TaxTMI 
TaxTMI 
TaxTMI 
2015 (11) TMI 1034
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.... Batra as its partners. Another partner of this firm is Mrs. Mala Batra wife of Shri Rajesh Batra. M/s Grandlay Cinema is a proprietary firm of Shri C.L. Batra Father of Shri Rakesh Batra, Shri Rajesh Batra, Shri Brajesh Batra and Shri Vivek Batra. M/s Batra Enterprises, M/s Batra Henlay Cables and M/s Grandlay Cinema have offices at the same place. The period of dispute in this case is from 1994-1995 to 1997-1998. During this period M/s Batra Henlay were availing of SSI exemption and were not paying any duty on the ground that according to them they were under full duty exemption. The premises of M/s Batra Henlay Cables, M/s Batra Enterprises were searched by the Jurisdictional Central Excise officers on 17/01/97. At that time while M/s Batra Henlay were not registered with Central Excise Department, they had issued invoices upto 356 dated 20th October, 1996 and after this invoice, there was only an isolated invoice No. 516 dated 28/12/96 and the invoices in between were missing. Certain other records which appeared to be relevant for investigation were taken over under Panchnama for further investigation. During investigation it was found that the invoice No. 183, 192, 205, 215, ....
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.... Syrian Bank Limited from where the amount were being withdrawn in cash. Shri Vinod Kumar in his statement dated 03/3/98 stated that while he is working as booking clerk in the Cinema Hall of Grandlay Cinema owned by Shri C.L. Batra, and at the instance of Shri Brajesh Batra, he had opened an account No. 347 in Catholic Syrian Bank Limited, Ashok Vihar, New Delhi in November 1994 as Proprietor of M/s Batra Henlay Cables on the introduction of Shri Naveen Mehta, a person known to Shri Brajesh Batra and that similarly he had opened an account No. 3159 in Punjab National Bank in his name as Proprietor M/s Batra Henlay Cables and account No. 367 in Catholic Syrian Bank Limited in his name as Proprietor of M/s Cosmoline Electrical and another account No. 4077 in Indian Overseas Bank in his name as Proprietor of M/s Cosmoline Electrical, that these accounts, though in his name, were being operated by Shri Brajesh Batra, that to his knowledge the amounts received through cheques in these account pertain to sale of wires and cables manufactured in the factory premises of M/s Batra Henlay Cables, that the cash withdrawn by him used to be handed over by him to Shri Brajesh Batra who was the ....
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....entral Excise Act, 1944 ; (c) confiscation of land, building, plant, machinery of M/s Batra Henlay Cables under Rule 173Q (2) of the Central Excise Rules, 1944 and (d) imposition of penalty under Rule 209A of Central Excise Rules, 2002 with Shri Rajesh Batra and Shri Brajesh Batra. The show cause notice also sought appropriation of an amount of Rs. 25,00,000/- already deposited by M/s Batra Henlay Cables during investigation. 1.3 Enquiry in respect of Batra Enterprises revealed that during period from 1994-1995 to 1997-1998 they had sold wires and cables to worth Rs. 1,10,34,576/- to various customers. Enquiry was made with the customers and they stated that under the invoices of Batra Enterprises they had purchased Batra Henlay wires. However, it was found that during that period, there were no sales of any Batra Henlay wires/cables by M/s Batra Henlay Cables to M/s Batra Enterprises and, thus, it appeared that the Batra Henlay brand cables supplied by M/s Batra Enterprises to various customers were those which had been manufactured and clandestinely cleared by M/s Batra Henlay Cables. Duty demand of Rs. 23,20,278/- is on this basis. In this regard a show cause notice dated 04/4/....
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.... the cables of Batra Henlay brand, that as regards duty demand of Rs. 23,20,278/-, from perusal of para 46, 47, 48 of the impugned order dated 29/10/04 of the Commissioner, it will be seen that M/s Batra Enterprises had purchased wires and cables from 12 parties during 1994-1995 to 1996-1997 period, that from the scrutiny of the sales and purchase register for 1996-1997 (upto 17/1/97) maintained by M/s Batra Enterprises it will be seen that they had sold electricals goods worth Rs. 87,63,425/- whereas from purchases were worth Rs. 68,24,884/- and they were having closing stock of Rs. 2,57,450/- as on 01/4/06, that the difference between the sale and purchase prices i.e. Rs. 16,81,091/- was the gross margin of M/s Batra Enterprises, that it has been incorrectly held that wires and cables bearing the brand name Batra Henlay valued at Rs. 71,13,121/- were manufactured and clandestinely cleared by M/s Batra Henlay Cables and were supplied to 17 buyers by M/s Batra Enterprises, that there is nothing brought on record to show as to how the unaccounted goods received from M/s Batra Henlay Cables have been accommodated against the statutory invoices issued by M/s Batra Enterprises, that th....
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.... Cosmoline Electricals cannot be linked to the goods manufactured and cleared by M/s Batra Henlay Cables, as M/s Cosmoline Electricals are a trader and there is no evidence to prove that the goods sold by M/s Cosmoline Cables had been purchased by them from M/s Batra Henlay Cables, that in view of this, the cheque payments made in the account of M/s Cosmoline Electricals cannot be assumed to be the payments for the goods manufactured and cleared by M/s Batra Henlay Cables, that in any case, Shri Brajesh Batra was an active partner of M/s Batra Enterprises and he was not a partner of M/s Batra Henlay Cables and if Shri Brajesh Batra opened the four accounts in- connivance with Shri Vinod Kumar, an employee of M/s Grandlay Cinema, the deposits made in the four accounts cannot be linked to M/s Batra Henlay Cables and cannot be treated as payments for the goods manufactured and cleared by M/s Batra Henlay Cables and on this basis M/s Batra Henlay Cables cannot be fastened with the duty liability, that in this regard the cross examination of Shri Brajesh Batra, Shri Vinod Kumar and Shri Naveen Mehta has been denied without lawful reason and that in view of the above submisions, the impu....
