TaxTMI 
TaxTMI 
2019 (1) TMI 368
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....rial Area, Raipur Rs.3,39,36,175/- Rs. 25,71,244/- Rs. 14,24,796/- Rs.3,79,32,215/- Rs.15,97,000/- 2 Shri Bajrang Jain, Director, M/s Hanukripa Ispat Pvt. Limited, Plot No. 86 &87, Urla Industrial Area, Raipur Rs.38,00,000/- 3 Shri Shankar Jain, Director, M/S Hanukripalspat Pvt. Limited, Plot No. 86 &87, Urla Industrial Area, Raipur. Rs.38,00,000/- 4 Shri Shankar Jain, Director, M/s Hanukripalspat Pvt .Limited, Plot No. 86 &87, Urla Industrial Area, Raipur. Rs.38,00,000/ 5 M/s Pankaj Ispat Limited Urla Industrial Area, Raipur - - - 6 M/s Shri Ram Rolling Mill, Plot No.13-B(Part), Industrial area, Rawabhata, Birgaon, Raipur Rs.4,76,904/- Rs.4,76,904/- 7 M/s Raipur Steel Casting India Limited, 619B/612, Urla Industrial Area, Raipur Rs.1,11,854/- Rs.1,11,854/- 8 M/s N.S. (Spat (India) Pvt. Limited, Kh. No. 217/5,393-394, Village-Sarora, Industrial Area Urla, Raipur Rs.3,58,955/- Paid and appropriated 53,843/- 9 M/s Hanuman Ispat (P) Ltd., Village Sondra, Phase-II, Siltara Industrial Area Raipur to Rs. ....
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....605.83 MTs of MS Ingot for the period 2010-11(From June'10) and 2011-12 respectively were not accounted for by it. 6. Shri Pankaj Agrawal, Director of Noticee No 5 in his statement dated 19.09.2012and 02.10.2012, had admitted that M.S. Ingots shown to have been removed from their factory were cleared without payment of duty. The clearances of M.S. Ingots, thus found to be made without payment of duty by Noticee No. 5 to Noticee No 1. 7. Further, weighment slips in relation to the clearances made to Noticee No. 1, were also recovered from the premises of Noticee No.5 and Shri Jivan Singh, working at the weighbridge installed in the factory premises of Noticee No.5, in his Statement dated 20.06.2012, stated that the weighment slips were prepared only in cases where actual dispatch took place. 8. It was also observed that clearance of goods from Noticee No.5 to Noticee No1, took place in vehicles under the ownership and control of Noticee No.5 or its related companies. 9. From the premises of Noticee No.5, some slips, duly acknowledged by NoticeeNo.1 were also found along with the weighment slips pertaining to the goods dispatched from Noticee No.5 to Noticee No. 1, wh....
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....half of Noticee No.1. He further stated that issue of Material receipt denoted that the goods were unloaded in its premises. After unloading the material, the receipt was issued for the purpose of payment. He also recognized and accepted that the signature on those receipt's were his signature. 15. Shri Kailash Agrawal (Noticee No.4) Director of Noticee No. 1, in his statement, dated 31.07.2013, showed his agreement with the statement of Shri Bajarang Jain dated 13.02.2013. 16. Shri Sandeep Gidwani, Partner in Noticee No.6's factory, in his statement dated, 20.02.2013, stated that out 133.05 MT of M.S. Ingots cleared them to Noticee No. 1., 101.53 MT of MS Ingots was rejected and returned to it. Out of this 101.53 MT of M.S. Ingots, it had diverted 61.67 MT of MS Ingot to M/s Kanha Steels and remaining 39.85 MT of Ingot had been used captively by it. He accepted that Noticee No. 6 had sold 31.52 MT of MS Ingots to M/s Hanukripa Ispat Pvt. Limited without cover of Central Excise invoice and without payment of duty and after accepting the liability paid Central excise duty amounting to Rs. 1,12,980/- on the clandestine removal of 31.52 MT of M.S. Ingots. 17. On scrut....
