. LIMITED [E/13720/2014] THAT SEIZURE OF THE SAID PEN -DRIVE WAS EFFECTED ON 17.7.2008 UNDER A PANCHNAMA AND IT WAS NOT STATED I N THIS PANCHNAMA THAT THE PEN-DRIVE WAS PUT INSIDE A SEALED COVER. IT HAS BEE N ADMITTED BY SHRI V.N. THAKKAR (SUPERINTENDENT) DGCEI IN THE CROSS-EXAMINATION BEF ORE THE ADJUDICATING AUTHORITY THAT WHEN AN ARTICLE IS SEIZED, THE SAME IS PLACED IN A SEALED COVER AND MENTION OF THE SAME IS MADE IN THE PANCHNAMA. IT IS ALSO ADMITTED BY SHRI THAKKAR THAT AS HE REMEMBERS THE SEIZED PEN- DRIVE WAS PLAC ED IN A PAPER COVER AND SEALED WITH ADHESIVE TAPES, IT IS THE CLAIM OF THE APPELLANTS THAT THE WAY THE SAID PEN-DRIVE WAS HANDLED, IT IS POSSIBLE THAT THE SAME COULD BE TEMPERED WITH AS THE SAME WAS KEPT IN THE PAPER COVER SEALED WITH ADHESI VE TAPES. A SECOND PANCHNAMA WAS MADE ON 30.8.2003 WHERE THE SAID PEN-DRIVE WAS MENTIONED TO HAVE BEEN TAKEN OUT SEALED COVER WHEN THE FIRST PANCHNAMA NEV ER MENTIONED KEEPING THE SAID PEN-DRIVE IN A SEALED COVER. IT IS ALSO OBSERVED TH AT ON 30.8.2008 THE SEALED CAVER WAS OPENED BUT CONTENTS OF THE SILVER PEN-DRIVE WER E NOT OPENED ON 30.8.2008 BUT INSTEAD ANOTHER BLACK COLOUR PEN-DRIVE WAS OPENED. ON 06.9.2008 UNDER A PANCHNAMA THE SAID SILVER PEN-DRIVE TAKEN OUT OF TH E SEALED COVER AND ON OPENING THIS PEN DRIVE IN THE TALLY FOLDER, NO DATA WAS FOU ND TO BE AVAILABLE. HOWEVER, UNDER ANOTHER PANCHNAMA DATED 12.09.2008, WHEN THE SAID SILVER PEN-DRIVE WAS OPENED DATA WAS FOUND IN TALLY FOTDER WHICH IS THE RELIED UPON AS 'AAJTAK XYZ'. THERE IS A STRONG FORCE IN THE ARGUMENTS MADE BY TH E APPELLANTS THAT WHEN NO DATA WAS FOUND IN TALLY FOLDER ON 06.9. 2008, HOW THE RE LIED UPON DOCUMENTS GOT GENERATED ON 12.09.2008. SHRI V.N. THAKKAR, SUPERIN TENDENT IN HIS CROSS- EXAMINATION EXPLAINED THE REASON FOR NON RETRIEVAL OF DATA ON 06.9.2008 TO BE DUE TO 'OPERATIONAL LACK', BUT HE ADMITTED THAT NO MENT ION OF ANY 'OPERATIONAL LACK' IS MADE IN THE PANCHNAMA DATED 06.9.2008. FURTHER, IT IS OBSERVED THAT IN PANCHNAMA DATED 12.09.2008, THE PRINT OUT OF ACCOUN T 'AJTAK' TAKEN CONTAINED 52 PAGES AND ACCOUNT OF APPELLANT WELLSUIT APPEARED AT PAGE 30 OUT OF 52 PAGES. ANOTHER PANCHNAMA DATED 24.09.2008 INDICATE IN ANNE XURE A3 THAT THE NUMBER OF PAGES OF ACCOUNT 'AAJTAK' WERE 94 AND THE NAME OF APPELLANT EXISTED AT PAGE 43 AS AGAINST PAGE 30 MENTIONED IN PANCHNAMA DATED 12.09. 