TaxTMI 
TaxTMI 
2019 (1) TMI 1165
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.... officials of the appellant company have filed appeal against imposition of penalty on them u/r 26 of Central Excise Rules 2002. 2. The facts, in brief, of the matter is that the appellant company is manufacturer of excisable goods namely, MS ingots, MS TMT bar, Runners, Risers and Mis-Rolls falling under heading 72 of First Schedule to the Central Excise Tariff Act, 1985. They are registered with the Central Excise Department for manufacture of the said goods and are holding Central Excise Registration No. AABCA8278MXM003. On the basis of some information that the appellant company was engaged in clandestine removal of their final product without payment of Central Excise Duty, and without entering such products in their statutory records, the officers of Anti-Evasion wing of Jaipur-I Commissionerate of Central Excise visited the factory premises of the appellant company and conducted simultaneous search of factory premises of the appellant company, residential premises of Shri Rakesh Bhatnagar- General manager, office-cum-residence of Shri K.S. Ahaluwalia Chairman, Guest House of the appellant company and residence of Shri Chirag Sharma- Executive Assistant to the Chairman on ....
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....Marketing Manager, on 15.03.2012 under section 14 of Central Excise Act 1944. During investigation the appellant company deposited amount of Rs. 1,40,93,564/- on various date(s) as per direction of the investigating officers. After scrutiny of records and comparison of the data in computer print out as well as in the slips resumed, three demand cum show cause notices were issued to the appellant company as detailed below:- S. No. SCN No. & Dt. Period involved Demand of duty (Rs.) 1. SCN No. V(H) Adj.-I/CE-72/59/2012/297 dt.03.05.2012 (i) 01.04.07 to 31.12.11 (except March 11 to June 11 & Aug 11) (ii) for March 11 to June 11 & Aug 11 Total 7,50,79,267/- 1,40,93,563/- 8,91,72,830/- 2. SCN No. V (H) Adj-I/CE-72/146/2012/3523 dt.06.02.2013 01.01.12 to 30.06.12 2,27,64,776/- 3. SCN No. V (H) Adj.-I/CE-72/39/2013/1354 dt.25.07.2013 01.07.12 to 31.12.12 11,00,285/- Grand Total 11,30,37,891/- 3. The appellant company, in addition to the duty demand, was also asked to show cause why interest should not be demanded on the amount of duty and why penalty should not be imposed under section 11AC of Centr....
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.... 5,00,000/- SCN dt 25.07.2011 11,00,285/- 2,00,000/- U/r 25 2,00,000/- 2,00,000/- 2,00,000/- 50,000/- 5. The appellants are before this Tribunal in appeal against the said Order-in-Original dt.31.03.2014 passed by Learned Commissioner of Central Excise, Jaipur-I. 6. The Learned Advocate appearing on behalf of the appellants stated that order appealed against is vitiated for denial of Natural justice. He stated that the appellants had asked for adjournment on valid grounds, which was not even considered by the learned Commissioner. Copy of request for adjournment is placed in the appeal folder. He also submitted that the request for cross examination has been erroneously denied. He submitted that method of physical verification adopted by the officers has not been stated in the panchnama. This could have been made known only by cross examination of the officers and the panch witnesses. However the Learned Advocate categorically stated that the appellants do not want remand of the matter. He prayed for decision in the matter by this Tribunal on the basis of evidence available on record. 7. The Learned counsel on behalf of the appellant further submitt....
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....uter printout relied upon by the department, to hold against the appellant. Thus, the demand of duty calculated on the basis of figures in the computer printout and loose slips is unsustainable. 10. The learned advocate also submitted that the demand of duty on the quantity of final product calculated on the basis of electricity consumption is unsustainable in view of law laid down in the case of R.A Casting. He also submitted that the said decision has been erroneously distinguished by the learned Commissioner. 11. As regards levy of interest, the learned counsel submitted that when the demand of duty itself is unsustainable in law, there is no question of levy of interest in the present case. 12. As regards imposition of penalty under section 11AC of Central Excise Act 1944, the learned advocate submitted that the said penal provision is invokable only in cases of non payment of duty by reasons of fraud etc. In the present case, since there is no tangible evidence of any clandestine activity by the appellant company, the ingredients specified in section 11AC are not satisfied in the present case. Likewise, the penal provisions contained in rule 25 of the Central Excise R....
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....Jhar.)] 21. Savitri Concast Ltd. Vs CCE [2015 (329) ELT 213 (Tri.)] 22. Madhu Foods Products Vs CCE 91-94[1995 (76) ELT 197 (Tri.)] 23. T.G.L. Poshak Corporation Vs CCE [2002 (140) ELT 187 (Tri.) 20. Oudh Sugar Mills Ltd. Vs UOI [1978 (2) ELT (J172) (S.C.)] 21. Saraya Steel Ltd. Vs CCE [1998 (98) ELT 787 (Tri.)] 22. P.S.P. Appliances (P) Ltd. & Ors. Vs CCE [2005 (70) RLT 431 (Tri.)] 23. CCE Vs Universal Polythene Industries [2001 (130) ELT 228 (Tri.)] 24. Utkal Galvanizers Ltd. Vs CCE [2003 (158) ELT 42 (Tri.)] 25. CCE Vs Supreme Fire Works Factory, Sivakasi [2004 (163) ELT 510 (Tri.)] 26. Andaman Timber Industries Vs CCE [2015 (324) ELT 641 (S.C.)] 27. CCE Vs Parmarth Iron Pvt Ltd. [2010 (260) ELT 514 (All.)] 28. Jindal Drugs Pvt Ltd. Vs UOI [2016 (340) ELT 67 (P&H)] 29. Century Metal Recycling Pvt Ltd. Vs CCE [2016 (333) ELT 483 (Tri.)] 30. CCE Vs Gopi Synthetics Pvt Ltd. [2014 (302) ELT 435 (Tri.)] 31. CCE Vs Heliwal Polypackers Pvt Ltd. [2016 (340) ELT 204 (Tri.)] 32. Balajee Structurals (India) Pvt Ltd. Vs CCE [2016 (341) ELT 457 (Tri.....
