TaxTMI 
TaxTMI 
2017 (6) TMI 901
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.... authority confirmed the duty demand of Rs. 26,00,730/- along with interest and also imposed penalty of Rs. 10,00,000/- and separate penalty of Rs. 5,00,000/- on the Managing Director and the Executive Manager of the respondents. In appeal, the Commissioner (Appeals) set aside the demand and penalties. Hence the department is now before the Tribunal. 2. On behalf of the department, the learned AR Shri S.Govindarajan submitted the following contentions:- 2.1 That the Commissioner (Appeals) erred in concluding that shortage of 24.02 MTs was not established for the reason that no physical stock by weighing the stock was taken. That officers of department had compared the stock lying in the premises with the stock account in RG-I Register and found shortage of steel ingots to the extent of 24.02 MTs. Mahazar dated 26.6.2003 was drawn on the same day and the Commissioner (Appeals) ought to have considered and given weight to this document. 2.2 During the search operation at factory premises, made-up file I containing details of removals of ingots without any bills or invoices was recovered. The sheets having Sl. No.255 in the same file was found to contain the details of ....
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....t these documents though contain date, destination and vehicle number, did not mention the exact quantity removed and value of the goods consigned. 2.5 That the Commissioner (Appeals) is wrong in concluding that there is no corroborative evidence to show movement of goods from the respondents to their customers and that there is no evidence like the excessive usage of raw materials or consumption of electricity during the relevant period. 2.6 The officers had found four handwritten slips at the security gate located near the entrance of the factory gate. It appeared that there was no Excise invoice corresponding to the lorry numbers found in such slips. However, the Commissioner (Appeals) accepted the explanation given by the respondents that it had a remark of X on such removals due to inferior quality and for the same reason, these were not accounted in the registers. It is also argued by learned AR that the Commissioner (Appeals) did not take into consideration the entire evidence and has merely dealt with only four main allegations. 3. Against these, the learned counsel Shri S. Venkatachalam, filed a detail written submissions and presented his arguments adverting to t....
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.... has been righty set aside. 3.5 The four handwritten slips recovered from the security room, does not lead to any conclusion that the respondents have removed consignments clearing 64.920 MTs to M/s. Bhuwalka Industries. The department has not conducted any investigation at the end of M/s. Bhuwalka Industries to establish that they have received such quantity. 3.6 Out of the seven vehicle numbers found in the chits, these lorries were used by the respondent for removing slag/wastage for which the respondents have submitted documentary evidence. There is no evidence to show that these vehicles were used for removal of MS ingots and no investigation was conducted with respect to such lorry owners. 3.7 Perusal of the respondent s books of account would show that the respondents actually have accounted the scrap alleged as unaccounted by the department. The details submitted by the respondents in Annexure B to their reply dated 26.10.2004 was deliberately ignored by the department to confirm the duty demand. If the allegation raised in the show cause notice had to be accepted, then there would have been huge quantity of excess scrap in the respondent s factory. The offic....
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....yment of cash and also cleared finished products clandestinely without payment of excise duty. The main evidence put forward in the show cause notice are (i) the mahazar drawn on the date of search i.e. 26.6.2003, (ii) made-up file I recovered from the premises, (iii) four handwritten slips recovered from the factory gate and loose sheets / lorry picking memos recovered alleged to be relating to transporters and (iv) the statements of employees and transporters. Though the department contends that the Commissioner (Appeals) has not considered the entire issue and confined mainly on the four issues, on perusal of the facts and appreciation of facts, we find in agreement with the Commissioner (Appeals) in codifying the issues into four numbers which are as under:- (a) On the shortage of 24.2 MTs, found during the stock taking conducted at the factory on 26.6.2003 i.e. the day of search; (b) For the four truckloads of ingots weighing 64.92 MTs removed on 25.6.2003 without invoices, as evident from the katcha report and slips recovered from the factory security; (c) For the two truckloads of ingots removed on 24.6.2003 without invoices as evident from t....
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....vehicle numbers TN 22 Z 7848, TN 01 Z 4221, which was used for removal of waste and slag, two days before the conduct of search i.e. on 24.6.2003. It is also correct that no investigation hase been done by the department at the end of M/s. Bhuwalka Industries as to whether they have received the load alleged to have been dispatched by respondent. The Commissioner (Appeals), therefore, has held that such private records are not reliable as these are not corroborated with evidence to whom the goods were cleared. Further, these slips did not contain the exact quantity of the alleged clearances and the department has arrived at an average quantity from the accounted clearances to raise demand basing upon these documents, which, in our opinion, cannot be accepted. 10. The other evidences relied upon by the department is the statements of the transporters TAT, RLT and STR as well as some documents recovered from them. The respondents have countered these documents contending that no corresponding lorry receipt copies have been recovered. That none of the customers who allegedly received materials in the said lorries and paid freight charges where contacted by the department to know wh....
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....cuments (invoices) raised by them have been submitted. Whereas about five clearances raised in the show cause notice, the respondents have been able to produce invoices showing that these clearances were effected by other manufacturers on the same day by same lorry and to the same destination. The adjudicating authority merely excluded such 10 clearances from the total demand. But, however, he accepted the evidences in regard to this and thus confirmed the duty. In appeal, the Commissioner, observed that when the respondent could substantiate that the figures shown in the show cause notice did not contain clearances made by the transporters to other manufacturers on the same day and by same vehicle to same destinations as noted in the GVR, dispatch notebooks etc. rejected the evidence put forward by such documents as these documents recovered from the transporters are not supported by evidence. For the same reason, as the respondent has been able to make out discrepancies in the document put forward by the department, in the show cause notice, we find ourselves in agreement with the conclusion arrived by the Commissioner (Appeals) in this regard. 12. There is no evidence regardi....