2008. APPELLANTS HAVE ALSO RAISED THE ISSUE REGARDING DISCREPANCIES IN THE NAM E OFTHEPANCH WITNESSES. IT IS ALSO CONTENDED THAT REVENUE HAD NOT FOLLOWED THE PR OCEDURE AS STIPULATED IN SECTION 36B OF THE CENTRAL ......................DI SCREPANCIES THE AUTHENTICITY AND VERACITY OF DATA RETRIEVED BY INVESTIGATION FROM THE SILVER PEN-DRIVE IS NOT RELIABLE AND CAN NOT BE ACCEPTED AS A PIECE OF EVIDENCE IN DECIDING THE CASE OF UNDERVALUATION AND CLANDESTINE REMOVAL AGAINST THE PRESENT APPELLANTS WITH RESPECT TO POINT MENTIONED IN PARA 6 (II). 10. SO FAR AS THE QUESTION MENTIONED AT PARA 6(III) REGARDING DENYING CROSS- EXAMINATION OF WITNESSES WHOSE STATEMENTS WERE USED FOR ESTABLISHING UNDERVALUATION/ CLANDESTINE REMOVAL OF FRIT BASED O N THE PRIVATE RECORDS, THE STATEMENTS OF TILE MANUFACTURERS AND SHROFF/ANGADIA S IS CONCERNED; IT IS ARGUED BY THE APPELLANTS THAT THE ENTIRE EXERCISE OF SUCH QUA NTIFICATION HAS BEEN MADE AS PER THE STATEMENTS OF THE WITNESSES WHOSE CROSS-EXAMINA TION HAS NOT BEEN ALLOWED BY THE ADJUDICATING AUTHORITY AS PER- SECTION 9D OF TH E CENTRAL EXCISE ACT, 1944. APPELLANTS RELIED UPON THE FOLLOWING CASE LAWS:- (I) J.K. CIGARETTES LIMITED VS. CCE-[2009 (242) ELT 189 (DEL.)] (II) CCE, ALLAHABAD VS. GOVIND MILLS LIMITED -[201 3 (294) ELT 361 (ALL.)] (III) BASUDEV GARG VS. CC -- [2013 (294) ELT 353 (D EL.)] ITA NO. 845/AHD/16 [DCIT VS. M/S. SUPREME GLAZE PVT . LTD.) A.Y. 2007-08 - 5 - (IV) SWIBER OFFSHORE CONSTRUCTION PVT. LIMITED VS. COMMISSIONER, OF CUSTOMS, KANDLA -[2014(301) ELT 119(TRI.AHMD.)] 10.1 SECTION 9DOFTHE CENTRAL EXCISE ACT, 1944 IS RE PRODUCED BELOW:- 10.2 IN THE CASE OF J.K. CIGARETTES LIMITED VS. CCE (SUPRA), FOLLOWING CONCLUSIONS WERE DRAWN BY THE DELHI HIGH COURT, IN PARA 32:- 10.3 IN THE ADJUDICATING PROCEEDINGS, A LIST OF WIT NESSES TO BE RELIED UPON BY REVENUE IS DISCLOSED TO THE APPELLANTS ALONGWITH TH E SHOW CAUSE NOTICE. THE REASONS FOR RELYING UPON THE STATEMENTS ARE ALSO AVAILABLE FROM THE FACTS NARRATED IN THE SHOW CAUSE NOTICE. IT IS NOT NECESSARY THAT ALL THE WITNESSES SHOULD BE CALLED BY THE ADJUDICATING AUTHORITY SUO-MOTA FOR EXAMINATION IN A QUASI-JUDICIAL PROCEEDING FOR CROSS-EXAMINATION. HOWEVER, AS PER THE PROVISIO NS OF SECTION 9D(1)(B) OF THE CENTRAL EXCISE ACT, 1,944, READ WITH THE JUDICIAL P RONOUNCEMENTS RELIED UPON BY THE APPELLANT EVERY ADJUDICATING AUTHORITY SHOULD C ALL THE WITNESSES WHEN REQUESTED BY THE PARTY AGAINST WHOM THOSE STATEMENT S ARE TO BE USED. IF BY MAKING EFFORTS FOR A FEW OCCASIONS THE WITNESSES SUMMONED