TaxTMI 
TaxTMI 
2015 (7) TMI 182
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....and Shri Mohanlal Sethia have share holding in MAPL, Shri Mahendra Sethia does not have any share holding and is a paid Director, who functions on salary of Rs. 15,000/- plus residence and vehicle provided by MAPL. According to the Appellants, Shri Mohanlal Sethia had joined MAPL as a paid Director on Feb. 2003. M/s. Mahaveer Metal, Mumbai (hereinafter referred to as MM ), M/s. Nagina Enterprises, Mumbai (hereinafter referred to as NE ), M/s. Ficon Aluminium (P) Ltd. (FAPL) and M/s. Peeraj Trade Links (hereinafter referred to as PTL ) all located at 17, Abdul Rehman Street, Mumbai, which deal Aluminium Profiles and Sections. Shri Manishraj Jain is partner of NE. 1.2 On receipt of an intelligence that MAPL are engaged in evasion of duty, the officers of Directorate General of Central Excise Intelligence (DGCEI) on 18.09.2003, searched the following premises:- (A) Factory premises of MAPL; (B) Office premises of MAPL at Sunrise Tower, Indore; (C) Premises of NE, MM, FAPL and PTL at Mumbai; (D) Office premises of Capital Road Lines and Parcel Service at Indore and Mumbai (Mumbai premises were searched on 7.01.2004); (E) Residential premises of Shri Mahendra Sethia at....
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....oaded from the factory of MAPL under the direction of Shri Jayanti Bhai and the goods had been delivered to NE, Mumbai and M/s. Tarachand Fouzmal, Mumbai. However, on inquiry with Shri Jayant Bhai, Proprietor of M/s.Metchem India, it was found that he was ex-employee of MAPL but he refuted the statement of Shri Mangal Singh of Capital Road Lines. 1.2.4 On 7.1.2004, the premises of Capital Road Lines and Parcel Services at Mumbai were searched. A computer printout from the computer in the premises of the Capital Road Lines and Parcel Services, Mumbai was resumed. The print out appeared to contain the details of consignments of Aluminium Profiles and Sections transported from Indore to Bombay and also the details of the consignments of scrap dispatched from Mumbai. From the print out, it appeared that the Aluminium scrap was being dispatched from Mumbai in the name of different consignors like M/s. Navdurga Metal, M/s. B.K. Metal, M/s. Ganesh Metal, M/s. Ambika Metal and was being cosigned to M/s. Mallinath Aluminium, New Delhi. However, on inquiry, M/s. Mallinath Aluminium, New Delhi was found to be a fictitious entity, which was not existing. The statement of Shri Tilak Ra....
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....ed to be false as when he accepted that the weighment slips had been prepared by him, there is no explanation for the presence of those weighment slips in the godown of M/s.NE along with the consignment of 352 bundles weighing 20,352 kgs. found in the godown and these goods, therefore, appeared to have been cleared by MAPL, Pithampur without payment of duty. 1.2.7 On the basis of entries regarding dispatch of the finished goods in the documents A/3, A/4, A/5, A/7, A/10, A/11 & A/12 recovered from the residential premises of Shri Mahendra Sethia, the investigating officered prepared a chart enclosed as Annexure-I to the show cause notice giving details of the Aluminium Sections which appeared to have been cleared clandestinely without payment of duty to various parties during the period from Jan. 2003 to September, 2003. Total value of these clearances is Rs. 76,41,20,031/- and the duty chargeable on these clearances is Rs. 1,22,35,525/-. Similarly, on the basis of the entries in the documents A-8, recovered from the residential premises of Mahendra Sethia, officers prepared Annexure 1 A which contained the details of clearances of Aluminium Profiles by MAPL to various buyers dur....
