TaxTMI 
TaxTMI 
TaxTMI 
2016 (10) TMI 951
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....forty three only already paid by the noticee stands appropriated against the duty liability confirmed herein above ii. I also demand interest at appropriate rates on the Central Excise duty not paid by the noticee under the provisions of Section 11AB of the Act iii. I also imposed a penalty of Rs. 81,94,403rupees Eighty only on the noticee in terms of Section 11AC of the Act readwith rule 25 of the Central Excise Rules, 2002 2. ESSSM i. I confirm the demand of Central Excise duty amounting to Rs. 2,77,488RsTwo lakh seventy seven thousand four hundred and eighty eight onlyon account of shortage of alloy Steel Ingots and Rs. 3,12,427RsThree lakh twelve thousand four hundred and twenty seven onlyon account of shortage of Non Alloy steel ingots as recomputed shortage detected on 21102005 under proviso to subSection 1of Section 11A of the Act and drop the demand of Rs. 7,57,105on account of under valuation being unsustainable in the eyes of lawAccordingly, an amount of Rs. 5,89,915out of Rs. 10,32,342already deposited by the noticee stands appropriated towards the Central Excise duty confirmed herewithThe balance amount may also be appropriated for payment of interest andor penal....
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....fiscate unaccounted stock of Alloy Non alloy Steel Flats weighing 77400 MT valued at Rs. 18,57,600Rupees Eighteen lakh fifty seven thousand and six hundred only However, I allow the same to be redeemed to the noticees on payment of redemption fine of Rs. 7,40,000Rupees Seven lakh forty thousand only ii. I also impose a penalty of Rs, 3,00,000Rupees Three lakh only under Rule 26 of the Central Excise Rules, 2002 6. I also order confiscation of unaccounted cash of Rs. 4700 lakh rupees Forty Seven lakh only seized from the residence of Shri Sunny Garg on 211005 under the provisions of Section 121 of the Customs Act, 1962, as made applicable to Central Excise matters vide Notification No6863CE dated 0451963 issued under Section 12 of the Central Excise Act, 1944Further, I also impose a penalty of Rs. 100,00,000Rupees Ten lakh only on Shri Sunny Garg in terms of Rule 26 of the Central Excise rules, 2002 for clandestine manufacture and clearance of excisable goods cleared without payment of duty 7. I impose a penalty of Rs. 10,00,000Rupees Ten lakh onlyon shri Kewal Garg, director in terms of Rule 26 of the Central Excise Rules, 2002 for clandestine manufacture and clearance of excis....
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....d shortage of raw material which has been used for manufacturing of dutiable goods and demand of duty on finished goods found short and to confiscate the amount of Rs. 47,00,000recovered during the course of investigation from the residential premises of Shri Sunny Garg and Shri Kewal Garg, interest was also sought to be demanded and penalties were proposed to be imposed. The show cause notice was adjudicated demand of duty was confirmed against M/s SSCL to the tune of Rs. 77,52,160 on account of clandestine clearance of dutiable goods without payment of duty alongwith interest. A demand of Rs. 4,42,243was also confirmed against Ms SSCL on account of shortages of raw material and finished goods Demand of Rs. 2,77,488and Rs. 3,12,427was also confirmed against M/s SSSM on account of shortage of raw material. A demand of Rs. 45,865and Rs. 44,503was confirmed against M/s SSIL alongwith interest and equivalent amount of penalties were also imposed on manufacturing units, penalties on Shri Sunny Garg and Shri Kewal Garg of Rs. 10,00,000each were imposed under Rule 26 of Central Excise Rules, 2002A penalty of Rs. 3,00,000was imposed on M/s Raghav enterprises and penalty of Rs. 25,00,000wa....
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....en ascertained. Therefore, there is a lack in adjudication, the duty cannot be demanded on raw material as the same is not manufactured goods. The only remedy was available with the Revenue was to deny cenvat credit on raw material but that is not the case of the Revenue. Therefore, on shortage of raw material no demand of duty is sustainable. 5. He further submits that the shortages in the case of SSIL on raw material the demand of duty is also not sustainable in the light of the submissions made by him in the case of SSSM. He further submits that duty cannot be demanded on the shortages of finished goods as waivement has been done on the basis of average which cannot be taken is correct as no actual waivement has been done, therefore, duty cannot be demanded. 6. he further submits that demand of Rs. 77,52,160/- has been confirmed against M/s SSCL on account of clandestine clearance to M/s Raghav Enterprises. For that, he has made a categorical statement that M/s SSCL never made any sale of their goods to M/s Raghav Enterprises and no incriminating document were recovered from the appellant for substantiating clandestine removal of goods to M/s Raghav Enterprises. The allegation....
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....calculated the value of seized goods of 77.4 MT of alloy/non-alloy steel flats at the rate of Rs. 24,000 per MT, therefore the valuation is also arbitrary. He further submits that in the impugned order, the penalty has imposed on M/s Raghav Enterprises as well as on its Prop. Shri Suresh Aggarwal. Two penalties cannot be imposed on the firm and Prop. In the light of decision of this Tribunal in the case of Ashwani Kumar Jain vs. CCE, Meerut reported in 2011 (270) E.L.T. 245 (Tri. - Del.) and Jayantibhai J. Patel vs. CCE, Ahmedabad reported in 2009 (244) E.L.T. 140 (Tri. -Ahmd.), therefore, it is prayed that impugned order is to be set aside. 8. On the other hand learned AR reiterated the findings of the impugned order and submit that on the basis of the investigation, the case has been made out against the appellants and by the reasoned order the learned Commissioner has demanded the demand of duty. 9. heard the parties considered the submissions in detail. 10. On careful consideration of the submissions made by both the sides, we find that the impugned order has been challenged on the following issues:- (a) Demand of duty on account of shortage of raw material/finished goods ....
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....the same is Set aside. 13. We also take note that demand of duty has been confirmed against M/s SSSM on account of shortage of raw material. The contention of the appellant is that they were using cenvatable inputs as well as non-cenvatable inputs but in the impugned order, the Adjudicating Authority has not given to credence to the fact that the appellant is using cenvatable ag well as non-cenvatable inputs which inputs has been found short during the course of investigation. Moreover, the duty has been demanded on raw material which are not manufactured goods of the appellant and it has not been held by the Adjudicating Authority, in the impugned order that the input found short has been used in manufacturing of final dutiable product. If that is the case, in that case duty is to be demanded on the value of final manufactured goods allegedly cleared without payment of duty. In the absence of such evidence, the duty cannot be demanded on raw material found short in the premises of M/s SSSM. Therefore, the demand of duty against M/s SSSM is not sustainable, the same is set aside. 14. With regard to demand of duty on account of shortage at the premises of M/s SSIL we find that dut....
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....llege clandestine removal. 16. Further, we have seen that in the case of Arya Fibres Pvt Ltd vs. CCE, Ahmedabad Il (supra) this Tribunal examined the issue of clandestine removal and in para 40 of the said order this Tribunal laid down the parameters to prove clandestine removal of goods which is reproduced here under :- "40. After having very carefully considered the law laid down by this Tribunal in the matter of clandestine manufacture and clearance, and the submissions made before us, it is clear that the law is well-settled that, in cases of clandestine manufacture and clearance, certain fundamental criteria have to be established by Revenue which mainly are the following : (i) There should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions; (ii) Evidence in support thereof should be of: (a) Raw materials, in excess of that contained as per the statutory records ; (b) Instances of actual removal of unaccounted finished goods (not inferential or assumed) from the factory without payment of duty; (c) Discovery of such finished goods outside the factory; (d) Instances of sale of such goods to identified....