2016 (10) TMI 677

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.... Ferrous Scrap (Non-Modvatable) - 25.000 - - - 3. C.I. Scrap 144.820 144.800 0.020 - -   Finished goods 4. Steel Ingots 176.865 161.652 15.213 (-) 1.81,795 29,097     Total       65,285   2. The department undertook investigation and came to the conclusion that the assessee has cleared inputs on which Cenvat credit have been taken as well as some finished products clandestinely without payment of duty. On conclusion of investigation a Show Cause Notice dated 11.7.2007 was issued to the assessee which was adjudicated vide order dated 23.6.2008 in which Central Excise duty to the extent of Rs. 14,12,984/- was demanded from the assessee along with interest and imposition of penalty. Also a penalty of Rs. 3 lakhs was imposed on the assessee under Rule 25 of the Central Excise Rules. The assessee challenged this order before the Commissioner (Appeals) who set aside the order and vacated all the demands. Revenue is presently in appeal against this impugned order of Commissioner (Appeals). They have argued that the Commissioner (Appeals) has wrongly vacated the dem....

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....earances made by the assessee without issuance of Central Excise invoice and without payment of Central Excise duty. He further admitted that they have moved raw materials without any documents between M/s Steel Abrasive Industries Ltd. and M/s Hi-Tech Abrasives Ltd. using three dumpers and one truck for transportation. He also admitted in his statement that the private records including note books and loose papers recovered by the officers were maintained by Shri Sanjay, Supervisor and were pertaining to M/s Steel Abrasive Industries as well as M/s Hi-Tech Abrasives Ltd. Further he admitted the shortages of raw material as well as finished goods during physical stock and expressed his satisfaction on the manner in which stock taking was conducted. 7. On the basis of the comparison chart prepared by the officers with the accounted clearances of the assessee, demand for duty was raised by Revenue vide Show Cause Notice dated 11.7.2007. An amount of Rs. 13,47,699/- was demanded on the alleged clearances of finished goods without payment of duty; Rs. 65,285/- was also demanded on the shortage of inputs as well as finished products noticed at the time of verification by the officers....

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....is admitted need not be proved. (iv) The demand is not time barred; but for the investigation conducted by the department, evasion of duty would not have been detected.  Therefore, this is clear case of suppression of facts wherein the extended period of limitation is invocable. 10. Heard Shri G.R. Singh ld. Advocate for the appellant and heard Ms. Rinky Arora, ld. Advocate for the assessee. 11. The ld. Advocate for the assessee sought to dismiss the appeal on the following grounds:- (i) From the records it may be seen that author of the private documents i.e. various note books recovered from the factory was Shri Sanjay Kejriwal, Supervisor. However, he has not been confronted and his statement has not been recorded. Hence, these records will not be admissible as evidence. (ii) Quantum of shortages detected is negligible and hence on the basis of such shortages no allegation of clandestine clearance can be made. (iii) The confessional statement of Shri N.P. Tekriwal, Director has not been corroborated with substantive evidence; consequently the same will not be admissible as evidence. (iv) The chart prepared by the department....

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.... the chart as well as private note books in his statement, the Director dated 7.6.20-03 has admitted that the notebooks contained details of clearances of raw material and finished products - both on payment of duty and otherwise  and also receipt of unaccounted raw materials. He further admitted the clearances listed out in the charts as having been made without payment of duty.  Duty demand raised in the Show Cause Notice and confirmed the order in original are on the basis of these charts which stand seen and admitted by the Director. It is also on record that the confessional statement of Shri Tekriwal has never been retracted. 14. On careful consideration of the facts and circumstances as outlined above, I find that the statement of Director is the basis for the demand. The statement is inculpatory and is specific. The Director clearly admitted that the documents/private records recovered by the officers contained details of procurement of raw materials as well as clearance of finished goods with and without payment of duty. This fact is further strengthened by the observation that many entries in the private documents are covered by the invoices issued by the ass....