TaxTMI 
TaxTMI 
2022 (5) TMI 646
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....n the appellant under Rule 25 of Central Excise Rules, 2002. 2. Further, the confiscation, of land, building, plant and machinery of the appellant, was ordered under Section 173Q of Central Excise Rules, 1944 read with Rule 25 of Central Excise Rules, 2002 with option to redeem on payment of fine of Rs.25 lakhs. 3. The amount of Rs. 44,45,000/- in cash was seized from sister unit - namely M/s Prakash Industries Limited, Ring Road No. 2, Raipur, was ordered to be released along with interest earned on it. However, penalty of Rs. 5 lakhs was imposed on Shri N. K. Gupta, Vice President of M/s Prakash Industries Limited, New Delhi under Rule 26 of Central Excise Rules, 2002. The proposed penalty on Shri V. K. Gupta, Vice President of M/s Prakash Industries Limited, Raipur was dropped. 4. Being aggrieved, the appellant - assessee had filed appeal before this Tribunal being Appeal No. E/2287/2006-EX(DB) against confirmation of duty amount of Rs. 1,51,44,426/- as well as penalty and confiscation. The Director Shri N. K. Gupta also filed Appeal No. E/2292/2006-EX(DB) challenging the imposition of penalty. 5. Revenue also filed Appeal No. E/3704/2006-EX(DB) assailing the order-in-origin....
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.... with the direction to the Adjudicating Authority to review its own order and nothing else. In the opinion of the High Court, this course of action in the facts and circumstances of the case was not available. It was also observed that the power of remand cannot be taken recourse to only for the purpose of directing the Adjudicating Authority to review its own order by entering into re-appreciation of oral and documentary evidence, which was already appreciated by it. It was further observed that if the Tribunal required more evidence, it could have called for the same. It was further observed that it was for the Tribunal to examine the legality and validity of the findings on the grounds raised by Revenue and arrive at its own finding, as to whether the Adjudicating Authority was correct in law and on facts in reaching upon the conclusion that demand of duty of Rs.9, 94, 65,997/-, was liable to be dropped. 10. As regards to the admissibility of the statements recorded during investigation, the Hon'ble High Court observed that such issue has been considered in its preceding judgment in the case of Hi Tech Abrasives Limited vs. The Commissioner, Central Excise and Customs, Raipur, ....
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....o the Commissioner for denovo inquiry on the issue concerning evasion of duty amounting to Rs.9,94,65,997/- without discussion of evidence available on record which prevailed upon the Commissioner to drop this part of the demand? (ii) Whether the Tribunal is justified in relying upon the admission made by the AGM of the assessee company to sustain the order of imposition of duty to the tune of Rs. 1, 51, 44,426/- more so when this part of the demand was also based on the same set of evidence on which the demand of Rs.9,94,65,997/- was dropped by the Commissioner?" 14. So far the first question is concerned, the same was held against the Revenue and in favour of the appellant -assessee. 15. So far the second question is concerned, the same was held against the appellant-assessee and in favour of Revenue. 16. So far the appeal of Shri N. K. Gupta against confirmation of reduced penalty is concerned, the said appeal was dismissed. 17. The Hon'ble High Court held - Revenue's appeal (No. TAXC 167/2017) is allowed and the order of the Tribunal to the extent it directed remand, is set aside and the appeal of Revenue before the Tribunal is restored to its original number. The Tribuna....
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....me appears to have been done under the cover of parallel invoices, which appeared to have been destroyed later on. Similarly, finished goods, listed under chart 'C', were also clandestinely removed under the cover of parallel invoices. The copies of such parallel invoices were provided by the source. The clandestine removal of the alleged goods appeared to be evident from the copy of LRs recovered from M/s Kamal Transport. Statement dated 30.04.2002 of Shri A. Pandey, incharge of M/s Bajrang, statement dated 30.04.2002 of Shri Kamal Kumar Agrawal, Proprietor of M/s Kamal Transport and statement dated 30.04.2002 of Shri Narayan Singh, employee of M/s Kamal Transport, who confirmed that the photocopy of LRs shown, were prepared by them in respect of transportation of goods manufactured by the appellant. Further, the fact of removal, both on invoices and without invoices were admitted by Shri S. N. Jha, AGM (Excise). Thus, it appeared that the appellant have clandestinely manufactured and cleared 67,170.156 MT of finished goods without payment of duty (excluding the entries in chart 'C' for which duty have been separately worked out). Such finished goods included semi-finished goods o....
