TaxTMI 
TaxTMI 
2026 (4) TMI 1270
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....esentative For the remaining Respondents : Shri Shivadass & Shri Rishab. J, Advocates for the Respondents at S.No.1-4 & 1415, None ORDER PER: A.K.JYOTISHI: The Department has come in appeal against the Order-in-Original dt.30.09.2011 passed by the Commissioner of Central Excise, Customs & Service Tax, Visakhapatnam. The Commissioner, vide the impugned order, has dropped the entire proceedings initiated by the department in terms of SCN dt.08.02.2008. 2. The brief facts of the case that the department carried out certain searches and post search investigation in respect of M/s Deccan Veneers Pvt Ltd, M/s Alpine Panels Pvt Ltd, M/s Maxworth Plywoods Pvt Ltd and M/s Truwoods Pvt Ltd (commonly known as 'Truwood Group' or 'Deccan Group') ('TW group' for short) and the investigation revealed that these units had not properly accounted for the manufactured goods and indulged in clearance of goods without payment of duty and also by undervaluing the goods by way of improper affixing of grades/ brands. Multiple statements of the concerned persons were recorded and other evidences were brought on record indicating the flow back of money from various entities in respect of unde....
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....., 01.01.2003 to 31.03.2005, for which SCNs were issued in the past to TW group units and therefore, raising of notice on the same charge of undervaluation for subsequent period was not legally sustainable on the grounds of limitation and the demand for remaining period i.e., 01.04.2005 to 31.03.2007 was also not legally tenable. Finally, the adjudicating authority has held that the SCN was based on assumption, extrapolations, arbitrary conclusions, weird calculations, inadmissible evidences, incomplete investigations and non-examination of legalities involved in the issue of invoking proviso to section 11A(1) of the Central Excise Act, 1944. 4. Essentially, the department was aggrieved on the dropping of the proceedings on various grounds as according to the department, the adjudicating authority has only examined certain aspects without holistically evaluating voluminous evidence on record, which clearly established clandestine removal as well as undervaluation and flock back of money in respect of those transactions. These transactions and activities have been duly corroborated in terms of documents recovered in the course of investigation, as also, in terms of the statements....
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.... covering from August, 2005 to February, 2006. Even payments made to couriers along with code number i.e., specified currency note serial number were also collected and these code numbers were found in the SMS mails sent as retrieved from micro memory chip cards recovered from HDFC bank lockers. These facts have also been admitted by Shri G.K. Ganeriwala. There has been systematic manipulation of books of account by TW group as alleged in Para 12.4, 12.5 and 17.1 of the SCN and thereafter, there has been clear cut evidence on ploughing back of unaccounted sale proceeds of excisable goods in the form of proceeds from fictitious high sea sale of timber logs as highlighted in Para 12.04, 16.01 to 16.01.08 of SCN. Even the high sea buyers have admitted this modus operandi. He has further highlighted that there is clear cut admission of these undervalued clearances and receipts of sale proceeds by Shri G.K. Ganeriwala, Chief Executive of M/s Deccan Veneer Pvt Ltd and looking after general administration and marketing of TW group, Shri Sanjiv Agarwal, statements of Area Sales Managers, Customer of High-sea sales, Transporters of logs reportedly sold on high-sea sale basis. 6. Learned ....
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....anufacture and clearance of excisable goods, apart from non-payment of duty. 8. Learned AR has also pointed out that at the very outset, the adjudicating authority has made an observation that the records/ documents involved in this case ran into thousands of pages and further since many aspects in the SCN were not clear, recourse had to be taken repeatedly to examine the related files and even certain basic documents like panchanama seizure documents and even registers. This observation clearly shows that the adjudicating authority had certain reservation about voluminous evidence and not gone into a great detail into these evidence and especially as regards flow back of money and holding that investigation itself was incomplete and therefore, the decision of adjudicating authority itself appears to be biased. 9. Subsequently, the department, by way of additional submission, has further submitted that reference made to various previous SCNs issued by the adjudicating authority to hold that the grounds of limitation were not available as similar issues were taken up in the past by the department, the department has submitted that four SCNs referred to in Para 122 of OIO were ....
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....24 (389) ELT 308 (SC)] b) CCE, Mangalore Vs Sushil Chemicals [2008 (230) ELT 117 (Tri-Bang)] c) CCE, Chandigarh Vs Shital International [2010 (259) ELT 165 (SC)] d) Gajanan Fabrics Distributors Vs CCE, Pune [1997 (92) ELT 451 (SC)] 11. He has further submitted that the question framed by the adjudicating authority was not correct and therefore, the conclusion drawn in respect of said question is also not true reflection of the charges levied against the evidence relied upon by the department. He has further justified the observation of the adjudicating authority for dropping the proceeding on the grounds that she has made a very categorical observation after framing the question holding that these are not legally sustainable and therefore, the decision cannot be called arbitrary or without appreciating evidence on record. Further, insofar as the observation of the adjudicating authority regarding non-invocation of extended period, he has submitted that a very categorical observation has been made based on precedent SCNs covering identical issue. Hence, no fault could be found on this ground. 12. Heard both sides and perused the records. 13. At th....
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....ode and method of calculation of differential duty is not proper and is based on presumptions and suppositions. Therefore, we find that there is force in the submissions and in the grounds taken by the department that the adjudicating authority has not holistically evaluated the entire gamut of evidence in the form of statements and other documents as well as other evidence unearthed in the course of investigation pointing out to a well-planned modus operandi by the individual units commonly known as TW group for clandestine removal as well as undervaluation of excisable goods resulting in short payment of duty. 15. Even in respect of her observations on the issue of the limitation, we find that the adjudicating authority has heavily relied on the fact that in the past, SCNs were issued involving similar grounds. We find that in this case also, the department has submitted that those SCNs were based on different set of facts and were also disposed of by the appellate authority appreciating particular set of evidence and facts and therefore, that cannot become precedence for non-invocation of extended period for any future evasion. We find that there is force in this contention i....