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....T of M.S. Ingots, were removed by it without payment of duty. Shri Suresh Gupta, Authorized signatory of Noticee No.9, in his statement dated 20.02.2013 accepted the same and deposited the Central Excise duty involved therein amounting to, Rs. 1,19,990/- (including Ed. Cess and S&H Ed. Cess. 22. On verification at the end of M/s Shri Bajrangbali Ingot & Steel (Pvt) Ltd. Noticee No.10, it was noticed one consignment of 16.710 MT of M.S. Ingot was cleared by Noticee No.10 without payment of duty ani without cover of any invoice. Shri Ramesh Chandra Bansal, Director of Noticee No.10, in his statement dated 20.02.2013 accepted the same and deposited the central excise duty involved therein amounting to Rs. 60,615/-(including Ed. Cess and S&H Ed. Cess) along with 25% Penalty amounting to Rs. 15,129/-. 23. On verification at the end of M/s Prayas Steels, transactions totalling to 99.370 MT of M.S. Ingots recorded in the 'In' slip recovered from Noticee No.1 during the search, were removed by Noticee No.11 without payment of duty. Shri P. Ramakrishna, Accountant &Authorized signatory of Noticee No.11, in his statement dated 20.02.2013, accepted the same and deposited the cen....
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....sently in appeal. Accordingly, their appeals are being taken up in this order as under :- APPEAL NO. E/50477/2016-EX[DB] FILED BY M/S HANUKRIPA ISPAT PVT. LIMITED Submissions with respect to demand of Rs. Rs. 3,39,36,175/- against supplies received from M/S Pankaj Ispat Ltd. 28.1 Ld. Advocate appearing on behalf of the appellant has assailed the impugned order on different grounds. He argued that the main demand of Rs. 3,39,36,175/-against the appellants is based on the allegation of purchase of 9240.395 MTs of MS Ingots, without accountal, from M/s Pankaj Ispat Ltd. A separate show cause notice dated 30.06.2014 has been issued to M/s Pankaj Ispat Ltd. which is understood to be still pending adjudication. The impugned Order-in-Original is, therefore, premature as it pre-supposes unaccounted clearance of the, above quantity of MS ingots by M/s Pankaj Ispat Ltd., without payment of duty, to the appellants. The adjudication of present show cause notice should have been taken up only after the case booked against has reached finality. He has further argued that the documents/records seized from M/s Pankaj Ispat are third party documents which cannot he accepted as evidence wit....
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.... from the premises of the appellants (i) Demand of duty of Rs. 7,26,769/- against M/s Rashmi Sponge & Power Industries was not tenable as those supplies were against duty paying invoices and were duly accounted for by the appellant. (ii) In respect of another supplier, M/s N.S. Ispat (India) Pvt Ltd., a quantity of 25.520 MT of M S Ingot has been recorded as having been supplied without accountal was duly covered by a duty paid invoice no 691 dt 11.2.2013. Hence this quantity needs to be deducted from the quantity of 126.01 MT attributed to this supplier as having been supplied without accountal. (iii) In respect of M/s Shri Ram Rolling Mills the partner has stated that out of 133.05 MT shown as supplied to the appellants, 101.53 MT was returned and sold to another company whose payment was received by cheque. Hence only the balance quantity of 31.52 MT could be considered as unaccounted. (iv) Ms Rooplaxmi Industries Pvt. Ltd. have confirmed that all supplies were against invoices. Further, the sample of full signatures and initials of Shri Radhey Shyam taken during the course of investigations did not match with most of the "IN slips". Submissions with respect to....
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....nce the question of confiscation does not arise. 28.6 The Ld. advocate further argued that the statements of persons including those who did not appear for cross-examination cannot be admitted as evidence. That the purchase of unaccounted raw materials is itself not proof of clandestine production and sale of finished goods [Commissioner of Central Excise vs. Brims Products-2011 (271) ELT 184 (Pat)]. He has assailed the Commissioners finding on manufacture of 8946.463 MT of finished goods cleared clandestinely on the ground that some clinching evidence is required to establish the charge of clandestine manufacture and sale and in the present case not a single buyer of clandestinely removed finished goods has been identified. Further, no evidence for transportation, cash receipts, electricity consumption, production capacity have been established. In support he relied upon the case law in Sakeen Alloys Pvt. Ltd. Vs. CCE, Ahmadabad [2013 (296) ELT 392 (Tri-Ahmd.], Continental Cement Company Vs. UOI (2014 (309) ELT 411 (All), Triveni Engineering Industries Ltd. Vs. CCE Allahabad [2016 (334) ELT 595 (All)]. He further argued that Cum-duty benefit should have been extended to the app....
