TaxTMI 
TaxTMI 
TaxTMI 
2017 (2) TMI 1028
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....) of the Central Excise Act, 1944 against M/s Som Sungandh Industries Limited, Sonipat. An amount of Rs. 8.00 Crore already deposited by them is ordered to be appropriated and adjust against the said demand of duty. (iii) I confirm the recovery of interest on (i) & (ii) above payable at the rate prescribed under notifications issued from time to time under section 11AB of the Central Excise Act, 1944, from due date of payment to the actual date of payment of duty. (iv) I impose penalty of Rs. 8,28,45,474/- (Rs.8,25,00,000/- + Rs. 3,45,474/-) under Rules, 25 of the Central Excise Rules, 2002 read with section 11AC of the Central Excise Act, 1944 upon M/s Som Sugandh Industries Limited, Sonipat. They shall be eligible to pay penalty equivalent to 25% of Rs. 8,28,45,474/- in terms of proviso to section 11Ac of the Central Excise Act, 1944, subject to the condition that duty confirmed at (i) & (ii) above is fully paid along with interest confirmed at (iii) above within 30 days of the receipt of this order, the 25% of penalty will also be required to be paid within 30 days of the receipt of the order provided the first condition is fulfilled by them. (v) I impose penalty under ....
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....as already paid Rs. 1,74,01717/-, therefore, balance duty proposed to be demanded by way of issuance of show cause notice of Rs. 13,41,65,685/- alongwith interest and penalties were also sought to be imposed on the co-appellants. During the investigation, M/s. Som paid a sum of Rs. 8,00,00,000/- the same was appropriated. M/s. Som has approached to the Settlement Commission for settling the issue but it could not be materialized. Thereafter, the adjudication took place. The Commissioner while adjudicating the matter, has found that the appellant is not having the capacity to produce 50.89 crores of pouches with a short span time of 20 days. He held that only 30.06 crores of pouches could have been manufactured during the said period. Therefore, at his best judgement on the production capacity of M/s. Som he demanded duty as per Pan Masala Packing Machines (Capacity Determination & Collection of Duty) Rules, 2008. Accordingly, he confirmed demand the demand of duty of Rs. 8,25,00,000/- against M/s. Som which was to be paid alongwith interest and imposed penalty of Rs. 8,28,45,474/- under Rule 25 and various penalties on the co-appellants. Aggrieved with the said order, M/s. Som and ....
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....tatement was recorded and three cheques were dishourned by the bank for which cheques bouncing cases were initiated against him in various courts. In that circumstance, M/s. Som had filed application for settlement of its case agreeing to pay duty on all 99 machines for 20 days at the speed determined by the Central Excise officers for 20 hours. It is her submission that admission before the Settlement Commission does not amount to admission of guilt as held by the larger bench of this Tribunal in the case of Bosch Chassis Systems India Ltd.-2008 (232) ELT 622 (Trig-LB). 6. She further submits that Sh. Manoja Rajouria is the third party who was the director with the appellants in 2005 and he was made to resign from the directorship when M/s. Som was formed and was not taken as director or employee and had no role in the working of M/s. Som. His statement that he was given Rs. 10,000/- per month to keep GR account has not been corroborated by any evidence. Records resumed from third party premises cannot be relied upon without independent corroboration. She submits that visit was on the basis of intelligence that the documents evidencing suppressed production and clandestine cleara....
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.... procured the PWB's from the Railways during the said period showing transport of Gutkha etc. through railways, A comparison of the railways receipts and the resumed documents show that there is no record of transport of goods through railways to many destinations mentioned in the dispatch slips. Moreover, the department has clubbed together several railway receipts, sometimes different dates to correspond with the quantity of gutkha shown as transported in the resumed documents. 11. She submits that it is common knowledge thatzare several gutkha manufacturers in and around Delhi who transport their goods through railways. In the absence of the name of M/s. Som or the brand name of the goods manufactured by M/s.Som on RR's, the goods transported through railways cannot be attributed to M/s. Som. 12. It is her submissions that one of the transporters shown to have transported the goods of M/s. Som in the seized documents was M/s Transolutions Pvt. Ltd. The department visited premises of M/s. Transolutions Pvt. Ltd. and procured the consignment notes of M/s. Transolutions Pvt. Ltd. in respect of gutkha booked by it. The names of the various traders appear as consignors in t....
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....vidence of purchase of excess diesel for running generators was brought on record. 16. In view of these submissions, she prayed that the impugned order is to be set aside and the appeal filed by the Revenue is to be dismissed. 17. On the other hand, learned AR appearing for the Revenue submits that the adjudicating authority has not given due credence to the records resumed from the premises of Sh. Manoj Rajouria. Records resumed from the premises of Sh. Manoj Rajouria clearly shows that there was clandestine removal of the goods by M/s. Som which was secreted over there. Moreover, the transporters also revealed that the goods have been dispatched for clandestine removal by M/s. Som. The Commissioner while adjudicating the case has gone into the production capacity of the machines. As per the statement of Sh. Satish Seth the speed of the machines could have been altered and after alteration, the machine could have produced such huge quantity of 50.89 crores pouches. Therefore, the demand is to be confirmed on the basis of documents resumed from the premises of Sh. Manoj Rajouria. 18. Heard the parties and considered the submissions. 19. On careful consideration of the rival sub....
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....ty has gone beyond the scope of show cause notice, therefore the impugned order is not sustainable in the eyes of law. Issue No. 2 23. As the Pan Masala Packing Machines (Capacity Determination & Collection of Duty) Rules, 2008 were not in existence during the relevant time. Moreover, these rules have not been made effective retrospectively, in that circumstance, the duty cannot be demanded under Pan Masala Packing Machines (Capacity Determination & Collection of Duty) Rules, 2008. Therefore, the method of calculation of demand in the impugned order is also set aside. Issue No-3 and 4 24. Now we come to the evidence in the form of the documents resumed from the premises of Sh. Manoj Rajouria can be relied on for adjudication of the case or not. We have seen that in this case, Sh. Manoja Rajouria is the third party who was the director in 2005 and he was made to resign from the directorship when M/s. Som was formed and was not taken as director or employee and had no role in the working of M/s. Som, these facts have not been denied by the Revenue. With regard to the records recovered from the premises of Shri Manoj Rajouria, in his cross examination, Shri Manoj Rajouria categori....
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....ents. It is not correct that there are several gutkha manufacturers in and around Delhi who transported their goods through railways but no efforts have been made to ascertain whether the gutkha has been sent by M/s. Som. On careful analysis of various evidence on record, the following points are noted as relevant: a) On the date of physical verification of records and stocks at the factory premises of M/s. Som, there was a shortage of 18,480 polypacks of gutkha. As the shortage could not be explained, the appellant discharged duty of Rs. 3,45,474/- on the same. There is no context on this liability. This is apparently admitted unaccounted clearance of gutkha. b) Officers could collect private records, loose slips showing raw materials for manufacturing gutkha/pan masala/khaini, date wise production, dispatch, consignment notes, central excise invoices etc. The corroborative / evidentiary value of these are to be appreciated in proper perspective. c) The allegation in the notice was that during the relevant period, M/s Som manufactured /cleared 50.89 crore pouches, involving duty of Rs. 15.15 crores whereas quantification of duty has been made based on best judgement method, fo....