Custom, Excise & Service Tax Tribunal
Pankaj Tobacco Pvt Ltd vs Ce & Cgst Noida on 28 November, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
(E-Hearing)
Excise Appeal No.70218 of 2016
(Arising out of Order-in-Original No.32/Commr/Noida-I/2015-16 dated
30/11/2015 passed by Commissioner of Central Excise, Noida)
M/s Pankaj Tobacco Pvt. Ltd., .....Appellant
(A-90, Sector-63, Noida)
VERSUS
Commissioner of Central Excise, Noida-I ....Respondent
(C-56/42, Sector-62, Noida) WITH I. Excise Appeal No.70223 of 2016 (Mr. Pradeep Kumar Arya, Director) II. Excise Appeal No.70219 of 2016 (Mr. Pankaj Kumar Arya, Director) III. Excise Appeal No.70220 of 2016 (Shri Deepak Sharma) IV. Excise Appeal No.70222 of 2016 (Shri Neeraj Kumar, Auth. Signatory) V. Excise Appeal No.70221 of 2016 (Shri Yogendra Kumar Sharma, Proprietor) (Arising out of Order-in-Original No.32/Commr/Noida-I/2015-16 dated 30/11/2015 passed by Commissioner of Central Excise, Noida) APPEARANCE:
Shri S.D. Gaur, Consultant for the Appellants Shri Tuleshwar Prasad, Authorised Representative & Shri Santosh Kumar, Authorised Representative for the Respondents CORAM: HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NOs.70777-70782/2024 DATE OF HEARING : 01 August, 2024 DATE OF PRONOUNCEMENT : 28 November, 2024 Excise Appeal Nos.70218-70223 of 2016 2 SANJIV SRIVASTAVA:
These appeals are directed against ORDER-in-ORIGINAL No. 32 /COMMR/ NOIDA-1/2015-16 dated- 30.11.2015 of the Commissioner, Central Excise, Noida-I. By the impugned order following has been held:-
"ORDER
1. (a) I, confirm the demand the CENVAT credit amounting to Rs. 59,225/- (Rs. Fifty nine thousand two hundred twenty five) from M/s Pankaj Tobacco Private Limited A-
90, Sector-63, Noida, under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A (10) of the Central Excise Act, 1944;
(b) I, order for recovery of interest from them under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11AA of the Central Excise Act, 1944.
(c) I, impose a penalty of Rs 59,225/- (Rs. Fifty nine thousand two hundred twenty five) upon them under Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944
2. (a) I, confirm the demand of duty of Rs. 75153/- ( Rs.
Seventy five thousand one hundred fifty three) from M/s Pankaj Tobacco Private Limited, A-90, Sector- 63, Noida under Section 11A(10) of the Central Excise Act, 1944.
(b) I, order for recovery of interest from them under Section 11AA of the Central Excise Act, 1944.
(c) I, impose a penalty of Rs 75153/- ( Rs. Seventy five thousand one hundred fifty three) upon them in terms of Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944
3. (a) I, confirm the demand of duty of Rs. 2,29,955/-( Rs.
Two lacs twenty nine thousand nine hundred fifty five) on M/s Pankaj Tobacco Private Limited, A-90 Sector-63, Noida under section 11A(10) of the Central Excise Act, 1944.
Excise Appeal Nos.70218-70223 of 2016 3
(b) I, order for recovery of interest from them under Section 11AA of the Central Excise Act, 1944.
(c) I, impose a penalty of Rs 2,29,955/-( Rs. Two lacs twenty nine thousand nine hundred fifty five only) upon them in terms of Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944.
4. (a) I, confirm the demand of duty of Rs. 1,50,02,965/- ( Rs One Crore fifty (a) lacs two thousand nine hundred sixty five only) ) on M/s Pankaj Tobacco Private Limited, A- 90, Sector-63, Noida under section 11A(10) of the Central Excise Act, 1944.
(b) I, order for recovery of interest from them under Section 11AA of the Central Excise Act, 1944.
(c) I, impose a penalty of Rs. 1,50,02,965/- ( Rs. One Crore fifty lacs two thousand nine hundred sixty five only) ) upon them in terms of Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944.
(d) I, order for appropriation of Rs. 48,26,992/- (Rs. Forty eight lacs twenty six thousand nine hundred ninety two only) deposited by them against their aforesaid duty liabilities
5. I, impose a penalty of Rs 30,00,000/-(Rs. Thirty Lacs only) upon Shri Pradeep Kumar Arya, Director of M/s Pankaj Tobacco Pvt. Ltd under Rule 26 of the Central Excise Rules, 2002.
6. I , impose a penalty of Rs 30,00,000/-(Rs Thirty Lacs only) upon Shri Pankaj Kumar Arya, Director of M/s Pankaj Tobacco Pvt. Ltd. under Rule 26 of the Central Excise Rules, 2002.
