[Order per : K. Prakash Anand, Member (T)]. - In this matter, the facts which survive for our consideration are that when the Central Excise Officers visited the appellant’s factory on 5th October, 1979, they found that the manufacturer was concurrently preparing and issuing two sets of invoices for his goods, some handwritten and some typed. Some of the invoices in one set were in disagreement with corresponding ones of the other set in respect of identity of buyers, quantity and value of the goods etc. It was observed that the total value of clearances of the goods during the period in question amounted to Rs. 4.95 lakhs, so far as the accountal in the excise record went. However, it appeared that the appellants had also manufactured and separately cleared goods of a further value of Rs. 1.60 lakhs during the same period. The total production, therefore, valued over Rs. 5 lakhs disentitling the appellants from exemption from duty being availed of by them under Notifcation No. 71/78, dated 1-3-1978, which was admissible only to manufacturers whose production was within the ceiling of Rs. 5 lakhs in value. It is further alleged that the appellants charged and recovered higher prices than those approved by the department.

2.  Shri kamal M.Mehta, advocate appears on behalf of the appellants. In the course of his arguments, the learned advocate had sought to rely on a certain judgment of the Supreme Court. He had sought time to furnish a copy of the same, which was allowed. Apart from this, he was also asked to file a copy of the memorandum of appeal of the appellant before the Central Board of Excise and Customs. While filing these documents, we observe that the learned advocate has also sought to file in writing the submissions that he made in the course of the hearing before us. These so called written submissions contain points which were not made before us.  No permission was sought or granted for filing these written submissions and no application has been made for filing any additional ground of appeal. Therefore, these written submissions, together with the new points sought to be made are disallowed by us.

3. The learned advocate has submitted that the department has no case at all so far as the parallel set of invoices is concerned. It is submitted that apart from the correct invoices, appellants prepared a set of invoices with lower values in order to save on the octroi duty payable to the Ahmedabad Municipal Corporation. It is pointed out that the department has no evidence whatsoever that there were any goods additionally manufactured and cleared other than those accounted for in the Central Excise records. It is pointed out that in the course of investigation, a number of parties were contacted by the department, but they all denied receipt oof any goods under the cover of parallel invoices.

4. It is also submitted for our information that on the same charges, the Chief Judicial Magistrate, Ahmedabad (Rural) has held the appellants innocent and relieved.

5. In so far as the allegation regarding differences in value of goods is concerned, it is submitted on behalf of the appellants that the difference in value is on account of the secondary packing of the products, which is undertaken only at the request of the customers. The cost of such packing is separately charged and, therefore, is not treated as part of the assessable value. It is submitted that as per Trade Advice 5/68, dated 14th Aug., 1968, the Central Board of Excise & Customs has directed that Latex Foam Sponge should be assessed to duty without cover.

6.  The learned advocate has cited the decision of the Gujarat High Court in the case of Navgujarat Paper Industries v. Superintendent of Central Excise & Others, 1977 E.L.T. (J67), in which it was held that even if Trade Notice amounts to not more than executive instructions, it would be binding on the department and that the department would be estopped from contending that what was mentioned in the Trade Notice should not be adhered to.

7. Further, Shri Mehta submits that the entire case of the department is based on surmises as there is no evidence whatsoever of there actually being any unaccounted for production or clandestine removal. No such goods have been located nor their journey from the stage of production to the destination has been traced. In this connection, appellants have cited the decision of the Supreme Court of India in the case of Oudh Sugar Mills Ltd. v. Union of India, 1978 E.L.T. (J172) and stated that in such circumstances, the department cannot, in the absence of any tangible evidence, based its demand of duty on inferences involving unwarranted assumptions.

8. Finally, it is submitted before us that even if there are some errors in the maintenance of accounts, the penalty imposed is wholly disproportionate and merits being substantially reduced if not set aside altogether. In this connection, appellants have cited the decision of the Supreme Court in the case of Hindustan Steels Ltd., AIR 1970 S.C. 235.

9.  Responding, Shri K.C. Sachar refers to Section 36A of the Central Excises & Salt Act, 1944 and points out that where any document is seized from the custody of any person, and such document is tendered by the prosecution in evidence against him, the court shall, unless the contrary is proved by such person, presume the truth of the contents of such document. Shri Sachar states that in this matter, the burden of proof is on the appellants to establish that the charges are without basis. This burden, they have not been able to discharge. There is no reason to believe that the so called parallel invoices are not genuine invoices. Referring to the acquittal by the Chief Judicial Magistrate, it is submitted that acquittal in criminal proceedings does not bind the Tribunal. So far as the argument related to the differences in value on account of packing is concerned, it is submitted that the packing in this case is to be considered as primary and essential and, therefore, it is ought to be included in the assessable value.

