TaxTMI 
TaxTMI 
2024 (1) TMI 1155
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.... demands made in the Notice were confirmed vide Order-in-Original dated 30.03.2009, along with interest and penalty equivalent to the duty on the Appellant. Penalties of Rs 10,00,000/-on Sh.C.S.Grewal, Director, Rs 2,00,000/- on Sh. Nimananda Pradhan, Manager and Rs 1,00,000/- on Sh. R.S. Pandey, DGM were also imposed. Aggrieved against the impugned order, the Appellant and the above three persons on whom penalties were imposed, filed separate appeals. Since, the confirmation of duty and imposition of penalties were made under the same impugned order, all these four appeals are taken up together for decision. 2. In their submissions, the Appellant stated that the demands can be classified to fall under three categories: (i) Rs. 32,36,758/- has been confirmed on the basis of computer printouts seized from the Appellant's premises. (ii) Rs 3,37,080/- has been confirmed on the ground of under valuation (iii) Rs. 18,37,986/- has been confirmed on the basis of difference between RG-1, Daily Production and Consumption of Material Report and Daily Stock Tally Report. 3. Regarding the demands confirmed on the basis of computer printout, as mentioned in (i) ....
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.... buyers of the clandestinely removed goods and flow back of funds pertaining to clandestine removals. Hence, the demands made without any corroborative evidence for clandestine clearances, is not sustainable. In support of this contention, the Appellant relied on the following case laws:- (i) Continental Cement Company Vs. U.O.I [2014 (309) ELT 411 (All.)] (ii) Jai Balaji Industries Ltd. Vs. CCE & ST Durgapur [2020 (371) ELT 751 (Tri.-Kol.)]; (iii) Shyam Steel Corpn. Vs. CCE, BBSR-II [2016 (339) ELT 310 (Tri.- Kol)] 4. The demand of Rs.3,37,080/- was confirmed on the ground of undervaluation. The Appellant stated that the basis of this allegation is the difference between the Appellant's invoice values and the 'Rate per MT' available in respect of the corresponding entries in the computer printout. Since, the computer print-out itself does not belong to them, the differential value adopted on that basis is not sustainable. 5. Regarding the demand of Rs.18,37,986/- mentioned at para (iii) supra, the Appellant submits that this demand has been confirmed on the basis of the difference between RG-I, 'Daily Production & Consumption of Material Report' an....
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.... non availability of corroborative evidence to establish clandestine removal, he cited the decision of the Hon'ble High Court of Madras in the case of Lawn Textile Mills Pvt. Ltd Vs CESTAT, Chennai reported in 2018(362) ELT 559 (Mad) wherein it has been observed that the intention to evade is always secret and not open transaction and hence direct documentary evidence may not be available. In this case, the registers maintained by the Appellant themselves show the discrepancy. The shortages have been arrived at on the basis of these records and hence it does not require any further corroborative evidence. Accordingly, he prayed for upholding the demands confirmed in the impugned order. 9. Heard both sides and perused the appeal records. 10. We observe that the demands mentioned at (i) and (ii) in para 2 above have been worked out on the basis of the details available in the computer print-out recovered from the premised of the Appellant and the statements recorded from the concerned persons. In their submissions, the Appellant questioned the evidentiary value of the computer print-out. They stated that the computerized documents relied upon by the department are not admissibl....
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....e Appellant. In their submissions, the Appellant questioned the evidentiary value of the computerized documents relied upon by the department to allege clandestine clearance, since the mandate provided under section 36B of the Central Excise Act, 1944 was not followed. We observe that there are two types of computer print-outs relied upon in this case to confirm the demands. One set of computer print outs recovered from the premises of the Appellant for which the ownership of the documents are in question. The other set of computer print outs are the normal Registers of the Appellant which are maintained in the computers, for which the ownership is not in question. We now deal with the first set of computer print outs wherein the ownership of the documents have been questioned. Computer print outs can be relied upon in the departmental proceedings. The only requirement is that the mandate as provided in Section 36B has to be followed. 13. We observe that the demands at (i) and (ii) in para 2 supra has been confirmed based on the computer print outs recovered from the premises of the Appellant, wherein the ownership of the documents have been questioned by the Appellant. The Appe....