7. I, impose a penalty of Rs 5,00,000/- (Rs Five lacs only) upon Shri Neeraj Kumar Authorized Signatory of M/s Pankaj Tobacco Pvt Ltd under Ruie 26 of the Central Excise Rules, 2002 Excise Appeal Nos.70218-70223 of 2016 4
8. I , impose a penalty of Rs 5,00,000/- (Rs. Five lacs only) upon Shri Yogendra . Kumar Sharma, Proprietor of M/s Om Roadways Corporation, Main Noida Dadri Road, Salarpur. Bhangel,Nr. Police Station, Phase II, Noida under Rule 26 of the Central Excise Rules, 2002
9. I, impose a penalty of Rs 5,00,000/- (Rs. Five lacs only) upon Shri Deepak Sharma son of Shri Yogendra Sharma, proprietor of M/s Om Transport Co under Rule 26 of the Central Excise Rules, 2002
10. I , impose a penalty of Rs 10,00,000/- (Rs. Ten Lacs only) upon M/s Ghatge Patil Transport, C-9, SMA Industrial Area, Jhangirpuri, Deihi, under Rule 26 of the Central Excise Rules, 2002
11. I , impose a penalty of Rs 2,00,000/-( Rs. Two lacs only) upon Shri B. S. Kothawale Proprietor of M/s Sri Siddheswar Traders, Shop-11, Kumbharwar Shopping Centre Solapur, Maharashtra, under Rule 26 of the Central Excise Rules, 2002
12. I, impose a penalty of Rs 2,00,000/-( Rs. Two lacs only) upon Shri H. M. Kasar Proprietor of M/s Shree Sai Agencies, 299, Satakar Chal, Mangalwar Peth, Sangli Madhavnagar, Maharashtra, under Rule 26 of the Central Excise Rules, 2002
13. I, impose a penalty of Rs 2,00,000/-( Rs Two lacs only) upon Shri Manoj Kumar Patil Proprietor of M/s Siddaram Traders, Shah Peth. Bijapur, Karnataka, under Rule 26 of the Central Excise Rules, 2002.
14. I, impose a penalty of Rs 2,00,000/-( Rs. Two lacs only) upon Shri Srinivas Hegde, Proprietor of M/s Vishal Enterprises, Aditi Chamber, Hugar Oni, Hubli, Karnataka, under Rule 26 of the Central Excise Rules, 2002
15. I, impose a penalty of Rs 2,00,000/-( Rs. Two lacs only) Shri N. G. Mohan, Proprietor of M/s Sri Ram Stores, C V Excise Appeal Nos.70218-70223 of 2016 5 Complex, Station Road, Davangere Karnataka, under Rule 26 of the Central Excise Rules, 2002."
2.1 Appellant 1 is engaged in the manufacture and clearance of Flavoured Chewing Tobacco bearing the brands name of `Aradhna' Zafrani Patti, Rangoli' Zafarani Patti, 'Pritam' Zafarani Patti, 'Kiran' Zafarani Patti and Radhna' Zafarani Patti falling under Sub Heading No. 24039910 of the First Schedule to Central Excise Tariff Act, 1985, are registered with the Central Excise Department vide Registration No.AADCP3613NXM001 2.2 Shri Pradeep Kumar (Appellant 2), Smt. Kiran Devi wife of Shri Pradeep Kumar and Shri Pankaj Kumar Arya (Appellant
3) son of Shri Pradeep Kumar are the Directors of Appellant 1. Appellant 2 and Appellant 3 are looking after all the business affairs of Appellant 1. Appellant 4 is son of the agent of transporter and is loking after the business of agent. Appellant 5 is authorized signatory of the Appellant 1 and Appellant 6 is the agent of the transporter and is responsible for booking the consignments of the Appellant 1.
2.3 ln persuasion of an intelligence that Appellant 1 indulged in clandestine removal of the finished goods and evading Central Excise duty, doing off the record storage of some of the principal inputs related to their finished goods and there was strong possibility of recovery of documents, related to the evasion of the Central Excise duty from the residential premises owned by Director's of Appellant 1 or its relatives, simultaneously searches were conducted on 11.04.2012 & 13.04.2012 at the following premises
(i) A-90, Sector-63, Noida (the factory premises of Appellant 1);
(ii) 1-23, Sector-12, Noida (the residential premises owned by the Director's of Appellant 1and being used by the staff);
(iii) E-27, Sector-55, Noida (the residential premises owned by the Director of PTPL and being used by the staff) Excise Appeal Nos.70218-70223 of 2016 6
(iv) E-2, Sector-55, Noida (the residential premises owned by the Director of PTPL and being used by the staff) 2.4.1 At the time of search at factory premises, the officers physically verified the stock of the finished excisable goods lying in the factory premises of the party, as detailed in the Annexure B of the Panchnama dated 11/12.4.2012. During the verification, stock of finished goods, raw maerials, ceratin disceprancies were noted. On the basis of reasonable belief that the improper accountal of such excess stock was for the purpose of unaccounted manufacturing and clandestine ciearances of the finished excisable goods, in contravention to Rule 10 of Central Excise Rules 2002, with the intention to evade Central Excise Duty due thereon, the said goods (i.e. 102 Kg. of Aradhna Zafrani Patti No. 311 of 50 gms. contained in 10 Cartons and 85.26 Kg. of Aradhna Zafrani Patti No 311 of 200 gms. contained in 21 Cartons) were seized under Section 110 of Customs Act, 1962 as made applicable to Section 12 of Central Excise Act 1944 read with Rule 24 of Central Excise Rules, 2002 vide Seizure Memo dated 12.4.2012 and were handed over to Shri Pradeep Kumar, Director, for keeping the said goods in safe custody under Supurdnama dated 12.04.2012.
2.4.2 The physical verification of the stock of packing material was also conducted by the officers. Since the goods were not verifiable vis a vis book balance as the party was not maintaining any stock account of packing materials, the stock of packing material, i.e. empty tin containers, were detained by the officers and Shri Pradeep Kumar, Director, was suitably instructed not to deal with or dispose off the aforementioned detained goods without the prior permission of the Competent authority of Central Excise vide Detention Memo dated 12.04 2012 2.4.3 The input goods namely Raw tobacco was found short by 5449.74 Kg. valuing Rs. 3,26,984/- as per last bill of procurement. Similarly flavours and saffron were found short by 1661.505 Kg. and Spice & Herbs were found short by 1620.278 Kg., value of the same could not be ascertained as PTPL had not Excise Appeal Nos.70218-70223 of 2016 7 maintained variety wise entries in the stock register Annexure A-2 of the Panchnama dated 11/12.04.2012 2.4.5 Further, certain records were also resumed by the officers from the factory premises for further scrutiny under proper panchnama.
