TaxTMI 
TaxTMI 
2019 (4) TMI 935
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....garh Road, Hathras and Rishabh International is located at Circular Rd. (near Canara Bank), Hathras, about 5 Km away from S.K.J. Metals. 3. Both the concerns are registered with sales tax/ VAT department, file regular returns and assessed to sales tax and Income Tax. That proper books of accounts are maintained, which are audited by C.A. and audit reports etc are filed with the Tax Authorities. 4. That S K J had acquired a new metal furnace (cupola) sometime in the middle of 2015 and the same was installed by the end of December, 2015 and production of ingots started from Jan, 2016. 5. That there was a search by the Central Excise officers on 07.01.2016 in the premises of S K J Metals. During the search, when the officers learnt about Rishabh International (sister concern), they also went to the premises of Rishabh and inspected the office & premises, without drawing any separate panchnama, withdrew the records/books of accounts, etc, in the presence one Smt. Sandhya Maheshwari and brought them to the premises of SKJ and included these in the panchnama of SKJ, as having been found and resumed from there. That physical stock of goods-scrap, ingots etc, was taken, and found ....
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....ate of goods as per incriminating documents Dutiable Value (in Rs.) Rate of Duty Total Duty Liability (in Rs) 1 2 3 4 5 6.(3x5) 7 8 2011-12 01.04.11 to 16.03.12 1678624.81 162948279.21 126.88 212983916.00 10.30% 21937343.00 2011-12 17.03.12 to 31.03.12 72983.69 7084707.79 126.88 9260171.00 12.36% 1144557.00 2012-13 01.04.12 to 31.03.12 2144224.55 225375639.00 126.30 270815561.00 12.36% 33472803.00 2013-14 01.04.13 to 31.03.14 2783669.80 290987367.00 139.31 387793040.00 12.36% 47931220.00 2014-15 01.04.14 to 28.02.15 2531562.23 296214735.67 166.80 422264580.00 12.36% 52191902.00 2014-15 01.03.15 to 31.12.15 230142.02 26928612.33 166.80 38387689.00 12.50% 4798461.00 2015-16 01.04.15 to 31.12.15 164155001.00 160.40 164155001.00 12.50% 20519375.00 Total 9441207.10 1173694342.00 1505659957.00 181995662.00 M/s Rishabh International Financial Year period Quantity cleared (in Kgs.) as per Balance Sheet) Value (in Rs) (As per B....
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....dvocate had further urged that, in the absence of any documentary evidence to substantiate activities of manufacture of Zinc Ingots and in turn its unit sale price, the Revenue , for valuation and quantification of demand, illegally treated the quantities of sale of Zinc Scrap in audited Balance Sheets as the quantities of Zinc Ingots and adopted pseudo unit sale price of some unidentified commodity from the irrelevant Note Pads (RUD) etc, as the unit sale price of Zinc Ingots. (c). It was, further submitted that there is not even an iota of evidence of receipt of differential consideration on account of alleged sale of Zinc Ingots under the guise of Zinc Scrap. That the Revenue have failed to adduce even a single transport document evidencing transportation, transit seizure, instance of movement through Toll-gate, of the consignments of Zinc/Aluminum Ingots or of transit seizure on account of mis-declaration of the description of goods by the other Govt. departments like Sales Tax, etc. 12. Heard both the ld Advocate and the ld DR Shri Rajeev Ranjan, Additional Commissioner. The core issue for decision before us is as to whether the findings of the Adjudicator holding that b....
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....rut V/s Parmarth Iron Pvt. Ltd [2010 (260) E.L.T. 514 (All.)] and International Electron Devices Ltd. Vs. Union of India [2010 (252) E.L.T. 352] and Hon'ble Delhi High Court in the case of Basudev Garg v/s Commissioner of Customs - 2013 (294) ELT 353 generally holding that Evidence - Cross-examination - Revenue if chooses not to examine any witnesses in adjudication, their statements are not considerable as evidence - Statements if relied, then persons whose statements is relied upon have to be made available for cross-examination, for evidence to be considered (c). We, in light of the facts and circumstances, are constrained to reject the credibility and admissibility, of the Panchanama following the Hon'ble Apex Court' ratified decision by the Principle Bench of the Tribunal, New Delhi in the case of M/s Kuber Tobacco Products Ltd. v/s CCE, Delhi [2013(290) ELT545]. 15(a). As regards , ld Advocates contention challenging the very recovery of resumed private records viz Note pads, Writing Pads and Register, we find from the narration in the Panchanama dated 07/08.01.2016 of search proceedings, do not substantiate recovery of any private records but 'invoices & other recor....
