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2023 (7) TMI 424
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.... Manganese found short in course joint physical stock taking in terms of proviso to sub-section (1) of Section 11A read with Section 11A(2) of the Central Excise Act, 1944; (ii) I confirm the demand of CENVAT duty amounting to Rs.99,255/-, Education Cess amounting to Rs.1,985/- and Secondary & Higher Education Cess amounting to Rs.992/- altogether amounting to Rs.1,02,232/- (Rupees one lakh two thousand two hundred thirty two only) evaded by the Noticee No.1 out of the total demand of Rs.4,79,62,368/- (Rupees four crore seventy lakh sixty two thousand three hundred sixty eight only) in respect of finished excisable goods namely Sponge Iron cleared during the period from 2006-07 to 200910 in terms of proviso to sub-section (1) of Section 11A read with Section 11A(2) of the Central Excise Act, 1944 and the rest of the demanded amount to the extent of Rs.4,78,60,136/- (Rupees four crore seventy eight lakh sixty thousand one hundred thirty six only) is set aside; (iii) I also charge the interest to the tune of Rs.16,083/- (Rupees sixteen thousand eightly three only) against the Noticee No.1 leviable on the aforesaid amounts of duty in terms of Section 11AB of the Cent....
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....) I confirm the demand of the CENVAT duty amounting to Rs.10,50,749/-, Education Cess amounting to Rs.21,015/- and Secondary & Higher Education Cess amounting to Rs.10,508/- altogether amounting to Rs.10,82,272/- (Rupees ten lakh eight two thousand two hundred seventy two only) being the amount of duty evaded by the Noticee No.2 in respect of finished excisable goods namely pig iron, sponge iron, Silico Manganese & Ferro Manganese found short in course joint physical stock taking in terms of the first proviso to Section 11A(1) of the Central Excise Act, 1944 read with Section 11A(2) of the Central Excise Act, 1944; (x) I also order payment of interest leviable on Noticee No.2 in terms of Section 11AB of the Central Excise Act, 1944 and Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944 on the amounts of duty evaded as demanded in clause (vi), (viii) and (ix) above; (xi) I impose penalty to the tune of (Rs.1,62,697/- + Rs.10,82,272/)Rs.12,44,969/- (Rupees twelve lakh forty four thousand nine hundred sixty nine only) upon the Noticee No.2 in terms of Section 11AC of the Central Excise Act, 1944. However, I allow the benef....
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....e tune of (Rs.6,45,943/- + Rs.93,481/-) Rs.7,39,424/- (Rupees seven lakh thirty nine thousand four hundred twenty four only) upon the Noticee No.3 in terms of section 11AC of the Central Excise Act, 1944. However, I allow the benefit for payment reduced penalty i.e. 25% (twenty five percent) of the duty amount to the Noticee NO.3 subject to fulfillment of conditions laid down in 1st and 2nd proviso to Section 11AC of the Central Excise Act, 1944. (xvii) I also order for appropriation of Rs.4,00,000/- (Rupees four lakh only), voluntarily deposited by the Noticee No.3 against the instant demand, interest, penalty etc. to the Government Account. (xviii) I impose penalty to the tune of Rs.10,00,000/- (Rupees Ten lakh only) upon Shri Gaurav Jajodia, Director (Noticee No.4) of M/s. Jai Balaji Industries Limited Unit-1 [Noticee No.1], M/s. Jai Balaji Industries Limtied Unit-IV [Noticee No.2] and M/s. Jai Salasar Balaji Industries (P) Limited, (Noticee No.3) in terms of Rule 26(1) of the Central Excise Rules, 2002. (xix) I impose penalty to the tune of Rs.5,00,000/- (Rupees Five lakh only) upon Shri Satya Narayan Dey Proprietor of M/s. Shyam Sons India (Noticee N....
