TaxTMI 
TaxTMI 
2014 (3) TMI 201
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....ishnu & Company Pvt. Ltd. (hereinafter referred to as 'VCPL') are engaged in the manufacture of 'Vimal' brand gutka and zarda. The said final products manufactured by them were being cleared and transported through various transporters, i.e. M/s. GG Carriers; Delhi Indore Transport Company; M/s. Gopi Road Lines; M/s. Harsh Transport and M/s. Singhal Transport Co. Ltd. Based upon certain information, the revenue officers visited the premises of the said transporters on 5.7.2003 and conducted various checks and verifications. Certain consignments of 'Vimal' brand gutka were recovered from the premises of the said transporters, leading the officers to entertain a belief that the said goods were manufactured by Vishnu & Company and had been cleared by them without payment of duty. Accordingly, statements of various authorized representatives of the transporters were recorded. Inasmuch as the Revenues case is mainly based upon the evidences collected at the transporter's end, we deem it fit to deal with such evidences recovered from each and every transporter, separately. 3. GG Carriers 3.1 It is seen that there was no seizure of any goods from the premises of the said transporter....
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....sh as his job was to look after the maintenance of the trucks. It is seen that though Shri Harjinder Singh in his statement described himself to be Marketing Executive of the transporter, in subsequent paragraph he clarified that his job was to maintain the trucks. When he was shown the relevant pages of the vehicles movement note book and specific question was put to him, he clarified that though the goods transported were pan masala and zarda, they were wrongly mentioning the same as sweet supari and khand. 3.3 Based upon the information retrieved from the seized documents from the premises of GG Carriers, the Revenue officers decoded some of the abbreviations mentioned in the seized records and carried out further investigations. The GRKmentioned in the seized book showing summary of the transportation of the goods was decoded by the officers as Gobind Ram, Kota. As Gobind Ram was one of the admitted buyers of the gutka from M/s.Vishnu & Company, the investigations were conducted at his end and the statement of Shri Leela Ram Makhija, Proprietor of Gobind Ram, Kota was recorded on 16.07.2003. In his statement, Shri Leela Ram Makhija deposed that the abbreviation GRKdoes not b....
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....eviation GRK and GOB, mentioned against such transportation related to M/s. Gobind Ram, Kota and Gobind Store, Jaipur respectively. Accordingly, the records of Vishnu & Company were also scrutinized and it was found that there are no corresponding entries of clearance of pan masala or gutka in the statutory records of Vishnu & Company. Based upon the same, the demand of central excise duty of Rs.6,72,30,900/- on 20373 bags was believed to have been evaded by the said manufacturer. 4. M/s. Gopi Road Lines 4.1 Premises of the said transport company was put to search on 5.7.2003. There was no seizure of the goods lying at their premises. However, various documents including challan books were recovered. Statement of one Shri Sushil Kumar, Commission Agent, was recorded wherein he deposed that he books for several transport companies including Gopi Road Lines for the transportation of Vimal brand gutka for the area of Jalgaon. He further clarified that no employee of M/s. Vishnu & Company comes to the transport office and the goods usually come in rickshaw accompanied with bills of different companies but they know it is only Vimal brand gutka and no GRs are prepared in the name ....
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.... Singh was shown to Shri H. Sunder, Director of Vishnu & Company and he agreed with the same. 5.4 As a result of the above investigation, the premises of M/s.Gupta Chemicals Works, who was shown as the consignor of the goods in the GRs recovered from the premises of the said transporter were also visited by the officers and put to search. He was found to be dealing in various tobacco products. However, no seizure of any goods was made from his premises and no statement of the proprietor of Gupta Chemicals was recorded. He was also not questioned about the said GRs wherein he was shown as the consignor. 5.5 Statement of driver of the truck HR 38 D-4117 was also recorded, wherein he admitted having loaded 40 bags of Vimal brand gutka in the truck, which were seized by the officers. Statement of Mohd. Ilias, Driver of the Tata 407 Truck no.DL1L/A6232 was recorded wherein he stated that everyday he made 2 to 3 trucks with 40 bags from the factory of VCPL to the Transport Company. Shri Yogesh Sharma, godown In charge of M/s. Singhal Transport in his statement stated that he mainly receives Vimal gutka for transportation through trucks DL 1L/A6232; DL 12/E 0591, 9891 & 3707. 5.6....
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....herein he revealed that they had been booking vimal brand gutka brought to their transport company by one Mr. Dubey, who used to bring sale bills in the name of different companies. He also, in his subsequent statement recorded on 26.08.2003, clarified that they started booking vimal brand gutka from April, 2002 onwards. 6.3 Further statement of Shri Kamal Panjwani, partner of transport company was recorded on 7.7.2003, wherein he deposed that 9 bags of vimal brand gutka seized from Bhopal office on 7.7.2003 were covered under the invoice of M/s. Sudha Sales Agency and the GRs issued by their Delhi office in the said name only. He also submitted that though these bags were booked for delivery at Amravati, the same were actually to be delivered at Chindwara through their delivery agent M/s. Indian Goods Transport Company. 6.4 Statement of Shri Lokesh Jain, Proprietor of M/s. Indian Transport, Chindwara was recorded on 17.11.2003 wherein he stated that all the Vimal Brand Gutka received from Harsh Transport and booked under various names was actually delivered to M/s.Santosh Tobacco. The investigations could not be conducted at the end of M/s.Santosh Tobacco as he failed to cau....
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....idences, allegation of clearance of 8406 bags involving duty of Rs.2,77,39,800/- was made against the manufacturing company. 8. Based upon the above investigation at the end of the transporters, Revenue further conducted investigations at various ends including the manufacturing unit premises, raw material supplierspremises, packing material supplierspremises. Visit of the officers in the premises of M/s.Vishnu & Company revealed that they were not maintaining any records in respect of all the raw materials. However, the records in respect of the main inputs i.e. supari and raw tobacco were being maintained by them as also in respect of the final products so manufactured. The verification of the same revealed that there was excess of supari in as much as quantum recorded in the statutory records was less. The same were put under seizure along with the seizure of other raw materials found in the factory as no records were being maintained by the said assessee. The statements of Shri H. Sunder, Director of the manufacturing unit were recorded on six different dates. It seems that all the six statements are exculpatory except the first statement where he agreed with the statement o....
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....re used for transporting Vishnu brand gutka from the factory at Rama Road to various transport companies and railways stations. The said transportations of the gutka is made as per instructions received from the supervisor of the company on phone. He further submitted that the bills are given by the company only when the goods are to be transported through Jaipur Golden Transport or Prakash Road Lines and wherever the goods are to be transported without the cover of bills, it is always the other transport companies and the goods are usually lifted from the factory between 6 p.m. and 7 a.m. 9. Revenue also conducted investigation at the end of the packing material suppliers. It is seen that during the period 1.4.2003 to 5.7.2003, M/s. Vishnu & Company purchased 11,500 jute bags from M/s. Shyam Jute Industries as per information available from the files maintained by them. However, the manufacturing unit has shown the production of 5087 bags of production of final product during the relevant period. The Revenue entertained a view that as there was no accountal of 6143 bags, the same must have been consumed for packing and clearance of gutka cleared clandestinely. 10. It was fur....
