TaxTMI 
TaxTMI 
2018 (10) TMI 693
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....for demand of duty or Rs. 23,20,278/-. 7. Coming first to the duty demanded of Rs. 23,20,278/- this demand for the period from 1994-1995 to 1996-1997 is based on the sales of wires and cables made by the trading firm with Shri Brajesh Batra as its main partner to 17 buyers and the statements of those buyers stating that they had received Batra Henlay brand wires and cables. Since, during that period M/s Batra Enterprises were also purchasing wires from 12 suppliers and each of those 12 suppliers has stated that they had not supplied Batra Henlay brand wire, it has been inferred that the 'Batra Henlay brand wires and cables supplied to the 17 buyers had come from M/s Batra Henlay Cables and since during that period as per the books of accounts and other records of M/s Batra Henlay Cables, there was no sales to M/s Batra Enterprises, it has been presumed that the 'Batra Henlay wires' and cables supplied to the 17 buyers, had been procured from M/s Batra Henlay Cables who had cleared the same clandestinely, without issue of invoices. The value of these sales is Rs. 71,13,121/- on which the duty of Rs. 23,20,278/- has been demanded. The defence of the appellant is that merely ....
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....n case of prosecution proceedings, to permit cross examination of every witness whose statement is being relied upon, the cross examination has to be allowed "as far as possible" and more so, when the facts and circumstances warrant. Some of the circumstances warranting cross examination would be where the case against the assessee is based mainly on the oral evidence in form of statements of certain witnesses and those statements are not corroborated by any other independent evidence. In such circumstances, in order to ascertain as to whether the statement given by the deponents are true, their cross examination would be mandatory. Since, in this case, the cross examination of the 17 buyers whose statements are being relied upon in support of the allegation of duty evasion on the appellants company - M/s Batra Henlay Cables, has not been allowed, in our view, the duty demand based on their statements would not be sustainable and the matter would have to be remanded to the Commissioner for denovo adjudication after permitting cross examination of the 17 buyers. In case, any of these persons are not available and the Department wishes to rely upon their statements, the directions of....
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....bles and Shri Brajesh Batra is the main partner of M/s Batra Enterprises and the works related to sales of M/s Batra Henlay Cables was being looked after by Shri Brajesh Batra; (5) statement dated 22/5/98 and 21/7/99 of Shri Brajesh Batra, wherein he admitted to opening of four bank accounts mentioned above in the name of Shri Vinod Kumar in Catholic Syrian Bank Limited, Punjab National Bank and Indian Overseas Bank and that the amounts deposited pertain to the illegal sales from Batra Henlay Cables. However, in the second statement dated 21/7/99, he, while still admitting that the four accounts were opened in the name of Shri Vinod Kumar on his instructions, stated that he had got the cables manufactured from job workers and the payment received into these accounts were of the sale proceeds of the cables got manufactured on job work basis; (6) statements from certain customers of Batra Henlay Cables namely M/s Khandelwal Laminated Ltd., M/s Electrical Associates, M/s ETA, M/s MEC Electrical Contracts Pvt. Ltd., M/s Bharat Construction Corporation, M/s Larson & Turbo Ltd., M/s Sterling & Wilson Electricals Pvt. Ltd., M/s Unitech Ltd., M/s Switchgear & Control and ....
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....h Batra. Therefore, without a specific finding on the point as to whether M/s Cosmoline Electricals is a fictitious entity floated by Shri Brajesh Batra or whether it is a real firm of Shri Brajesh Batra, the amounts deposited in the name of M/s Cosmoline Electricals cannot be presumed to be the payments for the goods manufactured and cleared by M/s Batra Henlay Cables. 8.4 On perusal of some of the invoices procured from the customers who had made cheque payments to M/s Batra Henlay Cables and M/s Cosmoline Electricals, it is seen that some of the invoices are in respect of supply of aluminium cables, while it is the stand of M/s Batra Henlay Cables that their unit was not capable of manufacturing aluminium cables. In this regard, Shri Krishan Singh Rathore, an employee of the appellant company, in his statement dated 17/1/97 has stated that Batra Henlay Cables were manufacturing only the house wire cables and telephone cables and were not manufacturing any aluminium cables. On this point no finding has been given by the Commissioner. If M/s Batra Henlay Cables were not having any machinery for manufacture of aluminium cables, the aluminium cables sold by them must obviou....
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....of M/s Batra Henlay Cables. (iv) Some invoices found are of clearance of Aluminium Cables. There is no finding on capacity of Appellant - M/s Batra Henlay Cables, to manufacture Aluminium Wires / Cables. Thus, no demand can be raised for alleged manufacture of Aluminium Cables / Wires. As regards the ten buyers, to whom M/s Batra Henlay Corporation had cleared the goods, and whose statements have been recorded and relied upon by Revenue, they are required to be cross-verified by providing opportunity of cross-examination. (v) Where there has been no enquiry from a buyer, no addition or demand of duty is sustainable in the hands of M/s Batra Henlay Cables. 3. The brief facts emerging from the records are as follows: 3.1 M/s Batra Henlay Cables, Delhi is a partnership firm with Shri Rajesh Batra, his mother Mrs. Vidya Batra and Mrs Madhvi Batra, wife of Shri Brajesh Batra (brother of Shri Rajesh Batra) as its partners. This partnership firm has its factory at Village Molar Band, Badarpur, Delhi manufactures wires and cables, house wires, cables for internal wiring and telecom cables of various sizes under the brand name "Batra Henlay". M/s Batra Enterprises is a partnersh....
