TaxTMI 
TaxTMI 
2016 (7) TMI 300
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....sioner (Appeals) while learned adjudicating authority dropped the proceedings initiated by the show cause notice on the ground of lack of evidence as to the clandestine clearance. This is evident from para 21 of his order. The duty demanded was followed by interest and penalty. 2.2 Learned Commissioner (Appeals) threadbare examined the allegations, evidence gathered by investigation and pleadings of the appellants. He held in page 13 and 14 of his order that the adjudicating authority failed in his duty to raise demand despite sufficient evidence, both oral and documentary were available on record demonstrating the premeditated design of the appellant-company and its Director colluding with a racket of perpetuators of offence including bill traders (false invoice issuing persons in the name of non-existing concerns) and brokers. They all had oblique motive followed questionable modus operandi to fulfill this mission. He examined the plea of the Director of the appellant-company as to receipt of unaccounted raw-material of 200 MTs of MS ingots by it from its sister concern viz., M/s. Triveni Alloys Limited (TAL) and use thereof in manufacture of 180 MTs of CTD bars which were ultim....
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....econd sale invoices in the name of non-existing concerns. He further revealed that he came across the broker R. Murali who was procuring orders and instrumental for issue of false invoices. Under his advices he opened a bank account No. 351720 in the name of Tirupathi Enterprise at Mount Road in Tamilnadu Mercantile Bank (TMB) and the proceeds of the false bill were routed through that account. He also opened a bank account No.321528 in the name of S.S Enterprises at Mount Road, Tamilnadu Mercantile Bank (TMB). He further opened an account vide No. 325576 in the name of D.M. Agencies at T. Nagar, Tamilnadu Mercantile Bank (TMB). All these bank accounts were operated in the name of non-existing concern and a person called Ravikumar who has no identity was operating such accounts. Proceeds of clandestine removals were routed through these accounts. 3.4 Chander Sharma also stated in his statement that he came across one Shri Thangavelu who connived with him giving him two firm names namely RVS Traders and Krishna Traders for opening bank account in such names. Account of RVS Traders was opened in Tamilnadu Mercantile Bank (TMB), Mount Road Branch vide Account No. 321671. The account ....
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....r No. II under Annexure C1 - 3 to the mahazar. 4.3 Apart from noticing S. Chander was one of the key players in the racket of clandestine removal and issued false invoices, investigation also noticed that R. Murali, a broker was also a conduit for which search to his premises was made and his statement recorded. In his statement dated 7.8.1996, he admitted that he was a broker procuring orders of goods for the manufacturers of iron and steel. So also he vividly explained role of Chander Sharma who was issuing false invoices to accommodate clandestinely removed goods of the appellant. He stated that sale proceeds were routed through bank accounts opened in the name of non-existing concerns and members of the racket were beneficiary of the ill gain from such trade. 4.4 Murali identified Chander Sharma and admitted that he was assisting Sri Sharma to issue false invoices. He also stated that members of the racket colluded to give shelter to the clandestinely removed goods of the appellant and other manufacturers issuing false second sales invoices as if Chander Sharma was the buyer of the offending excisable goods from the appellant and others and selling that as second stage dealer....
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....riyank International was a non-existing concern and had lent his sale book with firm XX to Sitaram Ojha for issuing false invoices. Sitaram Ojha had opened bank account in the name of Priyank International and transacted the clandestinely removed goods of the appellant therein. He also identified the buyers M/s. Gold Star, Shams Steels, PMA Steel who were all beneficiary of the false invoices. 9. Search to Triveni Alloys Ltd. (TAL), the sister concern of the appellant at Gumudipoondi revealed that 209.075MT of unaccounted raw materials were supplied to the appellant without payment of duty. Sampath Raj Jain, director of TAL as well as the appellant-company admitted such fact in his statement on 30.4.1997 and 20.12.1998. He also admitted that the above quantity of the ingots cleared by TAL were utilized by appellant company for manufacture of re-rolled products and cleared the same unaccounted. This comes out from paragraphs 22, 23, 24 of the show cause notice. He further admitted that TAL received about 245.970 MTs of shredded scrap through a scrap broker namely Shri Bankat lal Indoria from M/s. Sujana Steels Ltd./Sujana Industries Ltd. Chennai. He further stated that 200 MTs of M....
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....od grounds. Demand was raised on 180 MTS of clandestinely removed goods. The appellate authority further held that 89.712 MTs (269.712 MTs - 180 MTs) of CTD Bars were also clandestinely removed by the appellant. It was liable to duty and penalty as well as interest. Learned appellate authority has also rightly levied appropriate penalty on both the appellants upholding the allegations made by investigation through echoing evidence surfaced during search. 12. Heard both sides and perused the records. 13. Appellant neither led any cogent evidence to controvert allegations of clandestine clearance of 269.712 MTs of CTD bars valued at Rs. 34,22,342/- involving duty evasion of Rs. 5,13,351/- alleged in the para 34 of SCN in respect of the periods involved in 1995-96 and 1996-97 nor discarded the evidence gathered by investigation against it. Nothing could be demonstrated by the appellant company to establish that it had no unaccounted clearances. The only prayer of the appellant was to take a lenient view when the appellant disclosed unaccounted finished goods of 180 MTs cleared clandestinely, manufacturing that out of the unaccounted raw materials received from its sister concern M/s....
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....oods of the appellant. This was revealed by them in their statement and incriminating materials seized revealed such material fact. 16. All unaccounted transactions were routed through various bank accounts opened by the bill traders in collusion with brokers in the name of non-existing concerns. This was revealed by the bill traders and substantiated from the respective bank accounts. Such facts are elaborated at the outset in the preceding paragraphs of this order. Discovery of such bank accounts by the investigation remained uncontroverted by appellants for no contrary evidence led by them. Revenue discharged its burden of proof making allegation based on credible evidence gathered in the course of investigation. In the course of search, incriminating note books and documents recovered from different premises as has been depicted at the outset brought the truth of subterfuge done to Revenue. Appellant utterly failed to discard any of the evidence gathered by investigation. 18. The Director Sri Sampath Raj Jain admitted that 180MTs of finished goods were cleared clandestinely. Such clearance was apart from the clearance of 269.712 MTs of unaccounted goods appearing in para 28 o....
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....he brokers and bill traders. Therefore there shall be no concession at all be granted to 180 MTs setting off the same against 269.712 MTS of goods clandestinely removed. 19. Hon'ble High Court of Madras in the case of Alagappa Cement Pvt. Ltd. Vs. CEGAT - 2010 (260) ELT 511 (Mad.) laid down the law that plea of absence of positive proof of commitment of offence is not a defence for the author thereof. It is settled principle of law that law does not insist upon an impossible threshold of proof to establish allegations, but if on probabilities the statutory authorities can establish evasion, the legal standards are adequately met with. The appellants were implicated for their complicity not on the basis of solitary evidence only, but cumulative evidence like actual manufacture not brought to accounts, clandestine removals were patent, conduct of parties questionable, false bank accounts opened to route sale proceeds of clandestine removals, destruction of evidence, false invoices issued in the name of non-existing concerns which are determinative factors and sufficient to justify the levy under the charge of clandestine removal for the settled principle of law that no one should be....