TaxTMI 
TaxTMI 
2016 (10) TMI 904
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....inafter referred to as DTC), 14, Datia Houser K, Colony, Khurshed Bagh, Lucknow was engaged in the manufacturing of Pan Masata & Gutkha under the Brand name 'Pukar'. Most of the finished goods of DTC are sold to various dealers either directly by DTC or through the traders, namely, M/s Udaj Traders (UT, for brevity) and M/s ROPI Products (RP, for brevity), Shri Udai Chaurasia was the Proprietor of M/s Udai Traders. Smt. Asha Chaurasia W/o Shri Udai Chaurasia was the proprietor of DTC No.E-S5665, while Shri Ashish Srivastava was the authorized signatory of the said firm. Shri Udai Chaurasia was looking after day to day work of DTC, besides being the proprietor of M/s Udai Traders (U. T.) / M/s Udai Traders was trading in all major Raw materials of Pan Masala & Gutkha, such as Betel nuts, Katha, Perfume etc and was also engaged in trading of Pan Masala Gutkha, exclusively purchased from DTC. M/S R.P. Products was another trading firm, engaged in similar activities as that of M/s U, T. Shri Raj Kumar Chaurasia was the proprietor of M/s RIP. Products. Both these trading firms, had same set of dealers, who were getting their supply of Pan Masala & Gutkha from DTC. 2.1 M/s Kashi L....
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....ation. DTC deposited Rs. 60 lakhs vide eight TR-6 Challans during the course of investigation. 2.6 The officers searched the premises of M/s Udai Traders and seized 21 bags of Pukar Gutkha & 18 bags of Pukar Pan Masala on a reasonable belief that such goods were cleared from the factory of DTC without accountal in their records. 2.7 Similarly the officers searched the trading premises of M/s R.P. Products and seized cash amounting to 2.8 The Godown of R.P. was also searched on 18.03.2004, A huge stock of supari, Katha, Lime Tobacco, Cardamom etc. valuing more than 80 lakhs, was available there. The officers resumed one pocket diary & one pen drive/thumb drive for further investigation. 2.9 The officers searched the residential premises of Shri Pushkar Chaurasi, Shri Raj Kumar Chaurasia & Shri Pankaj' Chaurasia and seized cash amounting to Rs. 3,70,000/-, Rs. 10,03,000/- & Rs. 2,93,000/- respectively, 2.10 The officers intercepted a Tata truck containing 110 bags of 'Pukar'Gutkha which was part of 120 bags of Gutkha purchased by U. T. (10 bags were still lying in the godown) from DTC The consignment of 110 bags was seized by the officers. The remaining 10 ....
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.... this amount has already been deposited why this should not D k- appropriated against the above demand. (iv) Central Excise duty amounting to Rs. 1,05,030/- should not be demanded towards the finished goods seized at the premises of UT on 18.03.2004. (v) Central Excise duty amounting to Rs. 44,465/- should not be demanded towards the shortage of finished goods noticed in the factory of DTC on the day of search. (vi) Following seized Pukar Pan Masala/Gutkha should not confiscated. (1) 18 bags Pukar brand Pan Masata & 21 bags of Pukar Brand Gutkha valued at Rs. 3,51,000/- seized at 67, Sri Ram Road, Lucknow on 18.03.2004. (2) 15 bags and 32 packets of Pukar brand Gutkha valued at seized at Rs. 1,45,920/- Shashi Zarda Bhandar, Raebareli on 18.03.2004. (3) 13 bags of Pukar brand Gutkha valued at Rs. 1,24,800/- seized at M/s Rastogi General Store, Ailahabad seized on 18.03.2004, (4) 1.5 bags of Pukar brand Gutkha valued at Rs. 14,400/- seized on 21.07.2004 at M/s Chaurasia Traders, Tulsipur. Duty on these goods has been covered in demand at Point No.(i) above. (vii) Cash amounting to Rs. 13,18,000/- seized from the factory cum residenti....
