TaxTMI 
TaxTMI 
2009 (6) TMI 572
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....ing partner of ARM stated that these records pertain to M/s. Sai Metal Industries (SMI) situated in Gandhi Nagar. It was also noted by the Officers that Mr. Sanjeev Kumar Mishra of Sai Metal Industries was supposed to be the friend of the proprietor Shri Hameed Ali Lakhani of Lakhani Steels. 3. On the preliminary scrutiny of the records it was found that they contained details of the shift of raw materials, production of re-rolled products of iron and steel products and clearance of the same of Sai Metal Industries. On a follow up action conducted, the Officers searched the premises of Sai Metal Industries and their registered office and residential premises of the partner and resumed lots of records. On the scrutiny of the records, it was found that the re cords contained details of manufacturing and clearance of the iron and steel products without payment of duty. Further, statements of the suppliers of raw materials and the weigh bridge authorities and many other people were re corded. After the completion of the investigation it was found that the appellant Sai Metal Industries manufactured iron and steel re-rolled products in their factory during the May 1995 to November 19....
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....em to show cause as to why (a) An amount of Rs. 22,80,480/- (Rupees twenty two lakhs eighty thousand four hundred and eighty only) being the central excise duty payable on the finished goods of 1496.525 Mt. totally valued at Rs. 1,79,48,770/- manufactured and cleared during the period May, 1995 to November 1995 should not be paid by them under Rule 9(2) of Central Excise Rules, 1944 read with the proviso to sub-section (1) of Section 11A of the Central Excise Act, 1944. (b) Mandatory penalty equivalent to the duty amount mentioned above should not be imposed on them in terms of Section 11AC of the Central Excise Act, 1944. (c) Interest @ 20% per annum on the duty amount mentioned above should not be paid by them as envisaged in Section 11AB of the Central Excise Act, 1944, read with Notification No. 34/96-C.E. (N.T.) dated 9-10-96. (d) Penalties should not be imposed on them under Rules 9(2)52A(B), 173Q and 226 of the Central Excise Rules, 1944 for the contravention cited supra. The appellants herein resisted the show cause notice on many grounds. It was the submission of the appellant that the show cause notice is based upon the uncorroborated evidences and presumption....
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....he alleged private records were not examined during the investigation and no statements were recorded from such persons, no reliance can be placed on such private records to allege removal of final products without accounting and without payment of duty. Nor, the said persons were produced for cross examination. Therefore, the only basis for demanding and confirming the duty in the present case does not survive and hence the order confirming the demand is not sustainable. In this regard reliance is placed on the following Judgment (a) M/s. Opel Allays v. CCE reported in 2005 (182) E.L.T. 64 (Tri.-Del). (b) M/s. CCE v. MIs. Raman Ispat - 2000 (121) E.L.T. Page 46. (c) M/s. Dalmia Vinayls Pvt. Ltd v. Commr. C.Ex. reported in 2005 (192) E.L.T. Page 606 (Tri.-Bang). 2. Further it is well settled that the charge of clandestine removal based merely on private notebooks is not sustainable unless supported by corroborative evidence with regard to purchase of raw material, manufacture of final products, flow back of money etc. In the present case, the reliance placed on the statements recorded from the alleged suppliers from raw material and purchase of the final products is not....
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....his regard reliance is placed on the following decisions: (a)M/s. Ankaleshwar Paper Boards. v. CCE reported in 1996 (83) E.L.T. page 87 (b)CCE v. M/s. Dhanavilas Snuff Reported in 2003 (153) E.L.T. Page 437 (Tri.) (c) M/s. Meenambal Firewall v. CCE reported in 2002 (49) R.L.T. Page 832.(Tri.) (d) M/s. Ramashayama Papers Ltd. v. CCE reported in 2004 (168) E.L.T. Page 494. (Fri.) (e) M/s. Arsh Castings v. CCE reported in 1996 (81) E.L.T. page 276. 5. It is submitted that the Electricity Consumption during Jan. 1994 to April 1994 was taken as a basis for alleging the excess production during the disputed period Viz. May 1995 to Nov. 1995. It is well settled that the consumption of electricity would vary from time to time and mostly depend upon undisrupted power supply from the electricity board and the electricity consumption relating to past period can not be the relevant factor to allege excess production during the disputed period. During the disputed period, there was an acute power crisis and disrupted power supply of electricity, was in prevalence and due to the same, the consumption of electricity was higher than the normal consumption. In this regard, the app....
