TaxTMI 
TaxTMI 
2019 (3) TMI 109
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....is no ground to uphold the proposed confiscation of the goods. 2. The evidences relied upon by Revenue in the show cause notice are as follows:- 2.1. Panchnama dated 07.07.2011 drawn at M/s Shilpy Steels Pvt. Ltd. Behind Shivali Udyog, Urla Industrial Area, Sarora, Raipur (C.G.)-493 221 [RUD-1] 2.2. Panchnama dated 07.07.2011 drawn at office of M/s Shilpy Steels Pvt. Ltd. 6 & 7, Jeevan Plaza, Avanti Bai Chowk, Raipur (C.G.)-492 001 [RUD-5] 2.3. Panchnama dated 07.07.2011 drawn at residential premises (Flat No. 501, Ashoka Ratan, Diamond, Shankar Nagar, Raipur) of Shri Nitin Agarwal, Director of M/s SSPL [RUD-6] 2.4. Panchnama dated 07.07.2011 drawn at another residential premise (Flat No. 12/202, Ashoka Ratan, Diamond, Shankar Nagar, Raipur) of Shri Nitin Agarwal, Director of M/s SSPL [RUD-7] 2.5. Panchnama dated 13.07.2011 for cloning of two pen drives seized from the residential premises of Shri Nitin Agarwal, Director [RUD-8] 2.6. Panchnama dated 03.08.2011 for cloning of 01 hard disk and 02 pen drives seized from the city -office premises of M/s SSPL [RUD-10] 2.7. Panchanama dated 04.08.2011 for cloning of 03 hard disk and 01 hard disk of laptop seized f....
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....ndervaluing the excisable goods. b. All the transactions of the clandestine production activities and the additional amount charged/recovered from the customers were in cash which is not accounted for in the specified books of accounts of the appellant. c. SSPL purchased excess raw materials, i.e. iron ore, coal, dolomite, etc, for consuming them in its plant to manufacture unaccounted finished excisable goods. d. The aforementioned charges are made on the basis of entries in private diaries notebook, rough pad, etc, maintained to record clandestine removal of the excisable goods, corroborated by evidence in private financial accounts maintained in tally accounting software, as well as admissions made by director-Nitin Agarwal and the employees of appellant company. 4. The Ld. Counsel for appellants, assails the impugned order on the following grounds and contentions- 4.1. That during the search, the officers found cash amounting to Rs. 4,30,000/- in the office premises of the appellant. The officers were fully satisfied that the said cash was fully accounted for and they did not seize this cash. Thus no unaccounted cash was found during the search of the office prem....
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....onth. He otherwise resides with his family in Kanpur. The residential premises in Raipur is looked after by a care taker/ servant and is also used as a guest-house by the appellant company. Various employees of the appellant company have free access to this premises. The alleged incriminating documents were recovered from the sitting room of the said premises to which various employees of the appellant have access. These documents do not contain a true and correct picture of the clearances of the appellant and no reliance can be placed on them to confirm the demand of duty. 4.6. Out of the nine records seized during the search, only one is in the handwriting of Sh. Nitin Agarwal. However this record has not even been relied upon in the show cause notice as it was not found to contain anything incriminating. 4.7. That the so called incriminating records are not in the handwriting of Sh. Nitin Agarwal. The person in whose handwriting these records are written has neither been identified nor questioned by the officers. Admittedly these records do not bear the name of the appellant and are not official records of the appellant. There is no justification whatsoever for presuming t....
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....Vs. Baroda Rolling Works 2009 (238) ELT 495 (CESTAT) -Madura Coats Pvt. Ltd. Vs. CCE 2009 (92) RLT 368 (Trib.) -Kamal Biri Factory Vs. Collector 2003 (161) ELT 1197 (Tribunal) In the light of these said judgments, the demand of duty against the appellant on the basis of these documents is not sustainable. 4.10. The stock verification was done by eye estimation only as no calculation sheet is available or referred. Thus the demand of duty of Rs. 4,09,162/- on alleged shortages in stock of sponge iron & ingots is not sustainable. The appellant is supported in its contention by, inter alia, the following cases :- -Shree Nakoda Ispat Ltd. Vs. CCE, Raipur 2017 (348) ELT 313 (Trib-Delhi) -CCE Vs. Kwality Tube Industries 2009 (240) ELT 20 (Guj.) -CCE Vs. Kundan Castings Pvt. Ltd. 2008 (227) ELT 465 (Trib.) -Sri Chakra Cements Ltd. Vs. CCE 2008 (231) ELT 67 (Trib.) -Bhushan Ltd. Vs. Commr. 2005 (186) ELT 197 (Trib.) -Shiva Steel Rolling Mills Vs. CCE 2005 (186) ELT 326 (Trib.) -Moolchand Steels Pvt. Ltd. Vs. CCE2005 7) ELT 387 (Trib.) 4.11. That the actual stock of sponge iron as per books was 996.477 M.T. and not 1103.716 M.T. as alleged. The alleged sh....