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....of Punjab National Bank in the name of the same Shri Vinod Kumar by showing him as proprietor of M/s Batra Henlay Cables. Similarly, it was found that an account No. 367 had been opened in Ashok Vihar Branch of Catholics Syrian Bank Limited in the name M/s Cosmoline Electricals through the same Shri Vinod Kumar and an account No. 4077 had been in Darya Ganj, Delhi Branch of Indian Overseas Bank in the name of M/s Cosmoline Electricals through the same Shri Vinod Kumar. As per the statement of Shri Ramesh Chand Jain, Proprietor of M/s Bharat Construction Corporation, one of the customers of M/s Batra Henlay Cables, M/s Cosmoline Electrical is a concern of Shri Brajesh Batra. Another account was found in Ashok Vihar, New Delhi Branch of Catholic Syrian Bank Limited in the name of M/s Devine Board. From the bank statements of the accounts of Shri Vinod Kumar in Catholic Syrian Bank Limited and Punjab National Bank and from the bank statements in respect of accounts of M/s Cosmoline Electrical in the Catholic Syrian Bank Limited and Indian Overseas Bank, it was found that the cheques received from various customers were being deposited in these accounts and thereafter the amounts credi....
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....oceeds of the wires and cables manufactured by M/s Batra Henlay Cables which had not been accounted for in its books of accounts. The amounts deposited in these accounts during 1994-1995, 1995-1996, 1996-1997 and 1997-1998 were Rs. 43,67,280/, Rs. 1,38,55,588/- Rs. 99,14,298/- and Rs. 8,09,212/- respectively against which the value of clearances declared in the books of accounts during these years were Rs. 29,72,193/-, Rs. 29,37,677/-, Rs. 50,00,713/- and Rs. 1,15,40,988/- respectively and, thus, the total value of wires and cables cleared during 1994-1995, 1995-1996, 1996-1997 and 1997-1998 which had not been declared and had been deposited in the four bank account above-mentioned appeared to be Rs. 2,89,47,379/-. The duty demand of Rs. 66,04,307/- is on this basis. It is in view of this that the show cause notice dated 27/09/99 was issued to M/s Batra Henlay Cables, Shri Rajesh Batra and Shri Brajesh Batra for - (a) demand of Central Excise duty amounting to Rs. 66,04,307/- from them under proviso to Section 11A (1) of Central Excise Act, 1944 for the period from 1994-1995 to 1997-1998 alongwith interest thereon uner Section 11A (1) of Central Excise Act, 1944 for the period from....
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....10 lakhs each was imposed on Shri Brajesh Batra partner of Sh. Batra Enterprises and on M/s Batra Enterprises under Rule 209A of the Central Excise Rules, 1944. No penalty was imposed on individual partners of M/s Batra Henlay Cables. The land, building, plant and machinery of M/s Batra Henlay Cables was ordered to be confiscated under Rule 173Q(2) of Central Excise Rules, 1944 with option to be redeemed on redemption fine of Rs. 10,00,000/-. 4. Pursuant to remand by this Tribunal vide the impugned order, the ld. Commissioner have been pleased to drop the demand of Rs.23,20,278/- proposed against M/s Batra Enterprises observing: "58.6. In terms of the Tribunal directions, cross examination of the 17 buyers of wire and cables from Batra Enterprises was offered to the main noticee M/s Batra Henlay Cables. Opportunity for cross examination of these buyers was offered to the noticee as directed by the Tribunal and personal hearing for 02.02.2016 and again on 23.02.2016 was fixed for their cross examination and also for cross examination of Sh. Brajesh Batra which was also asked by the noticee‟s counsel. On 02.02.2016 Sh. Amarjeet Singh, director A.S. Malhotra & Associ....
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..... Ltd. one of the buyers of the alleged goods from Batra Enterprises too is to be understood in light of the circumstances here. He has stood by his earlier statement that they had received Batra Henlay brand wire and cables, however, in absence of the purchase order / agreement the same cannot be held to be factually correct and during the investigations no such documents were procured or examined. I also agree with the contention of the noticee that no goods bearing brand name 'Batra Henlay' were seized from M/s Batra Enterprises or any of their consignees. Further, the Show Cause Notice does not indicates as to what happened to the goods of value Rs. 71,13,121/- purchased by M/s Batra Enterprises. "Therefore, I hold that the demand based on the statement of 17 buyers is not sustainable in the absence of any other corroborative evidence. I find that no evidences are emerging from the show cause notice that M/s Batra Enterprises, the trading firm had purchased the alleged goods from M/s Batra Henlay Cables. Therefore, I drop the duty demand of Rs. 23,20,278/- pertaining to show cause notice dated 04.04.2001". The ld. Counsel for the appellant states that Revenue ....
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....nd the Sales tax number of the said firm was duly printed on the invoices. Without taking into account and giving any finding on the said invoices recovered during investigation and other material, the finding by the Commissioner regarding the non-existence of M/s Cosmoline Electricals, is without any basis and is accordingly set aside. 6. The next issue is whether the appellant had necessary infrastructure to manufacture aluminium wires. The appellant had relied upon the statements of Krishna Singh Rathore, Rajesh Batra to show that they did not possess the necessary machinery and infrastructure to manufacture aluminium products. The department has failed to contradict the said stand of the appellant with any positive evidence to show that the appellant indeed had the infrastructure to manufacture aluminium wires. Thus, we hold that the finding in the impugned order in this regard is untenable. 7. Regarding the deposits made in the four Bank Accounts. The department had quantified the demand based upon the deposits in the said four Bank Accounts. While remanding the matter, this Tribunal had observed that in absence of enquiry and cross-verification from the persons making t....