TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 443
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....49,70,691/- against the respondent. The appeal also seeks imposition of penalty on CHPL equivalent to the demand dropped. The Ld. Commissioner has also confirmed the demand of Rs.13,81,70,230/- along with interest and imposed equal amount of duty as penalty against the respondent, in the impugned order. However, no appeal has been filed against the demand confirmed in the impugned order against them by CHPL. 1.1. Excise Appeal No. 76740 of 2016 has been filed by the Commissioner, Central Excise & Service Tax, Jamshedpur against non-imposition of penalty on M/s. Ratangarva Industries, Plot No. NS-36 (P)/37, Near Industrial Estate, Adityapur, SaraikelaKharsawan, Jharkhand (herein after referred as RI) in the Order-in-Original No. 01/Commr./2016 dated 06.05.2016 passed by the Ld. Commissioner, Central Excise & Service Tax, Jamshedpur. 1.2. Excise Appeal No. 76741 of 2016 has been filed by the Commissioner, Central Excise & Service Tax, Jamshedpur against not imposing penalty on Shri Sudhir Kumar Singh, Authorised Representative of RI, in the Order-in-Original No. 01/Commr./2016 dated 06.05.2016 passed by the Ld. Commissioner, Central Excise & Service Tax, Jamshedpur. 1.3. As ....
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....y had not given M/s. RI on rent to M/s. CHPL and M/s. RI did not receive any charges from M/s. CHPL. They were running M/s. RI for their own manufacturing purpose. The investigating officers found his statement contradictory to the statement of Sunil Kumar Vajpayee. The statement of other persons were recorded wherefrom an inference has been made by the officers that the respondent was also clearing the goods manufactured at M/s. RI clandestinely. 2.3. On completion of the investigation, a show cause notice was issued to the Respondent CHPL demanding central excise duty of Rs.16,31,40,921/-, including Cess. 2.4. On adjudication, the Ld. Adjudicating Authority has passed the Order-in-Original No. 01/Commr./2016 dated 06.05.2016, wherein he has held that there was no independent corroborative evidence to show that M/s. Kalimati Steel and M/s. RI are the same. He also observed that the seized documents do not speak about M/s. Ratnagarva Industries. Accordingly, he dropped the demand of duty raised against RI and refrained from imposing any penalty on Shri Sudhir Kumar Singh, Authorised Representative of RI. 2.5. Aggrieved against the dropping of the demands Revenue has filed ....
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....Reply of question no. 7) stated that Sudhir Kumar was the owner of RI, Kalimati and Chandrakanta Dharmkanta and he used to report to Sudhir Kumar Singh for his work. Therefore, the statement of Sri Sudhir Kumar further corroborates the statement of Sunil Kumar Bajpai that the RI and Kalimati are same. (vi) Sri Bimlesh Kumar Ojha in his statement dated 22.03. 2013 in reply to question number 27 stated that the document No. 01/DGCEI/JRU/BKO/13. 02/DGCEI/JRU/BKO/13 and 03/DGCEI/JRU/BKO/13 (Annexure 134, 13B and 13C of the SCNI was related to Rl whereas "Kalimati" is written on these document which corroborates that "Kalimati and RI are the same Hence the statement of Bimlesh Kumar Ojha further corroborates the statement of Sunil Kumar Bajpai But the Adjudicating Authority failed to appreciate this fact. (vii) As discussed in the para 64 of the SCN on perusal of the Inward Outward report for the period 25.12 2012 to 31 12 2012 recovered and seized from the office of CHPL and the Inward Outward Report of R1 recovered and seized from the residence of Bimlesh Kumar Ojha (refer para 6 3 of the SCN) it is seen that these were just the carbon copy of the same report for the....
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....r Singh towards evasion of Central Excise Duty by suppressing the quantity & value of clearances. Further, the fact that Sri Amit Gupta, director of CHPL at the time of search of his residence tried to elope & destroy the evidences also put his conduct in question. This is also known to all that taxation frauds are cold blooded & executed in planned manner unlike criminal offences which are mostly committed in the heat of a moment. Thus the planners of the taxation frauds would take all possible steps to not to let all the evidences & documents to become available to the investigator The investigator get only those evidences which despite all efforts still could not be destroyed by the planners. And thus such offences are difficult to be proved with a mathematical precision. However, the investigation can only expose the master minds behind such frauds established on the basis of the circumstantial evidences and available documents with such a degree of probability that any prudent mind on its basis believe in the existence of the facts. Here in this case, the investigation has very well established the said probability as the entries in several documents seized from the office/fac....