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....neral Store, Allahabad and M/s Chaurasia Traders, Tuisipur. (i) dropped the confiscation proceedings against goods seized from M/s New Shashi Zarda Bhandar. He ordered release of Rs. 6,85,000/- seized from M/s New Shashi Zarda Bhandar, Raebareli. The then adjudicating authority did not impose any penalty on M/s New Shashi Zarda Bhandar Raebareli under Rule (j) ordered confiscation of cash amounting to Rs. 13,18,000/- seized from the factory cum residential premises i.e. 14, Datia House, Lucknow. (k) ordered confiscation of cash amounting to Rsa10,61,000/- seized from business of M/s R.P. Products, Lucknow. (I) ordered confiscation of cash amounting to Rs. 2,93,000/- seized from residence of Shri Pankaj Chaurasia, Lucknow. (m) ordered confiscation of cash amounting to Rs. 10,03,000/- and Rs. 3,70,000/- seized from residence of Shri Raj Kumar Chaurasia and Shri Pushkar Chaurasia. (n) imposed a penalty of Rs. 1,50,000.00/- on M/s Udai Traders, Lucknow under Rule 26. (o) imposed a penalty of Rs. 1,00,000.00 (Rs. One lakh only) on M/s R.P. Products, Lucknow. (p) The then adjudicating authority did not impose any penalty on Shri Ashish Srivastava. 5. Aggrieved ....
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....e same basis. (ix). A/A is not proper in concluding that recovery of nine slips has sufficiently proved possibility of taking finished goods for the purpose of evasion by clearing unaccounted finished goods. In-fact, unless credibility of the slips is established by properly analyizing the materials it cannot be concluded that recovery of such slips sufficiently proves possibility of packing finished goods. Further mere possibility of clearance cannot be a substitute for the evidence regarding actual clearance. (x). As regards the details retrieved from Pen Drive, the A/A has not analyzed the materials retrieved from the Pen Drive. Merely, because the large amount is shown as labour charges in the material retrieved from Pen Drive, it cannot be justified that the same links with the alleged manufacturing activity by the Party unless there is any analysis of material to establish the link. (xi). As regards the supply of 18602.35 Kg of Laminated Plastic Rolls by M/s Kashi Laminators to M/s DTC, it was held by A/A on the basis of some slips, issued in the name of "Sanjai Kumar, LKO" and recovered from residential premise of the father of MD of M/S Kashi Laminators, that same ....
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....st M/s Durga Trading Co., Lucknow on goods seized Kin transit, namely 110 bags of Gutkhar 10 bags of gutkha seized at the Godown of M/s Narayan Transport & Forwarding Agency, Lucknow and 40 bags of Gutkha seized at the premises of M/s New Mallik Transport under Section 11A of the Central Excise Act, 1944B This amount has already been deposited therefore he ordered to appropriate the same. (iv). He dropped the proposal for demand of duty of Rs. 1,05,030/- (Rs. One lacs Five thousand and thirty only) against M/s Durga Trading Co,, Lucknow on the goods seized at the premises of M/s UT under the sub-section 1 of Section 11A of the Central Excise 1944. (v). He imposed penalty of Rs. 43,68,960/- (Rupees Forty three lacs sixty eight thousands nine hundred sixty only) againt M/s Durga Trading Co., Lucknow under Section 1 IAC of the Central Excise Act, 1944. (vi). He ordered recovery of interest on the Central Excise duty of Rs. 39,08,160.00/- (Rupees Thirty nine lacs eight thousands one hundred sixty only) under Section 11 AB of the Central Excise Act, 1944 at the applicable rate from M/s Durga Trading Co., Lucknow. (vii). He dropped the proposal to demand duty amounting to Rs.....