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....:1 2008-09 Unit-I 143946 91502 1.57:1 2009-10 Unti-I 150642 98379 1.53:1 2008-09 Unit-IV 157429 98843 1.59:1 209-10 Unit-IV 173334 111734 1.55:1 Therefore, it was alleged that the input output ratio is to be 1.50:1 and by showing excess input output ratio, the assessees have clandestinely removed the goods, therefore, a demand of Rs.6,48,50,644/- was sought from the assessees. 4. In view of the above facts and circumstances of the case, show cause notice was issued to the assessees alleging clandestine removal of goods without payment of duty and availment of Cenvat credit on pig iron without receiving the same in the factory premises, to demand of duty and reversal of Cenvat credit along with interest and penalty upon the appellant. The matter was adjudicated and the order was passed as mentioned in paragraph 1 hereinabove, wherein the adjudicating authority dropped the demand sought to be evaded by the assessees on the basis of the input output ratio, but confirmed the demand of duty o....
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..... Union of India (ii) 2018 (362) ELT 961 (Chattisgarh) Hi-Tech Abrasives Ltd. v. CCE & C, Raipur (iii) 2016 (338) ELT 113 (T) CCE, Delhi-I v. Kuber Tobacco India Ltd. 7. With regard to denial of Cenvat credit on the invoices issued by M/s. Neo Metaliks Ltd. and KIC Metalics Ltd. he submits that the allegation that the assessee have availed Cenvat credit on 750 MT of pig iron on the strength of 36 invoices out of which 12 invoices pertained to KIC Metalics Ltd. and remaining 24 invoices pertained to M/s. Neo Metaliks. The case is that invoices of pig iron were issued on assessee 1's name but the same pig iron was not received in their manufacturing unit but was handed over to one agent Shri Satya Narayan Dey of Shyam Sons India, who used to load it in the containers and transported the same by means of trailers to Railway sliders at Majherhat Kolkata from where such containers were mounted in railway wagons/rakes for onward transportation and disposal mostly to northern parts of India. These all consignments had a specific quantity of 25.7 MT/28 MT which could not be transported by a trailer without the service of a container. 8. It is his content....
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....goods is to be confirmed. 12. With regard to the denial of Cenvat Credit it is his submission that Shri Satya Narayan Dey in his statement has stated that the goods has not been received by the assessee and they have been diverted to northern states of India, therefore, the cenvat credit is rightly denied. 13. With regard to dropping of demand by the Ld.Commissioner on account of input output ratio is not properly appreciated the fact that the production of sponge iron was recorded in daily stock account mainly on the basis of Fe(T) in iron ore and input output ratio. It is also submitted that from the production log sheet for the year 2005-06, the assessee themselves have recorded production of sponge iron maintaining input output ratio 1.5:1 throughout the year so it is clear that Fe(T) content in iron ore used throughout the year 2005-06 remained the same. During 2006-07 and onwards the input output ratio has been varied from day to day and even from kiln to kiln of a particular day although it cannot be said that Fe(T) content in the iron ore fed into the kilns on a particular day is varied from kiln to kiln. On the day of search, shortage of physical st....
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.... Adjudicating Authority while adjudicating the case has adopted the method of average weighment by sending the team to inspect and find out the average weight of ingots of different sizes. If the average weight during the course of adjudication has been taken, in that case also the shortage of 120 MT will come down to 38.796 MT i.e. too when the average weight of dimensions 3½' x 4½' and 4' x 5'are not available, therefore, we hold that the weighment done on average basis to alleged shortage of finished goods is not sustainable in the absence of any corroborative evidence of clearance of finished goods without payment of duty. Admittedly, no corroborative evidence has been produced by the Revenue in support of their claim, therefore, we hold that demand of duty on shortage of raw material/finished goods against M/s. SSCL is not sustainable, the same is set aside. The said order has been affirmed by the Hon'ble High Court. Further in the case of National Engineering Industries Ltd. (supra), this Tribunal has given an option to deal the issue and observed as under:- "5. The admitted facts of the case are that the assessee is having computerized accounting wh....
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....of credit on the raw material and the demand of duty on the finished goods solely on the ground of physical stock taking done by the assessee is not sustainable in the facts and circumstances of the present case." 18. As in this case it is claimed that physical stock taking has been done, but which is next to impossible to weighment of such a huge quantity in 10.30 hrs. without deployment of excess labour and transporting vehicles and the shortage is also of the negligible quantity of their production, in that circumstances, we hold that the shortages of finished goods are calculated on the basis of assumption and presumption. In the absence of any documentary evidences, therefore, relying on the above cited decision of this Tribunal, which has been affirmed by the Hon'ble High Court, we set aside the demand of Rs.10,82,271/- confirmed against the assessee. (c) Denial of Cenvat credit of Rs.90,71,832/-. 19. We find that Cenvat credit has been denied to the assessee on the basis of 36 invoices issued by M/s. Neo Metaliks Ltd. and KIC Metaliks Ltd amounting to Rs.19,71,832.00. From the statement of Shri Satya Narayan Dey, which was relied by the adjudicating auth....