2.5 During the search of the Residential premises situated at 1-23, Sector-12, Noida by the officers on 11.04.2012, Shri Om Prakash, who resided, in the said premises, informed that the premises belonged to Shri Pradeep Kumar Arya Director of PTPL. He was working as Supervisor of PTPL and was residing in the said premises with his family. The officers during search of the premises recovered copies of 6 (six) GRs bearing serial Nos.14514, 14515, 14516 and 14517 all dated 20.02.2012 (in original) 14505 dated 15.02.2012 and 14508 dated 16.02.2012 (both in Xerox copies) issued by M/s G.G.Carrier, Agra Road, Jaipur. These were resumed under a proper ppanchnama.
2.6 The residential premises owned by the Director and being used by the staff of PTPL situated at E-27, Sector-55, Noida was also searched by the officers on 11.04.2012. At ground floor of the said premises, a locked garage was located. The garage was searched with the help of Shri Ram Lakhan. In the garage 18 boris, each weighing 20 Kg., containing Magnesium Carbonate were found. Since those goods were apparently to be used in making Pan Masala and were stored without any purchase document, the same were detained by the officers and Shri Ram Lakhan was suitably instructed not to deal with or dispose off the aforementioned detained goods without the prior permission of the competent authority of Central Excise. A Panchnama dated 11.04.2012. was also drawn of the proceedings conducted.
2.7 The residential premises at E-2, Sector-55, Noida was searched by the officers on 11.04.2012, however nothing incriminating was found 2.8 Premises of M/s Hariom Krishna Transport Company, Harola Market Sector 5, Noida -A follow up action was also initiated at Excise Appeal Nos.70218-70223 of 2016 8 local office of M/s G.G.Carrier, Agra Road, Jaipur situated at Harola Market, Sector 5, Noida on 13.04.2012. Thè above address was identified during the search of the Residential premises at 1-23, Sector-12, Noida by the officers on 11.04.2012 wherein copies of 6 (six) GRs issued by M/s G.G.Carrier, Agra Road, Jaipur were resumed. It was observed that M/s Hariom Krishna Transport Company, Harola Market, Sector-5, Noida was acting as an agent of M/s G.G.Carrier. There were no premises of M/s G.G. Carrier. A Panchnama dated 13.04.2012 was also drawn of the proceedings conducted and statement of Shri Rajneesh Kumar Trehan, owner of M/s Hariom Krishna Transport Company was also recorded under section 14 of the Central Excise Act, 1944 2.9 Appellant 1 vide letter Ref. No. 003/12-13 dated 30.4.2012 had intimated that they had deposited an amount of Rs. 5,00,992/- as pre- deposit against Panchnama dated 11/12.04.2012, under protest. The stock of packing material, i.e. empty tin containers, detained by the officers vide Detention Memo dated 12.04.2012 (mentioned at para 3.1 above) was seized by the Department vide Seizure Memo dated 06.07.2012 valuing Rs. 5,62,450/- as the party could not get verified the stock of packing materiai vis a vis book balance since no stock account of packing materials was being maintained by the party. The value of 50 gms. empty tin containers has been ascertained on the basis of packing material Invoice No. 219 dated 20.02.2012 issued by M/s V.M. Industries, Wazirpur, Delhi to the party and resumed from their factory premises. The value of 20 gms and 200 gms empty tin containers has been calculated proportionately on the basis of rate of 50 gm. empty tin container mentioned in the above Invoice dated 20.02.2012 2.10 Statement of Appellant 2 was recorded under Section 14 of the Central Excise Act,1944on 11.04.2012. Statements of Appellant 4, Shri Om Prakash, Supervisor of Appellant 1 & Shri Excise Appeal Nos.70218-70223 of 2016 9 Rajneesh Kumar Trehan, owner of M/s Hariom Krishna Transport Company were also recorded.
2.11 The seized finished goods were released provisionally to the party by the jurisdictional Assistant Commissioner, Central Excise Division-lI. Noida, vide the Provisional Release Order issued under C No. V(30)Dem/Pankaj Tob./-N11/890/12/6296 dated 07.9.2012 acceding to their request(s), on furnishing of B11(Security) Bond for Rs. 2,09,060/- along with Fixed Deposit for Rs. 52,265/-. A show cause notice vide C. No. IV- CE(9)CP/N/59/12/1669-1671 dated 11.10.2012 for confiscation of finished goods valued at Rs. 2,09,060/- seized in the factory premises and packing materials valued at Rs. 5,62,450/- seized in the said premises on 06.07.2012 2.12 Appellant 4 in his further statement dated 28.02.2013 stated that M/s PTPL was maintaining double set of invoice books, first invoice books for parties i.e. their customers and the second invoice book for transport purpose only; that, he did not know M/s Hariom Traders, however, M/s PTPL sold their goods to M/s Krishna Pan Bhandar, Bangalore; that, as regards the garage situated at E-27, Sector-55, Noida, from where 18 bags each weighing 20 Kgs, containing Magnesium Carbonate were found, was in possession of the old tenant Shri J.K. Dua, who was living in that place before 2011; that, he did not have any knowledge about the whereabouts of Shri J.K. Dua the old tenant; that, no rent agreement was signed by Shri Pradeep Kumar Arya with him and the rent was received in cash.