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....appeared to have been evaded in respect of the clearances of Aluminium Profile as detailed in Annexure-1 and Annexure-1A to the show cause notice which includes the duty chargeable on 20,359 kgs of the goods seized from the godown premises of M/s. Nagina Enterprises, Mumbai under proviso to Section 11A(1) of the Central Excise Act, 1944 along with interest on it read with Section 11 AB; (b) imposition of penalty on MAPL under Section 11AC; and (c) imposition of penalty under Rule 26 of the Central Excise Rules, 2002 on Shri Mahendra Kumar Sethia, Manish Raj Jain, M/s. Nagina Enterprises, M/s. Mahaveer Metals Works Ltd., M/s. Ficon Aluminium Pvt.Ltd. and M/s. Peeraj Trade Link. Mumbai. 1.4 The above show cause notice was adjudicated by the Commissioner vide order-in-original dated 18.11.2005 by which he (a) Confirmed central excise duty demand of Rs. 1,38,34,497/- against MAPL, Pithampur under proviso to Section 11A(1) of Central Excise Act, 1944 along with interest on this duty under Section 11 AB; (b) Imposed penalty of equal amount on MAPL under Section 11 AC; and (c) Imposed penalty under Rule 26 of the Central Excise Rules, 2002 on other noticees a....
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....tatements dated 18.09.2003 16.10.2003 and 17.10.2003 has stated that the note books recovered from his residential premises pertain to the actual figures of sale and purchase made by MAPL but subsequently he retracted these statements stating that the figures contained in these diaries/files seized from him are imaginary figures prepared for the purpose of preparing documents for taking loan from the bank. (3) Though the Department seeks to corroborate allegation of clandestine removal based on the entries in the documents recovered from the residential premises of Shri Mahendra Sethia by alleging that the appellant during the period Jan. 2003 to September, 2003 received unaccounted consignment of Aluminium Scrap from suppliers in Mumbai, this allegation is also based on the documents recovered from the residential premises of Shri Mahendra Sethia, no inquiry has been conducted with anyone of the alleged Aluminium Suppliers . (4) The Department relies upon the statement of Shri Mangal Singh of Capital Road Lines, Loha Mandi , Indore , wherein he stated that the Capital Road Lines had provided transportation to MAPL for transportation of the goods from the factory at Pit....
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....had stated that he never personally supervised loading of the goods from MAPL. Similarly, in course of his cross examination, Shri Mahendra Jain, Manager, Capital Road Lines, also stated that he had only signed the statement in his writing and he did not remember the contents of the statement and that he did not personally supervise the loading of the goods at the factory of MAPL.Shri Tilak Lodaya, Manager of M/s.Capital Road Lines, Mumbai during his cross examination stated that the computer print-out generated from his computer at the Mumbai Office of the Capital Road Lines had been generated on 15.01.2004 but he was made to sign the same on back date i.e. 7.1.2004. It was obligatory on the part of the adjudicating authority to have taken into consideration the averments made by the witnesses in course of their cross examination which has not been done. (7) Though Shri Mahendra Sethia in his statement dated 16.10.2003 had stated that MAPL were selling Aluminium profiles to different customers such as M/s.Railway Tracks and Others and their details were also mentioned in the documents, absolutely no inquiry has been conducted by the Department with these parties. Similarly, no ....
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....e was containing details of the transportation provided by MAPL to Shri Manishraj Jain for transportation of Aluminium scrap from Mumbai to Indore under different names as per direction of Shri Manishraj Jain. He further stated that the computerized print out taken from the Mumbai office of the Transport Company also contained the details of the Aluminium Profiles consigned from Indore Branch in the name of different parties, M/s. Jainco Aluminium , M/s.Metchem India, etc. to M/s.Nagina Enterprises, Mumbai. He also disclosed the freight regarding transportation of the profiles from MAPL factory to Mumbai factory and transportation of the scrap from Mumbai to MAPL factory was being paid by Shri Manishraj Jain, Director, MAPL. However, Shri Manishraj Jain, Director, MAPL in his statement dated 4.2.2004 has flatly refused that MAPL had any customer at Mumbai. On being confronted with the computer print-outs taken from Capital Road Link Office at Mumbai, he refused to have dispatched any goods to MAPL. (10) The print-out at the premises of Capita Road Lines, Mumbai was seized on 7.1.2004 and it shows this rundate on all pages except 8 to 13. The pages 8 to 13, containing entries reg....