10.  We have carefully considered the facts of the case and the submissions made before us. So far as the charge of non-accountal and surreptitious removal of excisable goods without payment of duty is concerned, this is based entirely on a set of invoices seized by the Department. This set is other than the one which covered the actual sale of the goods accounted for. The lower authorities have come to the conclusion that these invoices are genuine invoices and that since they do not cover the transactions which are on record, they should be covering transactions in respect of other goods which are not accounted for. The appellants have explained that these are parallel invoices only meant to obtain the benefit of lower assessment from the octroi authorities. It is also submitted that by and large, the parties and the quantities of the goods mentioned in the two sets of invoices were the same. The learned Collector has not accepted this argument. He has noted that the manufacturer has not denied that the invoices are his and that he has not been able to show how he found the octroi duty exhorbitant and whether it was worthwhile for him to resort to the stratagem of issuing second set of invoices. Furthermore, the Collector has also observed that there differences in the two sets of the invoices which are not explained. The learned Collector has also noted that the dealers, who are named in the invoices, as having received the goods have denied receiving them, but he has held that it is not the case of the department that the goods covered by the listed invoices were in fact, supplied to the same dealers who had been named. In view of this, the Collector has held that the invoices in question represent different goods clandestinely manufactured and cleared without payment of duty. At the appeal stage also, the plea of the appellants has not been accepted but on the ground that merely because the consignee has given a statement that they have not received the goods, it cannot be said that the invoices themselves ceased to exist. It was concluded that the modus operandi followed “suggests” multiple clearances against single excise gate-pass to keep the production within the exemption limit. Before us, the learned Departmental Representative has referred to Section 36A of the Central Excises & Salt Act to make the point that where a document has been seized from any person and is tendered by the prosecution in evidence against him, then the court shall, unless the contrary proved by such person, presume the truth of the contents of such document. The facts before us, however, are that the appellants are not denying that the documents are theirs. In other words, there is no dispute so far as the ‘truth’ of those documents is concerned. The only point for us to decide is whether the department is correct in concluding that the invoices in question cover goods other than those accounted for by the manufacturer. For taking a view in the matter, it is necessary for us to go into the question whether there are any relative documents or any other evidence to support the view of the department that the goods represented by the set of invoices in question were unaccounted for an surreptitiously removed without payment of duty. The dealers who are named in the invoices have denied receipt of the goods. There is no trace of the goods, nor any evidence that they were actually transported to and received by these dealers. The learned Collector states that it is not the department’s case that the goods have gone to the dealers named. On the other hand, the Central Board of Excise & Customs has taken a different view and concluded that the modus operandi suggested multiple clearances against single excise gate-passes, obviously to the same dealers. There is no evidence on record to justify these different conclusions by the original and appellate authority. We are inclined to the view that either there were inadequate follow up investigations on the so called duplicate set of invoices seized by the department or that, if such investigations were conducted, they did not make any headway. The fact, however, remains that there are a set of invoices which the manufacturer has said, are meant only for show to the octroi authorities. There is no evidence that the department has made any attempt to check with the octroi authorities whether the payments of the appellants have been as per those invoices. These invoices have not got linked or related to any other documents which would establish the existence of any goods other than those accounted for. We cannot, therefore, comprehend how the department’s charges of clandestine production and removal and clearance without payment of duty can be established. It can, at best be only an idea in the realm of possibility, but on that basis, the appellants cannot be penalized or asked to pay duty in respect of such goods. In this respect, the ratio of the decision of the Supreme Court in the case of Oudh Sugar Mills Ltd. (supra) would certainly apply and the benefit of doubt has to go to the appellants.

11. Coming to the second issue relating to higher prices charged by the manufacturers and dealers in some cases, we find that the appellants’ plea against their liability to pay duty in respect of the value of such packing has not been considered or decided in the order of the Board. So far as the Collector is concerned, he has held that in terms of the appellant’s own submissions, the goods would be damaged if they were not to have the protective cover and, therefore, the cost of such packing should rightly form part of the assessable value. The learned Departmental Representative has stated that the Collector’s conclusion in this regard appears not to have been challenged before the Board. This is because, at the time of the hearing of the appeal by us the appellants had not filed a copy of their memorandum of appeal before the Central Board of Excise & Customs. In accordance with the directions of the Bench, this was done immediately after the hearing and we find that appellants had challenged the findings of the Collector in this regard. The issue, however, remained undecided at the Board’s level. Now, before us, the appellants have cited the Central Board of Excise & Customs letter No. Rubber-5/68, dated 14-8-1968, according to which, instructions had been issued that Latex Foam Sponze should be assessed without cover. The learned Departmental Representative has not disputed or denied the existence of such instructions. What is more, we are unable to accept that the kind of covering, which is provided by the appellants can be considered of such a nature as to form an essential part of the manufactured product. Appellants have contended before us that such packing was optional. This again has not been disputed us by the Departmental Representative. In view of these facts, the charge that the appellants collected a higher price than approved by the department and were, therefore, liable to pay duty on the difference must also fail.

12. In view of the above findings, there is no justification for the penalty of Rs. 20,000/-, which also has to be set aside.

13. Appeal allowed with consequential relief to the appellant.