TaxTMI 
TaxTMI 
2012 (3) TMI 403
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.... been dropped by Commissioner (Appeals). 2. We have heard both sides and perused the records. 3. These matters started with investigations against MSRMPL regarding clandestine manufacture and removal of goods. Based on evidences gathered during investigation, cases of clandestine manufacture and removal were made also against manufacturers of steel ingots who supplied non-duty paid ingots to MSRMPL. In those cases MSRMPL were also a party. On completion of adjudication proceedings, duty demanded was confirmed against the manufacturers of ingots with interest and penalty. Further penalty was imposed on MSRMPL equal to the duty evaded by the ingot manufacturers in each case. Against such adjudication orders the ingot manufacturers and MSRMPL filed appeals with Commissioner (Appeals). Commissioner (Appeals) set aside the duty demand and penalties adjudged by the adjudication orders on the ground that the case is based on third party records and the fact of clandestine manufacture and clearance is not proved adequately. Aggrieved by the orders of the Commissioner (Appeals), Revenue has filed these appeals. Eight appeals filed by Revenue against such ingot manufacturers (oth....
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....Sandeep Aggarwal, Director of M/s. Sangeeta Tools Ltd. to which factory the goods seized were intended to be delivered. (viii) Statement dated 11-9-2011, given by Sh. Jagdish Singh, son of Smt. Kulwant Kaur the owner of Mola Kanda, who was in charge of the day-to-day operations of the weigh-bridge of Mola Kanda. (ix) Evidence from records maintained by Mola Kanda, of supply of unaccounted raw materials needed by MSRMPL, by 19 induction furnace units. Out of the 19 units 5 units admitted supply of unaccounted raw material to MSRMPL and paid duty and penalty voluntarily. Another 2 had admitted unaccounted supply of materials and agreed to pay the duty unaccounted clearances of following types were noticed :- (a) where the consignments were not accounted by both the supplier and MSRMPL; and (b) where the consignments were accounted by the parties but the weight of the goods accounted was lesser than the weight recorded at Mola Kanda. 8. Five of the Ingot manufacturers admitted that they had supplied steel ingots without accounting and payment of duty to MSRMPL and paid duty and penalties. Some of these p....
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....stration number of their vehicles against the impugned entries; (iii) The Mola Kanda might have indulged in fake transactions either to give push to their balance sheet for bank purpose or to meet their other expenses; (iv) Revenue has not recorded statements of MSRMPL to clarify the entries in records of Mola Kanda; (v) The weighment slips show charge of Rs. 25/- for loaded vehicle and Rs. 15 for vehicle without load whereas in some other cases these are shown as Rs. 15/- and Rs. 10/- respectively thus showing that the weighment slips are not properly maintained; (vi) Revenue has not produced any evidence to show manufacture and sale of final products by MSRMPL using unaccounted material supplied by respondent. 12. The Commissioner (Appeals) had set aside the adjudication order on the following grounds : "I have carefully examined the case records including the submissions made by the appellants and the respondents in writing and also at the time of personal hearing and I observe that the whole case of the department is based on the entries in a register maintained by the owner of the weighment bridge namely M/....
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....hat records of third party cannot be considered as a conclusive evidence of clandestine removal of goods in the absence of corroborative evidence. It is a settled law that the liability cannot be fastened on an assessee on the strength of documents seized from the possession of third party. The Apex Court in the case of M/s. Oudh Sugar Mills Ltd. v. UOI - 1978 (2) E.L.T. (J172) (S.C.) has already held that if the findings of the authorities are reached on assumption, then ultimate conclusion will have to be rejected as incorrect." 13. The question as to what extent the records maintained by third parties can be accepted as evidence was examined in the main Appeal No. E/1257/2005 filed by MSRMPL and appeals filed by 9 of the ingot manufacturers. For convenience we reproduce the relevant paragraphs from the order below : "15. We do not agree with the argument that third party records cannot be accepted as evidence. In all criminal proceedings evidence is given mostly by third parties because criminal cases cannot be built on inculpatory statements given to police in view of Section 162 of Criminal Procedure Code. Provision of Section 164 of Cr.PC, for recording statement....
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.... books of account to show how the weighing slips show clearances of goods in the case of accounted goods. So it is very obvious that where corresponding entries are not found in the books of account those related to clandestine removals. Further conclusion in such matters is a result of overall appreciation of evidences put forth and cannot be taken as rule that weighing slips at weigh-bridges are no evidence at all. (ii) CCE, Chandigarh v. Dashmesh Castings - 2001 (130) E.L.T. 658 There is no ruling in this case that third party documents cannot be evidence. Extracts of a decision that the case was not proved is re-produced below : "4. We have heard Shri Mewa Singh, learned DR and Shri J.S. Agarwal, learned Counsel. We find that no investigations were conducted in respect of the goods alleged to have been removed without payment of duty, even though the names of the consignees were appended on the octroi receipts. Further the respondents have sometimes issued two gate passes in a single day and this would show that whenever they cleared two ....
