TaxTMI 
TaxTMI 
2017 (2) TMI 1333
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....envatable raw material) valued at Rs. 1,15,312.50 as compared to its stock shown in the relevant Stock Register(s). The CENVAT Credit involved on short quantity of HDPE Granules @ 16% was worked out Rs. 18,450.00. On further search of the Director's Room of the party situated in the factory premises itself, the officers recovered some private document/papers kept in two separate folders containing pages from 1 to 297 and pages from 1 to 123. During the course of interrogation Shri Manish Agrawal, Director of M/s Keymen Laminators (P) Ltd. Kanpur confirmed that the above said documents relate to unaccounted production and clearances of excisable goods pertaining to the party and no Central Excise duty had been paid on these clearances. 3. The other director Shri Siddhartha Gupta appeared before the officers on 12th May 2003, wherein he was shown the statement dated 10th May 2003 of Shri Manish Agarwal. After going through the papers in the two folders which were resumed from the room of the director situated in the factory, he expressed his inability to explain the details contained therein and requested that he will explain the queries about the said documents only after consult....
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....rth Gupta -Director retracted his statement dated 23rd May 2003 and informed that the resumed papers do not belong to his company - Keymen Laminators Private Ltd. In response to the retraction, Shri Siddhartha Gupta by letter dated 27 May, 2003 was requested to explain the circumstances under which the said papers reached his unit, if they did not pertain to his unit. Further, he was again summoned to appear on 29th May 2003. Shri Gupta again appeared on 02 June, 2003, wherein he stated that he retracted under pressure and confirmed his earlier statement dated 23rd May 2003. The officers in presence of Shri Gupta scrutinized the papers placed on the two folders and a chart showing commodity wise clearance was prepared by the officers in his presence. As per the chart the total Central Excise Duty amounting to Rs. 17,87,303/- was found to be evaded. The details of which were available in the resumed papers. The officers as well as Shri Gupta signed the chart (Annexure - X to the SCN) in token of correctness of the calculation of duty. On being asked about the abbreviation regarding the words (KP), appearing frequently on the resumed production slips and clearance slips, Shri Siddhar....
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....he packaging material, as detailed in the slips have been received by them is still lying in the factory. He further stated that the bill in respect of said packaging material have not been received from Keymen Laminators and as such the said material have not been consumed till date. On verification 209.650 KG of packing material to pack Palki brand biscuits was in the stock. Latter on Parmatma Foods Private Ltd. by their letter dated 23 August, 2003 informed the Department that a debit note dated 22 August, 2003 have been received from Keymen Laminators, wherein an amount of Rs. 35,606/- was paid by Parmatma Foods towards delivery of 209.45 KG laminates. It appeared that respondent had dispatched excisable goods -packing materials to Parmatama Foods without paying Central Excise Duty 218 and without the cover of any Central Excise Invoice. 9. During the investigation at Kothari Food and Fragrances on 24th June, 2003, statement of Authorized Signatory -Pradeep Kothari was recorded. On being shown the resumed slips wherein the details of clearances of packing materials bearing brand names: Dum Gutka, Sathiya, Humdum and Humdum Carry Bags, he accepted that the said slips containe....
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....67/-, was also deposited on 17 June, 2003 by Challan. It is further recorded in SCN that the respondent admitted the shortage of 123 bags the stock of HDPE Granules - raw material and debited an amount of Rs. 18,450/- being the Cenvat Credit involved vide PLA entry dated 10th May, 2003 and RG 23 A Part-II entry number 46 dated 10th May 2003. In view of the aforementioned facts and circumstances it appeared to Revenue that although the duty have been debited/paid the respondent is still liable for penal action as well as its director Shri Siddharth Gupta as well as Shri Manish Agarwal, Director and, accordingly, show cause notice dated 09 October, 2003 was issued proposing to demand Excise Duty of Rs. 18,450/-+ Rs. 17,90,434/- with proposal to appropriate from the amount already deposited alongwith interest and further penalty was also proposed on the respondent company as well as the two directors namely Shri Siddharth Gupta and Shri Manish Agarwal. 12. The SCN was contested by the respondent company and its directors by filing defence reply stating that the proposed demand is based relying upon various unsigned computerized printed paper sheets and handwritten sheets found lyin....