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....avour of the noticees without considering that the transporters and other persons have already stated the correct facts against DTC. The adjudicating authority has accepted the statements during cross-examination as such, ignoring the earlier statements and relevant evidence. Based on the cross-examination he has drawn the following inferences:- (i). All the transporters have admitted to have booked the goods on the strength of proper bill; (ii) Whenever they were asked to clarify the description of zarda gutkha, most of the transporters had stated that the booked consignments were never opened and as such it was difficult to indicate, as to which brand of goods were being transported. (iii). Some of the transporters had also confirmed that they were also transporting gutkha of various other brands. (iv). Some of the transporters have already stated that Mr. Udai Chand Chaurasia of M/s Udai Traders never came to their transport company for booking the consignment and whenever the goods were received in their transport company. The said person asserted that they had no contractual relationship with M/s Udai Traders and further they were not aware whether M/s Udai Traders....
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....ategorically in reply to question No.9, as under:- "Q. No. 09- Please go through said challan wherein Zarda Gutkha is mentioned under the column contents. What do you mean by Zarda Gutkha and who has manufactured such goods? Ans.- Zarda Gutkha means Gutkha pouch which was manufactured by D TC under the brand Pukar, Such goods were received under the credit/debit memo of UT." In view of the above, his later submissions i.e. during cross examination are an afterthought made belatedly after eight year. (ii). Statement dated 02.04.2004 of Shri Dharmendra Pratap Singh, Prop. M/s Narain Transport Co., Gorakhpur (page 59 of show cause notice). He was shown the chart which was earlier shown to Shri Radhey Shyam and Shri Harish Chandra Singh of M/s Narain Transport & Forwarding Agency, Lucknow. Shri Dharmendra Pratap Singh also confirmed the chart as the Pukar Gutkha received through M/s Narain Transport & Forwarding Agency, Lucknow for their delivery at Gorakhpur. Retraction of Shri Harish Chandra Singh, Prop. Of M/s Narain Transport & Forwarding Agency, Lucknow of his statement dated 15.03.2004 is belated afterthought. (iii). It is observed from points (iv) and (vii) of par....
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....as enquired in at length and it was found that all such goods were owned by DTC inasmuch as DTC asked for (RUD-122: all release application by DTC seeking release of finished goods seized/detained at different premises on 18.03.2004) their release to-them. Further, it was also found that the 21 bags of Pukar Gutkha and 18 bags of Pan Masala seized at the premises of UT was claimed by D TC as their goods. Hence claiming the ownership of such goods by DTC clearly shows that all the said parties e.g. DTC, UT etc. were involved together in the unaccounted clearance of such goods for evasion of Central Excise Duty. (d) More so, the evidence are overwhelming in the form of statements, slips, challans and clandestine modus-operandi of fraudulent preparation of transport documents, clandestinely sending through rikshwa pullers and clandestine transaction in cash payments and evidence of machines of production, seizure of non-duty paid goods. Therefore in the facts and circumstances of the case, there is clear evasion and nexus between the parties. The amounts of cash recovered from different premises was only the sale proceeds of the clandestine manufacture and removal of excisable good....
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....ertaking the second adjudication all eight parties were supposed to be addressed with proper discussion. 8. In appeal None/ 55665/2013/ the appellant, M/s Durga Trading Company, filed appeal, challenging the findings of Original Authority in Order-in-Original dated 01.11.2012, the grounds of appeal, inter-alia include findings by the Original Authority that 1,357 bags out of 15250 of Pukar Gutkha transported by Transporters, were not duty paid goods as contrary to law, the findings of Order of Original Authority to the appellant i.e. M/s Durga Trading Company, to pay Central Excise duty of 39,08,160/- without any basis taking into consideration, the fact that the said decision was arrived at by the original authority based on the evidence in cross-examination of the third party i.e. transporters. 9. The Learned D.R. for revenue has reiterated the grounds of appeal in the appeals filed by the Commissioner of Central Excise, Lucknow and he has contested the appeal preferred by M/s Durga Trading Company. The Ld. Counsel representing M/s Durga Trading Company has submitted that the following facts are undisputed in these proceedings (i) both M/s Durga Trading Company and M/s Udai....