TaxTMI 
TaxTMI 
2014 (12) TMI 621
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....nufacture and clearance of plywood without payment of Central Excise duty to the tune of Rs. 1,39,34,430/- for the period from January, 1998 to March 2001 on the garb of Job-work. The said show-cause notice was adjudicated by the Commissioner of Central Excise, Patna vide Order dated 06.12.2004 confirming the duty demanded and imposed penalty equivalent to the duty. The said order was challenged by the Appellants before CESTAT, New Delhi. Vide Order No.395-397/05-CS/175-177/05-C dated 2nd May, 2005, the Tribunal remanded the matter to the Ld. Commissioner for de novoadjudication. Pursuant to the said remand order, the ld. Commissioner, Patna, re-adjudicated the case; confirmed the duty and imposed equivalent penalty under Section 11AC of Central Excise Act, 1944 on the Appellant, M/s Metro (India) Wood Crafts Pvt. Ltd., penalty of Rs. 10.00 lakhs on Shri R. K. Agarwal, Director and penalty of Rs. 5.00 lakhs on Shri Bimal Kumar Chopra, Director of M/s Metro (India) Wood Crafts Pvt. Ltd., under Rule 209A of erstwhile Central Excise Rules, 1944. Hence, the present Appeals. 2.1 On conclusion of the hearing before this Tribunal both sides have been directed to file their written subm....
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....price of plywood in arriving at the assessable value of the goods cleared. He has submitted that even from the allegation in the show-cause notice, e.g., at Para 1.5 & Para 3, it is clear that the demand is based on assumptions. In Para 1.5, it was alleged that the Appellants might not be engaged in the activity of job work processing, but engaged in the removal of finished goods, i.e. plywood, block board manufactured in the guise of the said cash memos; in Para 3 , it has been alleged that from the statement of the Director, that they might have been indulged in clearances of excisable goods in the guise of cash memos for job work. Further, assailing the computation of demand, the ld. Advocate submitted that a perusal of the same would reveal that the year wise duty liability is calculated on the basis of job work cash memos/Bills; the quantities mentioned therein for the quantum of job work done either towards core veneer drying or face taping, are considered as the quantity of finished goods cleared clandestinely. It is concluded by the Department without any evidence that against the said job work/cash memos, the Appellant had cleared plywood of 24 mm thickness to the parties,....
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....tinely, the total weight of such goods would come Approx. 37.5 MT. and in the normal course, a truck could not carry the said load. He has submitted that even though they have adduced evidence in respect of capacity of the vehicles mentioned in the job-work challans collected from the respective transport offices, which are certified to be much less than the assumed weight of clandestinely removed goods, the same were not considered. 3.5 Further, he has submitted that the Appellants were undertaking job work, besides manufacture the plywood, during the relevant period, is corroborated from the respective balance sheet of the Appellant as in each of the balance sheets for the period 1997-1998 to 2000-2001, the Appellant had against the head 'other income', reflected the amount received from the activity of Job-work.3.6 He has further submitted that demand has been confirmed for the period 1997-98 to 2000-2001, alleging that the Applicant had removed 995664 Sq.Mtr of 24 mm thickness plywood, whereas their per day capacity to manufacture 24 mm plywood was 238.14 Sq. Mtr. It is not clear as to how the Department has assumed the clearances of entire quantity of plywood during....
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....the statements of these persons, confirmed the demand observing that the evidences furnished in the form of statements by these persons, are admissible in evidence and there is no necessity of any cross-examination. Further, he submitted that soon after search of the premises, Shri Pawitra Chopra, Authorized Signatory of the Appellants, accepted about the evasion of Central Excise duty and tendered an amount of Rs. 10.00 lakhs voluntarily. Therefore, subsequent, denial of clandestine removal by the Appellant, is un-sustainable and accordingly not accepted by the adjudicating authority. Further, he has submitted that the Appellants in the de novo proceedings before the ld.Commissioner, has produced affidavit of five persons, who claimed to have supplied the veneers for core drying were not accepted by the adjudicating authority on the basis of discrepancies noticed in the said Affidavit. He has submitted that since the Appellants did not produce the details of clandestine removal, therefore, the Department has no other option, but to adopt the price and the quantity as shown in the respective cash memo for the determination of value as well as duty. 4.1. The plea of job work by t....