DO NOT APPEAR THAN AUTOMATICALLY THE CASE COULD BE MATURE FOR ACCEPTIN G THE STATEMENTS AS ADMISSIBLE EVIDENCES UNDER SECTION 9(D)(1)(A) OF THE CENTRAL E XCISE ACT, 1944. HOWEVER, IT WAS NOT OPEN TO THE ADJUDICATING AUTHORITIES TO STR AIGHTAWAY REJECT THE REQUEST FOR CROSS-EXAMINATION IN VIEW OF THE LAW LAID DOWN BY T HE JUDICIAL LAW LAID DOWN BY THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE APPE LLANTS. THE REASONS FOR REJECTING THE APPELLANT'S REQUEST FOR NOT ALLOWING ARE ALSO REQUIRED TO BE INTIMATED TO THE APPELLANTS AS PER THE CASE LAW OF J.K. CIGAR ETTES LIMITED (SUPRA) SO THAT APPELLANT MAY EXPLORE THE POSSIBILITY OF FILING APP EAL AGAINST SUCH REJECTIONS. THE RATIO LAID DOWN BY THE J.K. CIGARETTES CASE (SUPRA) HAS ALSO BEEN FOLLOWED IN SERIES OF OTHER JUDGMENTS. NO SUCH REJECTION ORDERS WERE G IVEN BY THE ADJUDICATING AUTHORITIES SEPARATELY. HON'BLE SUPREME COURT IN TH E CASE OF UOI & ANR. VS. GTC INDIA AND D-S IN ORDER DATED 03.01.1995 ARISING OUT OF SLP (C) NO. 218131/1994 HAS ALREADY LAID THE FOLLOWING RATIO: FURTHER IN PARA 16 AND 19 CASE LAW A. TAJUBEEN VS. UOI-[2015(317)ELT 177(SC)] APEX COURT RECENTLY HELD AS FOLLOWS ON ADMISSIBILIT Y OF STATEMENTS AND CROSS- EXAMINATION:- IN VIEW OF THE ABOVE, BY NOT ALLOWING THE CROSS-EXA MINATION OF THE RELIED UPON WITNESS UNDER SECTION 9D OF THE CENTRAL EXCISE ACT, 1944, THE EVIDENTIARY VALUE OF SUCH STATEMENTS DOES NOT SURVIVE AND IS RE QUIRED TO BE DISCARDED. WE ACCORDINGLY HOLD SO. 13. IT IS NOT THE CASE OF THE REVENUE THAT THE VALU E OF THE GOODS CLEARED BY THE APPELLANTS IS NOT DETERMINATE AT THE FACTORY GATE A ND THEREFORE, SOME OTHER METHOD UNDER THE CENTRAL EXCISE VALUATION RULES IS REQUIRE D TO BE ADOPTED TO ARRIVE AT THE ASSESSABLE VALUE. RATHER THE CASE OF THE REVENUE ON VALUATION IS THAT CERTAIN ADDITIONAL CONSIDERATION COMING TO THE APPELLANT BY WAY OF CASH FLOW FROM THE TILE MANUFACTURERS TO THE FRIT MANUFACTURERS IS REQUIRED TO BE ADDED TO THE ASSESSABLE VALUE. IN THE PRESENT CIRCUMSTANCES AND FACTUAL MAT RIX THE EXACT AMOUNT OF SUCH ADDITIONAL CONSIDERATION WAS REQUIRED TO BE DETERMI NED FOR ADDITION TO THE TRANSACTION VALUE EVEN IF ALL THE STATEMENTS AND DO CUMENTS WERE HELD TO BE ADMISSIBLE EVIDENCE AND SATISFIED THE TEST OF SECTI ON 9D OF THE CENTRAL EXCISE ACT, 1944. IN APPEAL NOS. E/L 1960/2013 AND E/L2386/2014 , THE VALUATION HAS BEEN ENHANCED SOLELY BASED ON THE ASSUMPTION THAT AFTER BOOKING OF THE CASE THESE