Custom, Excise & Service Tax Tribunal
Yes vs Represented By : Shri Willingdon ... on 31 October, 2014
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad Appeal No. : E/399,400/2008 Arising out of : OIO-02/MP/VAPI/2008 dated 22.01.2008 Passed by : Commissioner of Central Excise & S.T., Vapi For approval and signature : Honble Mr. H.K. Thakur, Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Appellant (s) : M/s. Padmavati Tubes Shri Chandulal M. Vohera Represented by : Shri Willingdon Christian, Advocate Respondent (s) : Commissioner of Central Excise & S.T., Vapi
Represented by : Shri Govind Jha, A.R. CORAM :
Honble Mr. H.K. Thakur, Member (Technical) Date of Hearing : 19.09.2014 Date of Decision : 31.10.2014 ORDER No. A/11868-11869/2014 Dated 31.10.2014 Per : Mr. H.K. Thakur;
These appeals have been filed by the main appellant M/s. Padmavati Tubes, Umbargaon, Valsad and Shri Chandulal M. Vohera, Power of Attorney & authorised signatory of the main appellant, against the OIO No. 02/MP/VAPI/2008 dated 22.01.2008 passed by Commissioner of Central Excise & Customs, Vapi. Present order is passed as a result of remand order No. A/1161-1165/WZB/AHD/2007 passed by this bench wherein adjudicating authority was asked to decide the matter in de-novo proceedings after giving proper opportunity to the appellant.
2. Shri Willingdon Christian (Advocate) appearing on behalf of the appellants argued that a case of clandestine manufacture and clearance of excisable goods was made against the appellants on the basis of 8 note books recovered from the appellants during the search operations. These diaries contained details like date wise accounts of cash, stock of finished goods, raw material receipts, production related data, delivery of finished goods etc. for the months April to November 1997. That visiting officers did not record anything regarding shortages/ excess of finished goods/ raw materials etc. while recording the Panchnama. That Shri Chandulal M. Vohera, Power of Attorney holder and authorised signatory of the main appellant vide statement dated 24.11.1997 deposed that the eight note books recovered from main appellant were maintained by their invoices, employees and by himself and that he is not able to show any Central Excise invoices for the remaining finished goods sent outside the factory as per the said note books as appellants did not prepare any invoices for delivery of said goods and did not pay any Central Excise duty thereon. That Shri Parvez D. Zack, Partner of M/s. Ahur Mazda Roadway has produced 50 Lorry Receipts (LRs) vide his statement dated 28.11.1997 out of which 24 LRs find mention in the said eight note books and covered 49864.9 Kgs of raw material representing 30% of total quantity of raw material recorded in the eight note books. That by a further statement dated 04.12.1997 Shri Chandulal M. Vohera also deposed that some entries in the said eight note books also related to trading activities at Mumbai. That certain other statements of persons who sent the raw materials and received finished goods were also recorded. It was the case of the Learned Advocate that the demand is solely based upon the despatches of finished goods mentioned in the said eight note books, as mentioned in Annexure C-1 to C-8 of the show cause notice. That the statements given by the concerned persons were retracted. That the data of despatches in the said eight note books also contained despatches of certain trading firms at Mumbai as per statement dated 04.12.1997 of Shri Chandubhai M. Vohera. That there is no corroboration of extra raw materials procured by the appelalnts for making alleged clandestine manufacture and their subsequent clearances on which duty has been demanded. That no excess raw materials/ finished goods are seized anywhere in these proceedings. That out of 50 LRs as per statement of Shri Parvez D. Zack, Partner of M/s. Ahur Mazda Roadways, only 24 LRs were found mentioned in the eight note books. That no investigation was made for the remaining 26 LRs. It was also argued that eight note books also contained names of other transporters which were not investigated by the officers. That these details of other transporters in the eight note books mean that other trading goods data was also mentioned in these eight note books. As an alternative submission Learned advocate argued that even if on merits the case is not considered in their favour, appellants will be eligible for the cenvat credit of raw materials and will also be eligible for exemption under Notification No. 7/97-CE dated 01.3.1997.
