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TaxTMI 
TaxTMI 
2025 (2) TMI 1962
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....''Scouring powder' falling under Chapter Heading 3401 of first schedule to Central Excise Tariff Act, 1985, under the brand names duly registered and owned by the Appellant. The Appellant had obtained Central Excise Registration on 11.02.2010 and was submitting ER-1 returns to the Department on monthly basis showing 'Nil' production and clearance. During the period 2010-11, the Promoters of the Appellant Company were manufacturing Detergent Cake and Powder in 2(two) other factories as under: (i) M/s. Maharaja Industries Unit-I, Partnership Firm, situated at 2051/A, Lokikere Main Road, Davanagere. This factory commenced manufacture of Detergent Cakes in 1999 and continued in 2011-12. The firm was the registered owners of the brand names SHASHI, SAVAAL and SHALINI in respect of Detergent Cake and Detergent Powder/Scouring Powder, and the factory was registered with the Central Excise, clearing finished products on payment of duty and submitting monthly ER-1 Returns; (ii) M/s. Maharaja Industries, Unit-II, situated at KIADB Industrial Area, Opp. Bakkeswara Rice Mill, Lokikere Road, Davanagere was manufacturing Detergent Powder/Scouring Powder from....
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....om 12/2010 to 3/2011 as detailed in Annexure-III to the SCN No 04/2012-13 dated 17.05.2012 with Interest, vii) Penalties of Rs. 3,49,11,062/ and Rs. 5,40,132/- on M/s. Maharaja Soaps Industry Private Limited, under Section 11AC of the Central Excise Act, 1944,. viii) Personal Penalty of Rs. 15,00,000/- on M/s. Maharaja Soaps Industry Private Limited, as proposed in the SCN No. 30/2011-12 dated 21.09.2011; ix) Personal Penalty of Rs. 50,00,000/- on Shri. M E Raviraj, Managing Director under Rule 26; x) Personal Penalty of Rs. 10,00,000/- on Smt. E Shashikala, Director of Appellant Company under Rule 26; xi) Personal Penalty of Rs. 3,00,000/- on Shri M. T. Puttaraju, Proprietor of M/s Keerthana enterprises, under Rule 26; xii) Rs. 5,00,000/- on M/s Maharaja Industries, under Rule 25 of Central Excise Rules, 2002 for contravention of the provisions of the Rules. Aggrieved by said order, present appeals were filed before the Tribunal. 4. When the appeals came up for hearing, the Ld. Counsel for the Appellant submits that the entire allegation is unsustainable since, the goods alleged to have been produced by the Appellant comp....
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....dities Rules, 2011. The Ld. Counsel further submits that the mixing plant and power plant were in various stage of installation during the visit of the officers to the Appellant's factory in 29.03.2011. The erection, installation and commissioning were completed only in May/June 2011. In the absence of mixing and powder plant during 2010-2011, it was technically not feasible to manufacture commercial quantity of detergent cakes and detergent powder as alleged in the show cause notice. 6. As regards allegation of clandestine removal, the Ld. Counsel for the Appellant submits that the Adjudication authority in Para 15.10 of the impugned order held that the details contained in the computer printout pertains to clandestine removal of goods manufactured and cleared by the Appellant company is sustainable on the ground that the shifting of the machines was confirmed and as per the statement recorded from various persons. However, Adjudication Authority failed to consider that investigation officer had recorded the statement from Shri. Kumar, Production supervisor on 02.03.2012 and he stated that notebook written with the assistance of causal labour includes the production of M/s. Mah....
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....ory of Appellant and purchased 4(four) packing machines for the said factory and shifting of workers. But the same did not form subject of questions by the investigation officer. The Ld. Counsel also draws our attention to the details of the delivery challan including transfer of machines from 01.03.2011 onwards and also the completion certificate dated 14.03.2011 certifying that the construction of the factory was completed with all respect on 14.03.2011. The Ld. Counsel also draws our attention to the original invoices issued by M/s. Khosla Machines, Mohali regarding supply of machines to Appellant firm, where 2(two) machines were purchased on 03.11.2010 and another 2(two) machines were purchased on 28.11.2010. Further the accessories of the machines were supplied on 31.12.2010 vide invoice No. 398. 9. As regards the finding that the Appellant had procured large quantities of Acid Slurry for use in the manufacture of Detergent Cake is contrary to Invoices and documents on record. Ld. Counsel submits that the Appellants in their written submission dated 03.05.2013 has submitted stock statements of principal inputs-Acid Slurry and Soda Ash for the period from 01.04.2010 to 31.03....
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....tement of Stocks submitted to the SBI does not show that there was production of Detergent Cake in the Appellant's factory during the period from 19.6.2010 to 29.3.2011 as quantified in the Show Cause Notice (SCN) and confirmed in the impugned order. The finding in the impugned order that the meagre stock held proves that unaccounted stock was used for manufacture and clearance of the impugned goods is made without basis and contrary to documentary evidence and is unsustainable. Learned counsel for the Appellant further submits that small quantity of goods are shown manufactured for the purpose of financial accommodation, loan, etc., and is not an evidence of manufacture and removal of goods. It is well settled that the Statements filed with the Banks are not tangible evidence of manufacture and removal of goods. The Appellants rely on the following judgments: (i) Premium Packaging Pvt Ltd vs CCE, Kanpur 2004 (184) ELT 165 (Tri - Del) (ii) Vijay Packaging Systems Ltd Vs CCE, Hyderabad 2010 (262) ELT 832 (Tri) 11. As regarding the findings in the impugned order that that there was gradual increase in consumption of electricity from December 2010 to March 2011, L....
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....on and record of stock including raw materials in Maharaja Industries Unit I & II. 13. The Ld. Counsel further submits that as per the impugned order, retracted statements were considered as admissible evidence. It is well settled law that the retracted statements cannot be relied upon without corroboration by other independent and cogent evidences which would lend adequate assurance to the Court about its voluntariness and veracity. The Appellants rely on the following judgments in this regard:- (i) Vinod Solanki Vs. Union of India -2009 (233) ELT 157 (SC) (It is trite law that evidences brought on record by way of confession which stood retracted must substantially be corroborated by other independent and cogent evidences, which would lend adequate assurance to the Court.) (ii) Pascoal Dias Vs. Collector of Customs (P) Goa 2003 (157) ELT 132 (Bom) (Even if it is held that the statement was a voluntary statement, since it has been retracted, it cannot be used unless it is corroborated by other independent evidences.) Affirmed by Hon. Supreme Court in the case of Assistant Commissioner of Customs, Goa Vs. Pascoal Dias-2011 (2....
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...., soda ash, stone powder, etc., from various suppliers and accounted the same in the said notebook showing total purchase of 3324.11 tons of chemical and the same has not been accounted in the statutory records. The act of purchase of chemicals and the accounting of the same in the said Notebook has been admitted by the Managing Director of the Company in his statement dated 20.04.2011 deposed before the officers. Further Mahazar dated 29.03.2011 drawn at the premises and registers seized from the factory premises of appellant had supported the above finding that the appellant had indeed purchased the required raw materials from various sources and without accounting the same in the statutory books, utilized the said raw materials for manufacture and clandestine removal of finished goods. 17. Heard both sides and perused the records. 18. It is an admitted fact that the sister concern of the appellant were carrying out manufacturing of the similar products over a period of time and clearing finished products on payment of duty and submitting monthly ER-1 Returns. As per the statements recorded from the suppliers of materials relied in the impugned order, they were supplying th....