2.13 Appellant 3 in his statement dated 07.03.2013 stated that they manufacture Gutkha i.e. Pan masala containing tobacco; that, the ingredients or raw material used in manufacture of Gutkha are Supari, Kattha, Menthol, Lime, Tobacco, Spices and Fragrances; that, they had never used Magnesium Carbonate in manufacture of Gutkha in factory; that, they had never purchased Magnesium Carbonate for their factory; that, they had never manufactured pan masala in their factory; that, they did not use any anti caking material as they use paper foil Excise Appeal Nos.70218-70223 of 2016 10 aluminium coated for packing of their finished goods; that, they purchase high quality katthaa and mix with lime to maintain whiteness in the product.
2.14 On 17.04.2013. on the basis of specific information received regarding the clandestine removal of 'flavoured Chewing Tobacco' by PTPL, a team of officers of Anti Evasion branch of Central Excise, Commissionerate Noida was put on surveillance near Padam Petrol Pump,Sector-63, Noida to intercept a vehicle transporting clandestinely cieared consignment of flavoured Chewing Tobacco by PTPL. Simultaneously, the factory premises of PTPL were also kept under surveillance by the officers of Anti Evasion branch of Central Excise, Commissionerate Noida . At around 19.30 Hrs, a vehicle/truck Swaraj Mazda Registration No. UP-16 E-4970 was intercepted by the officers which was found to be loaded with 63 cartons of flavoured Chewing Tobacco. On enquiry, the driver of the truck Shri Umesh Yadav in his statement dated 17.04.2013 stated that those 63 cartons of flavoured Chewing Tobacco were loaded by him from the factory premises of PTPL. Shri Umesh Yadav produced Tax/Sale Invoice Nos. 01 & 02 both dated 17.04.13 and Challan/Transfer Invoice Nos. 01 & 02 both dated 17.04.13 in respect of 63 cartons of flavoured Chewing Tobacco issued by M/s PTPL. Further, Shri Umesh Yadav also produced three Bills/Cash Memo No. 317, 318 & 319 all dated 17.04.2013 issued by M/s Vishwakarma Trading Co. Bhardwaj Market, Barola, Noida in respect of same 63 cartons of flavoured Chewing Tobacco. The entire activity was recorded under Panchnama dated 17.04.2013.
2.15.1 Scrutiny of Tax/Sale Invoice No. 01 dated 17.04.2013 and Challan/Transfer Invoice No. 01 dated 17.04.2013 revealed that it was issued to M/s Sai Agency, 299, Mangalwar Peth, Madhav Nagar, Sangli, Maharashtra for sale of 47 cartons (6000 Pcs) of Aradhna No.311 brand of flavoured chewing tobacco valued at Rs.2,57,214/-. Further, Tax/Sale Invoice No. 02 dated 17.04.2013 and Challan/Transfer Invoice No. 02 dated Excise Appeal Nos.70218-70223 of 2016 11 17.04.2013 was issued to Mis Mohan Agency, Gopi Kishan Nagar, Near Santoshi Mata Mandir, Jalna, Maharashtra for sale of 33 cartons (6600 Pcs) of Aradhna No.311 brand of flavoured chewing tobacco valued at Rs. 3,25,614/- These Tax/Sale Invoices and Challan/Transfer Invoices were not accompanied by any transport documents 2.15.2 Scrutiny of Bills/Cash Memo issued by M/s Vishwakarma Trading Co. Bhardwaj Market, Barola, Noida revealed that the Bills / Cash Memo Nos. 317. 318 & 319 all dated 17.04.2013 were issued to M/s Hemant Kesar & Co. 1474, Rishala Road, Sangheshwar Tower, Madhav Nagar, Sanghi for sale of 30 cartons of manufactured tobacco valued at Rs. 1,19,700/-, M/s Bharat Trading Co., Begum Bazar, Hyderabad for sale of 20 cartons of manufactured tobacco valued at Rs. 77,520/-and M/s R.K. Trading Co., Sainath Ganj, Begum Bazar Hyderabad for sale of 13 cartons of manufactured tobacco valued at Rs. 53,352/- respectively. These bills/Cash Memos were also accompanied with Bilty / Way Bill No 2416335, 2416333 and 2416334 all dated 17.04.13 issued by M/s Ghatge Patil Transport Ltd., H.O. 517-E, Pune- Bangalore Road, Kolhapur. Apart from the aforesaid papers, driver Shri Umesh Yadav could not produce any valid Central Excise duty paying documents 2.15.3 Further, on verification of Flavoured Chewing Tobacco/ Zarda loaded on the truck it revealed that out of the 63 cartons • 13 cartons were of Aradhna Brand Tobacco Special-311, each carton having 20 packets and each packet contained 10 tin containers i.e. total 13*20*10 = 2600 tin container (each of 50 gms. of M.R.P. Rs. 85/-), total M.R.P. Rs. 2,21,000/-, after abatement of 55% Ass. Value Rs. 99,450/-
• 50 cartons were of Aradhna Brand Zafrani Patti No. 311 Super pouch, each carton having 20 packets and each packet contained 11 pouches i.e. total 50*20*11 ,11000 Excise Appeal Nos.70218-70223 of 2016 12 pouches (each 50 gms. M.R.P. Rs. 63/-). Total M.R.P. Rs. 6,93,000/-, after abatement of 55% Ass. Value Rs. 3, 11,850/-
• Total 63 cartons of flavoured chewing tobacco, involving total Assessable Value of Rs. 4,11,300 involving central excise duty amounting to Rs. 3,21,965/-
2.15.4 Enquiry was made on the spot on 17.04.2013 from Shri Umesh Yadav, Driver of vehicle/truck Swaraj Mazda Registration No. UP-16 E-4970. Shri Umesh Yadav in his statement dated 17.04.2013 stated that on the instructions of Shri Deepak Sharma, owner of the Vehicle/Truck, he took the unloaded vehicle/truck from M/s Ghatge Patil Transport Ltd., Jehangirpuri, Delhi to PTPL, Noida where 63 cartons of flavoured chewing tobacco were loaded; that Shri Deepak Sharma, owner of the Vehicle/Truck who was present at PTPL gave him Bills and Way Bill/Bilty in respect of 63 cartons of flavoured chewing tobacco; that he transports the goods of PTPL in his vehicle around 4 to S times in a month from Noida to the premises of M/s Ghatge Patil Transport Ltd., Jehangirpuri, Delhi; that each time Shri Deepak Sharma, Owner of the Vehicle/Truck hands him over the Bills both pertaining to PTPL and M/s Vishwakarma Trading Co., Noida and that on transit the bills pertaining to PTPL are taken back by Shri Deepak Sharma and goods are transported on the bills of M/s Vishwakanna Trading Co., Noida to the premises of M/s Ghatge Patil Transport Ltd., Jahangirpuri, Delhi from where they are sent to the final destinations.
