2017 (11) TMI 1102

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....harged by the Department in order to establish clandestine removal of goods by the Respondents? 2. Whether statement recorded under Section 14 of the Central Excise Act Constitutes admission on the part of the respondent as to the clandestine removal of goods and whether such statements ought to have been totally ignored in the absence of cross examination of the witnesses." 4. This Court while admitting the D.B. Excise Appeal No.20/2010 on 08.04.2013, framed the following substantial questions of law:- "1. What is the extent of burden required to be discharged by the Department in order to establish clandestine removal of goods by the Respondents? 2. Whether statement recorded under Section 14 of the Central Excise Act Constitutes admission on the part of the respondent as to the clandestine removal of goods and whether such statements ought to have been totally ignored in the absence of cross examination of the witnesses." 5. This Court while admitting the D.B. Excise Appeal No.21/2010 on 08.04.2013, framed the following substantial questions of law:- "1. What is the extent of burden required to be discharged by the Department in order to....

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....of hot rolled products of chapter 7606 of the Central Excise Traiff Act, 1985 to the products of the same heading by cold rolled method no new product different than the raw material emerges hence the said process of conversation of hot rolled product into cold rolled product is not an excisable process and no duty is leviable on the end product obtained by the said process". I find that- (I) According ot Section 2(f) of the central Excise Act, 1944, the word "manufactured" includes "Any process incidental or ancillary to the completion of a manufactured product". Since, this is not an exhaustive definition the normal meaning of the term may be ascertained for the judicial interpretation. (ii) Hon'ble Supreme Court in the case of UOI Vs Delhi Cloth Mills-1977 ELT 1999 (SC) had held that "manufacture" involve (bringing into existence a new substance). As to what is a new substance, the Apex Court adopted the Led 336 where in it was observed that a new and different article must emerge having a distinct character or use. (iii) Hon'ble Supreme Court in the case of CCE Vs Raj. State Chemical Works- 1991 (55) ELT-444 analysed the definition of manufact....

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....hri R.K. Sharma dated 20.2.2000, stating that the entries contained in the resumed note book pertained to weighment got done to calculate the annealing cycle or got done by the production department while transferring the material from one department to another and also that they had inadequate weighing facility, in their factory is not truthful. The explanation submitted by him is not supported by any document/evidence Shri Sudershan Rout in their respective statements. Besides this even while Transport Co., by the employees of the assessee were station outside Bhiwadi and thus it is seen that assessee had no intention for weighment of goods outside factory (and within Bhiwadi). (iii) Shri Rajesh Soni, Production Supervisor of the assessee dated 21.2.2000, stated that their raw material was Aluminium Coil of thickness 4.6 mm and the normal weight of a coil was 2.5 MT and 2200/2300 Kg. Of Aluminium foils was produced out of this; that, they were having two weighing scales, one capable of weighing 400 Kg. And the other upto 3.0 MT; that, the entire process of manufacture used to take 7 hours; that, they kept their finished goods in the form of sheets of 50 Kg. Bundle; that,....

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....Dv, Janakpuri, New Delhi under letter C. No. v (15)39/MOD V/Prev/Eng./5/99/2038 dated 03.03.2000 indicates that M/s Capseals, A-42, Mahipalpur, New Delhi had received seven consignments from the assessee & the details of the consignments received under invoice No. 40/16.09.99; that of S. No. 177, 201, 204 and 297 respectively of Annexure "B" where the date, name of the party and quantity is same. Also the vehicle number in the voice No. 87/03.02.2000 is tallying with S. No. 87 of Annexure "A". (b) The follow up report received from the Assistant Commissioner, Central Excise Division, Ambala under letter C. No. IV(16)CE/Prev/5/2000/1743 dated 23.02.2000 indicates that M/s Shambhu Metal Industries, Jagadhari had received five consignments of Aluminium scrap from the assessee. Out of these consignments two were received after 19.2.2000, where as the other three consignments received under invoice No. 65/4.12.99; 71/14.12.99 and 76/1.1.2000 are tallying with S. No. 247, 260 and 275 respectively of Annexure "B". The same entries are tallying with S. No. 37, 50 and 65 respectively of Annexure "A". (c) The follow up report received from the Deputy Commissioner, Central E....

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....f 7,45,993 Kg. (vi) From the Grs pertaining to the assessee it was observed that while booking the vehicle, the destination as told to the transporter namely M/s Baba Transport Co. by the employees of the assessee were stations other than Bhiwadi which shows that the assessee had no intention for weighment of goods outside factory (within Bhiwadi) and in fact these transport booking were meant for transportation of goods to places out side Bhiwadi. This fact is further corroborated by the version of Shri Rajesh Soni that work in process material was not sent outside. (vii) Issue os parallel invoices of 95 & 96 both dated 19.2.2000, shows that the assessee was indulged in suppression of production and clandestine clearances without payment of Central Excise duty on parallel set of invoices. This position has been admitted by Shri R.K. Sharma, Director in his statement dated 12.4.2001. (viii) Voluntary debit of an amount of Rs. 5.0 Lacs on this account is tacit admittance of the guilt i.e. clandestine and evasion of duty. (ix) Substantial quantity of raw material was received but was unaccounted for in the statutory records. Similarly substantial q....

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....alleged sale of the goods may be considered as cum-duty-price I find it unacceptable in view of the fact that the value of Aluminium Foils/Scrap has been taken on the basis of average assessable value of Aluminium Foils/Scraps as discussed in details in para 23 & 24 of show cause notice hence no benefit of cum-duty-price can be given to the assessee. 9.8. Further I find that Shri R.K. Sharma, Director, Shri L.K. Jha, Authorised Signatory and Shri Sudershan Rout, Despatch Clerk of M/s Rajasthan Foils Pvt. Ltd., Bhiwadi are also liable for penal action under Rule 209A of Central Excise Rules, 1944 read with Rule 26 of Central Excise (No.2) Rules,2001 as they are the person who concerned themselves with the goods which they knew and had reason to believe were liable for confiscation under Central Excise Rules, 1944 and are responsible for facilitating the assessee in evasion of duty in the manner stated above." 10. In view of the matter, in our considered opinion the matter is required to be reconsidered by the Tribunal. 11. However, counsel for the respondent has relied upon the decisions in following cases:- 1. CCE vs. Steel Strips Ltd. {1995 (77) ELT 248 SC}....