TaxTMI 
TaxTMI 
2001 (5) TMI 569
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....Rule 173Q read with Section 11AC and sub rule 4 of Rule 57. A personal penalty of Rs. 5000/- on each of the individuals under Rule 209A of CE Rules has also been imposed. All these appeals are taken up together for decision as they arise from the same order. 2. Appellants Sunco Rubbers Pvt. Ltd. contend that officers visited their factory on 11-6-1992 and checked the accounts and stock of finished goods and other goods. They found shortage of 25 kgs. of tread rubber and they have given a chart of shortage of inputs in their appeal memo. They suspected that M/s. Jayton Polymers was created by appellants Sunco Rubbers to avail separately slab exemption under Notification 56/88, dated 1-3-1988 due to the following surmises :- (i) Shri Chandrasekhar, Chief Executive was also the proprietor of M/s. Jayton Polymers Pvt. Ltd. (ii) M/s. Jayton Polymers produced 65237.7 kgs of tread rubber by consuming 12067 units of electricity which was considered impossible. (iii) Sunco produced 29036.7 kgs in their factory but cleared under Jayton Polymers' invoices, a manipulation to avail over and above slab exemption. 3....
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....duction was 1300 kgs per shift as against 125 kgs per hour by Ramankutty; (vii) Statement of Shri Kalyanaraman that Sunco produced 29036.7 kgs of tread rubber and cleared in the name of Jayton Polymers is not voluntary and cannot be relied upon; and (viii) that only the charge of improper maintenance of accounts was accepted. 7. The appellants contend that the Commissioner in the impugned order has not passed a speaking order but has only confirmed the allegations made in the show cause notice. They contend that the ld. Commissioner could not state the valid reason to disbelieve job work done under Rule 57F(3) procedure as to how filing of 57F(3) challan does not help the assessee.........therefore, "the assessee's defence is nothing but afterthought (para 27 of O-in-O)." They further contend that the Commissioner wrongly maintained that M/s. Sunco should pay for suppressed production of 29036 kgs of tread rubber to the extent of Rs. 368902.38 and he did not mention about the duty paid by Jayton Polymers under their gate passes. They further contend that the Commissioner's disallowance of input credit of Rs. 204467.70 by Jayton Polymers on the ground that ....
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....ld not have manufactured and cleared Tread rubber to the extent of 65237.7 kgs. For this purpose, it is alleged that M/s. Jayton Polymers had produced only 36201.7 kgs of tread rubber and the balance of 29036.0 kgs of tread rubber was manufactured by M/s. Jayton Polymers. It is contended that in order to substantiate this allegation, the officers had recorded statements from various employees of both M/s. Sunco Rubber as well as Jayton Polymers. In his statement dated 19-6-1992, Shri Ramankutty, an employee of M/s. Jayton Polymers, at the time of detection of alleged offence has answered to a specific question whether it is possible to produce 67,387.70 kgs of tread rubber with electric consumption of 12,067 units by stating that he is not having proper knowledge of production with reference to consumption of electricity. In his statement dated 27-6-1992 Shri T.B. Muralidharan, Plant Manager of M/s. Sunco Rubber Ltd. has deposed that only 36201 kgs of tread rubber was produced at M/s. Jayton Polymers with an approximate consumption of 12067 units of electricity. But he had not deposed whether it is possible to produce that much quantity of tread rubber with a consumption so much un....
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....d, especially the 57F(3) challans cannot be rejected as afterthought. They contend that the order is not a speaking order as laid down in the judgments reported in Rasoi Vanaspati & Industries Ltd. v. Collector - 1983 (12) E.L.T. 169 (T). The statement of R. Kalyanaraman dated 27-6-1992, Ramankutty dated 19-6-1992, T.B. Muralidharan dated 27-6-1992 and Porchezhian dated 24-6-1992 are at variance and are not in terms of the records maintained by them. They have given various instances to show how the statements are in variance with the consumption and production records. They rely on the judgment rendered in the case of S. Mohanlal v. Commissioner - 1987 (29) E.L.T. 63 (T) to support their submission that the confessional statement was not voluntary. 10. They further contended that Jayton Polymers had not contravened Rule 57(I) in so far as the 42944.2 kgs of tread rubber and 22293.5 PCTR manufactured out of 66715 kgs of compounded rubber received and job work was done as per 57F(3) challans as per the statutory records. Therefore, the demands against them and imposing penalty is totally unjustified. They rely on the judgment of the Hindustan Steel Ltd. v. State of Orissa - 19....
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....pulated reasonable period, the production of records during the time of reply cannot be said to be belated and an afterthought. The entire finding is vitiated on this ground itself and it is clearly violative of principles of natural justice. When an adjudicating authority refuses to take the statutory records for considering the replies filed by the appellants and proceeds solely on his own basis and on the basis of the assumptions and presumptions, then such findings are unsustainable in law. The allegation was that Sunco Rubbers had manufactured the goods but utilised the invoices of Jayton Polymers to remain within the first slab of exemption Notification No. 56/88, dated 1-3-1988. If this was the allegation, then it is difficult to understand as to how there could be electricity consumption of an enormous extent in Jayton Polymers factory. The fact that they have received inputs from Sunco Rubbers is noted in the statutory registers. The Rule 57F(3) challans have been prepared by Jayton Polymers for returning the final goods. When that is the case and there is no allegation of clubbing of the units, then it was incumbent upon the Commissioner to have first examined the statuto....
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....ave to be given weight only thereafter. If there are any discrepancies and statements are in variance, then it loses its evidential value. The appellants should also be granted an opportunity to cross examine these persons as they have clearly asked for the same and the same have not been given as contended by the consultant during the course of arguments. Therefore, the Commissioner, as already observed by us supra, was not justified in rejecting the documents produced by Sunco Rubbers and Jayton Polymers to prove that Jayton Polymers had received inputs under cover of Rule 57F(3) challans and the final products have been sent back to them and it is correlatable. The best evidence is in the form of electricity consumption utilised by Jayton Polymers. When electric consumption is available, it is for the Commissioner to arrive at the conclusion as to how they could have been utilised for manufacture of final goods in M/s. Jayton Polymers. Ld. SDR vehemently argued that appellants had deposited the amounts without demur. This argument has been countered by the appellants by pointing out that it was deposited due to coercion and due to threats brought out by the investigating officer....