2.16.1 The factory premises of Appellant 1 was also searched simultaneousiy on 17.04.2013 in the presence of Appellant 2 & Appellant 3 and proceedings were recorded under Panchnama dated 17.04.2013. On verification, no Central Excise Invoice was found to be issued on 17.04.2013 by M/s PTPL and the last Excise Invoice was found issued on 16.03.2013. The verification of the name of manufacturer printed upon the pouches/Tin Containers contained in 63 cartons of Flavoured Chewing Tobacco revealed that the same were manufactured by M/s Excise Appeal Nos.70218-70223 of 2016 13 PTPL. Thus, 63 cartons of Flavored Chewing Tobacco of Aradhna Brand Tobacco Special-311 and Aradhna Brand Zafrani Patti No. 311 valued at Rs. 4,11,300/- involving Central Excise duty of Rs 3,21,965/- manufactured by M/s PTPL were seized under Panchnama dated 17.04.2013 on the reasonable belief that the same were cleared without payment of central excise duty by M/s PTPL. Since the vehicle/truck Swaraj Mazda Registration No. UP-16 E-4970 valued at Rs. 1,50,000/- was being used for transportation of clandestinely cleared goods which were liable to central excise duty, the same was also seized on the reasonable belief that the same was liable to confiscation under section 115 of Customs Act, 1962 as made applicable to Central Excise matters vide Notification No. 68/63 dated 04.05.1963.The seized goods and the vehicle/truck Swaraj Mazda Registration No. UP-16 E-4970 were handed over to Shri Neeraj Kumar, Authorised Signatory of M/s PTPL for safe custody under Supurdnama dated 17.04.2013 2.16.2 During search, stock of raw material and packing material was also taken and on reconciliation details as per the statement Appellant 5 dated 23rd April, 2013, shortage in the stock of raw material and packing material was observed.
2.17 The follow up search operations were conducted at the premises of M/s Ghatge Patil Transport, C-9, SMA Industrial Area, Jhangirpuri, Delhi in the presence of Shri Kanwar Singh Yadav, Branch Manager of M/s Ghatge Patil Transport, C-9. SMA Industrial Area, Jehangirpuri, Delhi on 18.04.2013 as they were concerned with transporting clandestine finished goods manufactured and cleared by M/s PTPL. Search of the premises resulted in recovery of two consignments of flavoured chewing tobacco of Aradhna Brand Zafrani Patti No. 311 Super of 20 cartons each. On being asked Shri Kanwar Singh Yadav, Branch Manager of M/s Ghatge Patil Transport, C-9, SMA Industrial Area, Jhangirpuri, Delhi informed that the said consignments were booked by Appellant 6. Shri Kanwar Singh Yadav further produced Bill/Cash Memo Nos. 311 & 312 both dated 15.04.13 Excise Appeal Nos.70218-70223 of 2016 14 issued by M/s Vishwakarma Trading Co., Bhardwaj Market, Barola, Noida along with respective Billy/Way Bill Nos. 2416326 & 2416327 both dated 15.04.13. The verification of the consignments revealed that each carton contained 20 packets, each packet contained 11 pouches of Aradhna Brand Zafrani Patti, total 8800 pouches (40*20*11) each of M.R.P. Rs. 63/-, total M.R.P. value Rs. 5,54,000/-, Ass. Value Rs. 2,49,480/- which involved Central Excise duty of Rs. 1,95,293/-. Further, the verification of the name of manufacturer printed upon the pouches contained in 40 cartons of Flavoured Chewing Tobacco of Aradhna Brand Zafrani Patti No. 311 revealed that the same were manufactured by M/s PTPL. As the searches conducted at the premises of M/s PTPL on 17.04.2013 had already made it amply clear that no excise invoice for clearance of finished goods had been issued by M/s PTPL after 16.03. .2013, thus the consignments recovered at the premises of the transporter M/s Ghatge Patil Transport, C-9, SMA Industrial Area, Jehangirpuri, Delhi on 18.04.2013 were the clandestinely cleared finished goods. Accordingly, 40 cartons of Flavoured Chewing Tobacco of Aradhna Brand Zafrani Patti- 311' valued at Rs. 2,49,480/- involving Central Excise duty of Rs 1,95,293/- manufactured by M/s PTPL were seized under Panchnama dated 18.04.2013 on the reasonable belief that the same were cleared without payment of Central excise duty by M/s PTPL. The seized goods were further handed over to Shri Kanwar Singh Yadav, Branch Manager under Supurdnama dated 18.04.13.
2.18.1 Appellant 1 vide letter dated 25.04.2013 requested for provisional release of 63 cartons. of Flavoured Chewing Tobacco of Aradhna Brand Tobacco Special-311 and Aradhna Brand Zafrani Patti No. 311 valued at Rs. 4,11,300/- involving C Ex. duty of Rs 3,21,965/- manufactured by M/s PTPL that were seized near Padam Petrol Pump, Sector-63, Noida under Panchnama dated 17.04.2013.