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....ated some percentage use of various raw materials required for manufacture of gutka/pan masala. On comparison of the same with the VCPLs declaration regarding percentage of various raw materials like supari, tobacco, katha, menthol in the VIMAL brand gutka, it was alleged that the appellant over-stated the consumption of certain goods like supari, tobacco and menthol and such differential excess use, as reflected in the records, was for the purpose of manufacture of excess final product, which was ultimately cleared by them without payment of duty. 12.1 Apart from the above, Revenue also conducted the searches at various dealerspremises and seized the goods of Vimal brand gutka on the belief that the same were cleared by manufacturers clandestinely. 13. On the above basis, proceedings were initiated against the appellant by way of issuance of show cause notice dated 24.12.2003 proposing confirmation of demand of duty of Rs.12,85,58,100/- alongwith interest under Section 11 AB against M/s. Vishnu & Company along with imposition of penalty on VCPL and other noticees. The said show cause notice resulted in passing of the impugned order-in-original no.141/2005 dated 9.6.2005, by ....
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....t evidence. Referring to the documents recovered from the GG Carrier Transporters, ld. Advocate draws our attention to annexure D-17 of the show cause notice. Scrutiny of the same reveals that there is some numbers e.g. 18605 shown in the said register along with another no.40 and some code i.e. GRK. According to the Revenue, 18605 refers to the GRs nos. and 40 refers to the no. of jute bags whereas GRK is the code of their buyer which according to the Revenue is M/s. Gobind Ram, Kota. She submits that investigations were conducted at the level of Gobind Ram, Kota wherein the proprietor of the said dealer denied GRK being their code and very clearly stated that the said code - GRKdoes not belong to him. As such, it is the submission of the ld. Advocate that the entire case of the Revenue falls on this ground itself. 17. As regards the statement of Shri Harjinder Singh, employee of GG Carriers strongly relied upon by the Revenue, she submits that though the initial portion of the said statement refers Shri Harjinder Singh as the Marketing Executive of the transporter company but on being asked, he has clearly deposed that he was engaged in the maintenance of the trucks. As such, ....
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....e relevant period, M/s.VCPL was not engaged in the manufacture of pan masala. This fact by itself leads to the inevitable conclusion that no clearance was ever effected by the manufacturing unit without payment of duty. 21. As regards the documents seized from the premises of M/s. Singhal Transport Company, she submits that the Revenue has relied upon the statements of Shri Yogesh Sharma, the truck driver, Shri Sita Ram, as also Mohd. Ilyas, Kayum Khan, Paramjit Singh Kakkar owner of the transport company. She submits that whereas the deponents of statements of i.e. Shri Yogesh Sharma, Mohd. Ilyas, Shri Kayum Khan and Shri Sita Ram were not offered for cross examination so as to test the veracity of their statements, Shri Paramjit Singh Kakkar was produced for cross-examination. During cross examination, he revealed that the goods are always received in plain gunny bags without any markings and that they never opened the bags. He also disclosed that the payments for the transportation were never made by VCPL, who did not book the gutka consignments. It is always the person, who used to accompany the goods, who would make cash payment for transportation of the goods. As such, she....
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....ion to the result of cross-examination of Shri Ravi Bhandari, wherein he deposed that their transport company goes by the name of the consignor and not by the brand name and inasmuch as the invoices issued by them did not mention VIMAL brand, it cannot be said that same were in respect of the gutka manufactured by M/s.Vishnu & Company. Shri Ravi Bhandari also clarified that he has seen Shri Dubey, who used to bring the goods to his transport office only once and most of the time, he used to talk to him on phone. Further, our attention stands drawn to the cross examination of Kamal Panjwani, Partner of M/s.Harsh Transport Services, wherein he deposed that he never opened the bags and does not know whether the same contained the brand name of VIMAL. On examination by the Department, he submitted that his statement was written by Departmental Officers and only the last paragraph was written by him in English. Similarly, our attention stands drawn to the affidavit of Shri L. Jain, Proprietor of Indian Goods Transport, wherein he swore that he has no knowledge of the brand name of gutka inasmuch as the brand names were never written on the gunny bags and he was forced to write in his st....
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....endered an affidavit to the effect that he never knew the brand name of gutka as there was no method of knowing the same when the goods are received duly packed in gunny bags, which were not carrying any markings. 27. As regards the documents recovered from Delhi Indore Transport Company, she submits that loading register relied upon by the Revenue does not even mention the goods by name, and the Revenue has wrongly presumed that all such loading of the goods was in respect of the gutka. She submits that the Revenues contention that V/40/1200 refers to Vimal brand goods in 40 bags and 1200 is the total weight of the consignment as 1 bag consists of 300 bags is believed itself from the same page where the weight of the goods is written as 2300 kgs. As such, the same arguments in respect of the other transport units, stands reiterated. 28. In view of the foregoing, she submits that inasmuch as the entire case of the Revenue is based on the recovery of the documents from the transporters premises, which documents are not even clear, either in respect of the goods loaded in the transporters truck or in respect of the brand name or in respect of the manufacturer, reliance on the s....
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....clarified by Shri Dubey. In any case, she submits that Shri Dubey had subsequently filed an affidavit showing that he was getting some of the consignments booked from the transporters, at the request of the buyers of gutka at factory gate and this was done by him in his personal capacity. In any case, she submits that though the Commissioner has given a finding that all the transporters have taken his name but the facts remain that it is only two transporters i.e. Delhi/Indore Transport Company and Harsh Transport Company, which have named Shri Dubey as the person, who used to come with the consignments. She further submits that if according to the Revenue, Shri Dubey was involved with the illegal clearance, booking of the consignments and transportation of the same, he should have been issued a show cause notice for aiding and abetting M/s. Vishnu & Company. However, show cause notice never proposed any action against Shri Dubey for the reasons best known to the Revenue. 29. Ld. Advocate, Ms. Seema Jain, further by referring to the various statements of Managing Director or of the employees of Vishnu & Company submits that all the said statements are exculpatory except one stat....
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.... to Vishnu & Company. She submits that in the said gate register, the truck nos. are also mentioned and as such, it was possible for the Revenue to conduct investigations at the end of the truck owners/drivers so as to find out as to whether the said canvass bags were delivered to the appellants factory or not. No such investigation was conducted and as such, no reliance can be placed on the same. In any case, she submits that there were many spurious manufacturer, who were also engaged in manufacturing of Vimal brand gutka and were clearing using the brandname VIMAL. She draws our attention to a FIR dated 17.06.2002 lodged with the Police at Gwalior complaining about some other small manufacturers, manufacturing goods under their brand name and as a result of FIR lodged by VCPL, 480 bags of spurious VIMAL brand gutka manufactured by such spurious small manufacturers were also recovered from such manufacturers. She strongly contends that the said FIR was admittedly filed before the search of the transporters units and before the start of the investigations against the appellant. As such, they cannot be accused of creating a false defence. 31. By strongly relying upon the said FI....
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....ased upon the said packing machines is only hypothetical and theoretical and is not based upon the actual working of installed machines. The same is based upon the statement of other manufacturer, who might be dealing with different kind of machines or with different models. She clarifies that the production per machine is dependent upon a number of factors. On being questioned, she clarifies that the declaration about the number of installed machines was being made by the appellant in terms of some circulars issued by the jurisdictional Commissionerate and there was no requirement to declare such number of machines in terms of any statutory law. She further clarifies that Shri Sunder, Managing Director in his statement had clarified that they were working in one shift, which the Revenue has not controverted. If that be so, the number of packages alleged to have been produced by them were not capable of being produced. 33. As regards the report by Shriram Institute of Industrial Research relied upon by the Revenue, she submits that such report cannot be relied upon inasmuch as gutka is not a homogenous product. The same is mixed in a mixture with hand and then packed in a packin....