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....particular loose papers as mentioned hereinabove did not belong to them and it appeared that some person visiting their factory, in connection with the normal course of business, had mistakenly left them. The investigating officers failed to consider the capacity of the plant and machinery, electrical consumption, diesel consumption in boiler, purchases, outcome of physical stock verification, the cylinders (size), used by them for printing the material of their buyers, the quantity of waste lying in stock as entered in production register, the quantity of the finished goods lying in stock as entered in production register, etc. But none of these facts/aspects were ever looked into by the Investigating Officers and the whole case of Revenue is on presumptions. Right from very first day of search the director(s) were under pressure to own these papers (loose papers), which actually did not belong to them. The investigating officer never attempted to find out the author of those papers. Thus, the loose papers not owned by them cannot be relied upon and/or used against them, being wholly unrelated. Unless the person or auther making such documents is examined or identified. No such ef....
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....s actually belonged to the respondent, is without appreciating the fact that Shri Sidhartha Gupta in his statement dated 02/06/2003 which was recorded in continuation of his earlier statement dated 23rd May, 2003 have categorically stated and admitted the records resumed where actually the daily production reports regarding the excisable goods manufactured by them. 'That the observations of the appellate authority are contrary in itself, on one hand he notices that no doubt Shri Sidhartha Gupta had mentioned in his statement dated 02/06/2003 that he had agreed with the manner of calculation of the chart enclosed, as Annexure-2 of his statement whereas on the other hand he has mentioned, "however, the contents of that statement itself shows the manner of enquiry". This shows that the appellate authority was not sure in himself, as to which part of enquiry was not up to Mark.' 14. Further, the appellate authority have erred in observing that Department has already failed to lay hands on actual owner of those loose papers, because the loose sheets/papers contained in folders, resumed from directors room, and the retraction dated 24th May, 2003, was also later on withdrawn by Sh....
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....a Gupta has categorically admitted any clandestine removal of goods. The statement dated 23rd May, 2003 of Shri Sidhartha Gupta was retracted on the first available opportunity on 24th May, 2003 and again statement was drawn on 02/06/2003 and retraction was made in the reply. Even the Learned Adjudicating Authority has observed that the statement was being tendered under some pressure working upon the respondent-assessee, but it is not clear that the pressure was applied by the Department. Further, the Adjudicating Authority has observed that Shri Sidhartha Gupta could not explain the contents of the resumed papers on 12/05/2003 and told officers that he would explain the same after consulting the supervisor of his factory. This clearly establishes that Shri Sidhartha Gupta was not aware about the nature of resumed documents and whatever explanation was given by him was only hearsay in nature. 18. The learned Commissioner (Appeals) has observed that "I do not find much substance in these findings of the learned Adjudicating authority in view of his categorical conclusion that the statement was being tendered under some pressure working upon the assessee/appellant. That no statem....
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....lleged finished goods. Further, non availability of production capacity, work force and the very fact that the loose papers actually related to some other factory who was engaged in manufacture of holo laminated films exclusively, on the power generated by D.G. set. Whereas the respondents are using power, the generator was used only for emergency as a standby. The case of the Department is that the loose papers belong to the respondents and Shri Sidhartha Gupta director of the company had owned the calculations made on the basis of those loose papers & signed in token of having agreed with the manner of calculation, in his statement dated 02/06/2003 and in view of his admission no further proof is required from the facts and contentions on record. I am satisfied that the Department has not succeeded in establishing that the loose papers actually belonged to the respondents. Agreeing to the manner of calculation with respect to the loose papers, does not amount to categorical admission of clandestine removal by the director of the respondent's company. Moreover, there have been repeated retraction, verifying the position and as such the alleged admission is of no help to revenue. F....