2022 (1) TMI 1120

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....onfirmed and penalties are imposed. 2. The facts of the case are that an information was received that the DGCEI, New Delhi has booked a case of evasion of excise duty against M/s Dechem Plastic Pvt Ltd, M/s Ashoka Drugs and M/s Shiva Chem who were engaged in manufacturing of Formaldehyde. Further, during the investigation, it was revealed that said firms had manufactured and clandestinely cleared Formaldehyde to various manufacturers of Plywood and Plyboard including the appellant without issuing invoices. It was also revealed that duty liability against majority of clandestine supply was discharged by these firms by issuing invoices to some traders without supplying goods to them. The Show cause notices were issued to these firms who s....

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....remises of the appellant were visited on 2-12-2014 by the Anti- Evasion Branch, Panchkula. At the time of visit, Sh. Vikas Kataria partner of the firm was present and statement of Sh. Charnjit Singh, Manager was recorded. The statement of the co-noticee was also recorded. On the basis of the statements and the investigation conducted by DGCEI against the manufacturer of Formaldehyde, a show cause notice was issued to the appellants alleging that the appellants have purchased the Formaldehyde without bills from M/s Shiva Chem., M/s Dechem Plastic Pvt Ltd. as stated by Sh. Ashok Aggarwal in his statement and manufactured and cleared Plywood and Plyboard without accounting in their statutory records without payment of Central Excise duty durin....

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....ed that appellant has received one of the inputs namely Formaldehyde which has been used by the appellant for manufacturing of their final product which has been cleared clandestinely in such a short span of time to the tune of more than Rs. 17 crores. 3.3 It is his submission that to manufacture such a huge quantity, the appellant was required various other inputs namely timber/fatti, core veener, face veneer, phenol, melamine, etc., but the Revenue has failed to establish from where these other inputs have been procured by the appellant and how the appellant has manufactured such a huge quantity of the goods and cleared the same without payment of duty, there is no statement of buyer of the appellant to establish the fact that the appe....

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....ely manufactured clearance of the goods without payment of duty cannot be sustained. No cross examination of Shri. Ashok Aggarwal has been allowed to the appellant to ascertain the truth. No inculpatory statement of the appellant has been found on record to establish the fact that the appellant has received the goods on the basis of the Dharma-Kantas slips provided by the supplier of the goods. The same view was taken by this Tribunal in the case of Virgo Boards Ltd. (supra) wherein this Tribunal observed as under: - "I find that to manufacture their final product the appellant required inputs, namely, timber/fatti, core veener, face veneer, phenol, melamine apart from formaldehyde. It has been alleged that the appellant has receiv....