TaxTMI 
TaxTMI 
TaxTMI 
2018 (11) TMI 1147
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.... Revenue on 08.07.2013. The allegations in the show cause notice were briefly that the material included certain loose sheets and diaries, all of which tied up by the statements recorded in the course of the investigation from suppliers of raw materials. The Revenue also relied in the show cause notice, upon the statement of the proprietor as well as his brother. It also relied upon the statement of an employee who worked with the appellant as an Superintendent in the office. The appellant denied allegations of clandestine removal and submitted - besides arguing that the diaries per se did not have any evidentiary value, that the materials on record nowhere justified an inference that clandestine removal has been resorted to. The appellant also produced other documents and materials including electricity consumption bills etc. to say that the activity carried on and the returns filed with the excise authorities did not warrant a finding of clandestine removal or attract a duty liability. It was urged that the bills and invoices seized and the statements made by the raw material suppliers in fact established that duty had been paid and that no liability therefore, could arise. 3. T....
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....8.2011 that raw materials have been supplied to the appellant by his firm. He also confirmed the total quantity of such raw material supplied to the appellant during the years 2007-10,2010-2011 and 2011-12. (iv) The other major raw material i.e. PVC compound was supplied by M/s Ankur Plastic, Shahdara Prop. Vimal Kaparia. He admitted in his statement dt. 24.07.2012 that raw materials were supplied for payment in cash to the appellant. He also confirmed that the quantum of raw materials as was found in the loose papers recovered from residence of Sh. Lalit Jain was supplied to the appellant. (v) The other suppliers also confirmed the same. During investigation, upon checking the bank account of the appellant, it was found that some of the supplied raw materials found in the loose sheets were paid for by cheque by the appellant. (vi) Certain books/ diaries were also recovered from residence of Sh. Lalit Jain. In such diaries, the details were found regarding sale of finished products. Such diaries recorded partywise, datewise, running account of sale value, receipt of sale proceeds and outstanding balance, for the period 2008-09 to 2010/2011. Upon verification of the bank account o....
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....ccounted. This leads us to the reasonable conclusion that the documents found are a truthful account of the actual transactions made by the appellant in terms of procurement of raw material as well as manufacture and clearance of the finished products. We also note that in the several statements recorded from Sh. Lalit Jain, he has admitted in detail each and every entry found in such documents. The adjudicating authority has also given detailed findings in para No. 20 on how the appellant factory had the capacity to manufacture the quantum of goods alleged to have been cleared clandestinely. We are convinced on the basis of the Adjudicating authority's finding that appellant had the capacity to manufacture the quantity allegedly cleared clandestinely. 11. It has been contended that the loose sheet and diaries seized from the residence of Shri Lalit Jain do not pertain to the appellant, but pertains to the commission agent business said to have been run by Shri Prithaviraj Jain, brother of Shri Lalit Jain. This contention has been dealt with in para 16 of the impugned order. The Revenue has sent repeated summons to Sh. Prithaviraj Jain to seek his clarifications in connection ....
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....in did not fully corroborate the version given by Lalit Jain, the proprietor of the appellant. The order-in-original noted importantly as follows: "14. It is submitted by RCI in defense that the documents on the basis of which demand is raised show only the amount and date; that these nowhere give the description of the goods or the quality or quantity of goods and the amounts mentioned have been assumed to be pertaining to the sale of goods manufactured and cleared clandestinely. 14.1 I find the truth to be otherwise. Infact, Annexure XII specifically refers to page No. 12 (supplied to RCI as relied upon document No. X) of S.No. 15 of Annexure 'A' to Panchnama dated 8.8.2011 drawn at the factory premises of RCI which mentions the name of the item(coil), their quantity, size, amount and name of the party (S.B. Elec., Erode). In this regard, Shri Lalit Jain, proprietor of RCI admitted that they cleared wire and cable valued at Rs. 17,66,345/- to M/s S.B. Electricals, Erode clandestinely in cash during 2011-12 without issuing any invoice. Similarly, invoices of the fake firm in the name of Universal Enterprises (quantified in Annexure XII) and supplied to RCI as relied upon....