APPELLANT ENHANCED THEIR PRICES. IN THE CASE OF TRA NSACTION VALUE REALM THE SAME PRODUCT CAN BE SOLD AT DIFFERENT PRICES AS PER SECT ION 4 OF THE CENTRAL EXCISE ACT, ITA NO. 845/AHD/16 [DCIT VS. M/S. SUPREME GLAZE PVT . LTD.) A.Y. 2007-08 - 6 - 1944 UNLESS ACTUAL ADDITIONAL CONSIDERATION HAS BEE N SHOWN TO HAVE FLOWN BACK TO THE APPELLANTS. APPELLANTS IN THESE APPEALS AND IN APPEAL NOS. E/13720/2014 AND E/534/2011 HAVE ALSO NOT ADMITTED DURING INVESTIGAT ION THAT THEY HAVE RECEIVED ANY ADDITIONAL CONSIDERATION. IN OTHER APPEALS ON T HE ISSUE OF UNDERVALUATION INVESTIGATION ATTEMPTED TO SHOW THE FLOW BACK OF SU CH ADDITIONAL CASH FLOW THROUGH THE STATEMENTS OF CERAMIC TILE MANUFACTURER AND THE STATEMENTS OF SHROFFS AND ANGADIAS. THE AMOUNT SO WORKED OUT HAS BEEN WORKED OUT TO BE RS. 38,95,860/- AS PER THE STATEMENT OF SHRI JAYESH PATEL, PROP. OF M/ S. KEVEL MENTIONED IN PARA 9.3.3 OF OIO DATED 23.03.2011 IN THE CASE OF M/S. B ELGIUM GLASS & CERAMICS. THIS STATEMENT CLEARLY CONVEYS THAT AMOUNT OF RS.38,95,8 60/- WAS PAID TO VARIOUS FRIT MANUFACTURERS AND AT THE SAME TIME MENTIONS THAT TH E NAMES OF THE FRIT MANUFACTURERS ARE NOT WRITTEN AGAINST EACH PAYMENT IN THE CONCERNED DOCUMENTS. UNDER THE ABOVE FACTUAL MATRIX APPELLANTS HAD THE R IGHT TO CROSS-EXAMINATION THE WITNESS ESPECIALLY SHROFFS AND ANGADIAS AS TO WHAT PORTION OF SUCH PAYMENT BELONGS TO A PARTICULAR APPELLANT. AS MENTIONED IN THE DEFINITION OF TRANSACTION VALUE IN PARA 11.1 ABOVE, ONLY ACTUAL PRICE PAID OR PAYABLE HAS TO BE ADDED TO THE TRANSACTION VALUE AND NOT A HYPOTHETICAL VALUE BASE D ON AVERAGING OF PRICES OR STANDARDIZING OF FRIT GRADES. AS ALREADY MENTIONED UNDER THE REALM OF TRANSACTION VALUE AS PER SECTION 4 EVEN THE SAME PRODUCE COULD BE SOLD AT DIFFERENT PRICES DEPENDING UPON SEVERAL MARKET FACTORS AND ALL THESE PRICES WILL BE ACCEPTABLE AS PERMISSIBLE TRANSACTION VALUE. PRESENT SECTION 4 DO ES NOT GO BY THE CONCEPT OF 'NORMAL PRICE' OF THE OLD SECTION 4 OF THE CENTRAL EXCISE ACT, 1 944. IN THE ABSENCE OF EXACT QUANTIFICATION OF CASH RECEIVED BY INDIVID UAL FRIT MANUFACTURER, TRANSACTION VALUE CAN NOT BE ENHANCED EVEN IF THERE ARE HALF COOKED CIRCUMSTANTIAL EVIDENCES TO THE PROCEEDINGS INDICATING SUSPECTED U NDERVALUATION. IT IS NOW WELL UNDERSTOOD THAT SUSPICION HOWSOEVER GRAVE CAN NOT T AKE THE PLACE OF AN EVIDENCE. THEREFORE, IT MAY NOT BE CORRECT TO HOLD THAT PREPO NDERANCE OF PROBABILITY SHOULD ALWAYS BE GIVEN TO THE REVENUE, AS