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....8/SSI /OFF/0 9 8 Neo Metaliks Ltd. Jai Balaji Unit-IV 04/SSI/OF F/10 5 12.04.07 NML/DO/ 0607/946 DATED 29.03.07 328 NL 02 3582 22.040 08/SSI /OFF/0 9 9 Neo Metaliks Ltd. Jai Balaji Unit-IV 04/SSI/OF F/10 5 13.04.07 NML/DO/ 0607/946 DATED 29.03.07 362 WB 73 3884 8.570 08/SSI /OFF/0 9 10 Neo Metaliks Ltd. Jai Balaji Unit-IV 04/SSI/OF F/10 5 10.04.07 NML/DO/ 0607/946 DATED 29.03.07 283 WB 41 6338 22.870 08/SSI /OFF/0 9 11 Neo Metaliks Ltd. Jai Balaji Unit-IV 04/SSI/OF F/10 7 13.04.07 NML/DO/ 0607/968 DATED 30.03.07 382 WB 39 6511 21.410 08/SSI /OFF/0 9 12 Neo Metaliks Ltd. Jai Balaji Unit-IV 04/SSI/OF F/10 7 14.04.07 NML/DO/ 0607/968 DATED 30.03.07 414 WB 37 4791 24.590 08/SSI /OFF/0 9 13 Neo ....
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....44 JH 12A 9831 40.300 08/SSI /OFF/0 9 24 Neo Metaliks Ltd. Jai Balaji Unit-IV 04/SSI/OF F/10 16 17.05.07 NML/DO/ 0607/111 DATED 28.04.07 1151 NL 04A 7843 9.270 08/SSI /OFF/0 9 25 KIC Metaliks Ltd. Jai Balaji Unit-IV 04/SSI/OF F/10 98 06.12.07 559 DATED 28.11.200 7 5190 WB 23A 5496 27.500 08/SSI /OFF/0 9 26 KIC Metaliks Ltd. Jai Balaji Unit-IV 04/SSI/OF F/10 98 10.12.07 559 DATED 28.11.200 7 5286 WB 23A 5494 27.500 08/SSI /OFF/0 9 27 KIC Metaliks Ltd. Jai Balaji Unit-IV 04/SSI/OF F/10 98 13.12.07 559 DATED 28.11.200 7 5320 WB 37 1270 19.070 08/SSI /OFF/0 9 28 KIC Metaliks Ltd. Jai Balaji Unit-IV 04/SSI/OF F/10 98 15.12.07 559 DATED 28.11.200 5344 WB 41 1977 18.490 08/SSI /OFF/0 9 &n....
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....t pertained to these 9 consignments. Therefore, as same is not disputed by the assessee, we deny the Cenvat credit pertaining to these 9 consignments. The details of the same is as under:- Chart showing diversion Pig Iron through container of Container Corporation of India (CONCOR) Annexure - 'O' 04/SSI/OFF/10 08/SSI/OFF/09 Sl. No. From To Seizure sl .no. Page No. Date DO No. C.E. Invoice No. Trailer No. Weight Seizure Sl.No. Page No. Contain er No. Trailer No. In Time 1 Neo Metal ics Ltd. Jai Bal aji UIV 04/S SI/ OFF/ 10 7 16.04. 07 NML/DO/ 06-07/958 dated 30.03.07 459 WB 23A 1141 26.81 08/SSI/ OFF/09 2 ILCU 521577 8 WB 23A 1141 17/04/2 007 2 Neo Metal ics Ltd. Jai Bal aji UIV 04/S SI /OFF/ 10 7 17.04. 07 NML/DO/ 06-07/958 dated 30.03.07 520 WB 15A 0405 27.5 08/SSI/ OFF/09 2 CXNU 321120 3 WB 15A 0405 19/04/2 007 3 Neo Metal ics Ltd. Jai Bal aji UIV 04/S SI/ OF....
