TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 122
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....to the cutters and thereafter it was converted into SS flats. Thus, the final product - SS flats was manufactured by outsourcing to another manufacturer. Moreover, it appears that show cause notice was issued by this appellant to the respondent on 19th August, 2005. Thereafter, the Order-in-Original was passed by the officers of this appellant on 9th December, 2009. The same was decided against the respondent and hence the respondent had preferred an appeal before CESTAT, New Delhi. 3. That the CESTAT allowed the appeal by way of remand, vide final order dated 28th September, 2011, with the directions, to the respondents, to:- i. Allow the cross examination of the witnesses as sought by the respondents, ii. Ascertain the production capacity of the respondents, iii. Match the actual production with electricity consumption and fuel consumption and iv. Seek technical opinion to support its finding that, with one control panel, could both the furnaces simultaneously produce Stainless Steel Ingots. 4. The relevant portion of paras 9 to 11 of the aforesaid final order dated 28th September, 2011, of the CESTAT, may, in this context, be useful to reproduce as under: "9. We have....
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....llowing whose statements have been relied upon in the order is necessary in this case: i) Shri S.K. Sahu, ii) Four Re-rollers, iii) Cutters of the SS Flats, iv) Various scrap dealers, who stated that they were supplying scrap to M/s. Jindal, at the request of its Directors, Shri Ajay Gupta. The Commissioner is, therefore, directed to produce the aforesaid witnesses during the remand proceedings and thereafter proceed to adjudicate the matter afresh. The learned counsel for M/s. Jindal had submitted that they had offered to the Commissioner to produce the Chartered Engineer Shri R.K. Aggarwal for his examination. But the Commissioner has given no finding on this offer of M/s. Jindal. We give liberty to the Commissioner to examine the said Chartered Engineer during the remand proceedings, to confirm the production capacity of M/s. Jindal. 9.1 With regard to production capacity of M/s. Jindal, we agree with the learned counsel's submission that the Commissioner has not properly appreciated the facts available on record. The Commissioner has erroneously proceeded to hold that M/s. Jindal had the capacity to manufacture the SS Ingots, which were allegedly sent to the four....
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.... reject the said certificate, especially when the Revenue did not take any steps to obtain any expert opinion on the annual capacity production of M/s. Jindal. We are, therefore, of the view that documents seized from a third party could advance the case of the department only if it is conclusively proved by the department that M/s. Jindal had capacity to manufacture six times more than its installed capacity. We, therefore, direct the Commissioner to take a holistic view on the capacity of manufacture of M/s. Jindal also considering the technical literature of the type of furnace installed in the factory before arriving at any definite conclusion. 9.2 The learned DR has strenuously argued that there are incriminating documents as well as statements of Shri S.K. Sahu, two Directors of M/s. Jindal, scrap dealers, transporters, re-rollers cutters and buyers of SS Flats. In the first place, except scrap dealers and buyers of SS Flats, all others have been made co-noticees in the present case. It is well settled law that evidence of one of co-noticee cannot be relied upon against another co-noticee, unless it is corroborated by independent evidence. Further, merely because incriminat....
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....not maintain any book of accounts showing sales to S.S. Scrap to M/s. Jindal nickel and Alloy at any point of time. He had no knowledge of the transporters who transported the said scrap to M/s. Jindal Nickel and Alloy. Similarly, Sh. Mohammad Rizwan, Sh. Vinod Kumar and Sh. Devinder Jindal, during their cross examination, submitted that they did not keep any records of sale of scraps to M/s. Jindal Nickel and Alloy and they recorded the statement on the basis of their personal estimations. They had no evidence to corroborate that the scrap were supplied to M/s. Jindal Nickel and Alloy. In the absence of any evidential records, I find that their statement cannot be relied upon to conclude that M/s. Jindal Nickel and Alloy received those scraps from the alleged Scrap Dealers. xxx xxx xxx 108. As per the CESTAT directions, Central Excise authorities, those who booked and case were requested to offer their comments on the following issues raised in para 9.1 of the Hon'ble CESTAT order. i. No technical opinion has been brought on record in support of the finding that with one control panel both the furnaces simultaneously were capable of producing SS Ingots. ii. Also no attempt....
