TaxTMI 
TaxTMI 
2018 (5) TMI 659
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....ppellant's director Shri Brijesh kumar Agarwal is liable to penalty and under Rule 26 of Central Excise Rules, 2002 read with Rule 15 (1) of Cenvat Credit Rules, 2004. 2. The brief facts of the case are that the appellants are engaged in the manufacture of forged products of Carbon Steel, Alloy Steel and Stainless Steel falling under Chapter 73 of first Schedule to the Central Excise Tariff Act, 1985. A major portion of the production of 'flanges' is exported. The appellant also gets some process done on job work basis, Though the appellant have the facility for cutting and manufacturing of rough forgings, machined forgings and flanges, but due to insufficient capacity, raw material is also sent to various job workers for carrying out different processes like cutting of rough material, manufacture of rough forgings and rough machining. All goods are sent to job workers under cover of job work challan. Different job workers carry out different processes. On 12th May, 2006 there was a search or inspection in the manufacturing premises of the appellant, the residential premises of izs director, (Shri B. K. Agarwal), the premises of Eve raw material suppliers and the job w....
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....ce. He was making entries after verifying actual receipt and dispatch of goods. On being asked about the discrepancies between the said register and the job work register, he stated that the entries in the job work register were being made by the excise people. He also stated that he was preparing the job challans for sending material to job workers. In his further statement dated 31.12.2007 Shri Sharma stated that as regards the entries for 20, 21 and 27/09/2005, he did not get any excise documents from the Excise Department in respect of such dispatches. Therefore, he had mentioned the said remarks himself against the respective entries. Further, register at Sl.No.64 (Private record) resumed from the factory premises, bearing the heading 'Forging R.G.P." and contains entries for the period from 17.11.2005 to 23.01.2006. The said register was compared with the job work register and the registers at Sl. No.55. The dispatch particulars in the job work register were found tallying with the particulars in the said two registers. Some discrepancies in the dates of receipt of material were noticed in a few stray cases and in some cases, the weight of the goods received back was appa....
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....the job worker's premises. It also appeared that the appellant had issued much more quantity of raw materials or rough forgings for both in-house processing and job work, than required, This appeared to be the modus-operandi followed by the appellant to under report clearance. This appeared to be obvious from dispatch and receipt particulars of raw materials in private register were not fully matching with job work register. Thus, it appeared that the excess raw material/ rough forgings were cleared clandestinely, without payment of duty. Accordingly, it was alleged, that 487.882MT of raw materials issued (allegedly in excess) for job work were not received back, nor accounted for and 1173, 107 MT of rough forgings were also not accounted form The duty for the year 2004-05 to 2006-07 had been calculated and demanded Rs. 1,54,58,307/- plus cess. It also appeared that for the years 2004-05 to 2006-07, the RG-4, form-IV and daily stock account of the appellant indicated that certain quantity of raw materials and rough forgings were shown issued under the heading 'others'. In his statement dated 19.03.2008, Shri Pathak stated that during the period 2004-05 and 2005-06, a qu....
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....r Sachdeva, Proprietor of M/S Vdanshu Road Carrier and Shri Suresh Chaudhary of M/S S.R. Roadlines on 17.11.2009 behind the back of the appellant, when they presented themselves for cross-examination. Further, he stated, reliance on such statements recorded at the back of the appellant, is not good evidence and cannot be used against the appellant, the same being in violation of the ruling of Hon'ble Supreme Court in the case of Commissioner Vs Indian Oil Corpn, Ltd. reported at 2004 (165) ELT 257 (SC) and also in the case of M/S Tega India Ltd. Vs Commissioner reported at 2004 (164) ELT 390 (SC), Further, he stated that the impugned order has been passed without hearing the appellant. The learned counsel for the appellant was prevented by sufficient cause, to appear before the learned Commissioner. Further, he submitted that rejection of request for adjournment on a bona-fide ground is bad and hit by the ruling of Hon'ble Supreme Court in the case of M/S Salem Advocates Bar Association Vs Union of India reported at V (2005) STL 653. Further, the impugned order is bad for denying the opportunity to cross-examine the panch witnesses, transporters and Shri Nitin Agarwal, Dire....
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.... burning loss. Thus, the total scrap and burning loss as per the departmental report of the year 2002 is 53.22%. He further states that the demand has been calculated by taking the report of the Superintendent (on the basis of which Input Output norms were fixed by the Assistant Commissioner) as the basis and the duty has been demanded on the alleged excess scrap generated by presuming that the appellant has cleared forgings in the garb of scrap. However, this demand has been calculated erroneously, as the generation of scrap at the cutting stage (first step in the process of manufacture) has not been taken into account and only the burning loss has been considered, Further, the demand is raised on the presumption that the appellant must have cleared forgings in the garb of scrap without there being any evidence in support of this contention, Further, there is no investigation with regard to the alleged purchasers of the goods clandestinely cleared, the manufacture of excess quantity of forgings, the receipt of consideration for such forgings, and so on. The duty confirmed, being on the basis of bald allegations, in absence of any corroborative evidence, is not sustainable. Further....
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....to enable them to verify and make further submissions. However, the GRs were not supplied to the appellant, resulting in denial of Justice and opportunity of hearing. The goods supplied under Vehicle No. UP- 14X-7852 are not in dispute. The dispute is regarding supply by other vehicles for which Cenvat demand had been raised. Hence, no reliance can be placed on the statement of Shri Suresh Chaudhary of M/S S.R. Road Lines, the same is wholly irrelevant. Further, in the case of the appellant, as is evident from the records, that the disputed inputs were received by them, entered in the records, issued to production and the finished goods manufactured were duly reflected in the RG-I register and cleared upon payment of duty. Learned Counsel further states that the show cause notice is also bad for invocation of the extended period of limitation, the same being presumptive, based on input output norms. The appellants have been filing regular ER-I returns and have been maintaining the prescribed statutory records. The production of finished goods and generation of scrap was duly reflected in the records of the appellant and the percentage of scrap generated could have been easily verif....
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....that the same are not reliable nor have any evidential value, for drawing adverse inference against the appellant. Further, we find that there is no unaccountable discrepancy between the statement of Shri Brijesh Kumar Agarwal, Director and Shri C. P, Pathak, GM (Commercial), as both have stated that generation or yield of finished goods is about 48% of the inputs and generation of scrap plus burning loss being about 52% . The said ratio of generation of scrap and burning loss was also verified by Assistant Commissioner in the year 2002 for the purpose of fixing the input/output norms for production of goods for export. The Assistant Commissioner has found that the finished product/ flanges were 46.98% and scrap was 45.70% while burning loss was about 7.32% . Further, we find that it is admitted fact that the appellants have disclosed higher percentage of production and less percentage of scrap plus burning loss, during the periods under consideration and accordingly, adverse inference drawn by revenue on assumption and presumption is not tenable. Thus. duty- of Rs. 1,54,58,307/- is set aside. We find that similar view was taken by Hon'ble Supreme Court in the case of M/S Tega ....