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.... against bills and they are under no legal obligation to check either the contents of the bags received by them for further transportation or to verify the correctness of the bills or to examine the duty paid character of the goods. As such, no contravention of rules can be found in respect of such transporter justifying any penal action against them. Similarly, while challenging the imposition of penalty on dealers/buyers, she submits that there is also no evidence to show that alleged clandestinely removed goods were received by the said dealers/buyers at their premises and except for the oral statement of some persons to show that the goods were being loaded at the premises of Santosh Tobacco, there is no production of any documentary evidence by the Revenue. She further submits that authorized representative of Santosh Tobacco never appeared and there is no such statement by Santosh Tobacco. Thus, to impose huge penalty of Rs.20 crores upon him based upon the statement of a third person, without there being any corroboration, is neither justified nor warranted. 36. In support of above arguments, she referred to the various decisions of the Tribunal as also of the Honble H....
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....d in the factory in respect of other inputs and the packing material mentioned in the table below. In absence of any records the unaccounted goods were initially detained and were subsequently placed under seizure. Table: 2 Sr. No. Description Physical Stock Value(Rs.) 1. Printed Pacing laminates 6355 kgs 7,30,825/- 2. Polypacks 4,04,000 Pcs 1,37,360/- 3. Cotton Bags 5450 Pcs 1,36,250/- 4. Catechu 850 kgs 2,55,000/- 5. Gutkha Mix(ready to pack) 1200 kgs. 2,76,000/- 6. Lime 700 kgs 11,550/- 7. Magnesium 3400 kgs 95,200/- 8. Elaichi(cardamom) 6490 kgs 35,25,650/- 9. Elaichi Dana(cardamom seeds) 1750 kgs 9,36,250/- Total Rs. 61,04,085/- 3. Evidence of use of inputs for production of goods cleared clandestinely . (a) Packing material not accounted. (i) Canvass bags used for packing not accounted M/s. VCPL has not maintained any stock account of purchase and consumption of canvass bags procured from M/s. Ram La....
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....Ashok Chadha ( not retracted so far), the allegations of the Deptt. in this regard are duly substantiated by credible evidence. (iii) Non Accountal of 6413 jute bags. Purchase account shows payment for 11000 bags for a short period of 3 months while consumption from daily stock account register is only 5087 bags for same period. As per their own calculations given in para 17.3 of their reply, M/s VCPL should have had a stock of 6413 jute bags in the factory on the date of search. However the panchnama shows no stock of jute bags on the date of search. 4. Raw Material Consumption. (i) Menthol The assessee claims their manufacturing process requires Menthol consumption of 0.45% of the weight of the final product after all ingredients are mixed; while the analysis report says it is present only as 0.013%. It means that for every 450 gms claimed to have been added, only 13 gms are found on analysis. Even if an improbable 90% were to evaporate in such a short period, which is highly unlikely, the Noticee would have added only 130 gms in the mixture and not 450 gms. The rate of evaporation would have to be a whopping 97.2% to explain the gap between 450 gms and 13 gms whic....
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.... Transport Co. Sadar Bazar, Delhi. B. M/s. GG Carriers, Punjabi Bagh, Delhi. C. M/s. Delhi Indore Transport Company, Tis Hazari Delhi D. M/s. Harsh Transport(P) Ltd., Dayabasti, Delhi E. M/s. Gopi Roadlines, Dayabasti, Delhi. In the relevant entries of the transporters documents, registers, loose sheets, GRs & delivery challans, the goods have been described as Gutkha in respect of M/s. Singhal Transport Co. Sadar Bazar, Delhi, M/s. Harsh Transport(P) Ltd., Dayabasti, Delhi. and M/s. Gopi Roadlines, Dayabasti, Delhi. In the case of M/s. GG Carriers, Punjabi Bagh, Delhi, there are clear instructions to the booking staff to misdeclare the description of goods in their documents, as evidenced from entry on page 44 of record No. 8 seized from the office of M/s. G.G. Carriers. (a) M/s. Delhi Indore Transport Company (Annexure A5). In case of M/s. Delhi Indore Transport Company, the records resumed are the loading registers. However, both the persons namely Mr Vijay Singh and Mr Ravinder Kumar working in the booking office of the transporter have clearly stated in all the statements recorded from them over a period of time that the consignments identifiable by the le....
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....nd in the record of transport companies . On the basis of loading registers resumed from M/s. G.G. Carriers it is observed that 20373 bags of Vimal Gutka .were transported by them on behalf of M/s. VCPL involving Central Excise duty of Rs. 6,72,30,900/- From para 57 of SCN ,it is revealed that consignment shown in the invoice said to be the cash sales are of different from those booked from GG Carrier. No entries from these dispatches have been made in the statutory records of M/s VCPL. The contention of the appellant that all the records mentioned clearance of Pan Masala and not Gutkha has no relevance for the reason that it has been categorically admitted by Shri Harjinder Singh that the impugned goods were received from M/s. VCPL and during that time only gutkha was being cleared. In the records of transporter who may not be knowing the difference between Paan Masala and Gutkha in common parlance might be mentioning Gutkha as Paan Masala. (c) M/s. Gopi Roadlines (Annexure A2). All the consignments mentioned in Annexure A-2, prepared on the basis of Challans / other records of M/s. Gopi Roadlines and their Commission Agent Sh Sushil Kumar were of Vimal Gutkha, brought fr....
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.... Amaravati and booked under various names as consignors & consignees, were always delivered to M/s Santosh Tobacco, Chindwara. Scrutiny of invoice books of M/s VCPL Delhi revealed that no invoice was issued by them on 3.7.03. Last invoice (no 164) was issued on 1.7.03 in favour of Sh. Raj Kumar of Delhi. No invoice was issued in favour of M/s Sadhna Sales agency since 24.6.03 the date from which the invoice book begins. On the contrary one invoice no 411 dt. 3.7.03 issued by M/s Sadhna Sales Agencies, Tilak Bazar, KhariBaoli, Delhi-110006 was found attached with G.R.No. 225622 dt. 3.7.03. On investigation no such firm or company was found to exist in the area. In his statement recorded under section 14 of C.Ex. Act Sh. Ravi Bhandari, Managing Director, M/s Harsh Transport(P) Ltd, stated inter alia, that all the consignments of Vimal brand Gutkha were booked for dispatch by VCPL, Delhi, that he does not book Gutkha consignments for any other company. Regarding Annexure A-4 in respect of M/s Harsh Transport the findings given in para-71 of SCN reveals that no invoices have been issued by VCPL to M/s Santosh Tobacco, Gandhi Ganj, Chindwara, as evident from the invoice books. Non....
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....from the fact that one of the TATA-407 tempos, seized on 5.7.03 for having transported goods without valid documents, also belonged to him. It was further revealed by him that all such transport used to be in late night. (c) Statement of Sh. Dinesh Khilnani, Supervisor M/s. VCPL(Noticee) was recorded. On a query he stated that he receives instructions for dispatch of Gutkha on plain paper slips which are called factory gate pass, that the said instructions on plain paper chits are given to him either by Sh. Prakash Ji of their company or Sh. Rama Kant Tripathi, that the names of the factory is neither printed on these paper slips not stamped, that even the brand name of the products is not mentioned on these chits. That the paper slip is either signed by Sh. PrakashJi or Sh. Tripathi, that the security guard identifies the signatures of both of them and allows exit of the truck after tallying the details on the slip. That whenever and wherever the bill is issued for a particular consignment, it is issued by Prakash Ji, that he is not aware as to how many consignments have been covered under the proper bill/Invoices that he is not aware of the ratio between consignments covere....