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....uty during the period from 19-6-2000 to 22-6-2001 on the basis of books of account resumed from Chitra Traders; that the records resumed from Chitra Traders were manipulated; that Shri R.K. Mittal was asked in his cross-examination as to how the ledger seized on 24-6-2001 bore an entry of 26-6-2001; that he had admitted that the entry dated 26-6-2001 was in his own handwriting; that the finding of the adjudicating authority that the 26-6-2001 was a slip of pen is misplaced because if it is a slip of pen, then the original entry generated in the cash book must be available. He also mentioned that both S/Shri Kamlesh Singh and Anurag Sharma, Inspectors, stated in their cross-examination that no enquiry was made from Chitra Traders as to whom goods were sold or disposed by them; that Anurag Sharma also mentioned that he did not verify how seven GRs not relating to Chitra Traders were resumed from their business premises; that his cross-examination also reflects the manipulation of accounts inasmuch as the adjudicating authority, in the impugned orders, mentions that R.K. Mittal never acted as commission agent, Anurag Sharma has mentioned that Chitra Traders is a commission agent; that....
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.... CC v. D. Bhoormal - 1983 (13) E.L.T. 1546 (S.C.) (ii) Sita Cement Ltd. v. CCE - 2003 (153) E.L.T. 204 (iii) Gulabchand Silk Mills Pvt. Ltd. v. CCE - 2005 (184) E.L.T. 263. 16.3 The contention that unless details of all clandestine removal are written down by the person doing such activity and signed by such person it cannot become evidence against him is very fallacious argument as observed by the Tribunal in the case of Gulabchand Silks (supra). This view is supported by the decision of the Apex Court in the case of Bhoormal (supra). So each case has to be decided by taking into account the overall facts and appreciation of the quality of evidence. Though the records maintained at Mola Kanda are not signed records those have been authenticated by the statements given by the persons running Mola Kanda. The appellants did not cross-examine these persons to rebut their statements." 14. We note that in this case neither M/s. APM Associates Pvt. Ltd. nor MSRMPL, at the adjudication stage, wanted to cross-examine the persons who maintained the registers at the Mola Kanda. Thereafter they cannot be raising such re....
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....t's end. Total duty demanded and confirmed in the adjudication order is Rs. 4,36,287/-. 20. The facts recorded and the defence arguments of the respondents are on the same line as in the first case of APS Associates. We find no reason to come to a different conclusion in this case. 21. However, we notice that the appellants had paid duty of Rs. 20,289/- and penalty of Rs. 5,072/- before adjudication. However, penalty is imposed corresponding to duty amount inclusive of the amount of Rs. 20,239/-. So we reduce the penalty by this amount. Further, we note that the adjudicating authority did not give option to the appellants to pay the duty involved along with interest and 25% of duty demanded as penalty within 30 days of receipt of the order. Following the decision of the Delhi High Court in the case of K.P. Pouches v. Union of India - 2008 (228) E.L.T. 31. We give such option with the condition that such payment should be made within 30 days of receipt of this order failing which full penalty will have to be paid. Appeal No. E/315/2007 against Sharu Steel Ltd. 22. In this case duty demanded is in respect of two consignments in the vehicle of the respondents seen t....
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.... 31. We give such option with the condition that such payment should be made within 30 days of receipt of this order failing which full penalty will have to be paid. Twenty Appeals filed against MSRMPL 30. In this case Revenue argues that the evidences placed by Revenue is good enough to prove the charge of buying non-duty paid excisable goods. Thus issue has been considered in the appeal decided in the earlier order and the four appeals decided above in this order. We do not propose to examine this issue in detail in each case because we feel that it is not necessary to impose penalties on MSRMPL in these cases. 31. MSRMPL argued that a penalty under Rule 209A could not have been imposed on them as they are a company and such penalty could be imposed only on natural persons. They rely on the following decisions in support of their argument. (i) Woodman Industries v. CCE - 2004 (164) E.L.T. 339 (Tri.-Kol.) (ii) Commissioner v. Woodman Industries - 2004 (170) E.L.T. A307 (S.C.) (iii) Aditya Steel Industries v. CCE - 1996 (84) E.L.T. 229 (Tri.) (iv) Universal Radiators Ltd. v. CCE - 2008 (223) E.....