TaxTMI 
TaxTMI 
2025 (1) TMI 786
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....dhey Ispat Pvt. Ltd., D-17 to 21, UPSIDC Indl. Area, Malwan, Distt. - Fatehpur (noticee no.1) under the proviso to erstwhile Section 11A(1) of the Central Excise Act, 1944 {now Section 11A(4)} alongwith the interest on the said amount of duty at appropriate rate under the erstwhile Section 11AB {now Section 11(AA)} of the Central Excise Act, 1944. 02. I impose a penalty of Rs. 1,86.15.736/- (Rupees One Crore Eighty Six Lakh Fifteen Thousand Seven Hundred Thirty Six only) equal to the said amount of Central Excise duty upon M/s Shree Radhey Radhey Ispat Pvt. Ltd., D-17 to 21. UPSIDC Ind!. Area, Malwan, Distt. Fatehpur (noticee no.1) under Rule 25 of the Central Excise Rules, 2002 read with the erstwhile Section 11AC (now Section 11AC(a)} of the Central Excise Act, 1944. 03. I impose a penalty of Rs 50,00,000/- (Rupees fifty lakhs only) upon Shri Vijay Jakhodia, Director of M/s Shree Radhey HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL)HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) Radhey Ispat Pvt. Ltd. (noticee no.2) under Rule 26 of the Central Excise Rules, 2002. 04. I impose a penalty of Rs 50,00,000/- (Rupees fifty lakhs only) upon M/s Kamdhenu ispa....
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....0.2011 proposing recovery of service tax amounting to Rs.1,95,83,004/- was issued to M/s KIL for alleged evasion of service tax by suppressing the gross royalty received by M/s KIL from their franchisees. Statements of Shri Ravi Saini, AGM of M/s KIL, Shri Rattan Garg, Assistant of Shri Ravi Saini and Shri J. K. Yadav, Data Entry Operator found working at the secret office who in their statement inter alia admitted hiring of a rental premises and maintaining incriminating records of productions, clearance and sale of account of their Bhiwadi unit in the name of fictitious firm 'Jai Ambey' on the direction of their CMD. 6. The officers also scrutinized the records recovered from the related premises of M/s KIL, which include Franchisees Agreement, Annual Reports / Balance Sheets of M/s KIL, data retrieved from the laptop/pen drives/ CPUs and ST-3 Returns for the corresponding period i.e. April, 200 to September, 2008. The laptop/ pen drives/ CPUs were also forwarded to the Government Examiner of Questioned Documents [GEQD], Hyderabad. The forensic report/data recovered by GEQD reflected much high figures of receipt of royalty during the period from 01.04.2008 to 08.10.2008, as co....
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.... 1231@Rs. 150 5. 31-May-08 Radhey Radhey (new a/c) 389 3904 Travelling Gurgaon 3904 6. 23-Jun-08 Radhey Radhey (new a/c) 470 185866 Being Cheque no. 633068dt. 19.06.2008 received for royalty 185866 7. 30-Jun-08 Radhey Radhey (new a/c) 574 2986 Debit Note Travelling Gurgaon 2986 8. 30-Jun-08 Radhey Radhey (new a/c) 599 449580 Royalty from Radhey Radhey, Kanpur 449580 9. 11-Jul-08 Radhey Radhey (new a/c) 660 9000 Being cash received royalty 9000 10. 17-Jul-08 Radhey Radhey (new a/c) 707 130000 Being cash received for royalty 130000 11. 29-Jul-08 Radhey Radhey (new a/c) 740 337080 Being Cheque no. 63....
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....into with M/s KIL and also submitted the attested copy of bills raised by M/s KIL and party ledger of M/s KIL for the period of May, 2008 to Sep, 2008. Further going through the entries recovered by GEQD, Hyderabad and alleged to be related to his unit, he expressed his inability to explain difference between aforesaid two accounts/ ledger. He stated that payments of royalty to M/s KIL had been made through Cheque only and he is unable to give any explanation regarding cash entries given in data recovered by GEQD, Hyderabad. 10. Subsequently, SCN dated 03.06.2013 was issued to the Appellant No.1 proposing demand of wrongly availed cenvat credit of Rs.1,86,15,736/- alongwith equivalent amount of penalty and a separate penalty of Rs.50 lakhs each on Appellant No.2 & Appellant No.3. The sole basis of the allegation of clandestine clearance upon the Appellant No.1 and other Appellants was the difference shown in the GEQD report and the invoices raised by M/s KIL upon the Appellant No.1 alongwith ER-1 filed by the Appellant No.1. It is the case of the Department that the increased value of royalty shown in the GEQD report are the actual value of royalty and therefore, high quantity o....