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....sustain unless there is a clinching evidence to that effect. 30.1. We have also heard the ld Departmental Representative who has reiterated the finding given in the Order-in-Original. 30.2 Having heard both the sides and after perusal of record of the appeals, we feel that out of the total confirmed demand of Rs. 3,79,32,215/- Central Excise Duty of Rs. 3,39,36,175/- pertains to the supposedly received by the appellant quantity of M.S. Ingots clandestinely from M/s Pankaj Ispat Ltd. This amount of Central Excise Duty is purportedly have been evaded by the appellant No.1 on the quantities of their finished goods manufactured out of the total quantity of 9240.395 MTs of MS ingots received by the appellant from M/s Pankaj Ispat Ltd. It is an admitted fact that record of receipt of clandestinely removed M.S. Ingots was recovered in the form of private record maintained in the premises of M/s Pankaj Ispat Limited. During the search in the premises of the appellant No.1, no record has been recovered to suggest any clandestine receipt of the raw materials, namely, MS Ingots from which they purportedly manufactured and cleared quantity of 8316.357 MTs of their finished goods i.e. ang....
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....Ltd. Though at the initial stages, Sh. Radhe Shyam and Sh. Girdhar Sahu employees of the appellant had acknowledged receipt of raw materials against the material receipts issued by Pankaj Ispat Ltd. but those were not confirmed in cross-examination. Sh. Girdhar Sahu denied the contents of the statements and stated that a computer typed statement was signed by him without reading the same and could not identify the signatures on material receipts. Sh. Radhey Shyam did not appear for cross examination. Thus, the veracity of their statements could not be tested in cross examination. Even Sh. Pankaj Aggarwal, Director of M/S Pankaj Ispat ltd. did not appear for cross-examination. These charges against the appellant cannot be upheld merely on the basis of third party documents and certain statements which could not be tested in cross-examination. With regard to the required evidence in a case of clandestine removal we observe that the allegation of clandestine removal have been made entirely on the basis of the mathematical calculations and are based upon the input output ratio. Such assumptive clandestine removals cannot be upheld, inasmuch as the allegations of clandestine activities ....
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..... Chemtech where the entries regarding the purchase of the carbon black in the name of the appellants are there. The entries regarding the purchase of the carbon black in the name of the appellants in the records of M/s. Chemtech are borne out by invoices relating to these entries and these invoices also carry the sales-tax numbers of the appellants. One Augustin was stated to be making purchases for the appellants. This Augustin unfortunately has not been traced by the authorities nor he has been identified by anybody. The appellants' plea is that anybody could make the purchase of carbon black in anybody's name and that, therefore, the evidence cited is not reliable. The appellants have cited before us the record of the purchases in the name of the others and the said purchases have not been owned up by those purchasers. This lends credence to the appellants' plea that the purchases could be made in anybody's name. In any case it has not been shown before us that the Departmental authorities have drawn any proceedings against other such purchasers who have not owned up the purchases of the carbon black. There is also no inculpatory statement from the appellants in regard to the p....
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....n the third party's evidence, when no direct link has been established between the appellants and M/s. Chemtech Industries through cash transactions or any person. There is nothing on Record to show that M/s. Chemtech Industries had received any instructions over the phone etc., for supply of the carbon black from the appellants. In the absence of the linkman Augustin, it is therefore, not safe to go only by the evidence in the records of M/s. Chemtech. The learned lower authority, therefore, as pleaded by the learned Advocate, should have gone by other parameters like electricity consumption and even done some experiment to find out as to how much tread rubber could be produced by the consumption of unit of electricity. He admitted before us the consumption of 7,788 units of electricity during the period from May 1987 to 28-7-1988. In view of the above we hold that it was necessary in the present case for the lower authority to have gone into other parameters having a bearing on the production of tread rubber and we are of the view that in the facts of this case the authorities should have examined the production of appellants in the light of the electricity consumption in the uni....
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....hority has not disputed this fact that these clearances by M/s Rashmi Sponge & Power Industries and M/s N.S.Ispat ( India) Pvt Ltd. were no against valid invoices. The charge against the appellant is that the same were not accounted for in their records. We find that neither before the adjudicating authority or before us the appellant has produced any record with respect to specific entries with respect to accountal of these raw materials in their statutory records. Accordingly, we are not inclined to accept this plea of the Ld. advocate. Similarly in the case of M/s Rooplakshmi Industries (P) Ltd, though the supplier has claimed that all his supplies were against valid invoices and there is nothing against him to suggest any clandestine removals, there was an independent requirement on the part of the appellant to account for all the supplies received from the raw material suppliers. Any non-accountal will be inferred as a clandestine manufacture of finished goods unless specifically controverted by the appellant. As regards, the claim that 101.53 MT of ingots was returned to M/S Shri Ram Rolling Mills, we find that the claim is without any documentary evidence produced with regar....