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....PLA. He did not retract his statement, till the filing of the reply to SCN, either through direct communication or in the any of his five subsequent statements. It may be seen from aforementioned evidences that it is established against the appellants that all the consignments mentioned in the Annexures A-1 to A-5 pertain to transportation of Vimal Brand Gutkha, orders for which were placed on M/s VCPL by their outstation dealers, these originated from the factory of the Noticees M/s VCPL, were transported in the tempos of ShKayam Khan and booked at the transport on payment of freight by ShS.K.Dubey, an employee of M/s VCPL. These are different from the goods sold to local buyers of Delhi against the invoices listed by the noticees in the Annexure to their reply which were delivered at the factory gate to these buyers and were cleared without payment of duty. 9. Pleas raised by Appellant. 1) Disputed ground of law: Adjudication vitiated due to denial of right to Cross-examine witness A disputed ground for seeking order to allow the appeal is that cross examination of several people sought by the appellants was denied by the adjudicator. This ground is not admissible ....
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.... 3) Disputed Ground of law: Please that goods may have been cleared on cash sale basis. The appellants main ground for disputing the charge of clandestine removal is that all the goods alleged to have been transported through the above listed 5 transporters in the SCN (Annexures A-1 to A-5, comprising 38957 bags of Vimal brand Gutkha), were those booked by their customers, who had purchased these goods from the noticee on payment of duty and were delivered by the noticee at his factory gate. The Commissioner while dealing with this issue has recorded reasons for not accepting these pleas (paras 70 to 75 of the OIO). The Commissioner has scrutinized the list of such cash sales pleaded by the notice along with annexures A1 to A5 and records that neither the dates nor the quantities of goods tally. In particular para 75 clearly brings out the quantity shown as the cash sales vis-`-vis quantity cleared by Annexure A-I to A-V . It clearly brings out that during the period of cash sales neither the dates tally nor the quantities. This ground appears to have been taken to put a red herring on way to proper evaluation of the evidence of clandestine removal. The appellants do not ....
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....nge officer that they are working on 65 machines. The point of dispute is the availability of another 55 machines in the factory. While it is fairly acceptable that some machines may be kept in a standby mode to meet the exigencies of breakdowns, perhaps 5-7 additional machines could be reasonably kept to meet the act as stand by for 65 machines; it cannot be accepted that 55 machines were being maintained as standby for 65 machines. 8) In the relevant entries of the transporters documents, registers, loose sheets, GRs & delivery challans, the goods have been described as Gutkha in respect of M/s. Singhal Transport Co. Sadar Bazar, Delhi, M/s. Harsh Transport(P) Ltd., Dayabasti, Delhi. and M/s. Gopi Roadlines, Dayabasti, Delhi. In the case of M/s. GG Carriers, Punjabi Bagh, Delhi, there are clear instructions to the booking staff to misdeclare the description of goods in their documents, as evidenced from entry on page 44 of record No. 8 seized from the office of M/s. G.G. Carriers. 9) the consignments identifiable by the letter V in the registers pertain to Vimal brand Gutkha in view of the instructions given by VCPL (?). 10) The pan masala was being cleared as sweet supa....
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....g Director/employees. 38.1 As per facts on record, the Revenue searched the business premises of one transport company M/s. Laxmi freight Carriers Pvt. Ltd. on 3.9.03. 140 bags of gutka of vimal brand was found lying in the said premises. On demand, the sale bills of M/s. Vikram Sales Agency were produced and the consignment was found to be booked in their name. Revenue officers entertained a view that the said consignment of Vimal brand gutka was actually booked by Vishnu & Co. in the fictitious name of Vikram Sale Agency. Accordingly, they conducted further search of the said transporter company and resumed various documents like GRs . Scrutiny of said GRs revealed that various consignments of Gutka were booked in the names of various traders like AM Agency, M/s. Dinesh Ganesh Trader, M/s. National Trading Company and M/s. Goyal Trading Company. Statements of Shrishri Kant, the person looking after work of Laxmi Freight Carriers were recorded wherein he stated that they were transporting the consignments of VIMAL brand gutka only, which were coming to their premises through the tempo along with the bills of various trading firms on which full address is not written. Inasmuch a....
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.... gutka for transport through M/s. Laxmi Freight Carrier. He also denied having talked to any of their employees. Further statement of Shri R.K. Tripathi, Excise Incharge of M/s.VCPL were recorded. Said statements are not incriminating inasmuch as no question as regards transportation of Vimal Brand Gutka through Laxmi Freight carrier was put to him. 38.6 In his statement recorded on various dates, Shri H. Sunder Director of Vishnu and Company deposed that they are selling their branded gutka in the state of Gujarat, Madhya Pradesh and Rajasthan and receiving payments in cheques. They are also making cash sales at the factory gate when the buyer book their own vehicles. He clarified that they had made cash sales on 3.9.03 and the buyers might have booked the goods. He denied having sent the gutka to the said transport company. On being asked as to why full address of the buyers who purchased the gutka in cash at the factory gate was not being given in the sale memo, he stated that according to his knowledge and information there was no requirement. 38.7 Revenue also recorded statement of Shri Abdul Kayum Khan, owner of tempo and Shri Miraz Khan, driver of the tempos who accord....
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....09.03 and was found to be containing Vimal Brand Gutka, he just presumed that all the previous consignments were also of Vimal brand gutka and that is why he made a statement that all the previous consignments were of Vimal brand gutka. She submits that otherwise also the statement of Shri Shrikant is not reliable statement on the face of it inasmuch as he has disclosed certain tempo numbers which was allegedly used for transporting the gutka from the factory to their premises but when the owner of the said tempo was questioned by the Revenue, he in his statement very clearly denied having used tempos for transportation of Gutka from the factory of M/s. VCPL to the premises of transporters M/s. Laxmi Freight Carriers. She also submits that said statement of Shrishri Kant is again proved to be wrong inasmsuch as the said deponent stated that every time the consignment was received by them, they used to talk to R K Tripathi. However, the call records of R K Tripathi very clearly reflects upon the fact that there was only 6 calls prior to 3.9.03 out of which three were incoming and three outgoing. Similarly, these call records reflect that there was virtually no telephonic conversatio....
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....d are required to be confirmed by production of cogent and positive evidence. There is not even an iota of evidence to prove the allegation of clandestine manufacture of huge quantum of gutka and clearance of same without payment of duty. As such, she prays for setting aside the confirmation of demand of duty and imposition of penalty against M/s. Vishnu and Co. As a consequence, she submits that penalty imposed upon the employees and transporter would also get set aside. 40. Countering the argument of Ms. Jain, Advocate, learned Departmental Representative, Shri R K Verma draws our attention to the statement of Shri Srikant of Laxmi Freight Carrier wherein he in very clear terms stated that they are transporting gutka of only one brand name and the same is VIMAL brand. This fact according to the learned DR reflects upon the bonafides of said deponents inasmuch as he not knowing the name of the manufacturer has not stated the name of the manufacturer but has disclosed the brand name. Further the fact that Vimal brand gutka was found at the premises of transporter under the cover of bill raised in the name of Vikram Sales Agency corroborates the Revenues understanding that Vikram....
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....VCPL through M/s. Laxmi Freight Carriers. Learned DR further submits that there was discrepancy in the stock of the raw material found on the date of visit of the officers which is indicative of the fact that said manufacturing unit was indulging in clandestine activities. 40.3 As regards the appellants statement that said consignment might have been booked by a third buyer who purchased the goods at factory gate against cash bill, on the date of seizure from the transporter company or earlier same is nothing but an afterthought. By referring to the stock of goods entered in RG I register and the quantum of goods which could have been manufactured on the date of visit of the officer, learned DR submits that they have intentionally issued cash bills on the date of visit so as to cover up the discrepancy of stocks. He referred to para 39.3 and 40.2 of the impugned order in original. Thus the appellants plea that after buying the goods at the factory gate they were being booked by their buyers cannot be appreciated. He further submits that even the names of the buyers shown in the invoice issued for cash sales do not relate to the names of the persons who get the consignment booked....
