TaxTMI 
TaxTMI 
TaxTMI 
2023 (10) TMI 1252
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....e - I Sevadham, Loni, Distt Ghaziabad, under the provisions of Section 11A (4) of the Central Excise Act, 1944. 2. I order to charge and recover interest at the applicable rate on the aforesaid demand of Central Excise duty amounting to Rs 1,14,85,955/- till the date of payment of the said central excise duty under Section 11AA/ 11AB of the Central Excise Act, 1944. 3. I impose penalty of Rs 1,14,85,955/- upon Shri Pintu Tyagi and Shri Pradeep Tyagi having factory at 15, Krishna Vihar Phase - I Sevadham, Loni, Distt Ghaziabad, under Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944. 4. I impose penalty of Rs 5,00,000/- upon Shri Pintu Tyagi under Rule 26 of the Central Excise Rules, 2002. 5. I impose penalty of Rs 5,00,000/- upon Shri Pradeep Tyagi under Rule 26 of the Central Excise Rules, 2002. 2.1 Intelligence was received that Appellant (Shri Paresh Tyagi) and his brother Shri Pintu Tyagi (Expired on 17.06.2013) were operating a factory located at Gali No 15, Krishna Vihar Phase - I Sevadham, Loni, Distt Ghaziabad and were engaged in casting/ forging (commonly known as "Dhalai") of LPG stove valve of brass and bar of brass....
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....C of the Central Excise Act, 1944. Shri Pintu Tyagi and Shri Paresh Tyagi who were engaged in the day to day operation of the unit and were have by their act of omission and commission leading to the evasion of said duty were liable to penalty under Rule 26 of the Central Excise Rules, 2002. 2.4 A show cause notice dated 05.02.2015 was issued to- I. the unit of Shri Pintu Tyagi and Shri Pradeep Tyagi calling it to show cause as to why: a) The central excise duty amounting to Rs 1,14,85,955/- [Rs 1,11,51,412/- BED + Rs 2,23,028/- Ed Cess + Rs 1,11,514 SHE cess] [Rupees one crore eleven lakhs eighty five thousand nine hundred and fifty five only)] should not be demanded and recovered from them under the provisions of Section 11A (4) of the Central Excise Act, 1944. b) Interest on the amount as at S No (I) supra, should not be recovered till the date of payment of the said central excise duty under Section 11AA/ 11AB of Central Excise Act, 1944 c) Penalty should not be imposed upon them under Rule 25 of Central Excise Rules, 2002 read with Section 11 AC of the Central Excise Act, 1944. II. Shri Pintu Tyagi and Shri Paresh were asked to show cause as to why the penalty be no....
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....y address hence the notices were sent through speed post on 16.02.2015. The show cause sent to House No 873, Gali No 14 Mandoli Extension, Near National Flower School, Delhi returned undelivered on 27.02.2015. Therefore the same were served by pasting at that address under panchnama dtd 02.03.2015. None of the notices filed any written reply to the notice. They were also granted the opportunity of personal hearing on 15.02.2016 and 26.02.2016 vide C No V(15) Adj. /Pintu Tyagi / Gzb / Comm /166/ 14/ 552 to 554 dtd 05.02.2016 and even C No 848 to 852 dtd 17.02.2016. None of the noticee appeared on the aforesaid dates scheduled for personal hearing. Hence, I decide the case ex parte." 4.3 From the perusal of the show cause notice it is observed that the show cause notice was issued to three persons namely: 1. Factory of Shri Pintu Tyagi and Shri Pradeep Tyagi, Gali No 15 Krishna Vihar Phase I Sevadham. Loni, Distt Ghaziabad. 2. Shri Pintu Tyagi (S/o Rajbal Tyagi) House No 873, Gali No 14 Mandoli Extension, Near National Flower School, Delhi. 3. Shri Pradeep Tyagi (S/o Rajbal Tyagi) House No 873, Gali No 14 Mandoli Extension, Near National Flower School, Delhi. ....
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....ed at 16.30 Hrs on the same day i.e. 09.02.2016. We are satisfied with the proceedings conducted by the officers." "PANCHNAMA DATED 09.02.2016 Drawn At House No 873, Gali No 14 Mandoli Extension, Near National Flower School, Delhi Panch1: Shri Vikram Gautam, Aged 19 Years S/o Shri Sher Singh, R/o Village Rajapur, Shastri Nagar, Gahziabad (U P). Panch2: Shri Vijay Kumar, Aged 21 Years S/o Shri Puran Singh, R/o Baghwali Gali, Rajapur, Shastri Nagar, Gahziabad (U P). "We the above named panchas having been called upon by the officers of Anti Evasion, Central Excise & Service Tax Commissionerate Ghaziabad (hereinafter referred to as 'officers') presented ourselves today i.e. on 9th February' 206 at about 15.00 Hrs near Gali No 14, Mandoli Extension, Delhi. The officers introduced themselves by displaying their identity cards and requested us to witness the proceedings to serve a letter C No V(15) Adj. /Pintu Tyagi / Gzb / Comm /166/ 14/ 553 dtd 05.02.2016 issued by Superintendent (Adj), Central Excise Ghaziabad to Shri Pijntu Tyagi/ Shri Pradeep Tyagi S/o Shri Rajbal Tyagi at House No 873, Gali No 14 Mandoli Extension, Delhi, for which we gave our consent. The officers informed t....