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....ber, 2000 to October, 2001 is not supported by power consumption. While Average power consumption per kg. of Aluminium sections/profiles produced during 1.1.2000 to 30.09.2002 was 1.06 units/kg., the same during 1.1.2001 tofd 30.09.2001 was 1.18 units/kg. and during 1.1.2003 to 30.09.2003 was 1.24 units/kg. Similarly, the labour employed during 1.1.2001 to 30.09.2001, 1.1.2002 to 30.09.2002 and 1.1.2003 to 30.09.2003 were 17, 20 and 29 respectively. (14) The show cause notice alleged that from scrutiny of the note book marked A/3 to A/5, A/7, A/10, A/11 recovered from the residence of Shri Mahendra Sethia , it appeared that a sum of Rs. 29,66,023/- had been paid on account of Shri James Paul by MAPL to Shri Yogesh Dubey and Shri Patelji. These persons were summed by the Investigating Officers but they did not appear. Shri Devendra Dawani, Authorised Signatory of MAPL in his statement dated 12.01.2004 has stated that Shri Dubey was the Production in charge of MAPL who was a man of the contractor - Shri James Paul and had left the MAPL two months back. According to the statement of Shri Mahendra Sethia, Shri James Paul was providing man power to their factory and was being p....
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.....) Wherein it was held that commercial invoices and delivery challans prepared by the appellant solely for raising higher bank loans and entries made in the private diary cannot be made the basis for establishing clandestine removal when no evidence has been produced by the Revenue in respect of the unaccounted receipt of inputs or manufacture of finished goods and removal thereof. (iv) T.G.L. Poshak Corporation Vs. CCE, Hyderabad 2002 (140) ELT 187 (Tribunal-Chennai) Wherein it was held that the note books maintained by the workers and other private accounts cannot be the basis for establishing the charge of clandestine removal without any other corroborative evidence with regard to purchase of raw material, manufacture of final products, flow back of money or any seizure from or any statement from purchasers. (v) CCE, Chandigarh Vs. Laxmi Engineering Works 2010 (254) ELT 205 (P&H) Wherein Hon ble Punjab & Haryana High Court held that even if some private records are discovered during raid and some of such records are corroborated by some supportive evidence, for establishing the allegation of clandestine removal and duty demand based on the same, it is necessary to....
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....nce to buyers in Mumbai were showing the consignor s names like Metechem India , M/s.Narmada Traders, etc. The freight in respect of these dispatches to Mumbai was being paid by Shri Manishraj Jain, Director of MAPL, who was also a partner of M/s.Nagina Enterprises. (4) The documents recovered from the transporters clearly indicated that the consignments of Aluminium Scrap were being booked by Shri Manishraj Jain from Mumbai by showing bogus names as consignors and showing M/s.MallinathAluminium, New Delhi as consignee and all these consignments were being received in the factory of MAPL. On enquiry, Shri Mallinath Aluminium were found to be a fictitious party. (5) At the time of search of godown of M/s. Nagina Enterprises, Mumbai, 352 bundles of Aluminium Profiles totally weighing 20,359 kgs. had been found alongwith weighment slips. These goods along with the weighment slips had been placed under seizure. Since these consignments appeared to have originated from the factory of MAPL at Pithampur, inquiary was made with Shri Davendra Dawani, Excise Clerk of MAPL and he while admitting that the weightment slips had been prepared by him claimed that no goods had been cleared. T....
