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2018 (6) TMI 1338
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....t of Shri Ram Prakash Singh, Booking Clerk of M/s Bihar Carrying Company, Kanpur, was recorded. During the course of investigation the officers also recorded statement of Shri Shailendra Mittal, Proprietor of the respondent company on 19.02.2010. Statement of Shri Abhishek Gupta, Authorised Signatory of M/s Acchyut Packaging Pvt. Ltd., Kanpur was recorded and also of Shri Sushil Mishra, Authorised Signatory of M/s Sarvesh Polychem Pvt. Ltd., Kanpur. Further statement of Shri Tarun Kumar Pnadey, Authorised Signatory of M/s Sparsh Laminators Pvt. Ltd. and that of Shri Prashant Agarwal, Manager of M/s Shiva Group of Agencies, Kanpur and that of Shri Rishi Kumar Gupta, Director of M/s Southern Arecanut Pvt. Ltd., Kanpur was recorded on the basis of 'Private Diary Pad', 'JST Slips' recovered from M/s Bihar Carrying Company which were the documents maintained by Bihar Carrying Company, the transporter and on the basis of said various statements recorded it appeared to Revenue that the respondent had cleared 35,321 bags of Shikhar Gutkha for the period from April, 2007 to November, 2007, April 2006 to November, 2007 and February 2008 to April 2008, without payment of duty. Therefore, a sh....
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.... Bhagalupur and Ranchi destinations only and Shikhar brand gutkha was transported to various places of Bihar viz. Samastipur, Sitamarih, Darbhanga, Muzaffarpur, Patna, Betiah, Katihar. Accordingly, in view of joint decoding the codes of brands of gutkha as well as various destinations, Charts 2/G/J were prepared for quantification of transportation of unaccounted Shikhar brand of gutkha. The aforesaid chart has been prepared in accordance with decoding done by Shri Uma shanker Awasthi. Further, a regular transporter of gutkha, who is transporting unaccounted gutkha, is not supposed to writ the correct details of gutkha i.e. brand name, name of manufacturer and name of consignee etc., in the records of his transport company like loading registers etc. The Adjudicating Authority has failed to properly appreciate the facts on records and had failed to appreciate the correct picture of unaccounted transportation of Shikhar gutkha. (ii) that Shri Uma Shanker Awasthi, was shown the Private Diary Pad showing receipts of gutkha for the period April to November. He, in his statement dated 10.05.2008, stated that the Private Diary Pad shows receipt of gutkha for the period April 06 to Nov....
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.... of transportation. Thus, the Adjudicating Authority has failed to evaluate the statement of Shri Uma Shanker Awasthi in its true perspective. 2.1. The Adjudicating Authority has also not appreciated the fact that the statement of Shri Manoj Kumar Srivastava, Manager of M/s Bihar Carrying Co., Patna was recorded on 23.02.2010. During the statement Shri Manoj Kumar Srivastava accepted the contents of Chart-2, Chart-G and Chat-J showing transportation of unaccounted Shikhar brand of gutkha to various destinations. He also accepted the facts stated by Shri Uma Shanker Awasthi during his statements tendered on 10.05.2008, 14.08.2008 and 28.01.2010 and statement dated 20.11.2008 of Shri Ram Prakash Singh, Booking Clerk of M/s Bihar Carrying co. He further stated that since he used to receive these goods at Patna in the office of M/s Bihar Carrying Co., hence he can say that these goods containing 'Shikhar' Brand of Gutkha were actually transported through M/s Bihar Carrying Co. He also stated that 'Shikhar' brand of Gutkha transported from Kanpur to Darbhanga, Samastipur, Muzaffarpur, Betiah and Sitamarih were also routed through Patna. He further stated that the entire Registers/Rec....