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.... manufacture the alleged 67,170.156 MT of finished goods, M/s PIL would have required 79,000 MT of raw material and 5.73 crore units of electricity and there would have been receipt of sale proceeds amounting to Rs.62.17 crore approximately. However, no such evidence has been brought on record. 22. It was further pointed out that the appellant engages about seven transporters situated at Champa for their day-to-day requirement. The Revenue had also investigated as regards record of despatches mentioned in the 'bilty nakal register' from one of the named recipient namely M/s Jabalpur Ispat Re-rolling Mills, Jabalpur, but no confirmation or corroboration was found. 23. It was further urged that about 14 bilty books were recovered from the premises of M/s Bajrang Transport for the period related to February, 2002 to March, 2003, wherein only one bilty register was relied upon. Further, it indicates that others bilty register were not corroborating the allegation of Revenue. Further, if the theory of clandestine removal as alleged by Revenue is believed, the 'bilty nakal register' was seized on 30.04.2002 at 1200 hrs containing entries up to 29.04.2002. This register shows transport ....
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....amitra Cotton Mills -2004 (163) ELT 472 (T). 27. Taking notice of the aforesaid rulings, the learned Commissioner observed that the allegation of clandestine manufacture and clearance has to be established with the evidences relating to clandestine receipt of raw material, etc., consumption of electricity, transportation of the goods, receipt of the despatched finished goods by the buyers and evidence of receipt of flow back of sale proceeds of the alleged clandestine sales. Thus, suppression of production is required to be established first to establish clandestine removal of goods, as production is the first step for removal. 28. Learned Commissioner examined the evidences relied upon by Revenue in support of the allegation which are as follows:- (a) Statement of Shri S. N. Jha, AGM (Excise) wherein it was admitted that against some entries found in the register of M/s Kamal and M/s Bajrang, Central Excise duty was paid, while against some entries no duty was paid. (b) Statement of Shri R. K. Bhadoria, AGM (Logistics) dated 30.04.20002, wherein he has also admitted that on some invoices duty was paid and on certain other invoices no duty was paid. These invoices are entered....
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....search at the transporter - M/s Bajrang, as per Panchnama fourteen bilty books relating to the period under dispute were recovered and seized but none of the said bilty are relied upon. Thus, it indicates that the entries made in the 'bilty nakal register' were not corresponding with the bilties / GRs issued by M/s Bajrang. Thus, it creates a doubt about authenticity and correctness of the entries made in the 'bilty nakal register'. 33. Learned Commissioner also took notice that the 'bilty nakal register' were recovered and seized on 30.04.2002 at about 1200 hrs wherein entries were made upto 29.04.2002. Such entries contain details of despatch made on 29.04.2002. But investigation have not attempted to trace or intercept such despatches which must have been either in the course of transport or at the destination on 30.04.2002, as three such consignments were despatched within Raipur district. Revenue has neither traced the truck numbers which is mentioned in the 'bilty nakal register' nor at the premises of the said consignee. 34. Learned Commissioner also took notice that number of searches were conducted at various premises and records were withdrawn from the premises such as ....
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....0,45,267/- + Rs.6,45,427/- + Rs.4,95,738/-) and further the said amounts have also been upheld by this Tribunal, rejecting the appeal of the assessee. Thus, it is already established that the appellant have been indulging in clandestine removal and suppression of production. Further, the said amount of Rs.1, 51, 44,476/- also stood confirmed by the Hon'ble Chhattisgarh High Court by its order dated 09.08.2018. 38.2. It is further urged that the 'bilty nakal register' is not the only evidence. 'Bilty nakal register' may or may not be sufficient evidence of clandestine removal in the facts of the present case for the period in dispute. However, in the facts of the present case the 'bilty nakal register' was filling up some gaps, for the entire gamut of evidence. The investigation has been conducted on one principal offender/ respondent which covers a given period of time. There are various types of evidence adduced by the Revenue. The Adjudicating Authority has clearly erred in examining the different types of evidences, as if they belong to water tight compartments. Learned Commissioner have failed to consider that it have been established that the respondent -assessee have been in....