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....om certain suppliers of Mumbai, which was used in unaccounted manufacture of Aluminium Sections/Profiles, which were cleared to the various parties including M/s. NE, Mumbai and M/s.TF, Mumbai without payment of duty. This allegation of duty evasion is based on the following evidences:- (a) Documents recovered from the residential premises of Shir Mahendra Sethia in course of its search on 18.09.2003 alongwith his statement recorded on 16.10.2003, 17.10.2003 and 23.10.2003; (b) Recovery of 352 bundles weighing 20,359 kgs. of Aluminium Profiles valued at Rs. 22,39,490/-from the godown at 157, Pangera Pole, 3rd Lane, Mumbai of Nagina Enterprises along with hand written weighment slips containing details of size and number of Aluminium profiles coupled with statement dated 12.01.2003 of Shri Devendra Dawani, Excise Clerk of MAPL stating that weighment slips recovered from the above mentioned premises had been prepared by him but he did not know about the consignee of the goods; (c ) The documents recovered from the search on 18.09.2003 of the office premises of Capital Road Line and Parcel Services at 104, Loha Mandi, Indore and 28, Vinayak Apartments, Indore and also on 7.1.....
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....loaded at the factory premises of Pithampur and it has been alleged that it is this unaccounted scrap which was used for unaccounted manufacture of Aluminium Profiles/Sections, which has been cleared clandestinely to various parities including Nagina Enterprises and Tarachand Fauzmal, Mumbai. The duty demand of Rs. 1,22,35,525/- whose details are mentioned in Annexure A-1 to show cause notice is based on the documents A/3, A/4, A/5, A/6, A/7, A/8, A/11 and A/12 recovered from the residential premises of Mahendra Sethia and these documents contain the details regarding the purchase of Aluminium Scrap and removal of Aluminium Profiles during the period Jan. 2003 to September, 2003. The duty demand of Rs. 15,98,972/- for the period December, 2000 to December, 2002 is based on the entries regarding purchase of Aluminium scrap and sale of Aluminium Profiles during the period from December, 2000 to December, 2002 as mentioned in the documents A-8 recovered from the residential premises of Mahendra Sethia. On the basis of these entries Annexure-1A has been prepared giving the details of the calculation of this duty demand. 8. While the basic documents for calculation of duty demand aga....
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....inium Profiles/Sections to M/s.NE are corroborated by the details of the LRs as mentioned in the Register maintained by the transport company. The details of such consignments are compiled in Annexure-32 of the show cause notice. In respect of these consignments detailed in the Annexure-32, whose details are recorded in the documents recovered from the residential premises of Mahendra Sethia and which as per the records of the transporters M/s. Capital Road Lines had been transported to Mumbai, the claim of Shri Mehendra Sethia that these entries do not represent real transaction is difficult to accept as the documents recovered from residences of Shri Mahendra Sethia are corroborated not only by the documents recovered from the transporters Capital Road Lines, Indore, but also from the fact that on date of search of the godown of M/s. Nagina Enterprises on 18.09.2003, 352 bundles of Aluminium Profiles weighing 20,359 kgs. had been recovered along with the weighment slips containing details of size and numbers of the Aluminium profiles and further, inquiry revealed that weighment slips had been prepared by Shri Devendra Dawani, Excise Clerk of MAPL and Shri Devendra Dawani in....
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....e-130 to 131 of file A/13 recovered from the residential premises of Shri Mahendra Sethia. 8.3. In view of the above discussion, we hold that the duty demand in respect of the consignments cleared by the appellant company to M/s. NE, Mumbai, whose details are given in Annexures 32 of the Show cause notice, has to be confirmed. 8.4 However as regards the alleged clearances to M/s. Nagina Enterprises, Mumbai, M/s. Tarachand Fouzmal, Mumbai, M/s.Ambika Aluminium Profiles, M/s. Deepak Metals and M/s. G. Gajendra & Company detailed in Annexure in 33 to the show cause notice, though these clearances detailed in the computer printout seized from the Mumbai premises of Transporters, M/s. Capital Road Lines are corroborated by the entries in the documents recovered from the residential premises of Shri Mahendra Sehtia, except in respect of M/s.NE, no inquiry has been made with other parties M/s. TF, M/s. Ambika Aluminium Profiles, M/s. Deepak Metals and M/s. G. Gajendra & Co., Mumbai. They have not been even show caused for imposition of penalty under Rule 26 of the Central Excise Rules, 2002. In respect of M/s. Tarachand Fouzmal, M/s. Ambika Aluminium, M/s. Deepak Metals and M/....