TaxTMI 
TaxTMI 
2017 (3) TMI 773
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....cture of raw material (MS Ingots) alleged to have been supplied without accounts to M/s Rathi Bars Limited. The facts of the case are that the Commercial Tax Department of the Government of Rajasthan conducted certain survey and investigation, in March 2003, with reference to non-payment of sales tax for the year 2001-2002 on the goods (MS Bars, Mis- rolls, MS Scrap) sold by the main appellant, M/s Rathi Bars Limited. During the course of investigation, the Commercial Taxes Department recovered from the residence of two former employees of M/s Rathi Bars Limited, certain documents. On completion of the enquiry the Assistant Commissioner, Anti Evasion (Rajasthan), Circle III of Commercial Taxes Department, Jaipur, finalized the assessment for the year 2001-2002 by an order dated 10/08/2004. He held that the main appellant is liable to pay 303.13 lakhs of sales tax and imposed a penalty of 606.26 lakhs alongwith interest of Rs. 168.24 lakhs. The said assessment order was forwarded by Additional Director of Income Tax (Investigation), Jaipur, (Nodal Officer of Regional Economic Intelligence Committee) to the Jurisdictional Central Excise officer. Copies of relied upon documents for th....
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....Commercial Taxes Department, Jaipur. The same was received by the Central Excise Department through Income Tax Department. No action was taken by Income Tax Department. The sales tax assessment was set aside by Rajasthan Tax Board vide order dated 10/09/2007 on assessee's appeal. Since, the very basis of Central Excise proceedings are no more available, in view of the sales tax proceedings having been set aside by the Rajasthan Tax Board, there is no merit in the impugned order ; (iii) regarding the standard for electricity consumption it is submitted that Commercial Tax Department conducted technical verification using the officials of Malviya National Institute of Technology, Jaipur. The report was with reference to various rolling mills with some of the units having average consumption of power as high as 260 per MT. Further, it is submitted that the reliance placed by the Original Authority on certain decided cases are not relevant in the facts of the present case. The electricity meters and power bills of the appellant were not found to be either manipulated or incorrectly recorded ; (iv) in terms of Section 3A of Central Excise Act, 1944, the Department dete....
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....were not provided all the documents and basic calculations which supported the Department's case. There is no independent verification of the facts and there is no piece of evidence to indicate any unaccounted manufacture or clearance of MS ingots by these appellants ; (c) the charge of clandestine removal must be corroborated by independent and un-impeachable evidence such as purchase of raw material consumption of excess electricity, transportation and delivery of unaccounted goods etc. There is no evidence of such nature in the present case ; (d) in many instances, the allegation of unaccounted production has been made where the quantity of such manufacture is much more than even the annual production capacity of the appellants. No duty demand can be sustained when the appellants do not have the required capacity to manufacture the alleged excess quantity of the finished goods. 4. The learned AR reiterated the findings in the impugned order. He submitted that the records recovered by another Government Department can be relied upon in the proceedings by the Central Excise officers. The Department did conduct follow up verification and the same is taken into ....
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.... documents recovered by the sales tax department during their investigation from the ex-employees of the main appellant. As a matter of further enquiry the department got certain details from RTO regarding the details of vehicle registrations. There upon certain comparisons were made of the registration numbers of the vehicles, between the records maintained by the main appellant and records recovered from ex-employees. It was observed that registration numbers shown for particular consignor tallied with the particulars recovered from the documents and, as such, the details given in the recovered documents were taken as authentic. We find such summary conclusions are nothing but assumptions with no corroborative value at all. Similarly, even the findings with reference to electricity consumption lacks supporting evidence and cannot be taken as a evidence in support of allegation of huge quantity of unaccounted manufacture of excisable goods. 7. The main appellant was alleged to have cleared more than 64,000 MT of MS Bars, almost three times of their accounted production. The transaction will involve a cash receipt of more than Rs. 60 crores in a single financial year. It will al....