TaxTMI 
TaxTMI 
TaxTMI 
2016 (10) TMI 904
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.... 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 Laminators (P) Ltd., (KL, for brevity)/ Khadra, ....
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.... 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 bags of Gutkha were also seized from M/S Narayan Transport & forwarding Agency, Aishba....
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....al 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 residential premises i.e. 14, Datia House, Lucknow should not be confiscated. (viii) Interest should also not be charged. (ix) Penalty should not be imposed. 3.2 Further, M/s Udai Traders, Lucknow and M/s R P Products, Lucknow (Noticee No. 2 & 3) were asked to show cause as to why the following seized cash ....
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....bareli 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 by the said Order-in-Original No.19/Commr./LKO/2005 dated 27.05.2005, parties filed an appeal before this Tribunal. This Tribunal vide final Order No.732-737/2011 EX[DB] dated 12.08.2011, remanded the matter for consideration thereof afresh, inter-alia observing as under:- (i). No proper investigation was made on the point of duplicity of product though adj....
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....sibility 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 were issued for M/s DTC and the name "Sanjai Kumar, LKO" was the code name given to M/s DTC as stated by the MD of M/s Kashi Laminators in his statement, However, cross-examination of the MD of M/s Kashi Laminators was not permitted to the Party though same would have to be done. (xii). Findings of A/A regarding the fact that no excess of tobacco or the shortage thereof was foun....
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....). 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. 44,865/- (Rs. Forty Four Thousand Eight Hundred and Sixty five only) on account of shortage at M/s DTC. (viii). He dropped the proposal to confiscate goods seized at 67/ Sri Ram road, Lucknow, M/s New Shashi Zarda Bhandar, Raebareli, M/s Rastogi General Store, Allahabad and M/s Chaurasia Traders, Tulsipur. (ix). He ordered release of Rs. 6,85,000/- (Rs. Six Lacs Eighty five thousands only) seized f....
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....gth 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 had a Rickshaw Trolley or not. As seen above, the inferences, so drawn, by the adjudicating authority are self contradictory. If most of the transporters have stated that the consignments were never opened/ then how is it possible to conclude that whatever product was being carried in the consignment was not the product of M/s DTC when the facts have been admitted in their statements. In fact, it is amply substantiated in the S....
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....nation 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 para 9.3 of O-I-O regarding cross-examination dated 01.11.2012 of Shri Vivek Gupta, Prop. of M/S Lucknow Allahabad Forwarding Agency, that he did not deny his statement dated 27.05.2004 (Q/A No. 26) that the rickshaw Trolly of Pukar Chhap Gutkha was booked by M/s UT at Lucknow (iv). At point No.(vii) he confirmed having stated that transportation of 10 bags or more which has been done is Pukar Gutkha. His belated explanation that he had said so because he w....
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....s 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 goods i.e. Pan masala & Gutkha. The sale proceeds were due to evasion of duty. The explanations given by the Parties that the cash did not relate to evasion of duty have no basis, at all. Therefore, the cash amounts recovered were liable for confiscation. The adjudicating authority has without any reason or proper basis dropped the charges and confiscation of cash. (e) Further, the adjudicating authority has wrongly dropped the demand on the presumption without any basi....
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....s 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 Traders are separate legal juristic persons. (ii) Clearance of Pukar Brand Gutkha at ex-factory gate of the manufacturer, is not disputed. (iii) ownership of 21 bags of Pukar Brand Gutkha and 18 bags of Pukar Pan Massala allegedly seized in the premises of M/s Udai Trading is not disputed to the extent of both duty paid nature as well as ownership of M/s Udai Traders. (iv) There was no resumption of any incriminating documents either from M/s Durga Trading Company or from Udai Traders....