TaxTMI 
TaxTMI 
2017 (8) TMI 588
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....Gutkha bearing various brand names such as "Gagan", Patel and operated from 01.04.1997 to 12.03.2005. Shri Ram Prakash Dewakar was Authorized Signatory of KC. M/s Latex Chemicals (hereinafter referred as LC) were engaged in the manufacture of Laminated Pouch Rolls and Multilayer Co-extruded Film. Shri Sanjay Kumar Kurele was the Director of LC. On 30.05.2006 factory premises of KF and office premises of KC was searched by Officers of Central Excise Intelligence. The outcome of the search was as under :- (i) At the factory premises of M/s. Kurele Fragrances Pvt. Ltd. certain documents were resumed and officers detected alleged excess quantities of 4125 Polypack of Race brand Gutkha (247500 pouches of MRP. Rs. 0.50/- each, total valued at Rs. 61,875/-) and 68 cartons of Scented Tobacco (containing 25 Kg each, valued at Rs. 34,000/-) The same were seized by the officers. The officers also detained 205 bags of Supari (totally weighing 12300 Kgs, valued at Rs. 8,61,000/-), which was found in excess of the recorded balance. (ii) At the office premises of M/s. Kurele Chemicals Company Indian currency of Rs. 7,90,000/- was seized on the reasonable belief that the same was related to the ....
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....ing various brands of Pan Masala/Gutkha manufactured by M/s. Kurele Chemicals Company/M/s. Kurele Fragrances Pvt. Ltd. On being further asked bout the total quantum of the Gutkha transported by his transport company, which was manufactured by M/s. Kurele Chemicals Company or M/s. Kurele Fragrances Pvt. Ltd., he informed that on an average, 2-3 vehicles of "Gagan" and Kisan brand Gutkha was transported, per day. (ix) At the residential premises of Shri Jung Bahadur Singh Chandel, an employee of M/s. Latex Chemicals, one 'Kaccha' bill book with pages numbered 1 to 100 was recovered. On enquiry, Shri Chandel informed that on said 'Kaccha' bill book, description of clearance of Laminated Packaging Pouches, manufactured at M/s. Latex Chemicals, was mentioned. He also stated that the entries in said bill book were written by Shri Deepak Khare and Bhupendra Singh. 3. Statements of Shri Ram Prakash Dewakar and that on Shri Virendra Singh Yadav were recorded on 30.05.2006. Statement of Shri Pradeep Gupta, Supervisor of KF was recorded on 27.09.2006. Statement of Shri Ashok Kumar Dwivedi, partner of M/s. Vinod Forwarding Agency, Kanpur was recorded on 30.05.2006. Statement ....
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....ing the unaccounted dispatch of goods mentioned in the private record LC had clandestinely cleared laminated pouches without payment of Central Excise Duty. Therefore, through the said show cause notice M/s. Kurele Fragrances were called upon to show cause as to why the Central Excise Duty amounting to Rs. 10,84,961/- + Education Cess of Rs. 21,700/- should not be recovered under proviso to Section 11A (1) of Central Excise Act, 1944. Further, M/s. Kurele Chemicals was called upon to show cause as to why Central Excise Duty amounting to Rs. 70,45,596/- should not be recovered from them under the same provisions. Further there was a proposal to appropriate voluntary deposit of Rs. 50 lakhs deposited on 03.06.2006. The said show cause notice also called upon M/s. Latex Chemicals to show cause as to why Central Excise Duty amounting to Rs. 7,90,518/- + Education Cess of Rs. 15,810/- should not be recovered from them under the same provisions. Shri Ram Prakash Dewakar and Shri Sanjay Kumar Kurele were called upon to show cause as to why penalty under Rule 26 of Central Excise Rules, 2002 should not be imposed on them. In reply to the show cause notice through letters dated 24.04.2009 b....
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....me Gutkha was transported but not know which brand of Gutkha and that the goods cleared by them were duly duty paid and reflected in the returns regularly submitted and all the facts submitted in the said returns were within the knowledge of the Department and therefore the allegations of suppression and willfully statements were not sustainable. Further M/s. Latex Chemicals through their letter dated 27.04.2009 replied to the show cause notice stating that the show cause notice was based on the private slips recovered from the residential premises of Shri Jung Bahadur Singh and that the statement of Shri Jung Bahadur Singh was obtained behind their back therefore they requested for cross examination of Shri Jung Bahadur Singh. The cross examination of Shri Ashok Kumar Dwivedi was conducted on 08.05.2009. During the cross examination of Shri R.P. Dewakar informed that he had complained to Senior Officers of DGCEI that his statement had recorded under pressure. During the cross examination Shri Ashok Kumar Dwivedi has stated that they never booked any consignment of KF, he has further stated that they had never done any business with KF and KC and therefore question of getting payme....