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....ged to thecompany and that that they pertain to the production, sale, debtor, creditors of the company, that these documents were authored by Sh. Dinesh Goswami and Sh. Chirag Sharma, Purchase Officer. 15.4. Sh. Rakesh Bhatnagar, GM admitted the alleged clandestine sales/clearances arrived by officers at on the basis of recovered documents and paid Rs. 80,00,000/- vide Cheque dtd. 28.09.2011 against recoverable duty of Rs. 1,10, 25,351/- for the months of April, 2011, May, 2011 and June, 2011. He also paid Rs. 30,25,351/- vide Cheque dated 05.10.2011. Sh. Bhatnagar also paid Rs,10,49,669/- in lieu duty evaded on clearances in March, 2011. 15.5. The whole case is based on the unaccounted production and clearances as also on consumption of electricity. The corroborative evidences are in the form of documents - computer print outs, loose papers (Kacchi Parchi), slip pads recovered from the factory and its guest house and admissions by the stake holders. The officers of the company could not explain the reason for shortage and accepted the same and later on paid tax as calculated by Revenue. Sh. Rakesh Bhatnagar, GM, Sh. Dinesh Goswami, Excise Executive and Sh. Anil Sharma, Marke....
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....micals (P) Ltd. Vs. CCE, Kanpur - [ 2015 (317) ELT 243 All]. Collector Vs. D. Bhoormal - [1983 (13) ELT 1546 SC] Shiv Shakti Steel Tubes Vs. Commissioner - [2008 (227) ELT A 122 (SC)] Fathima Panels Vs. CCE, Mangalore - [2014 (213) ELT 641 (Tri. Bangalore) 16. In rejoinder the learned advocate submitted that the judgement in Shiv Shakti Steel Tubes stands distinguished by the Hon'ble High Court in the case of CCE Vs Saron Mechanical Works Pvt. Ltd. reported in 2016 (332) ELT 80 (P&H). He also submitted that law laid down in Bajrang Petro Chemicals (P) Ltd., case is no more a good law in view of contrary judgement of the same High Court in the case of Continental Cement Company Vs UOI reported in 2014 (309) ELT 411 (All.). 17. Heard both sides and perused the records. In this case the demand of duty is on the basis of allegation of clandestine removal of excisable goods without payment of duty. Such allegation has been levelled against the appellant company primarily on the basis of shortage in the stock of finished goods detected by the officers, comparison of figures in computer print outs and loose slips recovered from the guest house with the figures in the statut....
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....ical verification. Nor any calculation chart is made part of panchnama. Thus, we agree with the appellant that verification of stock was by eye estimation only. More over there is no dispute to the fact stated by the appellant company in their reply, that the shortage in case of MS Ingots was 3.24 % and that of TMT bars was 1.4 % of the total production. Such difference in quantity is normal in case of eye estimation of the stock. Therefore, we hold that the allegation of clandestine removal on the basis of the so called shortage in stock of final products is un-sustainable and demand in this regard is fit to be set aside. (ii) Demand based on figures/data in computer printout/loose slips The computer printout and loose slips relied upon by the department for alleging clandestine removal had been recovered from the guest house and from factory premises also. As regards computer printouts, there is nothing on record to suggest the manner in which such printouts were taken. There is also nothing on record to suggest fulfillment of the conditions stipulated in section 36 B of the Central Excise Act 1944 in order to treat computer printout as admissible piece of evidence. The ful....
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.... during the said period, there was regularly supplied to the computer in the ordinary course of the said activities, information of the kind contained in the statement of the kind from which the information so contained is derived; (c) throughout the material part of the said period, the computer was operation properly or, if not, then any respect in which it was not operating properly or was out of operation during that part of that period was not such as to affect the production of the document or the accuracy of the contents; and (d) the information contained in the statement reproduced or is derived from information supplied to the computer in the ordinary course of the said activities." 19. Ld. Sr. Counsel has argued that the above mentioned conditions were not fulfilled. The computer was not shown to have been used regularly to store or process information for the purposes of any activities regularly carried on by the company. It was also not shown that information of the kind contained in the computer print-out was regularly supplied by the Company to the computer of the appellant in the ordinary course of activities. Again, it was not shown that, during....
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.... be taken in evidence only if the parameters stipulated in section 35 B (2) of the Central Excise Act 1944 are fulfilled. In the present case, we are unable to find any evidence on record to show that the parameters have been fulfilled. In addition there is no corroborative evidence to prove correctness of the data/figure in the computer printout. Under the circumstances, we are of the view that it is not proper to take computer printout in evidence in the present case for holding appellant company guilty of suppression of production and clandestine removal of goods. 22. As regard demand on the basis of figures in the loose slips, it is admitted that the loose slips were found in the guest house and not in the factory premises. On perusal of the panchnama at page 77 of the appeal memo, it is observed that the place from which such loose slips were recovered is not stated therein. The author/scribe of the said loose slips is not identified. The loose slips are therefore unauthenticated and it is hard to place reliance on such unauthenticated piece of documents recovered from a place other than factory premises. More over there is no corroborative evidence to suggest correctness o....