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2016 (1) TMI 1061
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....EI conducted search operations on 7.8.96 of various premises of brokers/bill traders and traders of Iron and Steel products and recovered records relating to the products cleared from respondent. Subsequently, the respondent s factory premises was searched on 24.7.97 and verified the records and also seized the records relating to commercial production and clearance of excisable goods. After completing investigations and recording statements from various persons and from their employees of respondent company brokers dealers etc., a SCN No.33/99 dt. 2.6.99 was issued to the respondent demanding excise duty of Rs. 1,64,38,943/- under proviso to Section 11A on the clandestine removal of excisable goods without payment of duty made for the period 1994-95 to 1996-97 and also proposed for penalty under Section 11AC. SCN also proposed for confiscation of land and plant and machinery under Rule 173Q. SCN was also issued to co-noticees viz. R.Murali, Chander Sekhar Sharma, R. Sanjay Kumar Ojha and Shri B.S. Garg for imposing penalty under Rule 209A of Central Excise Rules. After following the principles of natural justice, the adjudicating adjudicated the notice and passed the impugned orde....
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....rest of demand proceedings. The adjudicating authority cannot have macroscopic view and come to the conclusion that there is no link established with the statements vis-a-vis records with actual clearance of goods. He also submits that adjudicating authority has clearly rejected evidence on power consumption by merely recording that power consumption consumed during the subsequent ACP period where the same was less. He submits that adjudicating authority has totally ignored all the statements and various documents recovered.He also ignored revenue's investigation report. He further submits that preponderance of probability is applicable in the revenue matters. To support this, he relied various case laws which is enclosed in the paper book separately. He drew our attention to following case laws :- (1) State of Rajasthan Vs Mohan Lal 2009 (237) ELT 435 (SC) (2) Super Tyres Pvt. Ltd. vs CCE Panchkula 2009 (244) ELT 363 (Tri-Del.) (3) Ravi & Co. Vs CCE Lucknow 2013 (291) ELT 47 (Tri.-Del) Particularly, he relied the State of Rajasthan Vs Mohanlal (supra) wherein the Hon ble Supreme Court has held preponderance of probability which has been proved by ....
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....ch is available at page 91, 92 of the paper book. He drew our attention to question related to payment details which was available in file no.22 captioned as commission challan file seized by mahazar on 7.8.96 and in his reply, Shri Murali acknowledged of having seen the documents and explained the statement and worksheet. Sl.No.8 of the worksheet relates to I.S.A.P.(1st respondent) He explained the worksheet with reference to handling of cash and handing over the amount to various units. Shri Murali in his statement also deposed that writing pad recovered from One Mr.Pankaj has been serially numbered from pages 1 59 in order to identify manufacturing unit who removed the goods through bill trader invoice. In reply to a query, he replied on transactions of removal of goods of the respondent company. 3.9 He further refers to statement dt.29.8.96 of Mohd.Iqbal available at page 106 of PB. He submits that Mohd.Iqbal is a dealer in old products in Chennai wherein his statement dt.29.8.96 at Sl.No.1, 8-10 gives list relating to the respondent company. The same statement at page 109 confirms collection of cash and payment to various employees and Sl.No.1 of the....
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....LT 107 (Tri.-Del.) 4.2 Regarding weighment certificate, relied by the Revenue, he submits that from the weighment slip recovered from the weigh bridge, nowhere it is mentioned respondent s name and no statement recorded from the person in charge of the weighbridge. The department has only collected weighment certificate from the weigh bridge, which was enclosed as Annexure IV to the SCN. Further he submits that these weighment certificates were not shown to the persons who had signed the weighment certificates so as to confirm whether these certificates were signed by him or not. Further he submits that description and quantity of all other discrepancies were countered by them in their reply to SCN which is annexed at Vol-IV before adjudicating authority. He submits that therefore the same was not applicable to their case as there is no movement of vehicle number which has not been verified by the department and correlated with the weighment slip. 4.3 On the bill trader documents, he submits that tabulations were not seized documents. Therefore, they cannot be relied. Regarding writing pad relied by them, he submits that it is not a relied upon document and was not produced t....
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....6/2005) and reiterated that his submissions made in respect of appeal of Indian Steel & Allied Products (E/380/2005) on 7.8.2015 holds good. On the issue of weighment slips and bills generated in respect of second sales, statements recorded from various persons as the same modus operandi was adopted in this case also. 7. The brief facts of the case in respect of Appeal No.E/483/2005 is that M/s.Goyal Ispat Udyog (GIU) (presently known as Sri Ram Ispat (P) Ltd.) are manufacturers of MS Rounds, Bars etc. and registered with Central Excise Department. On a specific intelligence by DGCEI, they conducted investigation against the present appellant on the premise they were removing unaccounted production of steel products, through "bill traders" against "second sales invoices". A show cause notice No.69/98 dt. 12.10.98 was issued based on the "weighment certificates" seized from the premises of the weighbridge proposing demand of duty of Rs. 1,33,62,467/- on the clearances made during the period April 1994 to 7.8.1996 and also proposing penalties both on the appellant and its Managing Director. The adjudicating authority vide his OIO No.3/2004 dt.27.4.2004 dropped the show cause....