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....ue in Appeal No. E/2700/2006 43.1 The said appeals stand filed by the Revenue against that part of the impugned order in original No. 141/2005 dated 19.6.2005 with which we have dealt in the first part of the impugned order. Vide the said order, Commissioner has dropped the confiscation of excess found raw materials. Revenue is in appeal against that part of the impugned order of the Commissioner vide which he has also dropped the proposal to confiscate the goods found at the premises of M/s. Lalwani Convertors and M/s. Ashok Tobacco and the alleged unaccounted raw materials seized from the premises of VCPL. 43.2 Learned advocate appearing for the manufacturing unit submits that thought the Revenue has shown three respondents in the same appeal, but only one appeal number is given by the registry and there is no notice served to M/s. Lalwani Convertors and M/s. Ashok Tobacco. Though we find that the Revenue was required to file three separate appeals, but keeping in view that all three respondents stand shown in the same appeal and it is only a technical lapse, we treat the said appeal as having been filed against three respondents. 43.3 Learned DR submits that admittedly ....
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....ppellant VCPL manufacture VIMAL brand gutka in pouches of MRP of rupee one. Fifty gutka pouches are packed in a bigger plastic packet and fifty five such packets are packed in one canvas bag. Four such canvas bags are packed in one gunny bag. Each gunny bag thus contains 11000 retail gutka pouches. The printed plastic laminated rolls for packing of gutka into retail pouches and packing of retail pouches into bigger plastic packets, canvas bags for packing of bigger plastic packets of gutka and gunny bags in which four canvas bags are packed are procured from different sources. There is no dispute that clearances to dealers were in gunny bags. While the gunny bags are unmarked, the retail plastic pouches, bigger plastic packets in which fifty retail pouches are packed and canvas bags in which 55 bigger plastic packets are packed have the manufactures name, brand name, logo details of the gutka packed, etc. printed on them. 45.1 The duty demand of Rs. 12,85,58,100/- against the main Appellant VCPL on 38957 bags of VIMAL gutka alleged to have cleared by them without payment of duty during the period from 01.04.2002 to 05.07.2003 is based on the records loading register & challans o....
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....upta, Managing Director, RLRC. (f)Alleged failure of VCPL for account for 6413 jute bags during period from 01.04.2003 to 05.07.2003 inasmuch as during this period, VCPL purchased 11500 jute bags from M/s Shyam Jute Industry and on 05.07.2003 at the time of officersvisit to the factory, there was no stock of jute bags while in the RG-1 register for this period, production of only 5087 bags of gutka had been shown which indicated that the missing jute bags had been used for packing of gutka pouches cleared clandestinely without payment of duty. Similarly there is alleged failure on the part of VCPL to account for a huge quantity of menthol inasmuch as while on search of the factory, an invoice showing purchase of 1000 kgs. Of menthol from M/s. MKS Aromatics, Delhi was found whereas at the time of search of the factory on 05.07.2003, there was no stock of menthol. (g) At the time of search of the factory of VCPL on 05.07.2003, 120 pouch sealing machines were found installed as against the declared number of 65 machines. 45.4 As regards the duty demand of Rs.2,75,15,400/- against VCPL which is the subject matter of second set of appeal, the same, in addition to the GRs recove....
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.... production of about 1,53,912 bags of gutka as against a much lower figure of production of gutka in terms of gunny bags shown during this period, in their records, this allegation is purely based on the entries in the gate registers maintained by the gate officers in the factory of RLRC, that there is no evidence of receipt of this much quantity of canvass bags in the factory of VCPL during April, 2002 to 4.7.2003 period, that the appellant during this period have received only 105000 canvass bags, which is evident from the computer print-outs taken from the suppliers computer, that delivery challans resumed by the officers from the factory of RLRC nowhere indicate that canvas bags mentioned in the gate register as supplied to VCPL have been received by the appellant and in this regard, no inquiry has been made with the drivers or owners of the trucks, whose numbers are mentioned in the delivery challans, that Shri Rajiv Gupta of RLRC was not made available for cross-examination, while in the affidavit filed by him, he has stated that certain quantities of canvass bags bearing Vimal brand name have been sold at the factory gate in cash, that there were other manufacturers of gutka....
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....pouches sealing machines had been found as against the declared number of machines of 65, there is no dispute that at that time only 65 machines were functioning, that during that period, the assessment of duty was not on the basis of the number of machines installed, that when at the time of officersvisit to the factory, only 65 machines were functioning, as against the declared machines of 65 and there is no evidence that at any point of time, the larger number of machines were being operated, the allegation of excess unaccounted production based on just larger number of machines being installed in the factory, cannot be made. 46.1 We have carefully considered the rival submissions in respect of the evidences at para 45.3 (d) to 45.3 (g). 46.2 As regards the test report of dated 28.8.2003 of Shri Ram Institute for Industrial Research, which is relied upon by the Department in support of its allegation that VCPL had been showing grossly inflated consumption of supari, tobacco and menthol inasmuch as while the content of supari, tobacco and menthol declared by them is 86% , 6% and 0.47% respectively, on test of a sample of Vimal brand gutka by SIIR, the percentage content of ....
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.... at their end so as to further their case. Failure on their part to do so has resulted in negating their case. Moreover, the cross examination of Shri Rajiv Gupta, Managing Director of RLRC has also not been allowed while he has given an affidavit that certain quantities of canvas bags bearing vimal brand have been sold at factory gate also in cash. In view of this, just on the basis of the entries in the gate registers and challans, not corroborated by any other evidence, it cannot be said that the canvas bags covered under those challans have been received by VCPL and used for packing of gutka, especially when there is evidence record that unscrupulous manufacturers were using VCPLs brand name and as such were in need of laminated pouches printed with their brand name. 46.4 It has been alleged that as per the records recovered from the premises of VCPL, during period from 1.4.2003 to 5.7.2003, they had purchased 11,500 jute bags from M/s. Shyam Jute Industries and as on 5.7.2003, there was no stock of jute bags, while the RG-I Register for this period showed the production of only 5087 bags of gutka and on this basis, it has been alleged that consumption of 6413 jute bags has ....
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....asis of the records recovered from GG Carriers, Delhi-Indore Transport Company, Gopi Road Lines, Harsh Transport, Singhal Transport Company, the duty demand confirmed against VCPL are Rs.6,72,33,900/-, Rs.2,77,39,800/- , Rs.1,97,04,300/-, Rs.74,81,100/- , Rs.62,02,000/- respectively. Similarly, the duty demand of Rs.2,75,15,400/- for the period 14.07.2003 to 2.9.2003 has been confirmed against VCPL on the basis of the records recovered from Laxmi Freight Carriers Ltd. Our findings in respect of the demands confirmed against the VCPL on the basis of the records recovered from different transport companies are as under:- 48. Duty demand based on the records recovered from the premises of GG Carriers and the statements of various persons recorded in course of inquiries on the basis of those records. 48.1 Duty demand of Rs.6,72,30,009/- has been confirmed against VCPL on the basis of alleged removal of 20,373 bags of vimal brand gutka each carrying 11,000 pouches. The basis of this allegation is that certain records found from the premises of GG Carriers and the inquiries made with their employees. From the premises of GG Carriers several loading registers as well as GRs were rec....
