TaxTMI 
TaxTMI 
2020 (1) TMI 479
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....od Jan' 2001 to Aug' 2001 and imposition of equal penalty under Section 11AC of the Central Excise Act, 1944 on the ground of undervaluation of their final product i.e. Silico-Manganese for the period from January 2001 to September 2001 and shortage of 10.005 MT of Silico Manganese being appeal No.E/584/2009. The Managing Director, Sri Hari Krishna Budhia and Sri A.D. Singh, Authorised Signatory have filed separate appeals challenging imposition of personal penalty of Rs. 5,00,000/- and Rs. 2,00,000/- respectively under Rule 209A of the Central Excise Rules, 1944/ Rule 26 of Central Excise Rules, 2001, being appeal nos.E/585/2009 and E/586/2009. 2. The brief facts of the case are that the appellant assessee in the instant case is engaged in the manufacture of Silico-Manganese classifiable under CH 7202.00 of the Central Excise Tariff Act, 1975. A search was conducted on 07-09-2001 at the factory and head office of the appellant assessee in which one private diary for the period from 12-01-2001 to 05-09-2001 (almost 8 months) was seized from the head office containing entries of purported sales written by the Managing Director Sri H.K.Budhia showing higher realisation. In the cour....
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.... the Impugned denovo adjudication Order dated 30-07-2009 the Ld. Commissioner has confirmed duty demand of Rs. 13,36,476/- along with interest and imposed penalty under Section 11AC on grounds of undervaluation on the basis of the entries in the private diary pertaining to the said 8 months and has confirmed duty demand of Rs. 24,012/- on shortage of 10.005 MT of Silico Manganese. However, the Ld. Commissioner has dropped duty demand of Rs. 2,34,62,483/- for the period 1997-98 to 2001-02 (upto Oct' 2001) on grounds of undervaluation finding no evidence of flow back of funds. 6. Being aggrieved, the Department has preferred appeal challenging dropping of demand of Rs. 2,34,62,483/- while the assessee is in appeal challenging confirmation of duty demand of Rs. 13,60,488/- along with interest and penalty. Sri Hari Krishna Budhia and Sri A.D. Singh have filed separate appeals challenging imposition of personal penalties. 7. The Ld. Authorised Representative for the Department submits that the Ld. Commissioner erred in dropping the demand by ignoring the fact that during 1996-97 the assessee had charged Rs. 21,000/- PMT for Silico Manganese and therefore quoting lower rates of Rs. 5....
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....ompany. In the course of investigation, buyers were examined who have declined to have paid any amount over and above the amount indicated in the invoice. In the Impugned Order the Ld. Commissioner has relied upon the statements of two buyers i.e. M/s. K. Steel and M/s. Stan Commodities. Sri A.K. Sheel, Authorised Signatory of M/s. K. Steel Pvt. Ltd. in his statement dated 04-10-2001 has stated that he does not look after the rates of the goods purchased which is done by the registered office. Sri S.B.S. Chouhan, Commercial Officer of M/s Stan Commodities, in his statement dated 03-10-2001 did not utter a single word about undervaluation. Sri Bipin Kumar, AGM (Commercial) of M/s. Ravi Hi-Tech Ltd. in his statement dated 03-10-2001 stated that they have never paid any amount over and above the amount indicated in their invoice. Sri Ajay Kumar Jha, Authorised Signatory of M/s. Bharat Ingots and Steel Company Pvt. Ltd. in his statement dated 04-12-2001 stated that cheaper rated material supplied by any party are sub-standard in quality. The Ld. Advocate further took us through the statements of Sri Hari Krishna Budhia recorded on 15-11-2001, in which it is stated by him that Silico-Ma....
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....er under Para 75 has clearly held that there is no evidence available on record to substantiate charges of undervaluation in respect of duty demand of Rs. 2,34,62,483/-. We find that in absence of evidence of flow back of funds over and above the invoice price, which are missing in the instant case, the charge of undervaluation cannot be sustained. There is no material on record to prove that the material supplied by the assessee were not of inferior quality but were prime material. The Department failed to cull out evidence in investigation with the buyers in support of the charge as none of the buyers have accepted payment of any amount over and above the invoice price nor receipt of prime quality materials in the guise of inferior quality material. Further, the entries found in the private diaries were only for the period Jan' 2001 to Sep' 2001 i.e. eight months. On facts as stated and under the circumstances, we have no hesitation to hold that the order of the Ld. Commissioner is in accordance with law and hence upheld and the Department Appeal is devoid of any merits. 11. We find that in the Impugned Order, the Ld. Commissioner has confirmed duty demand of Rs. 13,36,476/- un....