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....e any evidences. We cannot expect persons indulging in clandestine clearance to faithfully put the details of all such clearances in some register and append their signatures. This is never done. Hence, clandestine activity at best can be established only by circumstantial evidences." (ii) Commissioner of Customs, Madras vs. Bhoormull -1983 (13) ELT 1546 (SC) held that - "the department is not required to prove its case with mathematical precision but what is required is the establishment of such a degree of probability that a prudent man may on its basis believe in the existence of the facts in issue." (iii) Siemens Ltd., vs. Collector of Central Excise, Calcutta - 1994 (70) ELT 305 has held that "the whole circumstances of the case appearing in the case records as well as other documents are to be evaluated and necessary inferences are to be drawn from these facts as otherwise it would be impossible to prove everything in a direct way" (iv) Madras Chemicals -1986 (24) ELT 308 (T)- The Tribunal observed - "the Eldora do of absolute proof being unattainable, the law accepts for its, probability as a working substitute in this work-a-day world. In fine, legal proof is not nece....
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....sis of excise bill, gate pass and weighment slips handed over by the marketing Department of the respondent. Subsequently, the details of transportation were entered in the 'bilty nakal register'. On being shown set of invoice (photocopies) purportedly issued by the respondent along with lorry receipt issued by M/s Kamal Transport and weighment slip (all photocopies),they confirmed that the lorry receipts shown to him were prepared by them in respect of goods cleared by respondent. He further stated that the details mentioned in the lorry receipts, were true and correct. It is also stated that the goods were unloaded at the consignee place as mentioned in the Lorry Receipts. He also stated that his employee Shri Narayan Singh prepared the lorry receipts, and they do not receive any remuneration for unloading of goods at consignee place. 41.2. During his cross-examination on 17.01.2006 /22.02.2006, he reiterated that he works on commission basis and have got no trucks; the officers have recorded his statement in his office and was forced to give the statement as dictated; he was threatened that he will be arrested and taken to Police Station; he has filed affidavit of retraction da....
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....onsignee (5) truck No. (6) weight of goods (7) freight PMT (8) bilty No. and (9) invoice No. of the consigner/ respondent. 41.6. In his cross examination conducted on 17.01.2006 he deposed that M/s Bajrang Transport has no trucks and work on commission basis only; they arranged vehicle on receipt of commission and the goods were lifted by the truck peoples/ driver; further, stated that his earlier statement recorded on 30.04.2002 was obtained by the officer under pressure and force; the signature on the Lorry Receipts as per the photocopies of the bilties are not his signature; only the last page of the bills dated 30.04.2002 bears his signature and rest of the pages do not bear his signature; he writes 'A. Pandey' only as his signature; on being shown the 'bilty nakal register' of M/s Bajrang Transport Company (seized by the officers), he stated that he has not written the said register nor the register contains his signature. 42. On a careful examination of the aforementioned statements and cross-examination, we find that there is no categorical admission of clandestine removal as alleged by the Revenue. We also find that all these persons had retracted their statement within a....
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....inent to note here that the assessee submits that no efforts were made to intercept or apprehend or to enquire about even those trucks which were supposed to have left the premises just before the search operations began. Such failure only gives credence to the arguments put forth by the respondent assessee. 45. We further find that the show cause notice is bad for non -joinder of parties involved. Admittedly, the 'bilty nakal registers' which have been relied upon as material evidence by Revenue were seized from the premises of the two transporters; alleged parallel bilties, Xerox copy of which were provided by the source /informer, which were alleged to have been prepared by the said two transporters. For the reasons best known to the appellant Revenue, the transporters, who could have been charged with abetment and consequent penal action, were not made co-noticees in the show cause notice.In such circumstances, the 'bilty nakal register' which were recovered from their premises lose evidentiary value as it gives rise to serious suspicions and would not stand scrutiny of Law. (emphasis supplied). 46. Thus, the presumption as to the truth and evidentiary value of the documents....