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....and Rs. 52,77,158/- respectively; that due to stiff market competition they used to purchase unaccounted raw material from the suppliers in cash and accordingly sale of finished goods i.e. PVC wire and cable was made in cash only and that they did not maintain any record in respect of goods sold without bills. The above goes to prove that the transactions shown in the resumed documents were very clearly related to sale of wire and cables and purchase of raw materials only. Thus, there is sufficient evidence on record to show that the amount mentioned in the resumed documents represented value of the wire and cables clandestinely removed. 16. Relying on statements dated 10.08.2011 of Shri Lalit Jain and dated 14.03.2012 of Shri Prithiviraj it is submitted that the statements clearly show that the documents recovered from the residence were written by Shri Prithviraj; that an effort was made by Prithviraj to explain the entries in the records; that the details contain the amount pertaining to purchase and sale done by Prithviraj and that none of the details in those records pertained to RCI. It is further argued that statement dated 11.04.2013 and 17.05.2013 of Shri Lalit Jain are n....
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....Gupta of M/s Balaji Metals, who admitted having received the amounts mentioned on page 6 (of loose page 1 to 7) in cash and cheque for supply of bare copper wire was seized both from the factory premises of M/s Balaji Metals and RCI. Thus, the documents were clearly related to RCI and contained details of raw material suppliers and buyers and the monetary value of the raw material received in cash and wire and cables supplied in cash. 17. Referring to typed and in English language statements dated 11.4.2013 and 17.5.2013 of Shri Lalit Jain, it is argued that he could neither type nor had working knowledge of English and these statements were just placed before him and he was made to put his signatures. I find from statement dated 11.4.2013 of Shri Lalit Jain that he admitted at the start of the statement that "I am 8th pass. I can read and write Hindi and understand English". He also wrote in his own hand "Seen & Read" before putting his signatures in English". Further, on panchnama dated 8.8.2011 drawn at the factory premises of RCI he wrote in English in his own hand "Received copy of Panchnama" and put his dated signatures in English. In his statement dated 8.8.2011 he again in....
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..... bare copper wire, PVC, etc. as reflected in the resumed documents stand corroborated by the statement of the raw material supplier, Shri Lalit Jain of RCI, and seizure of PVC, bare copper wire, master batch and empty boxes at RCI and of bare copper wire at the factory premises of M/s Balaji Metals. 19. RCI has further submitted that the Department conducted investigation at buyer's end as well as from the transporters but did not bring on record the result of such investigation. I find that the Department is at liberty to prove its case by any means consistent with the Central Excise law, The evidence available against RCI has been supplied to them and they have been given an opportunity to rebut the allegations leveled. Further, -copies of all the non-relied upon documents have also been returned to Shri Lalit Jain, proprietor of RCI on 12.12.2103. I note that Shri Lalit Jain stated on 8.8.2011 that the transporter M/s S.R.D. Transport did not issue any bilty for the transportation of goods. 20. Next argument of RCI is that the unit is working on two extruders and maximum capacity of such extruder is not more than 20-25 bundles of cables of size Tffii-ri1f the extruders ru....
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....n record. Further, for establishing charge of clandestine removal the Department is not bound to prove excess electricity consumption. 21. RCI has further argued that private record/diaries of third party cannot be the sold basis for clandestine removal where the authenticity is doubted or there is absence of corroborative evidence; that charge of clandestine removal must be corroborated by independent and unimpeachable evidence such as purchase of excess raw material/excess consumption of electricity/transport and delivery of goods; that burden to prove charge of clandestine removal is always on the Revenue and that duty demand cannot be based on assumptions and presumptions. 21.1 I have already found above that there is sufficient evidence on record to prove that the documents resumed pertained to RCI, purchase of unaccounted raw material and sale of wire and cable by them and that statement of Shri Prithviraj was untruthful and baseless. I observe that unaccounted receipt of raw material as reflected in the resumed documents stand corroborated as detailed in paragraph 10 to 10.3, 11 to 11.2 and 12 above. Further, clandestine removal is also corroborated in the manner explained....