TaxTMI 
TaxTMI 
2007 (7) TMI 115
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....(iv) Shri Manish Jain, Partner of M/s. D.P. Industries - Rs. Five Lakhs. 3. The appellant strongly challenge the impugned order. Shri K.K. Anand, learned Advocate appeared on behalf of the appellants. Shri S.M. Tata, SDR appeared on behalf of the revenue. The learned Advocate briefly explained the facts of the case. The appellant M/s. D.P. Industries is a partnership firm engaged in the manufacturer of flats. They receive ingots from M/s D.P. Processors Private Ltd. and M/s. Ambeecee Consolidated Enterprises Pvt. Ltd. and convert the same to Steel flats/bars on job work basis. He emphasized the point that M/s. D.P. Industries do not sale directly the flats. In other y do the work on job work basis and clear the goods on added value on payment of duty to M/s D.P. Processors. They collect only the job charges from M/s. D.P. Processors Private Ltd. The partners of M/s. D.P. Processors are (i) Pankaj Jain (ii) Atul Jain, (iii) Manish Jain. He said that the demand of duty on the appellants is mainly based on certain documents recovered from Shri Hem Chand Jain who is the father of Pankaj Jain arid Atul Jain. He also referred to the statement of Shri Sanjay Jain who was Accountant and a....
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....ised not to give his real name to the Central Excise department. In these circumstances, Shri Tata argued that an adverse inference has to be drawn regarding the manufacture and clearances of the flats. He took us through all the statements of Shri Sanjay Jain and also the show cause notice and said from the statements of Sanjay Jain one can definitely come to the conclusion that the appellant M/s D.P. Industries manufactured and cleared flats without accounting them in the Central Excise records and without payment of duty. He said that the partners of D.P. Industries and the Directors of D.P. Processors Pvt. Ltd. are from the same family. The entire thing is a family show and .Shri Hem Chand Jain was running the show. Therefore, the documents seized from his showing the sales of flats would indicate that these flats were manufactured only by M/s. D.P. Industries and cleared without payment of duty. Referring to the relied on documents number 2, 3, 5 and 14, he said that the demand based on the above documents is required to be confirmed. 5. We have gone through the records of the case carefully. The show cause notice issued to the appellant for demand of duty is based on documen....
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....pellants have stated that they receive ingots against challans issued under Rule 57F(3) and against duty paid documents issued under Rule 52A. The appellants have stated that they manufacture flats from ingots on job-work basis and send the same on payment of duty to M/s. D.P. Processors and receive only job charges. In other words, it is their contention, that they do not sell the flats at all. The department's case is that apart from the job work, the appellants manufacture and clear flats without payment of duty. The basis for the charge is the documents namely Dharmkanta slips recovered from Shri Hem Chand Jain. When the Dharamkanta Slips indicate the details of lorry number, nothing prevented the departmental officers in investigating the matter further by locating the buyers of the flats. There is no evidence that the appellant firm actually cleared the flats without payment of duty. In order to manufacture flats, first raw materials namely the ingots should be received. Since, the source of ingots in the present case is M/s. D.P. Processors Pvt. Ltd. and also M/s. Ambeecee Consolidated Enterprises, there should be evidence that the above units produced ingots which were not ....
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....Page Nos. 52 & 81 of the ledger showed purchase of scrap. As already submitted, notice had no business to deal in scrap. Scrap was a raw material for an Ingot manufacturer and M/s. D.P. Processors (P) Ltd., Delhi was manufacturer of S.S. Ingots. (b) It had been submitted in reply to Show Cause Notice issued to M/s. Ambeecee Consolidated Enterprises (I) Pvt. Ltd. that document Nos. 9 & 13 belonged to M/s. D.P. Processors. The chart showing comparative entries in document Nos. 15 and 9 as well as Nos. 15 and 13 were enclosed herewith as Annexure 'D' to the reply dated 22-1-2001. Once it was seen that document No. 13.contained details of M/s. D.P. Processors (P) Ltd., Delhi, the datewise amount mentioned in this ledger (document No. 5) would be found reflected in document No. 13. A chart showing such comparison was enclosed herewith as Annexure 'E' to the reply dated 22-1-2001. This showed that the entries in ledger pertained to M/s. D.P. Processors (P) Ltd., Delhi and not to the notice. (c) As already mentioned that the notice was simply raising the bills of job charges as they were engaged in rolling of flats on behalf of others. The rolling charges for the relevant period were Rs....
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.... the same." 11. As regards, the statement of Shri Sanjay Jain, the appellants had contended that (a) he was not an employee of the noticee company (b) he was not aware of the activities of the noticee company (c) the documents stated to be shown to him were not written in his handwriting (d) he could not be aware of the details given in the said documents being a small time Accountant of a third company (e) he himself was not sure as to whether the documents Nos. 2,3,5 and 14 pertained to the noticee company (f) he had immediately reflected his statement at the first available opportunity. 12. The adjudicating authority has imposed penalties on Hem Chand Jain, Pankaj Jain, Atul Jain arid Manish Jain under Rule 209A of the Central Excise Rules. In the absence of a proper investigation, we are not able to sustain the demand or duty on D.P. Industries. The investigation has not brought out that the partners of D.P. Industries namely Pankaj Jain, Atul Jain and Manish Jain were actually involved in clandestine production and clearance. In our view based on the four documents Nos. 2, 3, 5 and 14 one cannot come to an inescapable conclusion that M/s. D.P. Industries indulged in clandest....