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....ted to have purchased wires and cables from M/s Batra Henlay Cables and made payments by cheque, that from this it is clear that all the cheque payments made into the above-mentioned four accounts opened in the name of Shri Vinod Kumar by showing him as Proprietor of M/s Batra Henlay Cables and M/s Cosmoline Electricals have been made against the sales of wires and cables manufactured and cleared by M/s Batra Henlay Cables, that though Shri Brajesh Batra claims that the amounts deposited in the four bank accounts are in respect of the sales of wires and cables which had been got manufactured on job work basis, no evidence in this regard has been produced, that M/s Cosmoline Electricals is a non-existent entity and all the sales made in the name of M/s Cosmoline Electricals are in fact the sales made by M/s Batra Henlay Cables, that in view of this, the duty demand of Rs. 66,04,307/- has been correctly confirmed by the Commissioner alongwith interest and penalty of equal amount has been correctly imposed, that as regards the duty demand of Rs. 23,20,278/- against M/s Batra Henlay Cables, this demand is based on the fact that during period from 1994-1995, to 1996-1997 M/s Batra Enter....
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....since during that period as per the books of accounts and other records of M/s Batra Henlay Cables, there was no sales to M/s Batra Enterprises, it has been presumed that the Batra Henlay brand wires and cables supplied to the 17 buyers had been procured from M/s Batra Henlay Cables who had cleared the same clandestinely, without issue of invoices. The value of these sales is Rs. 71,13,121/- on which the duty of Rs. 23,20,278/- has been demanded. The defence of the appellant is that merely on the basis of the statements of the 17 buyers, it cannot be inferred that the wires and cables supplied by M/s Batra Enterprises were of Batra Henlay brand manufactured by M/s Batra Henlay Cables. Since, this duty demand is based only on the statements of 17 buyers who had stated that they had purchased Batra Henlay brand cables from M/s Batra Enterprises and other than this, there is no evidence, in our view the cross examination of these buyers should have been allowed, which would be necessary in terms of the provisions of Section 9D (2) readwith Section 9D (1) of the Central Excise Act, 1944. In terms of Section 9D (2) the provisions of Section 9D (1) would, so far as may be, apply to any p....
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....ose statements are being relied upon in support of the allegation of duty evasion of the appellants company M/s Batra Henlay Cables has not been allowed, in our view, the duty demand based on their statements would not be sustainable and the matter would have to be remanded to the Commissioner for denovo adjudication after permitting cross examination of the 17 buyers. In case, any of these persons are not available and the Department wishes to rely upon their statements, the directions of Honble Delhi High Court in the case of J&K Cigarette (supra) would have to be followed for relying upon those statements i.e. specific finding would have to be given after hearing the assessee as to whether the person whose statement is to be relied upon is dead or cannot be found or is incapable of giving evidence or is being kept out of the way by the adverse party or whose presence cannot be obtained without an amount of delay or expenses, which under the circumstances of the case, the Court considers unreasonable. 8. As regards the duty demand of Rs. 66,04,307/-, the evidence on which it is based can be summarised as under :- (1) existence of four secret bank accounts ac....
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.... name of Shri Vinod Kumar on his instructions, stated that he had got the cables manufactured from job workers and the payments received into these accounts were of the sale proceeds of the cables got manufactured on job work basis ; (6) statements from certain customers of Batra Henlay Cables namely M/s Khandelwal Laminated Ltd., M/s Electrical Associates, M/s ETA, M/s MEC Electric Contracts Pvt. Ltd., M/s Bharat Construction Corporation, M/s Larson & Tourbo Ltd., M/s Sterling & Wilson Electricals Pvt. Ltd., M/s Unitech Ltd., M/s Switchgear & Control and M/s Gwalec Electricals (P) Ltd. who had made cheque payments for the wires and cables purchased by them by the cheques issued in the name of Batra Henlay Cables and M/s Cosmoline Electricals. All these buyers have admitted to have purchased Batra Henlay brand wires and cables from Batra Henlay Cables. 8.1 It is on this basis all the above evidence that the Department has alleged that the deposits totalling Rs. 2,89,47,379/- made in the above-mentioned four accounts during the period from 1994-1995 to 1997-1998 pertain to the clearances of wires and cables manufactured by M/s Batra Henlay Cables which have not been declared by ....
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....heir unit was not capable of manufactured aluminium cables. In this regard, Shri Krishan Singh Rathore, an employee of the appellant company, in his statement dated 17/1/97 has stated that Batra Henlay Cables were manufacturing only the house wire cables and telephone cables and were not manufacturing any aluminium cables. On this point no finding has been given by the Commissioner. If M/s Batra Henlay Cables were not having any machinery for manufacture of aluminium cables, the aluminium cables sold by them must obviously have been procured by them from other dealers and accordingly the payments received in the above-mentioned four bank accounts in respect of sales of aluminium cables cannot be treated as the payments received for sale of the cables manufactured and cleared by M/s Batra Henlay Cables. 8.5 It is also seen that while the payments in the four accounts mentioned above have been received from a large number of customers, the enquiries has been made only with 10 customers namely M/s Khandelwal Laminated Ltd., M/s Electrical Associates, M/s ETA, M/s MEC Electrical Contracts Pvt. Ltd., M/s Bharat Construction Corporation, M/s Larsen & Tourbo Ltd., M/s Sterling & Wilson E....