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....re retracted neither the noticee nor the persons concerned brought any documentary evidence before him that the statements were obtained under threat, duress or pressure. He has further held that the notices have ensured that no legitimate records namely bills/invoices/G.Rs were prepared/ maintained at manufactures level or transports level and dealers level. He has further held that the details of the goods transported through M/s. Vinod Forwarding Agency on which duty has been demanded has been duly accepted by the transporter, Authorizes Signatory and the Director. Therefore, he confirmed the demand. The order is reproduced below:- "(1) Order in respect of M/s. Kurele Fragrances Pvt. Ltd., Kanpur: (a) I confirm the demand of Central Excise duty amounting to Rs. 10,84,961/- and Education Cess of Rs. 21,700/- under proviso to Section 11A (1) of the Central Excise Act, 1944. (b) I order for recovery of interest on the amount of confirmed Central Excise duty till the date of its actual payment under Section 11AB of Central Excise Act, 1944. (c) I impose a penalty of Rs. 11,06,661/- under Rule 25 of the Central Excise Rules, 2002 read with Section 11 AC of the Central Excise Act....
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....rtment that Gutkha transported to Etawah, Farrukhabad and Karhal District through M/s Vinod Forwarding Agency was manufactured by the appellant and same was cleared to the aforesaid destinations without payment of Central Excise duty. Show cause notice proposes a demand of Rs. 70,45,596/- based on Annexures-A,B & C to the said show cause notice. (2) The entire demand against the appellant is first of all based on a third party documents which was either recovered by the officers during the search conducted against M/s K.P. Pan Flavours Pvt. Ltd. or search against M/s Ashwani Tobacco Company and M/s Kurele Fragrances Pvt. Ltd. It is an admitted fact that the department has failed to recover any document of the appellant's firm. It is also admitted that the appellant's firm was closed prior to the search conducted by the officers. Demand has been raised only on the ground that it is admitted by the owner of M/s Vinod Forwarding Agency that Gutkha of appellant's firm was transported to the destination Etawah, Farrukhabad and Karhal District in the name of Gutkha and mini Gutkha. It is presumed by Revenue that where even in the billties the Gutkha declared as mini Gutkha ....
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....6.02.2005, 22.02.2005 and 28.02.2005 were recorded prior to the search conducted at the premises of the appellant and in their statements they have never said anything about the appellant firm. The learned Commissioner, Central Excise, Kanpur relied upon the statements of the above referred persons merley because of the reason that the appellant did not choose to cross-examine the aforesaid persons. As a matter of fact the statements of above referred persons were not recorded by the department in respect of the search conducted by the department in case of M/s. Kurele Chemicals Company nor have they stated anything against the appellant firm. (5) Even if it presumed that the goods were manufactured and cleared clandestinely by the appellant firm without payment of Central Excise duty then the evidence as regard to procurement of raw materials without any accountal records is completely missing in the present case. For corroborative evidence the department is simply relied upon retracted statement of Shri R.P. Dewakar, wherein he has provided the formulation of consumption of Electricity and merely relied upon the said statement and department has arrived on the production capacit....
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....182 bags of Gutkha without payment of Central Excise duty through M/s. Vinod Forwarding Agency. On the basis of the aforesaid billties the department has calculated duty liability against M/s. Kurele Chemicals Company and M/s. Kurele Fragrances Pvt. Ltd. As per Annexure-A a demand of Central Excise duty Rs. 70,45,596/- has been demanded from M/s. Kurele Chemical Company on 2004 bags of Gutkha. (Para-22.3 of SCN). Demand of Central Excise duty amounting to Rs. 10,84,961/- and Rs. 21,700/-Ed. Cess has been demanded as per Annexure-B & C on 173 bags of Gutkha. (Para-22.4 of SCN). (3) Annexure-A on the basis of which demand of Central Excise duty on 2004 Bags of Gutkha has been demanded from M/s. Kurele Chemicals on the basis of GR's resumed by the officers during the search against M/s. K.P. Pan Flavours, Kanpur on 25/04/2004. Similarly as per Annexure-B demand of Central Excise duty has been raised against M/s. Kurele Chemicals on 114 bags of Gutkha on the basis of GR's tendered by M/s. Vinod Forwarding Agency in searched against M/s. Ashwani Tobacco Company Pvt. Ltd. Similarly demand of Central Excise duty on 59 bags has been demanded from M/s. Kurele Chemicals on the billt....
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.... under pressure and duress and the aforesaid Bills Books, Challan books are nothing; but the order slips. Therefore, only on the order slips it cannot be concluded that material was dispatched on the basis of the aforesaid slips for the reason that some time order were cancelled by the purchasers or it cannot be fulfilled due to non-availability of raw material. He further stated that the aforesaid slips were not in his hand writing same were prepared by one Shri Bhupender Singh and that under pressure and duress he has stated that the aforesaid slips were prepared by him. The Learned Commissioner neither discussed on the cross-examination of Shri Jang Bahadur Singh Chandel nor given any weightage to the defence put before him. (3) The Learned Commissioner has mainly relied upon the discrepancies in the stock of raw material found at the time of visit of the officers. The Learned Commissioner (Appeals) in order dated 23/12/2008 already set aside the seizure of stock account of 37300 Kgs. of Plastic Granules. Therefore, confirmation of demand on the basis of seizure is highly unsustainable. (d) In respect of personal penalties he has submitted that the personal penalties are prop....