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....inely. 4.16. That the principal raw material for manufacture of sponge iron is iron ore. The mining and procurement/distribution and transportation of iron ore is strictly controlled by the State Government. It is just not possible to procure unaccounted iron ore to manufacture sponge iron clandestinely. The impugned order is silent on this contention of the appellant. 4.17. That in order to manufacture 6872.48 M.T. of sponge iron and 7461 M.T. of ingots, which is alleged to have been produced clandestinely, the appellant should have procured 25412 M.T. of iron ore without accounting, during the period 01.04.2009 to 07.07.2011. Iron Ore is transported mostly in railway wagons having capacity of 3500 to 4500 M.T. It is also transported in trucks having capacity of 9 to 16 M.T. However unaccounted iron ore cannot be transported in Railway wagons as the Railways, which is also a Govt. Department would not transport iron ore unless it is accompanied by a 'fit pass' from the mine. If trucks are used for transporting iron ore, then, taking the average capacity of trucks as 13 M.T., approx., 2000 truck loads are needed to procure 25412 M.T. of iron ore. It is pertinent to n....
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....and cleared 20516 M.T. of sponge iron and 26808 M.T. of dolochar and char (19959 M.T. of dolochar + 6849 M.T. of char). The chart on page 14 of the show cause notice has been prepared on the basis of the tally accounts. The comparison between the quantity of sponge iron and dolochar and char alleged to have been produced clandestinely itself establishes that the appellant has not manufactured and cleared any goods clandestinely. 4.21. That no reliance can be placed on the statements of Sh. Nitin Agarwal and Sh. J.M. Rao, Accountant of the appellant wherein they have allegedly admitted that they have cleared sponge iron, ingots etc. clandestinely without payment of duty of excise. The department has not brought on record any material evidence to support the allegation of clandestine production & removal of goods. The appellant is supported in its contention by the judgment of Hon'ble CESTAT in the case of Premium Packaging Pvt. Ltd. Vs. CCE, 2005 (184) ELT 165 (CESTAT). 4.22. That no reliance can be placed on the statement dated 13.07.2011 of Sh. Nitin Agarwal as he has signed the statement dictated and typed by DGCEI officer on computer, only to buy peace with the department ....
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.... reply has been held to be admissible. In the light of the said judgment, no reliance can be placed on the statement of Sh. Nitin Agarwal. 4.27. That the cross-examination of Sh. Rao clearly establishes that • the statement dated 17.08.2011, of Sh. Rao is neither voluntary nor true. • that this statement was not written by him but was prepared by the officers and he has only signed it. • that he was only shown the panchnama of the search carried out in the premises of Sh. Nitin Agarwal on 07.07.2011 but not the documents allegedly recovered during the search. • that he has not stated that no invoices were issued against the documents alleged to have been recovered from the residence of Sh. Nitin Agarwal. • that he has not prepared Annexure A & Annexure B enclosed with the statement dated 17.08.2011 • that in respect of goods shown consigned by M/s. Dewatram & Co., Kanpur to M/s. Mamta Steels, Amethi, no invoices were issued by the noticee as these documents do not pertain to their company. • that physical verification of stock was conducted by eye estimation only and the material was not w....
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..... Vs. CCE 2004 (170) ELT 451 (CESTAT) -Nu Tech Polymers Ltd. Vs. CCE 2004 (173) ELT 358 (CESTAT) -CCE Vs. Shri Narottam Udyog Pvt. Ltd. 2003 (158) ELT 40 (CESTAT) -Rajasthan Petro Synthetics Vs. Commr.2003 0) ELT 297 (CESTAT) 4.31. That the Department has carried out investigations with four purchasers of sponge iron, whose accounts were found maintained under the heading 'Shri Raj Ji' in the tally accounts in the pen drive recovered from the residence of Sh. Nitin Agarwal. These four purchasers have denied the cash transactions reflected in these accounts. This further supports the appellant's contention that they have not manufactured & cleared any goods clandestinely. 4.32. That the demand of duty on the basis of the transaction value shown in the said tally accounts is not sustainable. As submitted hereinabove, no reliance can be placed on the said tally accounts as they do not reflect the actual transactions of the appellant. The allegation of under valuation is also not supported by any corroborative evidence. The statements dated 13.07.2011 and 08.08.2011 of Sh. Nitin Agarwal, wherein he has allegedly admitted undervaluation are neither voluntary nor true. Hen....
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....n, presume the truth of the contents of such documents and admit such document in evidence, notwithstanding it is not duty stamped. 6. Having considered the rival contentions we find that the case of the Revenue is mainly on the basis of procurement of unaccounted raw materials and its use in the manufacture of unaccounted finished goods, alleged to have been cleared clandestinely. We find that in the search proceedings no unaccounted cash was found. Further we find iron ore is a controlled commodity and no iron ore can be dispatched or received by the appellant assessee, without permit issued by the competent authority of the mines department of the States Government. Normally iron ore is dispatched in wagons from the mines, which is accompanies by 'Fit Pass' or permit issued by the competent authority. We find that no supplier of alleged quantity of iron ore have been identified. Neither there is evidence of any transportation for receipt of unaccounted iron ore. Similarly there is no evidence of receipt of other raw materials like dolomite and coal. We find that the allegations are mainly based on the unsubstantiated data retrieved from laptop/ pen drive which is not reliable....