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....ppeals filed by the Appellants being devoid of any merits. 18. Heard both the sides and perused the appeal records. 19. We find that the fact that the Appellant ever paid a higher amount of royalty to M/s KIL is not factually correct and established, the fact that the Appellant manufactured and cleared the higher quantity of goods corresponding to such alleged higher payment of royalty is not established or proved. 20. Further, there is neither any evidence of any excess consumption of electricity nor any evidence whatsoever and howsoever with regard to any clandestine procurement of raw materials or of production of any excess TMT Bars, use of labour, transporter, etc. No evidence regarding buyers of such alleged clandestine manufactured goods or any receipt of consideration against such alleged clandestinely manufactured goods. Thus, without adducing any evidence in support of such facts, a charge of clandestine removal cannot be sustained merely on assumption and presumption due to such alleged higher amount of royalty recorded by M/s KIL, where even correctness and truthfulness of such recording itself is not established. 21. Reliance in this regard is placed upon t....
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....Cement to the said parties. We are satisfied that the first appellate authority has rightly deleted the addition and cancel the penalties. Hence, we hereby set aside the impugned order passed by the Tribunal and restore the order passed by the first appellate authority, along with the reasons mentioned herein." 22. The above-mentioned judgment of the Hon'ble High Court has been relied by the Tribunal in the matter of Giriraj Irosteel Company Pvt. Ltd. v. CCE, Meerut- II, 2019 (370) ELT 1649 (Tri. - Alld), wherein the facts were similar to the present case framed based on the same facts of alleged recording of higher royalty by M/s KIL and the Tribunal set aside the demand by holding as follows : "Examiner of questioned documents only establishes that such data was maintained by M/s. KIL. We note that such maintenance of data by representative of M/s. KIL does not establish actual payment by the appellant. No evidence of actual payment has been brought on record by Revenue. Further, as held by Hon'ble Allahabad High Court that clinching evidence of the nature of purchase of raw material, use of electricity, sale of final products, clandestine removal and the more flowbac....
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....ary value and thus charge cannot be confirmed based on it : computer printouts are not admissible as per Section 36B of the Central Excise Act, 1944 read with section 65B of the Indian Evidence Act. 27. This Tribunal in the matter of CCE, Patna v. M/s Dadiji Steel Limited, 2023 (6) TMI 1241 - CESTAT KOLKATA has upheld the following finding of the impugned order in which the Adjudicating Authority has specifically held, in the same set of facts where demand was raised based on the same documents which were related to the alleged royalty received by M/s KIL: "From the above, it is manifest that Section 36B of the Act stipulates that a statement contained in a document and included in a printed material produced by a computer (computer printout) shall be deemed to be a document for the purpose of the Act and Rules made thereunder and shall be admissible in any proceedings thereunder, if the conditions mentioned in sub-section (2) and the other provisions contained in this Section are satisfied in relation to the statement and the computer in question. Further Section 36B(2)(a) of the Act provides the conditions with respect to the computer printouts that the computer print....
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.... (All.), wherein it has been held as follows: "16. We, therefore, have no hesitation in holding, that there is no requirement in the Act or Rules, nor do the principles of natural justice and fair play require that the witnesses whose statements were recorded and relied upon to issue the show cause notice, are liable to be examined at that stage. If the Revenue choose not to examine any witnesses in adjudication, their statements cannot be considered as evidence. However, if the Revenue choose to rely on the statements, then in that event, the persons whose statements are relied upon have to be made available for cross-examination for the evidence or statement to be considered." 33. The Principal Appellant was regularly filing ER-1 Returns and all the facts were within the knowledge of the Department. Further, SCN has not shown any act done by the Appellants, which proves the intention of evasion of Duty. Further there is not a murmur as to what were the various commission or omission on the part of the Appellants in Order to invoke in the First proviso to Section 11 A(1) of the Central Excise Act, 1944.That on the basis of record recovered from the third party and with....