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....s do not in any case reveal either manufacture of Zinc Ingots or clandestine removal thereof by the Appellants. 16(c). We together with ld Advocate and DR have further perused the Panchanama, the most crucial and key document of the proceeding having primacy over deposition and statements of various persons namely S/Shri Ramesh Chandra Tewari (representative of SKJ), Sandeep Maheswari (representative of Rishabh), Santosh Jhawar (Proprietor of SKJ). We found that it had by way of referring to disclosure by Shri Sandeep Maheswari described the manufactured brands of Ingots as RJ, PJ and LM. We, in light of the panchanama narration, had also gone through the statements of the said persons and found that even the statements also described that the Ingots manufactured in the factory were of RJ, PJ and LM brands. We also notice that the Panchanama of search and physical verification of the stocks do not disclose detection of Moulds of variable capacity and of brands other than the RJ, PJ and LM, not even of Star brand. Thus we are of the firm view that the Zinc Ingots described by any other nomenclature and brands other than RJ, PJ and LM were not manufacture of the Appellant. 16(d....
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....the document to ascertain the contents thereof. Reliance is placed on the ruling of Hon'ble Supreme Court in the case of Bareilly Electricity Supply v. Workmen, 1971 (2) SCC 617 that "when a document is produced in a Court or Tribunal, "mere production of the document does not amount to proof of it or the truth of the entries therein. The writer must be produced or his affidavit in respect thereof be filed and an opportunity accorded to the opposite party who challenges this fact to assess the probative value of the contents of the document." 16(i). We are in agreement with the ld. Advocate that production/admission of private documents has no meaning and it is necessary to establish their probative value as held by the Hon'ble Supreme Court in the case of Bareilly Electricity Supply v. Workmen, (supra) holding that mere production of document does not amount to proof. This position of settled law had been reiterated in the case of Life Insurance Corporation of India & Anr v. Rampal Singh Besin, (2010) 4 SCC 491. That the Revenue have however failed to produce any evidence to establish maintenance and linkage of these documents with the Appellants. 16(j). We, in light of t....
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.... without any reason. 17(d). We find from the settled law cited by the ld Advocate, Hon'ble High Court (P & H) in the case of Jindal Drugs Pvt. Ltd. vs. UOI - 2016 (340) ELT 67 (P&H), dealing with the evidentiary value of examination in chief, inter-alia held that i. Even if makers of statement is examined in chief by Department, cross-examination of witness must be allowed/offered. ii. Statements recorded behind back of assessee cannot be relied upon in adjudication proceedings, without allowing assessee an opportunity to test evidence by cross-examining makers of said statements iii. If the procedure, which is statutorily prescribed by plenary Parliamentary legislation, is not followed, it has to be regarded, that the Revenue has given up the said witnesses, iv. the said statements have to be eschewed from consideration, as they would not be relevant for proving the truth of the contents thereof 17(e). The Revenue, in our view, by withdrawing midway Shri Anil Malik from cross examination, have in no uncertain terms opted to give up its witness, and his statement becomes inadmissible as evidence. 17(f). We also discover from the Ld Advocate's submissions that U....
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....mittedly before the Adjudicator at the time of Adjudication of the case . Thus irrespective of the date of filing of retraction the judicial evaluation of their respective statements in light of the contents of the retraction affidavits were called for to decide over voluntary and truthful nature of their statements , as per settled law by a series of decisions like the honorable Apex Court decisions in the case of Parle Beverages Pvt. Ltd.v/s Collector of Central Excise, Bombay [1998 (98) E.L.T. 585 (S.C.)], which still holds the field inter-alia laying down that Evidence - Delay - Affidavit not to be brushed aside solely on the grounds of delay - Affidavit with invoices filed after a lapse of 2 years - Tribunal cannot refuse to consider affidavit and invoices - Delay may be a factor with some relevance as to the probative value of the statement made in the affidavit, but it cannot be totally brushed aside without going into the genuineness of the invoices - In case of doubt Tribunal could have called the Deponent for cross-examination or allowed the cross-examination by the Department. 18(c). We also discover that the Adjudicator did not record findings on the decisions cit....
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....le Gujrat High Court which was upheld by the Apex Court [2015 (319) E.L.T A117 ],Jindal Drugs Pvt. Ltd. vs. UOI - 2016 (340) ELT 67 (P&H) ,CCE, Ahmedabad vs. Rekhaben S. Shah - 2005 (180) ELT 48 (Tri. Mumbai) . 18(f). We, in view of the aforesaid findings, do not find substance in the observations that the retraction(s) were invalid, and hold that the retracted statements are inadmissible as credible evidence. 18(g). We had also examined the decisions of this Tribunal in the case of Centurion Laboratories v/s C.C.E., Vadodara - 2013 (293) ELT 689 (Tri. - Ahmd.) and Hon'ble High Court of Gujrat, in the case of C.C.E. v/s Omkar Textile Mills Pvt. Ltd- 2010 (259) ELT 687 (Guj.) and agree with the contention of the ld Advocate that even if the statements are presumed to be valid, mere statements of S/Shri Ramesh Chandra Tewari and Sandeep Maheswari and Shri Santosh Kumar Jhawer are not sufficient to establish a case of clandestine removal of goods. 19. Coming to the next evidence, we have carefully perused the Photographs of search operation. We agree with the observations of the Adjudicator that Photographs of search operation show manufacturing of Ingots on 07.01.2016, but d....
