Custom, Excise & Service Tax Tribunal
M/S Bhewani Shankar Castings Ltd vs Commissioner Of Central Excise, ... on 29 June, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL PRINCIPAL BENCH AT NEW DELHI COURT NO. Appeal No. E/1118 & 1142/05 (Arising out of Order-in-Appeal No. 616-617/ce/jal/2004 dated 30.12.2004 passed by the Commissioner of Central Excise (Appeals), Jalandhar). For approval and signature: Honble Dr. Chittaranjan Satapathy, Member (Technical Honble Shri Ashok Jindal, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== M/s Bhewani Shankar Castings Ltd. Shri Murli Manohar, Ex-MD Appellants Vs. Commissioner of Central Excise, Jalandhar Respondent Appearance: Shri Sudhir Malhotra Advocate for Appellants Shri B.L. Soni DR for Respondent CORAM: DR. CHITTARANJAN SATAPATHY, MEMBER (TECHNICAL) SHRI ASHOK JINDAL, MEMBER (JUDICIAL) Date of Hearing: 29.06.2010 Date of Decision: .2010 ORDER NO. Per: Ashok Jindal
In these appeals, the appellants are challenging duty, interest and penalty confirmed against them on the charges of clandestine removal of the goods.
2. The brief facts of the case are that on information, preventive staff of Central Excise conducted investigation against the appellants and it was alleged that during the period June, 97 to July, 98 had cleared a quantity of 891.90 MTs of Ingots/Billets in vehicle No. PCR-4785 on which the appellant No. 1 had paid octroi as per octroi records. On comparison, it was found that corresponding to most of the consignments of ingots/billets mentioned in octroi receipts, no Central Excise invoice had been issued by the appellant No. 1. The duty amount was worked out to Rs.14,66,445/-. It was further observed that appellant No. 1 had manufactured and cleared 106.795 MTs of Ingots/Billets involving Central Excise duty of Rs.1,61,598/- under parallel set of invoices which were subsequently destroyed by them. A show-cause notice was issued for recovery of Central Excise duty of Rs.16,28,043/- alongwith interest and penalty alleging therein that during the period 1997-98 & 1998-99, the appellant No. 1 had been indulging in the suppression of actual production of the MS Ingots/Billets manufactured in their factory and cleared the same clandestinely without their accountal in the statutory record and without duty paying invoices. Penal action under Rule 209A of the Central Excise Rules, 1994 was also proposed against the appellant No. 2 as he was looking after the affairs of the appellant No. 1. In adjudication, the adjudicating authority confirmed the duty demand of Rs.6,96,198/- along with interest against appellant No. 1 and dropped the demand of Rs.9,31,845/- which pertained to other goods not manufactured by the appellant no.1. A penalty of equal amount under Section 11AC was also confirmed along with a penalty of Rs.1 lakh under Rule 173Q of the erstwhile Central Excise Rules, 1944 and a penalty of Rs.50,000/- was also imposed on the appellant No. 2 under Rule 209A of erstwhile Central Excise Rules, 1944. The same were confirmed by the lower appellate authority. Aggrieved from the same the appellants are before us.
3. Shri Sudhir Malhotra, learned Advocate appearing on behalf of the appellants submits that the whole case has been made out against the appellants only on the basis of octroi receipt pertaining to one Truck No. PCR-4785, which is alleged to be owned by the appellant No.1 as stated by Shri Sarabjeet Singh, Driver. He denied that the appellants are the owner of the truck. He further submitted that as per the octroi receipt, there were mention of River sand, Iron goods, Nut Bolt, M.S. Angel, Pig Iron, Billet but the appellants are manufacturer of M.S. Ingots only. Further more, the whole demand is confirmed on the basis of the statements of two ex-employees of the appellants namely, Shri Sarabjeet Singh and Shri M.M. Saini after four years. Nothing has been brought as corroborative evidence in support of the allegation made against the appellants in the show-cause notice. The appellants never cleared any goods clandestinely. Moreover, no investigation was made to the buyers, with regard to the production capacity of the Ingots/Billets and procurement of raw material, consumption of electricity etc. to arrive at the conclusion of clandestine removal of the goods. No credence can be given to the statements of ex-employees without any corroboration. The onus to prove evasion of duty or clandestine removal of the goods lies on the department, which the department has failed to do so. Hence, the appeal be allowed with consequential relief.
4. On the other hand, the learned DR reiterated the impugned order and submitted that the statements given by the employees of the appellants are more relevant in this case and it was not denied by the appellants that they were not their employees during the relevant time. Hence, the impugned order is justified and sustainable.
5. Heard both sides. We have gone through the submissions made by the learned Advocate and the records before us.
6. As the application for stay of demand was dismissed by this Tribunal on 28.04.2004, after ascertaining the compliance we are proceeded to decide the case on merit.
7. The Revenue has made out the case against the appellants on the basis of the octroi receipt. Both, Shri Sarabjeet Sing, Driver and Shri M.M. Saini, Ex-GM have stated that the truck, which used to transport the impugned goods bearing registration No. PCR-4785 belongs to the appellants, which they have sold in 1998 and the demand is also based on the octroi receipt obtained by the department of the vehicle in question. We have seen the sample octroi receipt, where it bears the transportation of M.S. Ingots and Ingots/Billets. As the appellants are the manufacturer of M.S. Ingots, octroi receipt pertain to iron goods, Nut Bolt, Pig Iron, Billet etc does not belongs to the appellants. This fact confirms that the impugned truck was not wholly used by the appellants. We have seen the show-cause notice also. In show-cause notice the department has also relied on the statement of Shri Murli Manohar (one of the appellants). Shri Murali Manohar in his statement categorically denied that the impugned truck belongs to the appellants firm. Moreover, he has stated that for local transportation they used to take service of the Pal Transport Company and Sharma Transport Company. No enquiry has been made to these transporters whether the impugned truck belongs to them or not. He has categorically stated that the appellants firm used to transport goods through these transport companies and the goods supplied to the persons were also not interrogated by the Department during the course of investigation although all the four goods recipients were based in Jalandhar only. From the facts, it is clear that the whole of the octroi receipt does not belong to the appellants goods and it is also not denied by the appellants that their goods never transported by the vehicle in question. Hence, we are of the opinion that whole of the octroi receipts do not belongs to the appellants goods. We have also seen some of the invoices placed on record by the appellant, which bears No. of the Truck in question as transporting vehicles.
8. Apart from these octroi receipts, invoices and the statements of the two ex-employees, department has not produced any evidence in support of their allegations such as the statement of the goods recipients/ transporters from where the raw materials were procured, electricity consumption etc. Moreover, the department failed to bring out on record that who was the owner of the truck in question at the relevant time as it is specifically denied by the appellants that they are not the owner of the truck, which is necessary in this case. Nothing investigated by the department for procurement of the raw materials, electricity consumption and where the goods were sold. No other statement has been recorded. In fact, the investigation was not done properly. In the absence of proper investigation and corroborative evidence, the charges of clandestine removal are not sustainable.
9. With these observations, we do not find any merit in the impugned order, the same is set aside and the appeals are allowed with consequential relief, if any.
(Pronounced in Court on .)
(Chittaranjan Satapathy) (Ashok Jindal)
Member (Technical) Member (Judicial)
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