TaxTMI 
TaxTMI 
2015 (7) TMI 146
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....steel to be made is Mild Steel or high carbon steel. Ferro Alloys are added for manufacture of Alloy Steel and Stainless Steel. The period of dispute in this case is from May '05 to Aug. '06. 1.2 M/s. Monu Steel, Raipur, Chhattisgarh, a Proprietorship Concern of Sh. S.K. Pansari is a Commission Agent/Broker dealing in various Iron and Steel products viz. - Sponge Iron, MS Ingots etc. Acting on an intelligence that Appellant Company along with other Iron Steel manufacturers was evading Central Excise duty by clandestine removal of MS Ingots through M/s. Monu Steel, Raipur, the Premises of M/s. Monu Steel were searched on 15-1-2007 and some incriminating records found were taken over. The statements of Sh. S.K. Pansari were recorded on 15-1-2007, 19-9-2007, 21-9-2007, 30-5-2008 and 2-6-2008 under Section 14 of the Central Excise Act, 1944. Sh. Pansari in these statements while admitting that he is a Commission Agent dealing in various Iron Steel products including MS Ingots, stated that he is contacted by both the sides buyers as well as sellers, that he as broker procure sales orders for various Iron and Steel manufacturers including the Appellant Company for which he was ge....
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....ngots is Pig Iron which is added Carbon. The Investigating Officers obtained an opinion from the Department of Metallurgy, National Institute of Technology, Raipur (C.G.) under their letter No. 1388/Met. Engg./Consultancy/2009, dated 6-8-2009 stating that the maximum proportion of Pig Iron should not be more than 8%. However, it was found that in the appellant unit use of Pig Iron was to the extent of 16%, which also indicated that the production of MS Ingots was being under reported. 1.5 The statement of Sh. Mahesh Aggarwal, Director of the Appellant Company was recorded in course of which he was questioned about the above discrepancy in the consumption of electricity per MT and consumption of Pig Iron but he could not give any satisfactory reply. 1.6 In view of the above investigation show cause notice dated 28-5-2010 issued to the appellant company and its Director Sh. Mahesh Aggarwal and Sh. Monu Steels for :- (a) Demand of Central Excise duty amounting to Rs. 5,32,49,247/- from the appellant company on alleged clandestine removal of 21082 MT of MS Ingots during period from May '05 to Aug. '06 along with interest thereon under Section ....
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....er MT has been accepted, that no experiment has been conducted in the appellant's factory to determine the actual consumption of electricity for production of one MT on Mild Steel Ingots, that consumption of electricity depends upon various factors like power break down, power fluctuation, quality of scrap, etc., that letter from Department of Metallurgy, National Institute of Technology, Raipur opines that consumption of Pig Iron in the manufacture of MS Steel Ingots cannot be more than 8% is merely an opinion and unless the cross examination of the person which has given this opinion is allowed and its correctness is ascertained by cross examination of that person, this opinion has no evidentiary value, that similarly, the author of documents recovered from the premises of M/s. Monu Steels has not been identified for which cross-examination of Sh. S.K. Pansari was necessary, but the same has not been allowed, that the documents recovered from the premises of M/s. Monu Steel are third party documents which cannot be admitted as evidence without cross examination of the person from whom the documents have been recovered and the author of the documents, that cross-examination of a w....
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....allegation made in the Show Cause Notice and that in view of this the enquiry with National Commodity & Derivative Exchange Ltd., Mumbai cannot be used as evidence against the appellant. He, therefore, pleaded that the impugned order is not sustainable. 4. Sh. Pramod Kumar, learned Jt. CDR, defended the impugned order by reiterating the findings of the Commissioner and pleaded that the allegation of duty evasion against the appellant company is based on concrete evidence on record, that the power consumption of 830 unit per MT has been adopted on the basis of the technical literature of M/s. Inductotherm who are the manufactures of the induction furnace installed in the appellant factory, that no explanation has been given by the Appellant for vide fluctuation in power consumption per MT of MS Ingots which has varied from 3305 units per MT to 1444 per MT during April '05 to Aug '06 period, that the only explanation for such high power consumption is un-accounted, manufacture of MS Ingots cleared without payment of duty, that the fact of un-accounted manufacture and clearance of MS Ingots is also corroborated by the consumption of Pig Iron in the appellant factory which is 1....
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....gots during period of April '05 to Aug. '06 is based on the assumption that power consumption per MT of MS Ingots is 830 units of electricity which according to the Department, is based on Technical Literature of M/s. Inductotherm. The other supporting evidence relied upon by the Department is :- (a) documents recovered from M/s. Monu Steels through whom 685 MT of MS Ingots had been sold by the Appellant Company and which are not recorded in the books of accounts being maintained by the Appellant Company; (b) Statement of Sh. S.K. Pansari of M/s. Monu Steel admitting recovery of those documents also the fact that he was a broker for the appellant company and other manufacturer of Iron and Steel products and the entries with "O" were the entries in respect of which the goods had been sold without bills; (c) Opinion of National Institute of Technology, Raipur, Department of Metallurgy, under their letter dated 6-8-2009 wherein they have opined that proportion of Pig Iron in the manufacture of Mild Steel Ingots cannot be more than 8%; (d) Enquiry with National Commodity & Derivative E....