TaxTMI 
TaxTMI 
2010 (4) TMI 943
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....stigation and documents recovered show cause notice was issued on 29-3-2004 proposing to deny Modvat credit of Rs. 67,51,495/-, availed by the appellant during the period from May 1999 to April 2001 in respect of wire rods and wire bars on the allegations that the appellant had only received the invoices without the actual receipt of the inputs. Notice also proposed to confirm demand of duty of Rs. 10,96,768/- on the extrusions alleged to be clandestinely removed during the period April 1999, June & July 1999. Duty of Rs. 9,48,135/- was sought to be confirmed in respect of aluminium ingots allegedly removed clandestinely during the period May 2002 to July 2002. The said show cause notice culminated into the impugned order passed by the Commissioner confirming demands and imposing penalties on the manufacturing unit as also on Shri P.N. Shah, partner of the appellant firm. 2. We have heard Shri B.L. Narsimhan, learned advocate, appearing for the appellant and Shri S.K. Mall, learned S.D.R., appearing for the Revenue. 3. The first issue is demand of Rs. 67,51,495/- being the Cenvat credit availed on aluminium wire rods and wire bars. 3.1 The first submissio....
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....the two statements is more than one year. The statement given by Shri Patel has not been retracted till date. The General Manager has stated that they have received aluminium wire rods. It is also to be noted that Shri Urjit Patel being the melting in-charge has to be in the factory all the time unlike the General Manager who may not have to be present all the time. Further, the partner of the firm Shri Pravin Nagindas Shah whose statement was recorded on 3-12-2003 which is more than nearly five months after the statement of Shri Patel has stated that the statement is correct and has not denied. He also says that he was closely monitoring all day to day matters from head office. He was also shown the statements recorded from Shri Urjit Patel, melting in-charge. Shri Shah did not deny or contradict any of the submissions made by Shri Urjit Patel in his statement. Thus we have a situation where the partner of the firm and the melting in-charge who was in the factory for six years have stated that the wire rods have not been received in the factory at all and appellants would like to submit that both these statements are not to be relied upon. The defence given by the appellants is th....
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....ium waste and scrap and ingots/billets manufactured there from are not of good quality and to ensure quality of extrusions, they have used wire rods/bars. This leads to several questions and unfortunately neither the investigation officers nor the Commissioner have tried to answer and naturally the appellants would not be interested in finding the answer. The appellants have given the production figures for the financial year 1999-2000 which is reproduced below : "Financial Year 1999-2000 (A) (B) Inputs received & on which credit availed Kg. Kg. (1) Wire rods, wire bars 373752 0 (2) Others 447843 447843 (1+2) TOTAL 821595 447843 Production of finished extrusion entered in RG-1 register 561542 561542" 3.4 It is their contention that if wire rods and wire bars were not received, the production of finished extrusion of 5,61,542 Kgs could not have been possible since after excluding wire rods and bars, the raw-material quantity would come to only 4,47,843 Kgs. The question they ask is how is it possible to produce 5,61,542 Kgs out of 4,47,843 Kgs of raw-materials. Unfort....
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....Rs. 75/- per Kg and rates of extrusion as Rs. 80/- to 94/-, nowhere they have indicated the price of the other raw-materials used by them. Further, it is quite well known that ingots billets are available in the market and these are the products which are melted to get extrusions. In this case the appellants mix wire rods/bars with other products and produced billets for the manufacture of extrusions. The Commissioner's observation that the appellants have shown excessive waste is definitely true since no manufacturer of metals can afford to have 32% waste which is the figure that comes out from the reply submitted by the appellants. Unfortunately this data was not given to investigating officers nor the Commissioner but has come before us and prima facie there is something seriously wrong with the figures given as regards raw-material consumption and extrusion quantity produced. While the appellants claimed that 5,61,542 Kgs of final product could not have been manufactured from 4,47,843 Kgs appears to be correct, at the same time the claim of the appellants that they manufactured only 5,61,542 Kgs out of raw-material of 8,21,595 Kgs also appears to be incorrect. Another fact that....
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....roduce evidence in the form of truck numbers, lorry receipts, weighment slips and gate receipts (if the appellants maintained such records in the factory gate) to show that aluminium wire rods/bars have been actually received by them. Only when such positive evidence is produced by them, Revenue would be required to produce further evidence or show that the defence putforth is not acceptable for valid reasons. Except denying what has been stated in the show cause notice, appellants have not led any positive evidence which is possible in this case to show that they have actually received aluminium wire rods/bars. Further we find support to this view in the decision of Hon'ble Supreme Court in the case of Systems & Components Pvt. Ltd. reported in 2004 (165) E.L.T. 165 (S.C.) wherein it was held that what is admitted need not be proved. In this case we have the admission statements of Shri U.P. Patel & Shri P.N. Shah. It was also submitted by the learned advocate that Shri P.N. Shah never admitted non receipt of wire rods and excess production. According to him Shri P.N. Shah's statement "I have carefully through the contents of both the statements of Shri U.P. Patel alongwith its....