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....am Makhija but he also did not accept receiving any consignment of vimal brand gutka through GG Carriers. It was also found that VCPL were having dealings with Gobind Store, Jaipur, whose Manager is Shri Duli Chand Makhija and investigating officers were of the view that the abbreviation GOBmeans Gobind Store, Jaipur. However, on inquiry with Shri Dauli Chand Makhija, Manager of Gobind Store, he in his statement dated 16.07.2003 while accepting that he deals in vimal brand gutka and has dealings with VCPL, denied to have received any consignment of vimal brand gutka from VCPL through GG Carriers. 48.2 Ms. Seema Jain, ld. Counsel for the appellants, however, has pleaded that no consignments of gutka booked by VCPL has been transported through GG Carriers, that the only evidence relied upon by the department, the support of the allegation that the abbreviations GRK, GOB, Kaka, KK, UMS, 013, 017, etc. are the customers of VCPL at various outstation locations buying vimal brand gutka from VCPL, is the statement of Shri Harjinder, that Shri Harjinder Singh was looking after maintenance of the trucks and he had no concern with the booking of the consignments, that this fact has been a....
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....013, 017, etc mentioned. But no inquiry had been made with them. Inquiry had been made only with Shri Harjinder Singh, who in course of his cross examination, has stated that he was not dealing with the booking of cargo and he was looking after only the maintenance of the trucks. Though the department alleges that the abbreviations GRKmeans Leela Ram Gobind Ram, Kota and the abbreviation GOB, Gobind Store, Jaipur, the proprietor of these stores while admitting that they have dealings with VCPL have denied having received any consignments of vimal brand gutka through GG Carriers. According to them all the consignments of gutka from VCPL were being received by them through M/s. Jaipur Golden Transport Company. Though mobile number, telephone number of Tulsi along with abbreviation GRK was found written on a paper recovered from the premises of GG Carriers along with telephone number of VCPL and their employees and while Shri Leela Ram Makhija of M/s.Leela Ram Gobind Ram, Kota has stated that Mr. Tulsi is his nephew, just because the name and mobile number of Mr. Tulsi along with abbreviation GRK was found mentioned in a paper recovered from the premises of GG Carriers, it cannot be c....
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....bags of vimal brand gutka based on the records of M/s. SinghalTransport Company. 49.1 From the office of Singhal Transport Company, two GR books and 17 truck guidance notes had been recovered. The scrutiny of the GRs revealed that a number of consignments declared to be of gutka had been booked by M/s.Gupta Chemical Works to self. At the time of search of the premises of the Transport Company, 170 gunny bags containing vimal brand gutka were found. Besides this, there was a truck no.HR38B4117 parked just outside the Transport company in which 40 such bags were loaded. This truck was of Singhal Transport Company. Since there were no duty paying documents in respect of 40 bags of vimal brand gutka loaded in the truck and 170 bags of Vimal Gutka, lying in the godown, the same along with truck were placed under seizure. Besides the truck no.HR38D4117,another Tata 407 Truck no.DL1L A6232 was also parked and it appeared that a part of the consignment of gutka had been brought in that truck. Therefore, that truck was also placed under seizure. Statement of driver of the truck no.HR38D4117, Shri Sita Ram was recorded, wherein he admitted having loaded 40 bags of vimal brand gutka. State....
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.... Representative supports the Commissioners order confirming this duty demand on the basis of the records of the Singhal Transport Company read with statements of Shri Paramjit Singh, Shri H. Sunder and other persons, Ms. Seema Jain, ld. Counsel for the appellant, pleads that the statement of Shri Paramjit Singh cannot be relied upon, as in his cross examination, Shri Paramjit Singh has stated that bags brought to the transport company for booking were plain gunny bags without any marks, that they have never opened the bags and hence, they could not have known the contents, that these consignments were not booked by M/s. VCPL and name of the consignor used to be given by the person, who came to book the same, that statement of Shri Yogesh Sharma stating that the consignments of gutka were being received in the transport company in four Tata 407 mini trucks from the factory of VCPL cannot be relied upon as Shri Yogesh Sharma was not made available for cross examination, that for the same reason, the statement of Mohd. Ilias, driver of the truck DL 1LA6232 cannot be relied upon, that the statement of Shri H.Sunder had been recorded under duress and has been dictated by the investigati....
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....de. For the same reason, no penalty is imposable on Shri Mohd. Kayum Khan or M/s.Singhal Transport Company under Rule 26 of Central Excise Rules. As regards the duty demand in respect of 230 bags covered under 4 GRs issued by this transport company with the consignors name as M/s.Gupta Chemical Works, Hubly, Shri Paramjit Singh, Proprietor of the Transport Company in his statement dated 5.7.2003 has stated that GR No.195483 dated 4.7.2003 as well as GR No.195540 dated 5.7.2003 were in respect of vimal brand gutka and that, though the consignor is mentioned as Gupta Chemical Works with self as the consignee, the consignments have been booked by M/s. VCPL. It is seen that the Revenue is treating the said GRs, which has been issued by showing M/s. Gupta Chemical Works as the consignor, as for the goods belonging to M/s.VCPL on the basis of the statement of Shir Paramjeet Singh which was agreed to by Shri H. Sunder. But the Revenue has been able to locate M/s.Gupta Chemical Works, who was admittedly dealing in gutka and pan masala, etc. However, for the reasons best known to the officers, no statement of the representative of M/s. Gupta Chemical Works was recorded by the officers. When....
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....brought from VCPLs factory to M/s. Singhal Transport, is set aside and penalty on Shri Mohammad Kayum Khan, owner of the truck DL-1L/A-6232 is also set aside. 50. Duty demand of Rs.2,77,39,800/- in respect of 8406 bags of vimal brand gutka alleged to have been cleared by VCPL confirmed on the basis of the records of M/s. Delhi Indore Transport Company. 50.1 In course of search of office of this Transport Company, one day book registers/loading registers were recovered which had entries regarding the consignments booked for transport. Among these entries, there were entries like V-40/OK, V/40, etc. These registers were being maintained by booking clerk, Shri Uday Singh, who in his statement stated that the entries like V-40 represents 40 bags of Vimal brand gutka, that the number written in front of entries like V-40 represents the weight of the consignment, that the entry V-40/OK means 40 bags of Vimal brand gutka with total weight of 1200 kgs. i.e. 30 kgs. per bag, that similarly, the entries like V/10, V/5 represent 10 bags and 5 bags of Vimal brand gutka respectively and that the consignments of gutka used to be brought by one Shri Dubey. Statement of Shri Ravinder Kumar, ....
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....d. Counsel for the appellant, we find that the only basis for this duty demand is the entries like V/40, V/10, V/5 in the registers loading register, booking registers of the transport companies read with the statements of the booking clerks. But both the booking clerks have retracted their statements. These entries do not even mention the description of the goods and the names of the consignors or consignee and hence, there was no question of any inquiry being made with them. 50.4 In view of the above, we hold that the evidence on record is not at all sufficient to substantiate the allegation of clandestine removal of 8406 bags of vimal brand gutka without payment of duty and their transport to the customers through Delhi Indore Transport Company. Therefore, this demand is also not sustainable. 51. Duty demand of Rs.1,97,04,300/- on 5971 bags of Vimal brand gutka alleged to have been cleared clandestinely by VCPL is based on the records of the Gopi Road Links. 51.1 In the office of M/s. Gopi Road Lines, the investigating officers resumed fifty challan books nos. 4401 to 4450 and also 12 files containing loading challans. The challan books had entries regarding booking of ....