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....man proceeded against, the form, features and the fundamentals of such essential processual propriety being conditioned by the facts and circumstances of each situation, no breach of natural justice can be complained of. Unnatural expansion of natural justice without reference to the administrative realities and other factors of a given case, can be exasperating. We can neither be financial nor fanatical but should be flexible yet firm in this jurisdiction. No man shall be hit below the belt - that is the conscience of the matter." 4.6 In case DHARAMPAL SATYAPAL LTD. [2015 (320) E.L.T. 3 (S.C.)] Hon'ble Apex Court has observed as follows: "30) But that is not the end of the matter. While the law on the principle of audi alteram partem has progressed in the manner mentioned above, at the same time, the Courts have also repeatedly remarked that the principles of natural justice are very flexible principles. They cannot be applied in any straight-jacket formula. It all depends upon the kind of functions performed and to the extent to which a person is likely to be affected. For this reason, certain exceptions to the aforesaid principles have been invoked under certain circumstances....
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....unity would have availed him nothing'. In such situations, fair procedures appear to serve no purpose since 'right' result can be secured without according such treatment to the individual. In this behalf, we need to notice one other exception which has been carved out to the aforesaid principle by the Courts. Even if it is found by the Court that there is a violation of principles of natural justice, the Courts have held that it may not be necessary to strike down the action and refer the matter back to the authorities to take fresh decision after complying with the procedural requirement in those cases where non-grant of hearing has not caused any prejudice to the person against whom the action is taken. Therefore, every violation of a facet of natural justice may not lead to the conclusion that order passed is always null and void. The validity of the order has to be decided on the touchstone of 'prejudice'. The ultimate test is always the same, viz., the test of prejudice or the test of fair hearing. 32) In Managing Director, ECIL (supra), the majority opinion, penned down by Sawant, J., while summing up the discussion and answering the various questions posed, had to say as ....
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....atter has been adjudicated against the said three persons holding them responsible for their acts on the basis of the evidence available on record. From the facts as available on record, the factory of Shri Pintu Tyagi and Shri Pradeep Tyagi is a benaami firm, having no separate name. Both Shri Pintu Tyagi and Shri Pradeep Tyagi were operating the benaami firm to which no name was given and no registration under Central Excise Act, 1944 or under any other Act for the time being in force, was taken. Also as per the statements available on record it is evident that the appellant and his brother have not entered into any partnership deed for operating this factory. Interestingly the clandestine turnover of the factory was more than Rs 12,00,00,000/- (Rupees Twelve Crore) and all the transactions were undertaken in name of this benaami firm Pintu Tyagi and Pradeep Tyagi being the beneficiary of the transactions. 4.7 The entire chronology of the events leading to the confirmation of demand and imposition of penalty on the appellant is as follows: - Appellant was engaged in the business of Trading of Brass Parts of LPG Gas 01.04.2011 Younger brother of Appellant i.e. Late Shri Prade....
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....m September 2010. Some machines have also been fabricated by them in the factory. No rent has been paid for the reason of some disputes. No written rent agreement has been made except the agreement made on plain paper. *  For melting raw material they have two furnaces. One furnace is used for heating raw material and other is used for brass rods. Three forgings machines are installed in the factory. Out of three forging machines only two are in use. * They have electricity connection and the electricity the forging and casting machines are electricity operated. They also have generator back up. Electricity connection is in the name of brother of Shri Gajendra Tyagi and electricity bills are paid by them. * For melting in their furnace they use coal and gas cylinders for heating the material. Coal is purchased from Shri Anil and Shri Pramod having their godown in Sevadham. Gas cylinder is purchased from local vendors. * They employ about 35 laborers depending on the work load. Laborers are deputed to look after the work at furnace. * Main raw material is brass powder (burada), brass scrap and brass parts (purja). Other raw materials are zinc, soda suhaga etc. Bras....
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.... kg and finished good was valued around Rs 315-325/- per kg. * They are not registered with sales tax department or any other department. * The unit has been not named by them as they were not aware that for undertaking said works they had to form company or get registered with the government department. 4.9 In his statement record on the date of search, the Accountant/ Foreman of the unit Shri Raju Yadav stated that: * He is working as foreman in the unit and maintains all the records of production and clearance of the goods in the factory. The unit is engaged in manufacture of castings and forgings of LPG brass coke & valve and bar of brass, for last one year and three months and employs thirty five laborers. * There are three furnaces and they cast about 1400 kg to 1500 kg scrap at one time in each furnace. * They do not maintain any bill/ invoice book for removal/ sale of the goods from their factory. Goods are removed on the basis kacchi slips after receiving directions from Shri Pintu Tyagi on phone. * The record of removals is maintained in kachha register resumed by the officer during search. The receipt of raw material i.e. brass scrap is also on kachhi slip w....
