2018 (6) TMI 1421

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....der. 2. The question involved in these appeals is whether the Principal Commissioner vide its impugned order dated 28.12.2017 is justified in confirming the demand of Central Excise duty of Rs. 4,65,570/- along with interest and penalty in respect of clandestine removal of 154.580 mt of M.S. Ingots recovered from the appellant M/s. Sairam Steels Pvt. Ltd., Raigarh (CG) of which the appellant-Pawan Kuram Agarwal is Director. 3. I have Heard both the parties and perused the records. Two show cause notices were issued to the Appellants. In the First show cause notice the Appelllants were asked to show cases as to why:- (i) Central Excise duty amounting to Rs. 4,65,570/- (BED Rs. 4,546,44/- (+) Ed. Cess Rs. 9,129/- (as detailed i....

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....ded period of 5 years under the provisions of Section 11 A of Central Excise Act, 1944. (ii) Interest should not be recovered from them under the Section 11 AB of the Central Excise Act, 1944. (iii) Mandatory penalty equal to amount of duty should not be imposed upon the Noticee No. I under the provisions of Section 11 AC of the Central Excise Act, 1944 for indulging in suppression of production and clandestine removal of goods without payment of duty. (iv) Penalty should not be imposed upon them under the provisions of Rule 25 of Central Excise Rules, 2002 for contravention of Rule 4, 6, 8, 10 and 11 of Central Excise Rules. 4. In the 2nd show cause notice dated 14.06.2010, at the end of paragraph 8.7 (after C....

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....e dated 14.06.2010 it is clear that the appellant with intent to evade payment of duty suppressed reproduction of M.S. Ingots so manufactured out of such sponge iron and clandestinely removed 20745.926 MTs (including the quantity of 154.580 MT of M.S Ingots manufactured and cleared clandestine by the appellant in 2006-07) without issue of invoices and without payment of duty as recorded in the dairies of M/s. Monu Steel prop. Sh. S.K. Pansari. Therefore it is cleared that the Central Excise Duty amounting to Rs. 6,38,05,258/-is inclusive of the duty of Rs. 4,65,570/- in respect of clandestine removal of 154.580 MT of M.S. Ingots. 6. In the said show cause notice the total demand of Central Excise duty raised was amounting to Rs. 6,38,05,....

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....gularities and admitted the duty liability therefore no corroboration was required in those cases. But in the present case the appellant did not admit the liability and the same is recorded in para 6.6 of show cause notice dated 25.11.2009: "6.6. Shri Pawan Kumar Agarwal was also made aware of the fact that in the diary of Shri. S.K. Pansari the names of several Steel manufacurtres have been mentioned and that some of the manufactures have accepted these transactions as genuine and have discharged their duty liability, establishing thereby the auhteticity of the of diary contents/ entries. In spite of such clear evidences of the authenticity of diaries of Noticee no.2 indicating therein transaction pertaining to Noticee no....

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.... purchased such goods. However, no such enquiry has been made from any of those persons. 10. In the impugned order nowhere it has been discussed as to how the demand to duty of Rs. 4,65,570/- is sustainable in the absence of any clinching evidence of clandestine manufacture and removal of the goods and also in view of the fact that the said amount is already included in the duty demand of Rs. 6,38,05, 258/-which has been dropped in the impugned order by the ld. Principal Commissioner. There is absolutely no evidence on record to show that the appellant has cleared 154.580 MT of M.S. Ingots. The entire demand is based upon the records recovered from Sh. S.K. Pansari proprietor of M/s. Monu Steel. There is no evidence expect the said state....

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....rrectly and it is based upon the statement of the representative of M/s Monu Steels that the Revenue entertained a view that "S. Iron" refers to the appellant's clearances. When the Director of the appellant contacted by Revenue, he very clearly, in his statement recorded by the officers, deposed that he does not even know M/s Monu Steels. Further, the Revenue has not made any enquiries from the buyer M/s Sapna Steels and has solely relied upon the entries made in the record of M/s Monu Steels. 5. The law i.e. as to whether the third party records can be adopted as an evidence for arriving at the findings of clandestine removal, in the absence of any corroborative evidence, is well established. Reference can be made to Hon'ble Alla....