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....al clearance slips 39 weighment certificates were actually signed by P.K. Bansaland this was not considered bythe adjudicating authority whereas the local authorityhas confirmed duty in respect of 97 persons based on only 5 weighment certificates. He submits that the L.A. having admitted duty liability of 5 weighment slips, the same should have been applied for the remaining weighment slips and the local authority should have confirm the duty. Regarding power consumption and preponderance of probability, cases laws relied were identical to Indian Steel and Allied Products. 10. Ld. Advocate for the respondents submitted written submissions in respect of both the appellants Indira Ispat Udyog and Goyal Ispat Udyog and also submitted written synopsis and reiterated all the arguments and also relied findings of LA, in respect of both weighment certificate and also dealers statement and power consumption and other statements and case laws and submits that Vol-II submitted for Indira Ispat should be taken on record for both the appellants. He further submitted that quantification of demand is taken purely based on weighment slips and not based on any other documents on record recovere....
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....tements of persons are relied in all the cases. The revenue s main contention is that the adjudicating authority failed to consider the records and statements recorded from various persons and overlooked the evidences. Revenue placed their reliance heavily on the weighment certificates recovered from the Manali weighbridge and statements recorded from agents/bill traders particularly the statement of Mr.Murali Broker/Commission Agent and his private note and worksheet. Revenue s another main contention that preponderance of probability is applicable in this case which is not considered by the adjudicating authority. 13. On perusal of records, we find that the period of dispute relates to 1992-93 to 1996-97 and the whole issue of manufacture and clandestine removal of excisable goods appears to have emanated from the search of bill traders/agents premises on 7.8.96 and recovery of records and second sales invoices of various manufacturers. Interestingly, we find only on 13.9.96 (in respect of GIU), 28.10.96 (in respect of IIU) & 24.7.97 (in respect of ISAP) i.e. after one year the respondents premises were searched and statements were recorded. We find that the allegation of manu....
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.... relied by Revenue are clearly distinguishable and not applicable to the present cases. 14. In this regard, the Hon'ble High Courts and the Tribunal in various decisions consistently held that clandestine manufacture and removal of excisable goods is to be proved by tangible, direct and affirmative and incontrovertible evidences. The Hon'ble Allahabad High Court in the case of CCE Vs R.A. Castings Pvt. Ltd. (supra) on the identical issue upheld the Tribunal s order and dismissed the Revenue appeal. The said High Court's decision stands affirmed by Hon'ble Supreme Court as reported in Commissioner Vs R.A. Castings Pvt. Ltd. 2011 (269) ELT A108 (SC). The Tribunal in the recent decision in the case of Mahesh Silk Mills Vs CC Mumbai 2014 (304) ELT 703 (Tri.-Ahmd.) has relied the Tribunal s decision in the case of Nova Petrochemicals Vs CCE Ahmedabad [Final order Nos.A/11207-11219/2013 dt. 26.9.2013] wherein the Tribunal laid down the fundamental criteria to be established by revenue which is reproduced as under :- "8. Similarly, in the matter of' Nova Petrochemicals v. CCE, Ahmedabad-II, this Tribunal in its Final Order Nos. A/11207-1....
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....ing clandestine removal is squarely applicable to the present case. Whereas in the instant case none of the above evidences or any one evidence has been established by Revenue to prove the clandestine manufacture and removal. Therefore merely on the weighment slips from the weighbridge owner and statements and private worksheets of the Bill traders, it cannot be inferred that quantity shown in the weighment slips are actually received by the appellants used in the manufacture of goods and clandestinely as there is no evidence of any records brought out on receipt of the raw materials inside the factory or any evidence of clearance of finished goods from the factory or any documentary proof of receipt of the finished goods by the buyer having received the goods without cover of invoices or any payment particulars of sale and receipt of goods. No evidence advanced by Revenue to connect these weighment slips with either supplier / buyer or to the assessees or to the transporter or to sale proceeds etc. Therefore the burden of proof is on the Revenue to discharge onus and as already discussed in the preceeding paragraphs the revenue has not proved in this case. In this regard, th....
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....arty had clandestinely manufactured and removed excisable goods without payment of duty. That case was established by quantitative statements furnished by the party to their bank, stock taking report of the bank etc. Neither any such evidence with acceptable authenticity is available on record in the present case, nor any of the documents/statements relied on by the appellant is available. Demand of any amount of duty must have necessarily a quantitative basis, for which mathematical precision is required. This attribute is missing in this case. 7. The appeal is dismissed." The ratio of above Tribunal decision is squarely applicable to the present case. Further, we find this Bench on an identical issue of clandestine removal of finished goods in the recent decision in the case of CCE Vs Rawf Re-Rollers (supra) has rejected the Revenue s appeal and upheld the Commissioner order by relying Patna High Court order in the case of CCE Vs Brims Products - 2011 (271) ELT 184 (Pat.). 15. As regards higher consumption of electricity, we find the adjudicating authority in his order has dealt the issue in detail and brought out his clear findings. Though the Revenue has relied h....
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....ents of share brokers etc. have been relied upon in the proceedings, it was incumbent upon the Revenue to produce them as well as the investigating officer for cross-examination by the appellants, as was repeatedly requested by them. In the absence of the same, the statements of the share brokers etc. cannot be relied upon. The Tribunal further observed that even if, for the sake of argument, it is accepted that the income shown in the balance sheets is not the income derived form the sources declared by the appellants, there is nothing on record to link it with the so called clandestine removal of the goods. 5. On consideration of the aforesaid findings, we are of the view that the findings of the Tribunal are based on the material on record and they cannot be said to be without any material and perverse. We find that the Revenue has invoked the proviso to Section 11A(1) of the Act but no case has been made out in the show cause notices or in the adjudication order that there were any mis-statement, suppression of fact or fraud on the part of the respondents. No substantial question of law arises from the order of the Tribunal. 6. In the result, all the appeal fa....