2.1 Learned advocate also argued that data in the eight note books recovered is not reliable because on the date of search (24.11.1997) the physical stock of finished goods as per statutory records with the appellant was 28.9 MT whereas as per the note books the stock were 4328Kgs of raw materials + 17,225Kgs of works in progress and finished stock was Nil. It was further argued that as per annexure C-1 to C-8 of the show cause notice, 185 MT of finished goods were cleared whreas the raw material consumed as per B-1 and B-8 of the show cause notice comes to 169MT. That it is impossible to make 185MT of finished goods from 169 MT of raw material when processing/ burning loss itself is 18 to 20%. It was further argued that there is no corresponding increase in the consumption of electricity during the relevant period. That no cross-examination of the persons whose statements were relied upon, was allowed, therefore, as per Section 9D of the Central Excise Act, 1944, the relied upon statements can not be accepted as a piece of evidence against the appellants.
3. Shri Govind Jha (AR) appearing on behalf of the Revenue defended the order passed by the adjudicating authority. In the written submissions learned AR emphasised the oral and documentary evidences indicated in the show cause notice and argued that statements of Shri Chandulal M. Vohera of the appellant were recorded over a period of two years and he could not produce any evidence of trading goods and also did not bring any retraction made to the knowledge of the investigation. Learned AR relied upon the following case laws:-
(a) ESS Jay Poly Films (P) Limited [2010 (249) ELT 575 (Tri. Del.)]
(b) Pushpanjali Steel Alloys P. Limited [2004 (166) ELT 59 (Tri. Del.)]
(c) Systems & Components P. Limited [2004 (165 ELT 136 (SC)]
(d) Paras Steel Inds. [A/11709-11710/2014 dated 04.07.2014]
(e) Tulip Lamcraft P. Limited [A/11185-11186/2014 dt. 04.7.2014]
(f) Neha Prints [A/11536-11540/2014 dt. 25.08.2014]
(g) Devi Dass Garg [2010 (257) ELT 289 (Tri. Del.)]
(h) Kalvert Foods India Pvt. Limited [2011-TIOL-76-SC-CX]
(i) Shalu Dyg. & Ptg. Mills [2003 (152) ELT 352 (Tri. Mum.)]
(j) Umiya Chem Intermediate [2009 (239) ELT 429) (Guj)]
(k) MR Tobacco Pvt. Limited [2006 (202) ELT 64 (Tri. Del.)]
(l) MR Tobacco Pvt. Limited [2008 (228) ELT 171 (Del.)]
(m) Somani Iron & Steels Limited [2011 (270) ELT 189 (All.)]
(o) Somani Iron & Steels Limited [2012 (277) ELT A26 (SC)]
4. Heard both sides and perused the case records including the written submissions made by the Revenue. Appellants have mainly filed these appeals on the grounds that the entire case has been booked on the basis of eight note books recovered during investigation. One of the arguments taken by the appellants is that the said eight note books were recovered from the residence of Shri Chnadulal M Vohera and not from the factory premises. It is not appreciated as to what difference it will make when appellants are not disputing the correctness of the facts stated in these eight note books when the same were maintained by either the appellants or their employees. In the initial statements given appellants confessed to have manufactured and cleared goods mentioned in the eight note books. In between appellants also argued that the said eight note books also contained the goods under trading activities done by them. Adjudicating authority has given detailed findings in paras 7.4.1 to 7.4.6 of the adjudication order as why the explanation given by the appellants are not acceptable. It is also observed from the case records that suppliers of some of the raw materials, who received the finished goods have confirmed the correctness of the entries made in the eight note books maintained by the appellant. Therefore, the case is not merely made on the basis of few confessional statements but also on the basis of private note books which are further corroborated by the statements of some of the raw materials suppliers. It is a well accepted principle now that department is not required to establish a case with mathematical precision as per the case laws relied upon by the learned AR. Arguments on retractions, cross examination of witnesses etc. have been elaborately deliberated by the adjudicating authority in paras 7.4 (III), to 7.4 (v) and 7.5 of the order dated 22.01.2008 passed by the adjudicating authority and I agree with the findings of the adjudicating authority. In view of the above, I do not find any justification in interfering with the order passed by the adjudicating authority and accordingly, appeals filed by the appellants are required to be rejected.
5. Appeals filed by the appellants are rejected.
(Order pronounced in the Court 31.10.2014) (H.K. Thakur) Member (Technical) .KL 6