2.18.2 Appellant 1 vide letter dated 25.04.2013 also requested for provisional release of 40 cartons of Flavoured Excise Appeal Nos.70218-70223 of 2016 15 Chewing Tobacco of Aradhna Brand Zafrani Patti-311 valued at Rs. 2,49,480/- involving Central Excise duty of Rs. 1,95,293/- manufactured by M/s PTPL that were seized at the premises of M/s Ghatge Patil Transport, C-9, SMA Industrial Area, Jhangirpuri, Delhi under Panchnama dated 18.04.2013.
2.18.3 Appellant 6 vide letter dated 23.04.2013 requested for provisional release of vehicle/truck Swaraj Mazda Registration No. UP-16 E-4970 valued at Rs. 1,50,000./- which was seized along with 63 cartons of Flavoured Chewing Tobacco near Padam Petrol Pump, Sector-63, Noida under Panchnama dated 17.04.2013.
2.18.4 The request for provisional release was allowed by the Additional Commissioner (Pc Div-II), Central Excise, Noida vide the Provisional Release Order issued under C.No. IV- CE(9)CP/N/65/13/ 728 dated 03.05.2013 (RUD-31) on furnishing of B-11 (Security) Bond for Rs. 6,60,780/- (for the seized goods) and Rs. 1,50,000/- (for the seized vehicle) along with Fixed Deposit for Rs. 1,65,195/- and Rs. 37,500/- respectively.
2.18.5 A seizure show cause notice vide C. No. IV- CE(9)CP/N/65/13/ 1538-1544 dated 09.10.2013 was issued to M/s PTPL for confiscation of 63 cartons of Flavoured Chewing Tobacco and Zafrani Patti valued at Rs 4,11,300/- seized near Padam Petrol Pump, Sector-63, Noida on 17.04.2013 and 40 cartons of Flavored Chewing Tobacco.valued at Rs. 2,49,480/- seized at the premises of M/s Ghatge Patil Transport, C-9, SMA Industrial area, Jahangirpuri, Delhi on 18.04.2013. Duty amounting to Rs.5,17,258/- (including NCCD, AED, Ed. Cess & Higher Ed. Cess) involved on the aforesaid seized goods was also demanded from them. Shri Yogendra Kumar Sharma, Proprietor of M/s Om Roadways Corporation was also issued the notice for confiscation of the vehicle /truck Swaraj Mazda Registration No. UP-16 4970 seized 2.19 Further enquiries were made and statements of Appellant 3, 4, 5 and 6 on 23.04.2013 & 28.04.2014 Excise Appeal Nos.70218-70223 of 2016 16 2.20 Shri Naveen Kumar Kaul s/o Late Shri G. N. Kaul, aged 46 years, Supervisor, M/s Ghatge Patil Transport Limited, in his statement under Section 14 of Central Excise Act, 1944, dated 25.04.2014, submitted that finished goods of Appellant 1, were booked by our agent Appellant 4 & 6;
the finished goods of Appellant 1 were mainly booked on the bills of either Appellant 1, M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises, Noida;
he confirmed that all the consignments of Tobacco / Zarda booked on the bills of M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises, Noida were loaded from the factory of Appellant; all these bookings were on "TO PAY" basis and payments were received by them at the destination from the consignee 2.21 Enquiies were also made from the customers of Appellant, M/s Sri Siddheshwar Traders, shop No.11, Kumbharwar shopping centre, Solapur (Maharashtra), M/s Shree Sai Agencies, 299, Satakar Chal, Mangalwar Peth, Madhavnagar Sangli, M/s Siddaram Traders, Shah Peth, Bijapur, M/s Vishal Enterprises, Aditi Chamber, Hugaroni, Karnataka, M/s Shri Ram Stores, C.V.Complex, Station Road, Davangere Karnataka who agreed to have procured the goods clandestinely cleared by the appellant 1, using the transport of Ghatge Patil and Company. 2.22 Appellant 3 his statement dated 19.12.2014, under section 14 of the Central Excise Act, 1944 have submitted / confirmed that the finished goods of M/s PTPL, Noida were booked with M/s Ghatge Patil Transport Limited, Delhi, through Appelalnt 4 and 6.
The finished goods of Ms PTPL, Noida were mainly booked on the bills of either M/s PTPL, Noida or M/s Excise Appeal Nos.70218-70223 of 2016 17 Vishwakarma Trading Company, Bhardwaj Market, Near Water Tank, Barola, Noida-II, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises, Noida;
the GRs / Way bills submitted by M/s Ghatge Patil Transport Limited, Delhi pertains to the consignments of Tobacco / Zarda booked on the bills of M/s Vishwakarma Trading Co. Noida, M/s Rishabh Trading Co. Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises Noida- which were cleared clandestinely from the factory of Appellant 1; GRs /way bills submitted by M/s Ghatge Patil Transport Ltd, Delhi on which finished goods manufactured by M/s PTPL, Noida, were cleared without payment of duty pertain to the period January, 2012 to April 2013.
During this period they were packing 200 Tin containers of 50 gms each of MRP Rs. 85 in each carton and 220 pouches of 50 gms. each of MRP Rs. 63 were packed in each carton; the Aradhna Brand Zarda cleared by us are in Tin containers of 50 gms but the customers like Amit Agency / Trading, Aurangabad Bharat Trading, Hyderabad, Siddaram Traders, Bijapur, and Modern Tobacco/ Zarda, Latur have always purchased Aradhna Brand Zarda chewing tobacco in 50 gms pouch only; that he agreed that all the persons i.e. M/s Sri Siddheshwar Traders shop No. 11, Kumbharwar shopping centre, Solapur, M/s Shree Sai Agencies, 299 Satakar Chal, Mangalwar Peth, Madhavnagar, Sangli, M/s Siddaram Traders Shah Peth, Bijapur, M/s Vishal Enterprises, Aditi Chamber, Hugaroni, Karnataka M/s Shri Ram Stores, C.V.Complex, Station Road, Davangere, Karnataka, are customers of M/s PTPL, Noida who used to purchase Aradhan Brand Zarda manufactured by Appellant 1 both on the bill and without bills.