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....y 10 commission agent cannot be attributed to VCPL. She also pleaded that no personal number of Dubey was found in any diary of M/s.Gopi Road Lines. She, therefore, pleaded that the duty demand of Rs.1,97,04,300/- based on the records of the transport company and the statement of its employees and agents is not sustainable. 51.3 We have considered the submissions from both the sides and perused the records. The entries in the booking register and the loading challans simply mention the description of the goods as gutka, number of bags and consignors name. The name of VCPL does not figure anywhere as the consignor. While M/s. Gopi road Lines had ten commission agents in Delhi, out of them inquiry was made only with Shri Sushil Kumar and no inquiry was made with others. Therefore, in any case, in respect of the consignments of gutka booked by other agent, it cannot be presumed that the same were of vimal gutka. 51.4 With regard to the consignments of gutka booked by Shri Sushil Kumar, the only evidence to link those consignments with VCPL is the statement of Shri Sushil Kumar stating that those consignments were of vimal brand gutka brought to the transport company in tempo ric....
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....een left by mistake by some of their customers and that the vimal brand gutka used to be brought to the godown by Shri Dubey of VCPL. Shri Santosh Kumar Mishra, Booking Clerk of Harsh Transport also stated that they have been booking vimal brand gutka being brought to their company by one Shri Dubey whose mobile number is 9810555593, that he used to bring the consignments of gutka in the name of the different companies, that on 3.7.2003, Shri Dubey had brought 9 bags of vimal brand gutka which was booked under GR 225622 dated 3.7.2003 and that the goods were actually to be delivered to one M/s. Santosh Tobaco at Chindwara although the name of the consignor or consignee are different. At Bhopal office of Harsh Transport, 9 bags of the consignment of gutka covered under GR No.225622 dated 3.7.2003 with M/s. Sadhana Sales Agency as consignor was found. Even though this consignment was booked for transport to Amravati, on examination, the bags were found to be containing vimal brand gutka, Inquiry was made with Shri Kamal Panjwani, Partner of Harsh Transport Company and he in his statement dated 7.7.2003 stated that the goods covered under this GR mentioning M/s. Sadhana Sales Agency a....
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.... say that for booking, Shri Dubey of VCPL used to come. She, therefore, pleaded that the duty demand of Rs.74,81,100/- based on the records of M/s. Harsh Transport Pvt. Ltd. and the statement of its Managing Director, employees and another persons is not sustainable. 52.3 We have considered the submissions from both the sides. The duty demand is based on the basis of various GRs issued by Harsh Transport Pvt. Ltd. showing the names of various companies including Sadhana Sales Agency as consignor and in which the description of the goods mentioned is gutka. These GRs are sought to be linked to VCPL on the basis of the statements of Shri Ravi Bhandari, Managing Director of Harsh Transport Co. Pvt. Ltd. and also the statement of Santosh Kumar Mishra, booking clerk of the transport company at Delhi, wherein they have stated that they were booking only the consignment of vimal brand gutka and that all the GRs where the description of the goods is gutkaare of Vimal brand gutka booked by Shri Dubey of VCPL. One such consignments of 9 bags had been booked on 3.7.2003 under GR No.2256 dated 3.7.2003 for transportation to Amravati, wherein Sadhana Sales Agency was mentioned as the consign....
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....o not sustainable. 53. Duty demand of Rs.235/- on 950 VIMAL gutka pouches seized from M/s. Gobind Stores, Jaipur and duty demand of Rs.9,156/- on 30518 VIMAL gutka pouches seized from the premises of M/s. Laxmi Prakash Gupta, Seoni. 53.1 As mentioned in para 48.4 above on 16.07.2003 from the premises of M/s. Gobind Stores, Jaipur, 19 plastic packets of VIMAL gutka containing 950 pouches involving duty of Rs.285/- were recovered. Similarly on 12.07.2003, 30518 pouches of VIMAL gutka were seized from Shri Lakshmi Prakash Gupta, Seoni on which duty involved is Rs.9,156/-. According to Department, the gutka pouches seized from M/s. Gobind Stores, Jaipur and Shri Lakshmi Prakash Gupta, Seoni are non-duty paid. While M/s. Gobind Stores, Jaipur pleaded that 950 pouches, though as per markings on these packets are packed in July, 2003, are covered by VCPLs invoice No.161 dated 27.6.2003, the plea of Shri Lakshmi Prakash Gupta is that 30518 VIMAL gutka pouches seized from his premises are a part of a consignment of 10 bags sold by VCPL to him under invoice no.58 dated 2.5.2003. 53.2 As regards 30518 VIMAL brand gutka pouches seized from Shri Lakshmi Prasad Gupta of Seoni, in our vi....
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....al no.141/2005 dated 9.6.2005 is concerned, out of the total duty demand of Rs.12,85,58,100/-, only the duty demand of Rs.6,93,285/- (Rs.6,93,000 + Rs.285/-) with interest under Section 11 AB and penalty of equal amount on VCPL under Section 11 AC to be upheld. The duty demand against VCPL of the remaining amount, interest thereon and the remaining amount of penalty under Section 11 AC on VCPL is not sustainable. 55.1 As regards the penalty on the transporters, sofar as M/s. GG Carriers, M/s. Delhi Indore Transport, M/s. Gopi Road Lines and M/s. Harsh Transport are concerned, since as discussed above, there is no evidence on record that they had dealt with any excisable goods which they knew or had reason to believe are liable to confiscation, penalty on them under Rule 26 is not sustainable. 55.2 As regards M/s. Singhal Transport Company, though at the time of officersvisit to the transport company, 210 bags of vimal brand gutka had been seized, which were not covered by any central excise invoice, since according to the Appellants the invoice was to be received, it cannot be said that M/s. Singhal Transport Company had knowledge about the goods being liable for confiscation....
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....shnu & Company, penalty of Rs.5,00,000/- has been imposed on Shri R.K. Tripathi, employee of Vishnu & Company and penalty of Rs.15 lakh, Rs.1 Lakh, Rs.5 Lakh and Rs.10 lakh has been imposed on M/s. Laxmi Freight Carriers, Gopal Krishna Parashar, Director of Laxmi Freight, M/s.Gopi Road Lines and Paramjit Kakkar, Proprietor, M/s. Singhal Transport respectively. The duty demand against VCPL is on 8388 bags of gutka alleged to have been cleared clandestinely by them without payment of duty and the same is based on the records of M/s. Laxmi Freight Carriers for the period from 14.07.2003 to 2.9.2003. The jurisdictional central excise officers visited the premises of M/s. Laxmi Freight Carriers on 3.9.2003 and found a consignment of 140 bags of vimal brand gutka booked under an invoice of Vikram Sales Agency. The goods in the bags were found to be vimal brand gutka and the consignor, M/s. Vikram Sales Agency was found to be non-traceable entity. Scrutiny of the GRs of Laxmi Freight Carriers revealed that various consignments of gutkahad been booked in the name of various traders like M/s. Anurag Sales Agency, M/s. Naveen Trading Co., M/s. Ganesh Trading Co., M/s. Goyal Trading Co., M/s.....
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....acts between him and M/s. Laxmi Freight Carriers and M/s. Singhal Transport which indicated that these transport agences were being used by VCPL for booking the consignment of gutka, which had been cleared by them clandestinely without payment of duty. 56.1 Ld. Departmental Representative supports the Commissioners order by emphasizing on the evidence on records as mentioned above. 56.2 Ms. Seema Jain, ld. Counsel, however, pleaded that Revenues case is based on the statement of Shri Srikant and Shri M.L. Sharma of Laxmi Freight Carriers, that both the persons were tendered for cross examination and during cross examination they deposed that since the consignments received on 2/3.09.2003 had been opened by the officers at the time of visit on 3.9.2003 and were found to be containing vimal brand gutka, they presumed that all the consignments were of vimal brand gutka and that is why he had made statement that all the previous consignment were of vimal brand gutka, that otherwise also, the statement of Shri Shrikant is not reliable inasmuch as he disclosed certain tempo numbers which were alleged to have been used for transportation of gutka to the transport company from the fa....