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....Singh clerk of the transport company in their statements have categorically accepted that 440 bags of Shikhar brand gutkha, were transported by them under the guise of 'kachri'/ 'papad'. At no stage of time they have retracted from their statements. The demand cannot be set aside merely on the basis of non mentioning of goods manifests in the list of relied documents, which has been discussed in the body of the notice, as held in the case of Ashok R. Mistry vs. Commissioner of Customs (Acc & Import), Mumbai reported in 2011 (266) ELT 58 (Tri.-Mumbai) wherein it was observed as under- "The learned counsel has objected to placing reliance on this affidavit which is not one of the documents relied upon in the show-cause notice. It is true that this affidavit does not figure in the list of annexed to the show-cause notice. However, it very much was mentioned in the body of the show-cuase notice vide para 13, which reads "Shri Ashok Rashiklal Mistry sent an affidavit dated 27-7-06 to this office wherein he had stated that the entire import was handled by him and by no one else and he was solely responsible for it." In this scenario, the objection raised by the counsel is overru....
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....on 19.02.10. He stated that he has sold tobacco to the manufacturer of 'Shikhar' brand of gutkha. He also sells tobacco to Gutkha manufacturers on cash payment basis. In such cases, name of customer is shown as CASH, in the cash memos, as per prevailing market practices. At present, he cannot segregate the cash memos which were pertained to sale of tobacco to M/s Trimurti Products, Kanpur since the cash memos does not bear the name of customer (Gutkha manufacturer). Further, he does not maintain any such record which can show the name of customer/Gutkha manufacturer, in cases of cash sale. (iii) The statement of Shri Rishi Kumar Gupta, Director of M/s Southern Arecanut Pvt. Ltd., Kanpur (supplier of Supari) was recorded on 19.02.10. He stated that he sells supari to the manufacturers of Shikhar brand of gutkha and others. He also stated that he also sells supari to Gutkha manufactures on cash payment basis. In such cases, name of customer is shown as CASH, in the cash memos, as per prevailing market practices. At present, he cannot segregate the cash memos which were pertained to sale of tobacco to M/s Trimurit Products, Kanpur since the cash memos does not bear the name of cost....
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....the speed of machine is taken to be 120 pouches per minute, the suppression of production comes to nearly 70% of the total production (estimated on the basis of capacity), as per chart given below:- S. No. Period Nos. of machines Production capacity (kg) Recorded production (kg) Percentage of unrecorded production 1. Apr'06 to Sept'06 71 1722539.52 354948 79% 2. Oct'06 to Apr'08 77 5915669.76 1927692 67% 7. The observation of the Adjudicating Authority that the demands cannot be confirmed on the basis of private registers maintained by third party, without corroborative evidence. The observation of the Adjudicating Authority is incorrect both in legal and factual terms. The case laws cited by the Adjudicating Authority are not applicable in the facts and circumstances of the instant case. In fact, the records of transporter showing unaccounted transportation of Shikhar brand of gutkha are self explanatory and contains the systematic details of Shikhar brand of gutkha, as explained by the author of the said records as well as the manager of the transport company. The suppression of production of Shikhar brand of gutkha and its....
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....rying Co., Kanpur, tendered on 10.05.08, 14.08.08 and 28.01.10 and statement of Shri Ram Prakash Singh, clerk of M/s Bihar Carrying Co., Kanpur, tendered on 20.11.08. He also accepted the contents of Chart-2, Chart-G and Chart-J, prepared on the basis of 'Private Diary Pad' and 'Loading Registers'. He also stated that Shikhar Gutkha was transported from Kanpur to Darbhanga, Samastipur, Muzaffarpur, Betish and Sitamarih and were also routed through Patna. He stated that Chart-2, Chart-G and Chart-J shows transportation of unaccounted 'Shikhar' Gutkha, which was not accompanied with any builty, bill or any other document and the same were not entered in Entry Register maintained by them at Patna. However, such quantity of 'Shikhar' brand of Gutkha were transported from Kanpur to Patna/various destinations en-routed through Patna and on the basis of this, he can say that the questions shown in the aforesaid Chart-2, Chart-G and Chart-J are correct. (iv) A scrutiny of various incriminating records reveals that the entries showing the quantities of Gutkha, transported to various stations on various dates, as mentioned in different private records viz. 'Private Diary Pad', 'Loading Re....