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....at the search team based on the activities and corresponding records maintained and produced by the Appellant-SKJ, accepted that production activities were being undertaken by them in their premises and held that the ownership of the stocks of finished goods vested in them. This fact is also forthcoming from the provisional release of the seized goods to the Appellant-SKJ. We further discover that only the Appellant -SKJ are asked to show cause against the proposed confiscation of the seized stocks. 20(c). We also observe from Table A to the panchanama that the Zinc Ingots which are clearly described as of imported origin were also seized and confiscated. Similarly the negligible quantity of Aluminum Ingots, bearing 'Star' brand and segregated from imported scrap, were treated as domestic produce and also seized and confiscated. We have heard the contentions of both sides on the findings of confiscation and notice that the Appellant-SKJ possessed moulds of only RJ,PJ and LM brands capable of manufacturing Ingots of around 9Kgs each and thus agree with the ld Advocate that the seized/ confiscated Aluminum Ingots bearing 'Star' brand as described in impugned Order and weighing dif....
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.....2016 in the nature of Tax Invoices showing description of goods as Zinc Scrap/ Zinc, Transport bilties showing transportation of Zinc Scrap/ Zinc ,Receipts as sales proceeds of Zinc Scrap/ Zinc ,Confirmation of accounts of buyers against receipt of Zinc Scrap, Balance sheets showing sale of Zinc Scrap/ Zinc and S.T Returns/ I.T Returns and respective Assessment orders recognising trading of Zinc Scrap/ Zinc. 21(c). The ld Advocate contends that the charge of clandestine manufacture of Ingots made against the Appellants stand demolished by the contrary views of the other wing of the same Revenue authorities, namely the Customs House, Calcutta , who had been accepting the activities of trading of scrap by the Appellants, and continued to allow refunds of SAD on the invoices of sales of Scrap . 22. In nutshell, the relied upon documents of the Revenue do not establish charges of manufacture of Zinc Ingots by the Appellants during the disputed period in the Show Cause Notice, that too from the alleged common premises of the Appellants and clandestine removal thereof.. 21(a). We also observe that the Appellants are not required to prove the negative, and had furnished sufficie....
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....e alleged resumption of records of the Appellant-Rishabh also from the premises of Appellant-SKJ , non appearance of Smt Rashmi Jhawer (Proprietor of Appellant-Rishabh) despite repeated summons as the basis of the said findings. statement of Shri Sandeep Maheswari, that all the dealings and day to day affair of Appellant-Rishabh were being looked after by Shri Santosh Kumar Jhawar, and Shri Jhawer's admission in his statement dated 15.01.2016 . 23(b). We have perused and considered the evidences relied by the Revenue and heard both the sides. It is evident that the records of the Appellant-Rishabh were picked up or resumed from their own premises located near Cannara Bank at Circular Road, Hathras without panchnama. We notice that the said claim of Appellant-Rishabh is duly supported by the letters of Smt Sandhya Maheswari and Shri Sandeep Maheshwari (Authorized representative of Appellant-Rishabh) both dated 8.01.2016 , intimating the facts to the Commissioner Central Excise, Agra . We do not feel that any further evidence was required to substantiate the claim .That if at all any further evidence is needed by the Revenue, the same could have been gathered by acceding to the Ap....
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....s , as dummy proprietor of Appellant-Rishabh and her husband Shri Santosh Kumar Jhawar, Prop of Appellant-SKJ as the main functionary and owner of the Appellant-Rishabh . We thus feel that on the said basis, applying the statement of Shri Santosh Kumar Jhawar dated 15.06.2016 to the activities of the Appellant-Rishabh also, that too by denying his cross-examination, is arbitrary and untenable in the eyes of law. (f). We also notice that the Appellants individually held separate registrations with different statutory authorities; that they individually complied with the requirements of these statutory authorities like Customs, Income Tax and Sales Tax, DGFT, etc. We also find that the Revenue had failed to challenge the contra evidences, coroborating existence of independent storage go-downs and business premises of the Appellant-Rishabh located near Canara Bank at Circular Road Hathras, separated by as long a distance as about 5 Km from the Appellant-SKJ premises at Ruheri. We have perused the documents evidencing possession/ title over the premises located near Canara Bank at Circular Road Hathras, to buttress receipt, discharge, storage of the imported scrap consignments of th....