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....of (a) Kamdeep Marketing Pvt. Ltd. v. CCE, 2004 (165) E.L.T. 206 (Tri). (b) B.C. Sharma v. CCE, 2000 (122) E.L.T. 158 (Tri.) In view of the for going submissions, it is prayed that this Hon'ble Bench, at Bangalore may be pleased to allow the appeals with consequential relief and thus render justice." 7. As against the these submissions, the learned SDR appearing on behalf of the revenue would submit that the appellants arguments are incorrect. It is his submission that the lower authorities have gone into the details of the clearances made which were recorded in a private note books. It is his submission that non-granting of cross examination of the persons who maintained the records would not in any case help the appellants to argue that there was no clandestine removal. He would submit that the weigh bridge records and the statements of one of the persons who maintained the private records would indicate that there was systematic method of manufacturing and clearing the goods without payment of duty. It is also his submission that the learned Commissioner has gone into the details of the electricity consumption and also the procurement of raw materials from various so....
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....atements that the said note books belongs to their friend Mr. Sanjeev Mishra the proprietor/partner of Sai Metal Industries, appellants herein. It is on record that the said note book was maintained by S/Shri Poosaram Kukuna, Laluram Netar and Ashok Kumar Sharma. The main contention of the appellant that these people were not produced for the recording their. statements and hence the veracity of the entries made in the private notebooks is doubtful, cannot be the sole basis for demand of the duty. We note from paragraph 25. of the 010 that Shri Kedar Prasad Singh the purported proprietor of RG Trading Company in his statement dated 17-12-96 had stated that the Shri Sanjeev Kumar Mishra i.e proprietor and partner of Sai Metal was his nephew and that Shri Kedar Prasad Singh was working in Sai Metal Industries for some time. In his statement he has categorically Stated that S/Shri Poosaram Kukuna, Laluram Netar and Ashok Kumar Sharma were other supervisors working in Sai Metal Industries during the relevant time and they used to record daily production and dispatch particulars in small note books. It is seen that the appellant has not rebutted this important piece of evidence in the f....
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.... and confirmed the details of payments, received for weighing the consignments. The reconciliation of the weigh bridge records and the records maintained by the appellants for the statutory purposes and private records clearly indicated that all these record reconciled with each other that is to say, even the statutory clearances made by the appellants on payment of duty were getting correlated with the records maintained by the weigh bridge authorities and the clearances as recorded in the private records for which no statutory clearances or records were available, were also reconciled with the register maintained by the weight bridge authorities. In short, the total clearance made, recorded on a statutory record or otherwise were getting tallied with the records maintained by the weigh bridge authorities 9. As regards the electricity consumption, we find the adjudication has clearly brought out how the said electricity consumption was reconciled by them. We may reproduce the said findings. "Further evidence was unearthed from the recovered records in the form of the monthly electricity consumption and the electricity charges paid by Sai Metal Industries during the relevant ....
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....e records annexed to the show cause notice as Annexure 01,01, and 02 and the same clearly indicates the massive evasion of duty indulged by Sai Metal Industries, in fact Sai metal Industries has never made any attempt to counter/rebut statistical information and the evidences adduced by the Department to prove their case. In this connection, the Chartered Accountant's Certificate/findings dt. 10-12- 2003 submitted on 10-2-05 by Sai Metal Industries (along with the final reply) on the factors like efficiency of the machinery in his factory correlated with the electricity consumption and the reference to the purported power crisis prevalent in the State are nothing to do with the clandestine manufacture and removal of goods and it is nothing but an attempt by the assessee to misguide/hoodwink the clinching evidence available on record in this regard. Further it is not clear from the above certificate/findings dated 10-12-03 as to what was the machinery that got examined by the Chartered Engineer after a lapse of considerable time from the date of occurrence of the offence. Therefore, I do not find any merit in the contention of the noticee in placing reliance of their defence on the ....