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....y. Referring to judgment of this Tribunal M/s. Universal Radiates Ltd. vs, Commissioner of Central Excise, Coimbatore [2002(148) ELT 1193 (Tri.-Chennai)] he has submitted that in the said case it was held that admission made by the Purchase Assistant, Authorised Signatory that there was clandestine manufacture and removal of goods, and such admission never retracted at anytime, findings of manufacture and clandestine removal of goods as arrived were quite reasonable. Further, he has submitted that private records are reliable piece of evidence as held in the case of CCE,Indore M/s Pithampur Alloys Casting Ltd. 2013-TIOL-1932-CESTAT(DEL) Thus, in view of the facts discussed by the adjudicating authority that the preponderance of probability of clandestine removal of plywood is established against the job work cash memos. Further, Shri R.K. Agarwal was responsible for the day to day affairs and hence was liable to Penal action as held by the adjudicating authority. 5. Heard both sides and perused the records. The issue for determination is: whether the Appellant during the period April, 1997 to March, 2001, manufactured and cleared clandestinely excisable goods viz. 24mm thickness....
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....letter of the sixth one, which were collected behind their back, cannot be relied upon as these persons were not produced/allowed to be cross examined by the Appellant. Besides, the Appellants, had filed affidavits of their witnesses, whose names, also figured in the cash memos/challans, to buttress their claim that during the relevant period, they had undertaken the job work of core veneer drying & Face Veneer Tapping besides manufacturing of plywood in their factory; non-consideration of these affidavits had resulted in to miscarriage of justice. 5.4 The other argument advanced by the ld. Advocate is that the machineries installed by the Applicant are incapable of manufacturing the quantity of 24 mm thickness plywood alleged to have been removed without payment of duty during the relevant period. In support, they have relied upon a Chartered Engineer's Certificate who has certified that the capacity of machines to produce 24 mm of plywood per day is around 238.14 Sq.Mtrs. Accordingly, for the period in dispute, they could not have manufactured the alleged quantity of ten lakh square meter of 24mm thickness plywood. Also, referring to the respective job work challans/cash m....
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....ppellant had not carried out job work in their premises. Besides requesting cross-examination of these witnesses, the appellant had also filed affidavits of five persons, in making an attempt, to rebut the allegation of the Department that no job work had been carried out by them in their factory during the relevant period. Also, during the course of hearing before us, the Ld. Advocate for the appellant has referred to a letter dated 16.04.1997 addressed to the Asst. Commissioner of Central Excise informing about the intention of undertaking job work by the appellant. 5.7 The aforesaid arguments advanced on behalf of the appellants, in our opinion, cannot be brushed aside, in considering their plea for cross examination of the witnesses, who had stated before the Department that they were not sending the materials for job work. It cannot be denied that these statements have been recorded by the Department under section 14 of Central Excise act, 1944 behind the back of the appellant and its veracity is under challenge. The correctness or otherwise of these statements would definitely be decisive factor in arriving at the conclusion that the appellant in the guise of job work manu....
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....ement is dead; (b) when he cannot be found; (c) when he is incapable of giving evidence;(d) when he is kept out of the way by the adverse party; and (e) when his presence cannot be obtained without an amount of delay or expense, which the Officer considers unreasonable." 5.9 Their Lordships while upholding the constitutional validity of the said provision summarized their observation as follows: " 32.Thus, we summarize our conclusions as under:- (i) We are of the opinion that the provisions of Section 9D(2) of the Act are not unconstitutional or ultra vires; (ii) while invoking Section 9D of the Act, the concerned authority is to form an opinion on the basis of material on record that a particular ground, as stipulated in the said Section, exists and is established; (iii) such an opinion has to be supported with reasons;(iv) before arriving at this opinion, the authority would give opportunity to the affected party to make submissions on the available material on the basis of which the authority intends to arrive at the said op....