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.... which was not accepted by the Hon'ble CESTAT and which according to it was based on assumptions as it was not duly substantiated by documentary evidences. Therefore, it had remanded back the case and directed to re-determine the production capacity and therefore the concerned authorities were further requested to offer specific comments in the matter. Subsequently, they furnished a reply which inter-alia reads as under: I. The basis of production capacity determination of ingots by M/s. Jindal Nickel & Alloys was derived from the data fed into the computer by Shri Sushant Kumar Sahu, Accountant on the basis of kacha parchis provided by Shri. Ashwani Jindal, Director of the firm and not on technical aspect whether one control panel can support the working of both the furnaces simultaneously. This fact was corroborated by the voluntarily statement made by Shri. Mangat Rai, Director of the firm under section 14 of the Central Excise Act, 1944 dated 25-4-2013. Therefore no technical opinion was warranted. II. Productive capacity of the party was based upon the investigations conducted in the case and as arrived at after taking on record the admissions made by Sh. Mangat Rai, Direc....
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....07 through expert opinion and to match the actual production with electricity consumption and fuel consumption so that Chartered Engineers certificate supplied by the party can be countered. Further, the Chartered Engineer had determined the annual production capacity considering that M/s. Jindal steels were working only for one shift. As such evidence was to be placed on record that M/s. Jindal Steels were working for more than one shift. Further comment whether five transformers were installed in the factory premise of M/s. Jindal Nickel & Alloys ltd. on 22.11.2007 or only one transformer was installed as mentioned in the CE certificate/Panchnama to controvert the CE certificate. But no supportive comments could be furnished by the department. 111.1 On going through the Panchnama, dated 22.11.2007 drawn at the factory premises of M/s. Jindal, it was clearly noted therein that they had only one transformer available in their factory on the date of visit of the officers in their factory. The officers made no attempt to find out the production capacity of M/s. Jindal. They did not record any statement of production staff to find out the said capacity. No statements of any employ....
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.... by independent evidence. Further, merely because incriminating oral evidence was recorded, therefore in the absence of substantial documentary records, the same was not sufficient to establish a serious charge of clandestine production and removal of excisable goods. It was contended that the computer printouts were hit by the provisions of Section 36B(2) of the Central Excise Act as the computer from which the printouts were taken was not in the control of M/s. Jindal. The genuineness of other loose slips was required to be established as the scribe of them could not be identified. However, no substantive evidences were provided to corroborate the genuineness of the same. The investigation officers had seized some records from the residence of Shri S.K. Sahu and subsequently retrieved the computer printouts and concluded that quantity of the ingots which found mention in the said records were manufactured in the factory of the notices. The department was required to prove that what was source of procurements of Ingots to enable the Re-Rollers to manufacture a quantity of around 11125.7555 MT quantity of SS Flats. There could be a possibility that in the absence of notice having r....
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....er wherein it has been clearly stated that only one crucible can be used for production at a time and not both. This clearly proves that the Revenue's projection of the production capacity is hugely inflated. 7. M/s. Jindal has been sending S.S. Ingots/flats to their rerollers and cutters for manufacture of S.S. Flats on job work basis under Notification No. 214/86. In respect of such ingots, M/s. Jindal had also discharged the duty payable on the S.S. Flats cleared directly to customers from the premises of job workers. In this regard, we find that the claim of M/s. Jindal is reasonable inasmuch as they are not liable for payment of excise duty on the quantity of S.S. Flats cleared by the job workers, over and above the quantity manufactured making use of the ingots received from the appellant on job work basis. In this regard we sustain the findings of the adjudicating authority. 8. Computer print outs were retrieved from the residence of sh. S.K. Sahu during the search. M/s. Jindal has claimed that such documents are not admissible as evidence since the conditions specified in Section 36B have not been satisfied. The conditions specified therein are that the CPU was under th....
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....several aspects of the matter have already been settled by CESTAT, New Delhi. There is no appeal preferred by the Department against the order dated 28th September, 2011 passed by CESTAT. 13. Counsel for the appellant submitted that certificate of the Chartered Engineer was obtained after the premises was searched. This argument is of no help to the appellant because the capacity of the furnace has nothing to do with the date of raid. If there is a particular capacity of the furnace, the same remains as it is even prior to the search and after the search also. 14. Thus, this appellant has failed to prove the clandestine removal of the final product. Even otherwise, all the arguments of this appellant is based upon re-appreciation of the evidence by the CESTAT. The CESTAT is the final fact finding authority, and in matters such as this, an appeal lies, from the final order of the CESTAT, to this Court, only on substantial questions of law. Matters involving appreciable evidence ordinarily, would not involve substantial question of law, as this Court, in exercise of its powers conferred by Section 35H of the Act, is not empowered to re-appreciate evidence, which has already been ap....