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....at credit cannot be denied as held by the Hon'ble Punjab & Haryana High Court in the case of Shakti Roll Cold Strips Pvt. Ltd. (supra), wherein the Hon'ble High Court has observed as under:- "5. We have heard Mr. Kamal Sehgal, learned counsel for the revenue and perused the record. However, we find no force in the contention raised by him. The Tribunal has recorded a finding of fact that the inputs supplied by the respondent were duly received by the manufacturers and were used in the goods manufactured, which were cleared on payment of duty. The Tribunal also found that the Department has not been able to prove that any other alternative raw material was received and used in the final products. The Tribunal also held that the findings of the Commissioner (Appeals) in favour of the respondent were not challenged by the Departmental Representative before the Tribunal. The Tribunal has also noted that the findings of the Commissioner clearly established that RT-12 returns have been assessed finally by the Range Officer which contains all the documents including the invoices under dispute on the basis of which the Modvat Credit has been availed and utilised and that payments ....
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....n. 25. We find that - (i) There is no statutory obligation under the Central Excise Act, 1944 and the Rules framed thereunder to maintain standard norms of production in respect of an assessee liable to pay Central Excise duty under Section 3 of the said Act. (ii) There is nothing on record that the assesses herein have ever declared input-output ratio to the Central Excise authority during the material period. (iii) In the SCN, input-output ratio of 1.50:1 has been arrived at for the period 2004-05, based on quantities of Iron Ore consumed and sponge iron produced as per balance sheet and in conformities with ER-6 Returns for the material period. (iv) The same ratio alleged to have been maintained during 2005-06, which has been computed on the basis of production log sheets maintained by the JBIL Unit 1. (v) Further during 2004-05, Balance Sheet figures for the whole year of 2004-05 were taken into account to arrive at the input-output ratio, and compilation of figures recorded in Production Log Sheets, during the period 2005-06 was done to work out the input-output ratio i.e. 1.50:1, the same as in 2004-05. (vi)....
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....med. (xii) All such statements were recorded u/s 14 of the Central Excise Act, 1944 and none of the statements is found to have been retracted subsequently. (xiii) We find that Shri R.N.Goel, General Manager of the assessee No.1, in his statement recorded on 05.12.2018 with reference to Question No.5 and stated that they have no specific norms of ratio for production of finished goods, like Sopnge Iron, Pig Iron, Silico Manganese, Ferro Manganese etc. Against specific query, Shri Goel also categorically stated that production per kiln varies from 38 MT to 40 MT per day. (xiv) Shri Niranjan Gourisarai, General Manager, Unit-IV (assessee No.2) in his statement dated 05.12.2018, stated that production of Sponge Iron is recorded on the basis of total consumption of Iron Ore and Fe(T) contents of the Ore. (xv) We find that deposition of Md.Yusuf, G.M. (operations), recorded on 23.06.2010 is most vital. a) Against Question No.1 Md.Yusuf identified himself as the GM of both the units i.e., Unit I and Unit IV. He supervised day to day production of Sponge Iron, laboratory, raw material handling system and dispatch of Sponge Iron of the fac....
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.... carbon content in coal without fines and foreign particles, good condition castables etc. and for that matter, yield widely varies even on day to day as well as kiln to kiln basis, is in conformity with the deposition of Md.Yusuf against question No.8. 26. Further, in the impugned order the Ld.Adjudicating authority also examined the above issue and did not rely on the earlier input output ratio to allege that same is to be maintained by the assessee in the subsequent years. 27. A similar view was taken by the Hon'ble Calcutta High Court judgement in the case of CCE, Kolkata-III v. Sai Sulphonate Pvt.Ltd. [2022 (380) E.L.T. 441 (Cal.)], wherein the Hon'ble High Court has observed as under:- "5. The assessee has filed appeal before the Tribunal challenging the said order and explained that their manufacturing activities as to how they were engaged in manufacture for themselves as well as they have been carrying on conversion job for another third party. After noting the facts the Tribunal held that LABSA and Spent Sulphuric Acid are of the same quality and the processing tank is also common in the factory as it is not possible to manufacture goods separat....