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....lied upon to arrive at clandestine clearance. 15. We observe that this view has been held by the Tribunal in the case of (i) Shivam Steel Corporation Vs CCE, BBSR-II, 2016(339)ELT 310(Tri- Kolkata) (ii) Super Smelters Vs CCE, Durgapur, 2020(371)ELT 751 (Tri-Kolkata) The relevant Para in the case of Super Smelters is reproduced below : "22. Further, we find that an similar issue has come up for consideration of this Tribunal in case of Bihar Foundary and Casting Limited v. Commissioner of Central Excise and Service Tax, Ranchi, Appeal Nos. 75819 and 75822 of 2015. The Tribunal vide its Final Order Nos. 75994-75995 of 2013 ha held tht in view of non-compliance of mandatory requirement of 36B of the Act case the clandestine removal cannot be made applicable merely based on the printouts taken from the laptop, computer obtained during the search. And the appeals were allowed by setting aside the order passed by the Adjudicating Authority. The ratio of this case is squarely applicable in toto to this case on hand also thus the demand is not sustainable and liable to be set aside." 16. We observe that the decision is squarely applicable in this case....
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....in (out of Klin-I, II & III) not covered in the main report. In his statement, Sri Ramashish Pandey, DGM (Production) affirmed the correctness of these reports, (both the main reports and the additional sheets) and stated that RG-1 is maintained on the basis of these reports. However on comparison of the production reflected therein with the RG-1 showed that while the figures tallied on the days when the report was prepared in a single sheet, the quantities shown in the additional sheets were not reflected in the RG-1. Thus I find that during the months of June'05, Aug'05, Sep'05, March & April, 2006 a total quantity of 2442 MT. of sponge iron was not accounted for in the RG-1. Shri Pandey being the overall incharge of the production has admitted the genuineness of the production data reflected in the additional sheets of the report, Under the circumstances, I accept the data as correct. 8. The Daily Production Report gives a brief account of klin wise production and consumption of raw materials. Interestingly, from the records placed in the file, I find that the total quantity produced as per the main report and the additional sheet of the Daily Production and Raw Materia....
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.... and Raw Material Report' is the basic document for logging of production in the RG-1, the assessee would normally expect that the Department would refer it for cross-checking and hence it's figures always match with RG- 1. But as investigation reveals, on some days one additional sheet is attached to it which contained the extra production quantity. These extra quantities are obviously not shown in the main report. However, the excess production shown in the additional sheet of the report is indeed in the total production for the two other documents discussed supra. Thereby the management ensures uniformity in maintenance of private records and exercises control over its employees. This leads to an unmistakable conclusion that the assessee resorted to suppression of production and clandestine removal of their finished goods. 12. The exception taken to the additional sheets of the 'Daily Production and Raw Material Report' by Sri Grewal, Director of the assessee company on the ground that it has not been signed and authenticated and the quantity shown therein did not pass through the quality control checks which is a must before accounting in RG-1 etc., is not tenable as t....
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....ional sheets, the validity of which has been established on the basis of the signatures affixed therein. We observe that the production shown in the additional sheets works out to 1753 MT of Sponge Iron Lumps and 689 MT of Sponge Iron Fines, totally 2442 of MT. This quantity have not been recorded in the RG-1. The impugned order held that the excess production shown in the additional sheet of the report is to be added to the production reported in RG-1 register to arrive at the total production, for which the Appellant has not given any valid counter. Accordingly, we hold that the shortages worked by the department based on the differences in the reports maintained by the Appellant themselves is sustainable. 20. Regarding the allegations of clandestine removal, the Appellant submits that there must be positive evidences like admission of clandestine removal, purchase and consumption of unaccounted raw materials etc, which are not there in this case. We observe that the Daily Production Report gives a brief account of klin wise production and consumption of raw materials. The total quantity produced as per the main report and the additional sheet of the Daily Production and Raw M....
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....Appellant could not give any valid explanation for the shortages. Thus, by relying on the decision cited above, we hold that the discrepancies in the registers itself is sufficient to corroborate the clandestine clearance. Accordingly, we hold that the demand of Rs. 18,37,986/-confirmed on the basis of difference between RG-1, Daily Production and Consumption of Material Report and Daily Stock Tally Report, is sustainable. The Appellant is liable to pay this duty along with applicable interest. As the Appellant has suppressed the actual production with an intention to evade payment of duty, they are liable for penalty equivalent to the duty evaded under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002. 22. Regarding the Penalty imposed, we observe that a penalty of Rs.10,00,000/-was imposed on Sh.C.S.Grewal, Director, Rs 2,00,000/- on Sh. Nimananda Pradhan, Manager and Rs 1,00,000/- on Sh. R.S. Pandey, DGM. Regarding penalty on the Director, Sh.C.S.Grewal, it has been alleged that as the Director of a family based private limited company, he was the beneficiary of the illegal activities. As per the discussions above, we observe tha....