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....ant and other in their statement recorded under Section 14 of the Central Excise Act, 1944 it is quite evident that factory at Gali No 15 Krishna Vihar Phase 1, Sevadham, Loni Gaziabad, is a factory jointly owned by the Appellant and his younger brother, without entering into any formal partnership. The factory has not been given any name nor has been registered with any of the government departments either centre or state. The entire activities undertaken in the factory were done clandestinely and no formal records were maintained about the operation. Then factory was having sufficient machines/ furnaces & equipments to produce 1400-1500 kgs of finished goods i.e. Brass Rods and Brass Forgings for gas stoves in a day. All the receipt of raw material and dispatch of finished goods was done on kachha slips. Sufficient evidences have been adduced to allege clandestine removal and demand duty on these removals in the show cause notice and impugned order. When the officers visited the factory it was running and had stock of finished goods and raw material which has been seized by the officers. These goods have been confiscated by the Additional Commissioner in separate proceedings with....
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.... the principle underlying Section 106, Evidence Act, the burden to establish those facts is cast on the person concerned : and if he fails to establish or explain those facts, an adverse inference of facts may arise against him, which coupled with the presumptive evidence adduced by the prosecution or the Department would rebut the initial presumption of innocence in favour of that person, and in the result prove him guilty. As pointed out by Best in `Law if Evidence' (12th Edn. Article 320, page 291), the "presumption of innocence is, no doubt, presumptio juris : but every day's practice shows that it may be successfully encountered by the presumption of guilt arising from the recent (unexplained) possession of stolen property," though the latter is only a presumption of fact. Thus the burden on the prosecution or the Department may be considerably lightened even by such presumption of fact arising in their favour. However, this does not mean that the special or peculiar knowledge of the person proceeded against will relieve the prosecution or the Department altogether of the burden of producing some evidence in respect of that fact in issue. It will only alleviate that burden to ....
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.... High Court of Madhya Pradesh, the Hon'ble High Court, while disposing of the writ petition of the partners ordered the noticees to file their reply on 24-3-2003 and participate in the proceedings. Accordingly, the partners have participated in the proceedings and, in fact, the present appeal has been filed in the firm name by one of the partners for challenging the impugned order. 18. It is not in dispute that two note books being private record, namely, "daily report tin factory" and "Daily production report" were seized from the factory premises of the appellant on 1-8-1998 under a panchnama in the presence of the authorized signatory of the appellant and two panch witnesses. The authenticity of these two note-books is not disputed, but a contention is canvassed that reliance cannot be placed on such private record in the absence of corroborative evidence to show clandestine removal of the excisable goods. 18.1 The "Daily report tin factory" note-book contained details of production and issue of tin containers by the appellant, which did not reflect in the statutory record. The details of production and clearance of tin containers were also shown in the note-book 'Daily prod....
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....ulars of the opening stock, production and the closing stock of the said excisable goods. Admittedly, the production of the tin containers, which was recorded in these daily record books and which were removed, did not appear in the statutory record i.e. RG. 1 register of the appellant. This not a case where mere private record without anything more is relied upon. The private record was recovered from the factory of the appellant, and it is established beyond doubt and not even disputed that it was so recovered and that it belonged to the appellant. The nature of particulars contained in this private record clearly go to show their intrinsic authenticity about the clandestine production and removal of the excisable goods by the appellants who had obtained the excise registration for the manufacture of such goods in the firm name. There cannot be more authentic evidence than recovery of the said private record from the appellant's factory which admittedly was prepared and bears the signatures of the supervisors of the appellant, and which is proved to have been maintained in the factory, from the statements of the partner Shri Yogesh Garg, the Electronics Engineer, Shri Awadesh Kum....
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....recorded by the Commissioner in the impugned order. When the appellant has in his statement recorded under section 14 while giving the details of working of the unit have admitted that he was actively involved in the working of the unit the grounds taken in the appeal which are in nature of alibi do not merit any consideration. Hon'ble Supreme Court has in case of Kamal Prasad & Ors [order dated 10th October 2023 in Criminal Appeal No.1578 Of 2012] rejecting such pleas held as follows: 19. The principles regarding the plea of alibi, as can be appreciated from the various decisions [Dhananjoy Chatterjee v. State of W.B., (1994) 2 SCC 220; Binay Kumar Singh (supra) Jitender Kumar v. State of Haryana (2012) 6 SCC 204; Vijay Pal v. State (Govt. of NCT of Delhi) (2015) 4 SCC 749; Darshan Singh v. State of Punjab (2016) 3 SCC 37; Mukesh v. State (NCT of Delhi) (2016) 6 SCC 1; Pappu Tiwari v. State of Jharkhand 2022 SCC OnLine SC 109.] of this Court, are: 19.1 It is not part of the General Exceptions under the IPC and is instead a rule of evidence under Section 11 of the Indian Evidence Act, 1872. 19.2 This plea being taken does not lessen the burden of the prosecution to prove that....