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....were issued to M/s Trimurti Products, Kanpur, since the cash memos does not bear the name of customer (Gutkha manufacturer). Further, on perusal of records of M/s Trimurti Products, it is found that they have not shown the purchase of supari on cash payment basis. Thus, M/s Trimurti have suppressed the purchase of supari, which appear to have been used in the manufacture of unaccounted Gutkha, which was cleared without cover of any invoice and without payment of Central Excise duty. (vii) The enquiry was also conducted at the end of suppliers of packaging materials. Shri T.K. Pandey, Authorised signatory of M/s Sparsh Laminators, in his statement dated 18.02.10 stated that as per instructions of Shri Shailendra Mittal proprietor of M/s Trimurti Products, he had sometimes supplied the packaging materials to them without cover of any invoice, due to some constraints of market. However, he cannot furnish the details of such supplies as such type of records were not maintained/preserved. (viii) The above detailed enquiries conducted at the end of suppliers of raw materials reveal that the orders supply of raw materials were not given in writing and the same were given on telephon....
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....es, installed in the factory premises were many times more than the recorded production of Gutkha, which indicates that more than 90% of the production was suppressed and clandestinely removed without payment of duty. 8. While adjudicating a similar case against M/s Kaya Fragrances & M/s H-Choice Collection Pvt. Ltd., Kanpur, which was based on the same 'private diary' and 'loading registers' and statements tendered by employees of same transport company (i.e. M/s Bihar Carrying Co., Kanpur) and other identical evidences, the same Adjudicating Authority has relied on such evidences and has confirmed the demand on the consignments of 'Tiranga' brand of gutkha, vide earlier OIO No.19&20/2011 dated 18.09.2011. Thus, non-reliance on same/identical evidences in instant case is not legal and proper. 9. Now coming to legal aspect of cases of clandestine removal in addition to case laws already reported above, following case laws can also be referred to:- (i) Sai Chemicals Pvt. Ltd. vs. Commissioner of Central Excise, Raipur 2010(257) ELT 0457 (Tri.-Del.) "It is true that the respondent had not conducted any investigation in relation to buyers of such final product, nor in rela....
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....t the appellant's use indulging in clandestine removals. All the statements recorded during investigation are corroborative of each other. Further, the records maintained by labour contractor fully tally with the pencil entries in private records, thus lending further corroboration to charges of clandestine removals. Shortages of raw material and final product detected at the time of visit of the officers furthers the Revenue's stand. In the backdrop of the above evidence, assessee's contention that procurement of raw material and consumption of electricity does not stand investigated and proved, cannot be appreciated. It is not that in each and every case of clandestine removals, such factors are required to be established. As already observed, it is the appreciation of various evidences available on record in a given case, which will from the basis of conclusion. As discussed above, the evidence in the present case conclusively prove the charge of clandestine removal against the appellant. We, accordingly, uphold the findings of clandestine removal against M/s Motorol Technologies Ltd., as arrived at by the Adjudicating Authority." (iii) Columbia Electronics Pvt. Ltd. vs....
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....et aside and demand of duty is liable to be confirmed. 11. In view of the foregoing submissions, it appears that the party was engaged in willful suppression of production of Shikhar brand of gutkha an clandestine removal thereof without cover of invoice and without its accountal in statutory records with intent to evade payment of duty. Accordingly, they appears to be liable for penal action under Section 11 AC of the Central Excise Act, 1944 as well as penalty under Rule 25 of Central Excise Rules, 2002. Further, it also appears that the party were engaged in evasion of duty accordingly they are required to pay duty not paid by them alongwith interest under Section 11AB of the Act." 4. Heard the learned AR who has taken us through the aforementioned grounds of appeal. 5. Heard the learned counsel for the respondent. The learned counsel for the respondent has taken us through page 80 of impugned Order-in-Original wherein the Original Authority discussed the statement dated 19.02.2010 recorded of Shri Shailendra Mittal, Proprietor of respondent company wherein Shri Mittal has stated that he sold the goods at the factory gate on cash payment and that there was no evidence t....