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....kram Sales Agency, National Trading Co., Goyal Trading Company, A.M. Agency, etc. were of vimal brand gutka manufactured and cleared by VCPL and had been booked by VCPL. No documents showing booking of any consignment of gutka through Laxmi Freight Carries were recovered from VCPL. In view of this, we hold that the evidence on record is not sufficient to uphold the departments allegation and as such, the duty demand of Rs.2,75,15,400/- confirmed against VCPL alongwith interest, imposition of penalty of equal amount on them under Section 11 AC and imposition of penalty of Rs.1 Crore on Shri H. Sunder on this ground and penalty of Rs.5,00,000/- on Shri R.K. Tripathi is not sustainable. The same, therefore, has to be set aside. As regards the duty demand on 140 bags of VIMAL Brand gutka seized from the premises of M/s. Laxmi Freight Carriers and which were under an invoice of M/s. Vikram Sales Agency, even if these goods are those manufactured by VCPL, there is no evidence to prove that the same had been cleared by them without payment of duty and there is merit in the Appellants plea that 140 bags of Vimal brand gutka seized from the godown of M/s. Laxmi Freight Carriers may be part ....
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....me buyer; (iii) the statement of Shri R.K. Tripathi that sometimes he arranged the transportation for other buyers who had purchased the goods at the factory gate and his calls to Shri Paramjeet Singh of M/s. Singhal Transport were in this connection is a plausible explanation for the telephone contacts between him and Shri Paramjeet Kakkar and just on the basis of these telephone contacts it cannot be presumed that all these telephone contacts were for booking of the clandestinely cleared consignments of gutka; and (iv) no documents have been recovered from the premises of VCPL indicating booking of consignments by them through M/s. Singhal Transport during 14.07.2003 to 3.9.2003 period. Therefore, neither 160 bags of gutka seized from the premises of M/s.Singhal Transport are liable for confiscation nor Shri Paramjeet Singh, Proprietor , M/s.Singhal Transport is liable for penalty. 58. As regards penalty of Rs.5,00,000/- M/s. Gopi Road Lines and redemption fine in lieu of confiscation demanded from VCPL in respectof seizure of 25 boras of sweet supari and zarda from the godown of M/s. Gopi Road Lines, the ownership of the goods and their clearance without payment of d....
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....by the Revenue is against the part of the Order-in-Original No.141/05 dated 19.06.2005 of the Commissioner by which the commissioner has dropped the proposal for confiscation of flexible laminates and kimam & unprocessed tobacco seized from the premises of M/s.Lalwani Convetor and M/s. Ashok Tobacco respectively and alleged unaccounted raw material seized from the premises of M/s. VCPL. 59.2 As regards the confiscation of alleged unaccounted raw materials seized from the premises of VCPL after considering the submissions from both the sides, we are of the view that there is no provision for confiscation of unaccounted raw material under Rule 25 of the Central Excise Rules, 2002 as neither this is covered by clause (a), (b) and (c ) of Rule 25 (1) nor by clause (d) of this sub-rule, as no rule of Central Excise Rules, 2002 or notification issued under these rules provide for maintenance of raw materials account. Rule 9(5) of Cenvat Credit Rules is not applicable, as this Rule applies for Cenvat Credit availed inputs while in this case, the alleged unaccounted raw materials are not cenvat credit availed raw materials. Therefore, the alleged unaccounted raw materials seized from th....
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....ived for transportation and the transporters are not allowed to open the gunny bags. As such, it is not possible for a transporters employee to find out whether gutka packed in the gunny bag is of the Vimal brand or any other brand. We, therefore, fully agree with the above contention of the ld. Advocate. In the light of the depositions made by certain employees of the transport companies and in view of the admitted position that no markings are put on the outer surface of the gunny bags of the gutka, it is not only improper but almost impossible for any employee to find out the brand name of the gutka contained in those gunny bags. 61. Apart from the above, ld. Advocate appearing for the appellant has strongly contended that they were also selling gutka at their factory gate against cash. During the period, in question, they have reflected a cash sale of almost Rs.9 Crores at their factory gate on which they have paid the duty. Transportation of such bought out goods by the customers is arranged by themselves to the place of destination. She submits that the name of Shri Dubey was taken by the employees of most of the transport companies as a person, who used to bring the goods....
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....ufficient to show that it was the appellant and not the other manufacturers, who were manufacturing and clearing Vimal brand gutka without payment of duty. We note that the fact of filing of an FIR is not contested by the Revenue and the same reflects the factual position. If the other manufacturers were clandestinely using the brand name Vimal and were also procuring the materials including packing materials, etc from the same source and would also be engaged in transportation of the said goods, the evidence collected by Revenue cannot linked with M/s.VCPL, in the absence of there being any other direct and positive evidence. 63. We would like to observe that the charges in the present cases are that of clandestine manufacture and removal by M/s.VCPL. There are plethora of judgements laying down that such charges are required to be proved by production of tangible evidence and sufficient evidences. The same being in the nature of the quasi-criminal cannot be upheld on the basis of assumptions and presumptions or on the basis of doubts. The required evidence, at least, should be able to tilt the weight of the facts in favour of the Revenue so as to act upon the theory prepondera....
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....d in 2011 (271) ELT 184 (Patna) has held that even when the investigations with the transporters revealed that they had received consignment of betel nuts, the presumption of Revenue authorities that the same was used in clandestinely removed pan masala cannot be held to be a substitute for the legal positive evidence as based on investigaton conducted only at transporter send, no presumption could be drawn with regard to manufacture and removal of Pan masala. The Hon'ble High Court even observed that the Revenue has to prove its case beyond reasonable doubt and proof by mere preponderance probabilities was not sufficient. Honble High Court further observed that in absence of positive evidence, benefit of doubt has to go in favour of the assessee. The Tribunal in the case of Raj Petroleum Products Vs. CCE reported in 2005 (192) ELT 806 (Tribunal) has held that when the documentary evidence does not establish clandestine removal the oral statements which travels beyond the documentary evidences has to be viewed with suspicion. 65. In view of the ratio of the above decisions, that the charges of clandestine removal cannot be proved on the basis of third party documents without the....
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....s.5,00,000/- (Rupees Five Lakh only). 62.1.2. Penalty under Rule 26 of Central Excise Rules on M/s.GG Carriers, M/s. Delhi Indore Transport Company, M/s. Singhal Transport Company, Shri Paramjit Singh Kakkar, Prop., M/s. Singhal Transport Company, M/s. Harsh Transport Co. and M/s. Gopi Road Lines is set aside and the appeals filed by them and Shri Paramjit Singh, Prop., M/s. Singhal Transport Company are allowed. 62.1.3. Confiscation of the truck no.HR 38D-4117 of M/s. Singhal Transport Co. is set aside. 62.1.4. Confiscation of Tata 407 tempo DL-1LA 6232 of Shri Kayum Khan and penalty on him is set aside and as such, the apeal filed by Shri Kayum Khan is allowed. 62.1.5. Confiscation of 210 bags of Vimal gutak seized from the premises of M/s.Singhal Tranport Company and 950 pouches of Vimal gutka seized from M/s. Gobind Stores, Jaipur and redemption fine in respect of them is upheld. 62.1.6. Confiscation of 9 bags of Vimal gutka seized from Bhopal office of M/s. Harsh Transport Company and redemption fine in respect of them is set aside. 62.1.7. Confiscation of 30518 Vimal gutka pouches seized from Shri Lakshmi Prakash Gupta of Seoni, redemption fine in respect of....