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.... recorded form some persons in support of their contentions. They want to cross-examine the persons whose statements are relied upon against them, however, the Ld. Adjudicating Authority did not allow their request for cross-examination. Thus, the Respondent submits that the statements relied upon in this case are not admissible evidences. Once these statements are removed, then there is no other evidence to substantiate the allegations against the Respondent. In this regard, the Respondent cited the statement of the Authorised Representative of M/s. RI, wherein he has categorically stated that they are independent unit. Accordingly, the Respondent submits that there is no evidence available on record to substantiate the allegation that CHPL was clearing the goods manufactured by M/s. RI. 5. CHPL have inter alia raised following points in their defence: (i) That CHPL, KYS and RI are independent manufacturers, duly registered with the Central Excise Department, having their independent factories located at different geographical locations. All of them are working under Self-Assessment and are independent assessees. As such, it is highly improper to allege that CHPL has c....
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....g separate registrations. There is no provision under law to demand duty from CHPL for the excisable goods said to have been manufactured by KYS and RI. However, in the present case duty has been demanded from CHPL for the goods allegedly manufactured and cleared by RI, which is legally not permissible. (xi) That Sudhir Kumar Singh, Authorized Representative of RI, has stated that they had not given the RI on rent to CHPL and RI did not receive any charges from CHPL; rather they were running RI for their own manufacturing. (xii) CHPL cannot be made responsible for KYS and RI not maintaining daily stock account, Cenvat registers, making payment of duty through PLA/Cenvat, issuing invoices separately under their own name etc. Thus, duty cannot be demanded from CHPL on behalf of manufacture and clearance, if any, undertaken by KYS & RI. (xiii) That neither DGCEI officers nor the preventive wing of the Commissionerate or the Range or the Division have made any effort to contact the transporters, the dealers, the buyers of the alleged clandestinely manufactured and removed goods from three different factories. Even after the search and seizure no effort has be....
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....r rejecting the appeals filed by the Revenue. 7. Heard both sides and perused the appeal documents. 8. We observe that the entire demand of Central Excise Duty of Rs. 16,31,40,921/ has been demanded from CHPL, on the allegation that CHPL manufactured the goods in the premises of KYS and RI and and hence CHPL has been made responsible for the alleged manufacture and clandestine clearance of goods from the factory premises of KYS and RI. Thus, the entire duty has been demanded from CHPL. We observe that CHPL, KYS and RI are independent manufacturers, duly registered with the Central Excise Department, having their independent factories located at different geographical locations. All of them are working under Self-Assessment and are independent assessees. When all the manufacturers are independent manufacturers of excisable goods, assessed to VAT, Factory Act, independent in paying Service tax holding independent PAN Cards and effecting clearances independently under the cover of Cenvatable Invoices, it requires irrefutable evidence to allege that CHPL has clandestinely cleared goods manufactured at the factory of other manufacturers. 8.1. In this regard, we find that the Ld....
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....find that the whole demand has been made on the basis of the Pen Drive recovered from the office premises of CHPL alleged to be in the presence of Annu Singh, Accountant, Sneha Kumari and Departmental officers. We observe that subsequently the pen drive was connected to a computer and print outs were taken. In this regard, we observe that the admissibility of Computer printouts as an evidence has to be strictly judged subject to compliance of Section 36B of the Central Excise Act. It is on record that the provisions of Section 36B are not complied with in this case. As the provisions of Sub Section 2 of Section 36B has not been satisfied, the hold that the printouts taken from the pen drive cannot be relied upon as admissible evidence in this case. 8.4. Regarding dropping of the demand raised in respect of the goods said to have been manufactured at RI and cleared by CHPL, we observe that the Ld. Adjudicating Authority relied on the statement of Shri Sudhir Kumar Singh, authorized representative of RI, wherein he has categorically stated that they had not given M/s. RI on rent to M/s. CHPL and M/s. RI did not receive any charges from M/s. CHPL. They were running M/s. RI for thei....