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....bsp; Actual production as per notice 51179 62212 63402 Less : (1) Production recorded in RG-1 register 19473 46014 36178 (2) Production recorded in job work register 2360 1508 3209 (3) Packing scrap mentioned in the handwritten document relied upon by the notice 7603 7930 4721 (4) Subsequent month's production 9075 5303 10576 Balance 1 2668 1457 8718 4.3 We have analyzed the three monthly statements in detail but give the analysis in respect of July, 99 since all the three statements are in the same format and contain same details. 4.4 July Statement : This statement is found in page 15-18 of the file A/32. This is a statement which shows the actual production of billets. In this statement there are columns for date, ingots, aluminium scrap, metal scrap, L.E.+P. outs, Mg, LM-6, total charged metal and finished goods (billets). All the columns from ingots to charging metal are totaled to arrive at the ....
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....e furnace to the final output packed after manufacture of extrusions. It also gives the efficiency of the extrusion press, the total breakdown time and the scrap which has arisen at different stages. It cannot be the case of the appellants that after the packing scrap has been accounted extrusions have been rejected. 4.5 Similar is the statement in respect of June 1999 also. Even though it is not relevant, we cannot prevent ourselves from making the observation that the very fact that the departmental officers could recover such statements only for three months goes to show that the appellants do not keep this record on a regular basis because they do not account for the full quantity as reflected in these statements in the RG-1 register. Shri Urjit Patel, melting in-charge has clearly stated that this statement is handed over to the excise clerk and sent to the head office and he has no idea whatsoever as to how much has been accounted for. 4.6 The quality of the statements which has already been discussed above clearly shows that this is not a statement prepared by an ordinary contract worker but by a professional who, had control over the whole activity of extrus....
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....ent is that the production of aluminium ingots has been found mentioned in three note books marked as A/12, A/13 and A/14 recovered from the factory premises of the assessee firm and the statements of Shri U.P. Patel melting in-charge and the statement of Shri P.N. Shah partner. Shri P.N. Shah and Shri U.P. Patel had explained that since their extrusion press was not working for the past two years, they had produced aluminium ingots on job work basis for Pankaj Extrusion Ltd. However, on verification with Shri K.B. Chowdhary of Ekta Road Carriers it was found that all the consignments which were marked as "A" in their records were not actually transported but only fake LRs was issued for a commission. Shri K.B. Chowdhary also admitted that he had received payment for transportation by cheque but had refunded the amount after retaining his commission. Admittedly in respect of quantity not carried by Ekta Road Carriers, no physical movement of goods took place and only transport documents were prepared. Thus we find that the demand is based on the production records maintained at Shri U.P. Patel, the statement of Shri K.B. Chowdhary of Ekta Road Carriers and the statement of partner ....
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....i K.B. Chowdhary is corroborated by his own registers maintained and the very fact that he has explained the meaning of the code letter "A" shows that the statement is fully corroborated. The statement of Shri K.B. Chowdhary has been shown to the partner also. We do not know what more corroboration would be required by the appellants. Once again the onus of proving that they have accounted for all the goods produced, shifts to the appellants and they have failed to discharge this burden. They want the department to show challanwise details of goods transported or not transported. There are several decisions of Hon'ble Supreme Court and High Courts wherein it has been held that in such clandestine activities, only the person who indulges in such activities knows all the details and it would not be possible for any investigating officer to unearth all the evidences required and prove with mathematical precision, the evasion or the other illegal activities, in this connection we find that decision of Hon'ble Supreme Court in the case of Systems & Components Pvt. Ltd. cited by the learned DR relevant and we derive support from the observation of Apex Court. Therefore we have to hold th....
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....e had filed a miscellaneous application for early hearing which was allowed vide Order No. M389/WZB /06/C-II, dated 3-3-2006 and the appeal was fixed for final disposal on 17-4-2006 in the order itself. Thereafter the case was adjourned with a remark "no notice" on 11 occasions, which means that an oral request was made to the Bench for adjournment by the advocates. Totally the case was listed on 27 occasions for hearing before the Tribunal. It can be seen that from the date early hearing was allowed to the date of completion of final hearing two and a half years elapsed. The impugned order against the appellants was passed on 9-11-2004 and it has taken more than five years for the decision on the appeal. 8.1 Section 35C of the Act provides that no adjournment shall be granted more than three times to a party during hearing of the appeal. The advocates are considered to be officers of the court and have obligation to promote justice and effective operation of the judicial system. They are required to assist the court in implementation of the law. The Tribunal generally does not look into the number of adjournments sought and whenever adjournment is sought the request is acc....