Excise Appeal Nos.70218-70223 of 2016 18 The unaccounted consignments of Aradhan Brand Zarda were delivered to them on the bills of M/s Vishwakarma Trading Company, Bharadwaj Market, Near Water Tank, Barola Noida-ll, through transport M/s Ghatge Patil Transport Ltd.,C-9, SMA Industrial Area, Jehangirpuri, Delhi -33.
The payments in respect of consignment of Zarda received on the bills of Appellant 1, were received through cheques only. The payments in respect of consignment of Zarda received on the bills of M/s Vishwakaiina Trading Co. were received in cash; he have seen the quantification chart and admitted with the duty liability amounting to Rs 1,50,02,965/- for the period December, 2012 to April 2013;
admitting the duty liability he had deposited Rs. 43 Lakhs till 19.12.2014 18.12.
2.23 In furtherance of the investigations into searches conducted in the relevant premises of PTPL on 11/12.04.2012, the statement dated 11.04.2012 of Shri Om Prakash and the GRs having No. 14505 dated 15,02.2012, 14508 dated 16.02.2012 and 14514,14515,14516 14517 (all dated 20.02.2012) was shown to Shri Pankaj Arya S/o Shri Pradeep Kumar, Director of PTPL on 19.12.2014. And after going through the same, Shri Pankaj Arya in the statement dated 19.12.2014 recorded under section 14 of Central Excise Act, 1944, has submitted that he fully agreed with the statement and put his dated signature on the statement in token of his agreement; he admitted that the said finished goods were cleared clandestinely from their factory premises.
2.24 Appellant 1 vide letter dated 16.12.2014 satted that they admit the shortage of raw materials in the factory premises detected during the search dated 11/12.04.2012 and undertaken to reverse / debit the credit on the quantity found short in the raw material during the stock verification. It was also submitted that they had purchased cenvatable goods of quantity of 325 Excise Appeal Nos.70218-70223 of 2016 19 kgs., whereas the qty. of 1375 kgs. of such goods was non- cenvatable. They had availed the Cenvat credit of Rs. 57,500/- +Rs 1150/-+ Rs.575/- =Rs. 59,225/- vide RG23A Pt.-II E/No.1 dated 10.02.2012 on 325 Kgs. of the raw material Flavors' found short 2.25 Accepting the facts of manufacture and clandestine removal of goods without payment of Central Excise duty, PTPL deposited Rs.48,26,992/- vide the following e- payment Challans against their liability Sr. No Challan No. Date Amount (in Rs.) 1 02005293004201200068 30.04.2012 5,00,992/- 2 02005293012201300142 30.12.2013 10,00,000/- 3 02005291001201400092 10.01.2014 8,00,000/- 4 02005291501201400049 15.01.2014 15,26,000/- 5 02005292662201400059 26.02.2014 10,00,000/-
Total 48,26,992/- 2.26 Thus, it is evident that Appellant 1 was suppressing the
production and clandestine removal of finished goods in a well planned and systematic manner with intent to evade payment of Central Excise duty. On scrutiny of the seized records, confessional statements of various persons including the Directors and employees of the company their transporters and buyers, it appears that PTPL adopted a well planned modus operandi for evasion of Central Excise duty. The excisable goods manufactured in the factory of PTPL were clandestinely removed and transported to M/s Ghatge Patil Transport, Delhi with the help of M/s Om Road ways Corporation, Noida without payment of duty. They managed the booking of the offended goods on the basis of fabricated bills either of PTPL or of non existence firms like M/s Vishwakarma Trading Company Noida, M/s Rishabh Trading Company, Noida, M/s Pooja Traders, Noida and M/s Amir Enterprises, Noida. They also managed the transaction of their sale proceeds by way of cash transactions with their buyers 2.27 Thus Appelalnt 1, by their above acts of omissions and commission, have contravened the provisions of the Central Excise Appeal Nos.70218-70223 of 2016 20 Excise Act, 1944 Central Excise Rules, 2002 and Cenvat Credit Rules, 2004-
(i) The provisions of Rule 4 of the Central Excise Rules, 2002 in as much as they failed to pay duty on chewing tobacco& other excisable goods in the nature of raw materials & packing materials involving Central Excise duty amounting to Rs. 1,53,08,073/-;
(i) The provisions of Rule 6 of the Central Excise Rules 2002 in as they failed to assess the duty payable on the dutiable goods cieared without payment of Central Excise duty;
3 (il The provisions of Rule 8 as much as they failed to discharge the duty liability in respect of the finished excisable goods cleared by them as per - procedure laid down in the said Rule;
(v) The provisions of Rule 10, as they failed to properly maintain the daily stock account in respect of excisable finished goods and excisable raw material rather they willfully did not account for the same with the sole intent to manufacture unaccounted finished excisabie goods to ultimately evade the payment of Central Excise duty due thereon
(vi) The provisions of Rule 11, as they failed to issue proper invoice(s) in respect of the finished excisable goods cleared by them;
(vii) The provisions of Rule 12 of Central Excise Rules, 2002, in as much as they failed to properly and correctly file monthly returns showing actual production and clearance etc of the excisable goods removed by them, and (vii) The provisions of Rule 14 of Cenvat Credit Rules, 2004, in as much as they utilized inadmissible credit on inputs / raw materials amounting to Rs. 59,225/-used in the unaccounted production and clandestine clearances of the excisable goods by them Excise Appeal Nos.70218-70223 of 2016 21 2.28 A show cause notices dated 02.02.2015 was issued to the appellant 1 asking him to show casue as to why:
1. (a) The CENVAT credit amounting to Rs. 59,225/-