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.... 8.6. We fully agree with the above findings of the Ld. Adjudicating authority. Accordingly, we observe that the Ld. Adjudicating authority has dropped the demand of duty raised from CHPL, in respect of the goods said to have been manufactured at RI and refrained from imposing any penalty on Shri. Sudhir Kumar Singh, Authorised Representative of RI. In this regard, we do not find any infirmity in the findings of the Ld. Adjudicating authority on this issue. 8.7. We observe that demand of central excise duty cannot be made on the basis of assumptions and presumptions or preponderance of probabilities. It is a serious allegation which requires cogent corroborative evidences to substantiate the allegation of clandestine clearances, which are absent in this case. We observe that the said issue has been examined by the Hon'ble High Court of Allahabad in the case of Continental Cement Company v. Union of India [2014 (309) E.L.T. 411 (All.)], wherein it has been held as under: - "10. We have heard the learned counsel for the parties and gone through the material available on record, from which it appears that Shri Shubhashis Dev, Government Examiner of questioned documents, ....
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....tation payment, then manufacturing of extra goods is not possible. No purchase of raw material out side the books have been proved. 16. In the light of the above discussions and considering the totality of the case, we are satisfied that no case is made out for extra so called clandestine sale of the Portland 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. 17. In the result, all the appeals filed by the appellants are hereby allowed." 8.8. Further, the Tribunal in Nova Petrochemicals v. Commissioner of C.Ex., Ahmedabad-II [Final Order Nos. A/11207-11219/2013 dated 26.09.2013], while dealing with a similar issue, has observed as follows:- "40. After having very carefully considered the law laid down by this Tribunal In the matter of clandestine manufacture and clearance, and the submissions made before us, it is clear that the law is well settled that, in cases of clandestine manufacture and cle....
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....dence has been brought on record to corroborate the above averment of Sunil Kumar Bajpayee. Merely on the basis of third party statement (of Sunil Kumar Bajpayee), it cannot be held that Kalimati Steel is same as RI. Rather, it is found that there are a number of evidences which contradict the above. First of all, the seized pen drive, print-outs taken therefrom and other seized documents relied upon in this case, on the basis of which demand of Central Excise duty on account of Rl has been raised on CHPL in the impugned SCN, talk of Kalimati/Kalimati Steel/KL, and not M/s Ratnagarva Industries (RI). Further, Sudhir Kumar Singh, authorized representative of RI, has denied, in his statement recorded under Section 14 of CEA that Kalimati Steel is his concern. In his statement recorded on 05.06.2013, the said Sudhir Singh has stated that RI was a proprietorship firm and its proprietor Mr Arun Kumar do not live in Jamshedpur and so he looks after day-to-day activities of the said unit; that Rl is not registered in Central Excise; that commercial production in RI started sometime in 2011-12; that Ri is registered under Commercial Tax (Sales Tax); that Rl has no business relation with an....
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.... he works on the Chandrakanta Weighbridge for six months and goods of JMT, Arati Udyog, Kalimati, G.P.T. Rajesh and Amit Gupta are weighed on his weighbridge. He has also talked about Kalimati only in his voluntary as well as under Section 14 statement. In his voluntary statement, he has stated that Rajeshji used to run Kalimati earlier while H.C Jaiswal is running the same presently ie on 22.02.2013. He has further stated that Rajesh and Amit Gupta are partners, which is found to be factually incorrect since Amit Gupta and Sunil Kumar Bajpayee happens to be Directors of CHPL. Further, the aforesaid Sudhir Kumar Singh, authorized representative of RI, has again reiterated in the defence reply dated 29.03.2016 that Rl has no relation whatsoever with CHPL, KSPL, Amit Gupta or Bishendra Singh; that Rl is an unit working independently as per law, and that the documents and statement given by me to DGCEI during investigation will reveal that there is no relation whatsoever between him or RI and CHPL, KSPL, Amit Gupta or Bishendra Singh. It is also seen that the daily Inward Outward reports do not contain any remark or reference to suggest that the same relate to Rl. The other seized doc....