TaxTMI 
TaxTMI 
2017 (5) TMI 1248
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....sing the Braiding Thread procured from the open market for manufacture of Electric Cord/Lead. 2. It is pertinent to point out that the Electric Cord/Lead having use of Braiding Thread, Rubber, Copper Wire and 3 Pin Plug, are also used with an Electric Iron. On the materials like Braiding Thread, 3 Pin Plug and Rubber, they are not availing any CENVAT Credit and there is no dispute about the same in the present proceedings. 3. For the period from 1994-95 to 04.06.2002,the Appellants purchased raw materials of a value of Rs. 75,03,61,159.36/- in total. Further the materials like Braiding Thread, Rubber and 3 Pin Plug cannot be used in the manufacture of Armoured Cables, PVC Cables (Housing Wire). In respect of the materials received along with duty paying documents, the Appellants were taking MODVAT Credit. But on Braiding Thread, Rubber and 3 Pin Plug, no MODVAT Credit was being availed. 4. The first visit of the Officers to the factory of the Appellant was on 04/05.06.2003, wherein a Panchnama was drawn. While confirming about the factory premises consisting of the Basement, Ground Floor, First and Second Floor and each floor having machinery and fixtures installed on it, ....
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.... nor about the production of Electric Cord/Lead carried out on the Second floor where use of Braiding Thread,3 Pin Plug, Rubber, and Copper Wire was being undertaken. 10. In his statement dated 16.06.2003 Sh Lalit Babbar, Director of the Appellant unit when confronted with the alleged shortage of materials worth Rs. 1,56,61,346/- appearing in Panchnama dated 05.06.2003, stated that he would look into it and further clarified about the materials sent out for Job-work. He also referred that the Panchnama dated 05.06.2003 had been challenged through their letter dated 06.06.2003 (Page A49 of Paperbook). 11. Another statement dated 18.06.2003 of Sh Lalit Babbar, Director was recorded who confirmed about the Panchnama dated 17/18.06.2003 having been drawn in his presence. He also stated that the Appellants were undertaking trading from premises at 146-A, Vikrant Enclave, Mayapuri, New Delhi in cables of other manufacturers. 12. The last statement of Sh Lalit Babbar, Director was recorded on 29.07.2003, wherein he provided the copies of the Sale Bills in respect of trading goods and General Ledger and further undertook to file the Purchase Bills etc. He confirmed about undertaki....
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....ng to Rs. 14,96,424/- confirmed for - removal of raw materials valued at Rs. 93,52,653/- during 2002-03 under Section 11A of the Central Excise Act r/w Rule 14 of CENVAT Credit Rules, 2004. c. Interest to be charged on the above demands. d. Equal amount of penalty imposed on the above two demands confirmed under Section 11AC of the Central Excise Act r/w Rule 25 of Central Excise Rules, 2002. e. Imposed Penalty of Rs. 20,00,000/- on Sh Lalit Babbar under Rule 26 of Central Excise Rules. f. Rs. 2 lakhs on Shri S.P. Goel. g. Rs. 25000/- on Shri S.S. Tripathi, Manager. 16. The appellant's grounds of appeal are summarized below: i) Manufacture of 84,32,750/- number of cords. The Appellants raised preliminary objection with regard to the charge of clandestine removal of raw materials valued at Rs. 93,52,653/- and sought cross-examination of the Officers drawing the Panchnama, Panch witnesses to the Panchnama dated 05.06.2003 and 18.06.2003, Sh SS Tripathi, Sh Satpal Goel and further challenged the method by which contents of the said Panchnamas were drawn etc. However, the Adjudicating Authority did not allow any cross-ex....
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....as no legal sanctity. The burden to prove the charge of clandestine removal is on the Department and the same is not discharged. 17. Towards Demand Of Rs. 3,06,95,210/- On 84,32,750 Number Of Cords/Electric Leads, the main grounds are: i) There has been no admission on the part of the Appellants during investigation for clandestine manufacture and clearance of the above quantity of Electric Cord/Lead. The statements recorded of Sh Lalit Babbar, Director and employees of the Appellants do not touch upon this aspect at all. ii) The Appellants demonstrated that it would require 337.310 tonnes of Copper and 354.175 tonnes of Rubber for manufacturing the said quantity of Electric Cord/Lead. There is nothing on record to show that such a huge quantity was received There is also nothing on record as to who was the supplier of such materials, by which transport such goods were received or, mode of payment. iii) The Department had no evidence about the allegation and it was based on presumptions and surmises about the Appellants having allegedly procured other raw materials such as Copper Wire etc from the open market without any bills and in cash. There is no ....
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....een demanded on the ground that the appellant has surreptitiously manufactured and cleared 84,32,750/- numbers of electrical cords valued at about Rs. 19 crores. 22. A demand of about Rs. 15 lakhs has been made on the raw materials found short at the time of stock taking. At the time of the first visit by the Departmental Officers to the assessee's factory on 05.06.2003, the officers noticed some shortage of raw materials. The total shortage was worked out and recorded in the relevant panchnama. The assessee challenged the physical stock taking, vide their letter dated 06.06.2003. Accordingly, the stock taking of raw materials was conducted all over again on 17/18-6-2003. In the revised stock taking, the officers took into account the quantity of raw materials sent out for job worker in terms of Notification no.214/86 dated 25.03.1986. Further, the amount of raw materials contained in the work-in-progress as well as in the finished products available in stock was also taken into account and the value of shortage of raw materials was determined at Rs. 93.52 lakhs. Even though it is on record that the entire stock taking was conducted in the presence of responsible persons represe....
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....proceeds of clandestinely cleared electrical cords. v. In the activity of trading of braided thread, the assessee has recorded that they have sold the goods totally valued at Rs. 2.69 crores. These have been shown as sold through 4,730 sale invoices each with value less than Rs. 10,000 and shown in cash sales. This has been cited to support the conclusion that no such sales actually happened of the braided thread and by implication such goods have been diverted for clandestine manufacture of electrical cords and clearances thereof. 25. The ld. Counsels representing the various appellants argued that the demand of Excise duty cannot be sustained, since the Revenue failed to produce any evidence on record supporting the clandestine manufacture and clearance of the goods. They also submitted that the adjudicating authority did not permit cross examination of any of the witnesses whose statements have been relied upon. Without cross examination, the statements cannot be admitted as evidence in support of the charges. 26. The ld. DR supported the impugned order. He argued that the trading activity said to have been done by the appellants was nothing but a cover up for cla....
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....connection with the adjudication of show cause notice. The relevant portion is reproduced below:- "25. In the light of the above, respondent no.2 is directed to adjudicate the show cause notice issued to the writ petitioners by following the procedure contemplated by Section 9D of the Act and the law laid down by various judicial authorities in this regard, including the principles of natural justice, in the following manner : (i) In the event that the Revenue intends to rely on any of the statements, recorded under Section 14 of the Act and referred to in the show cause notices issued to Ambika and Jay Ambey, it would be incumbent on the Revenue to apply to Respondent No.2 to summon the makers of the said statements, so that the Revenue would examine them in chief, before the adjudicating authority, i.e., before Respondent No.2. (ii) A copy of the said record of examination-in-chief, by the Revenue, of the makers of any of the statements on which the Revenue chooses to rely, would have to be made available to the assessee, i.e., to Ambika and Jay Ambey in this case. (iii) Statements recorded during investigation, under Section 14 of the Act, who....