TaxTMI 
TaxTMI 
2014 (8) TMI 816
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....grey fabrics received by them from merchant manufacturers under kacha delivery challans and clandestinely removed the processed fabrics without payment of duty. Statements were also recorded of various persons including purchasers of the processed finished goods. Based upon various information collated and statements recorded, show cause notice was issued to the main appellant as well as all other appellants to show cause as to why the demand of duty be not raised on them along with interest for clandestine removal of the goods, interest thereof and penalties be not imposed on all the appellants. The main appellant as well as the other appellants contested the issue on merit before the adjudicating authority wherein they challenged the panchnama and also calculation of duty on the charge of clandestine removal. The adjudicating authority, after following the due process of law, did not agree with the contentions raised by the appellant and confirmed the demand of duty, interest thereof and also imposed penalties on all the appellants herein. 3. Ld.Counsels Shri J.C. Patel and Shri K.I. Vyas appeared on behalf of the appellants. Ld.Counsel, after giving us an overall view of the ....
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....company and they did not bear rubber stamp of the appellant i.e. M/s Sangam Prints Pvt.Ltd. He would draw our attention to the said documents which are annexed to the appeal memoranda. It is his submission that the appellant's director during the course of his statement was made to strike out the word 'Creation' from the said stamp and was made to write by hand the word 'Prints' which itself prove that the document recovered did not pertain to any goods manufactured by the main appellant. It is his submission that the statements which were recorded on 9/10.1.2003 have been retracted by affirming an affidavit before the notary public (annexed at Page No.159 of the appeal) and was produced before the adjudicating authority during the course of personal hearing; not considered by the adjudicating authority. It is his submission that the contention of the Revenue as to such affidavit cannot be relied upon which was not submitted to the Department during investigation, is untenable in view of the fact that similar contentions were rejected by the Tribunal in the case of Tejal Dyestuff Industries - 2007 (216) ELT 310 which has been upheld by Hon'ble High Court of Gujarat as reported ....
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....excess dues in the ledger account as compared to the private records. It is his submission that the main appellant did not produce party-wise ledger earlier, later on they produced the same and the summary of party-wise ledger for these 3 months i.e. July to September, 2002 indicated that the outstanding amounts were not true and the amounts indicated in the ledger were more than the amount as recorded in the private register. It is his submission that there were various discrepancies and the figures did not tally with each other. He would submit that the statement of Shri Suresh Kumar Agarwal when recorded on 9/10.01.2003, did not mention about the details of the figures for the period July to September, 2002 and subsequently after a period of 10 months, it was claimed that these figures are to be of the amount of job charges due from customers. It is his submission that the main appellant did not give the names of the customers from whom the said amount was due. 4.1 It is his further submission that for the period October 2002 to December 2002, the demand has been worked out based upon the confessional statement of Shri Suresh Agarwal. He would draw our attention to the statem....
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....lso his submission that the evidences which are on record are more than enough to confirm the demand raised on the appellant. He would reiterate the findings of the adjudicating authority. 5. We have considered the submissions made at length by both sides and perused the records. 6. The issue involved in this case is whether the adjudicating authority is correct in confirming the demand raised against the main appellant and imposing penalties on the main appellant as well as other individuals on the charge of clandestine removal of the goods i.e. printed and dyed MMF fabrics. 7. At the outset, we would like to reject the contentions raised by ld.Counsel as to the authenticity of the Panchnama having been signed by the director indicating that on various pages the date of 9.1.2003 and last page of the Panchnama indicating the date of 10.1.2003 as enough to discredit the said Panchnama. In our considered view and on perusal of the records, we find that the DGCEI officers started recording the Panchnama in the afternoon of 9.1.2003 and it went on overnight till the afternoon of 10.1.2003, a fact undisputed. If that be so, the challenge of ld.Counsel as to the Panchnama being ....
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....the case of the Revenue any further. To that extent, we find that the appellant has made out a case for holding that the duty liability Rs. 80,89,255/- for the period July to September 2002 is unsustainable and is liable to set aside. 9. As regards the demand of duty for the period October 2002 to December 2002, we find that the Revenue authorities have done some reconciliation as to the clearances effected and recorded in statutory records and the figures mentioned in the documents which were unearthed during the search. We find that the Revenue authorities have recorded statement of officials of M/s Sangam Prints, M/s Neha Prints and M/s Karishma Prints for that period. Though the said documents/diaries indicated the names of other purchasers like M/s Classic Fabrics, M/s Karishma Fabrics, and M/s Shivam Prints, we find that the Revenue has not placed any reliance on statement, if any, recorded of the officials of these 3 purchasers. On perusal of the records, we find that the officials of M/s Sangam Prints, M/s Neha Prints have admitted and stated categorically that the main appellant had removed/sold the man made fabrics to them without preparing any duty paying documents. T....
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.... 439 (Guj.). These our findings are based upon the fact that the adjudicating authority in the impugned order, has not extended this benefit to the main appellant. 12. As regards the penalties imposed on other 3 appellants, we find that the bulk of the demand has been set aside by us on merit, accordingly, the penalties imposed on all other appellants needs to be re-worked out. 13. As regards the personal penalties imposed on the individuals, we find that Shri Suresh Kumar Agarwal, Director of the main appellant is penalized under Rule 26 of Central Excise Rules, 1944, since we have upheld the demand of duty on the main appellant for clandestine removal of the goods to the extent as indicated hereinabove, we find that Shri Suresh Kumar Agarwal who is one of the director of the company needs to be penalized under Rule 26 having played a role in such clandestine removal of the goods. Considering that the amount of duty liability having been substantially reduced, we hold that the ends of justice will be met if Shri Suresh Kumar Agarwal is visited with a penalty of Rs. 2 lakhs (Rupees Two Lakhs only) under Rule 26 of Central Excise Rules, 1944. 14. As regards the personal pen....