HON'BLE APEX COU RT IN A PARTICULAR HELD IT TO BE SO. EACH CASE HAS TO BE DECIDED IN VIEW OF THE FACT S OF THAT CASE. IN VIEW OF THE ABOVE OBSERVATION AND THE LAW LAID DOWN BY THE APEX COURT IN THE CASE OF A. TAJUDEEN VS, UOI (SUPRA) PREPONDERANCE OF PROBABILI TY CAN NOT ALWAYS BE ALLOWED IN FAVOUR OF THE REVENUE WHEN THERE IS NO INDEPENDE NT CORROBORATION OF THE FACTS AND THE CASE IS MADE ON THE BASIS OF STATEMENTS WHI CH WERE NOT ALLOWED TO BE TESTED UNDER CROSS- EXAMINATION AS PER SECTION 9D ( 1)(B) OF THE CENTRAL EXCISE ACT, 1944. 14. IN VIEW OF THE REASONS RECORDED ABOVE, APPEALS FILE BY THE APPELLANTS MENTIONED IN PAR AS 5.1 AND 5.2 OF THIS ORDER, ARE ALLOWED WITH CONSEQUENTIAL RELIEFS, IF ANY. MISCELLANEOUS APPLICATIONS ARE ALS O DISPOSED OF ACCORDINGLY.' IT HAS BEEN NOTICED THAT THE AO HAS REJECTED THE BO OKS OF ACCOUNTS U/S.145(3) OF THE ACT MERELY ON THE BASIS OF THE FI NDINGS IN THE SHOW CAUSE NOTICE ISSUED BY THE DGCEI. NO INDEPENDENT DEFECTS OR DISC REPANCIES HAVE BEEN POINTED OUT FOR MAKING THE ADDITION. THUS THERE WAS NO CASE FOR INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT. SO ON THESE FACTS WHEN T HE ORIGINAL BASIS OF ADDITION I.E. THE SHOW CAUSE NOTICE ISSUED HAS BEEN DISMISSED/THE DEMAND OF EXCISE DUTY HAS BEEN NULLIFIED THEN THE BASIS ITSELF REMAINS NO MOR E TO UPHELD THE ADDITION ON ACCOUNT OF G,P. RATE MADE BY THE A.O. IN THIS CASE. THUS, THE ADDITION MADE BY THE A.O. ON ACCOUNT OF G.P. IS NOT SUSTAINABLE AND HENC E THE SAME IS DELETED . THE GROUND OF APPEAL IS ALLOWED. 3. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY C ONTENDS THAT THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING TH E IMPUGNED ADDITION. HE HOWEVER ITA NO. 845/AHD/16 [DCIT VS. M/S. SUPREME GLAZE PVT . LTD.) A.Y. 2007-08 - 7 - FAILS TO DISPUTE THE FACT THAT THE IMPUGNED RE-ASSE SSMENT EXERCISE IS BASED ON THE CENTRAL EXCISE DEPARTMENTS SHOW CAUSE NOTICE. IT HAS COME ON RECORD THAT THE ASSESSEE HAS ALREADY SUCCEEDED ON THE VERY ISSUE BE FORE THE CESTAT TRIBUNAL. THE IMPUGNED ADDITION THEREFORE HAS NO LEGS TO STAN D SINCE NOT BASED ON ANY INDEPENDENT EVIDENCE. THE CIT(A)S ABOVE EXTRACTED FINDINGS ARE ACCORDINGLY CONFIRMED. 4. THIS REVENUES APPEAL IS ACCORDINGLY DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 16 TH DAY OF MARCH, 2018.] SD/- SD/- ( AMARJIT SINGH ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 16/03/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0