(including Ed. Cess & Higher Ed. Cess) involved on the raw material (flavors and saffrons) found short during physical stock taking of raw materials at the factory premises at A- 90, Sector-63 Noida, on 11/12.04.2012, should not be recovered from them under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A (4) of the Central Excise Act, 1944
(b) Interest should not be demanded from them under Rule 14 of Cenvat Credit Rules, 2004 read with Section 1 IAA of the Central Excise Act, 1944, and Penalty should not be imposed upon them in terms of Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944
2. (a) The duty amounting to Rs. 75153/-(including NCCD, AED, Ed. Cess & Higher Ed. Cess) involved on the excisable goods namely Scented Patti found short during physical stock taking in the factory premises at A-90, Sector- 63, Noida on 11/12.04.2012, should not be demanded from them under Section 11A(4) of the Central Excise Act, 1944
(b) Interest should not be demanded from them under Section 11AA of the Central Excise Act, 1944, and
(c) Penalty should not be imposed upon them in terms of Rule 25 of the Central Excise Ruies, 2002 read with Section 11AC of the Central Excise Act, 1944
3. (a) the duty amounting to Rs. 2,29,955/- on the goods cleared clandestinely related to the GRs resumed from the residential premises at 1-23, Sector- 12, Noida on 11.04.2012, as per Annexure 'A' to the Show Cause Notice shouid not be demanded from them under section 11A(4) of the Central Excise Act, 1944
(b) Interest should not be demanded from them the under Section 11AA of Central Excise Act, 1944, and Excise Appeal Nos.70218-70223 of 2016 22
(c) Penalty should not be imposed upon them in terms of Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944.
4. (a) the duty amounting to Rs. 1,50,02,965/- on the goods cleared during the period December 2012 to April 2013 clandestinely in the garb of invoices of M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida M/s Pooja Traders, Noida and M/s Aamir Enterprises, Noida, related to the GRs / way bills submitted by M/s Ghatge Patil Transport Co., Delhi, during investigation, as per Annexure 'B' to the Show Cause Notice, should not be demanded from them under section 11A(4) of the Central Excise Act, 1944.
(b) Interest should not be demanded from them the under Section 11AA of Central Excise Act, 1944, and
(c) Penalty should not be imposed upon them in terms of Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944
(d) As to why the amount of Rs. 48,26,992/- (Rs. 5,00,992/- and Rs. 43,26,000/-) deposited by them during investigation should not be appropriated against their aforesaid duty liabilities.
2.29 Appellant 2, Appellant 3, Appellant 4, Appellant 5, Appellant 6 and others were called upon to show cause as to why penalty should not be imposed upon in terms of Rule 26 of the Central Excise Rules, 2002 as they were knowingly involved directly / indirectly in suppression of production and clandestine removal of goods, with intention to evade duty 2.30 Show cause notice was adjudicated as per the impugned order. Aggrieved appellants have filed these appeals.
3.1 We have heard Shri S D Gaur, Advocate for the appellant and Shri Tuleshwar Parsad & Santosh Kumar, authorized representative for the revenue.
3.2 Arguing for the appellant learned counsel submits,-
Excise Appeal Nos.70218-70223 of 2016 23 From the impugned order as made by the learned commissioner it is not clear except S.No.1 on what goods demand has been confirmed.
In respect of Cenvat Credit amounting to Rs. 59,225.00 it was submitted that inputs involved were used in manufacturer of final products and were never cleared out of factory. This mistake was clerical and there is no evidence to established that the input was ever cleared out of factory. The demand made is not proper and demand of interest is not justified and penalty imposed is not justify and legal.
In respect of demand of Rs.75153.00 it was submitted that scented patti on which demand appears to be made and found short is not proper reasonable & correct. As scented patti was lying in the intermediary stage of production. The goods under question are not final product, therefore demand of duty of such goods is not proper & justified.
The order for interest and imposition of penalty is not justified & legal.
The demand of Rs. 2,29,955.00 made on the basis of copies of GR's found at residential premises at I-23, Sector-12, Noida is also not correct & justified. From the perusal of copy of GR's it is seen that 5 out of 6 are for Masala and 1 for Tambaku, there is no name of appellant as consigner in view of this fact the demand confirmed by the adjudicating authority is not sustainable.
In respect of demand of Rs. 1,50,02,965.00 which was made on the basis of GR's/Waybill submitted by Ghatke Patil Transport Ltd. It was submitted that company may be asked for cross examination as there is no name of the appellant in the documents submitted by the transport agency.From the facts of the case and perusal of show cause notice is appears there is no evidence to established that the goods alleged to be removed from the factory of the appellant were manufactured and cleared from the Excise Appeal Nos.70218-70223 of 2016 24 factory. Reliance is made on the decision of the Honorable Tribunal in the case of M/s Super Smelters Ltd. v/s C.C.E. & ST, Durgapur reported in 2020 (371) ELT 751 (TRI- Kolkata) in which it was held that-
"Charge of clandestine removal of goods cannot be upheld merely on assumption and presumption but ought to be proved with positive evidence such as purchase of raw materials, consumption of excess electricity, excess employment of extra labour, seizer of cash, Transportation of clandestinely removed goods etc."
"Onus of proof of bringing clinching evidence is on revenue, clandestine manufacturing and removal of excisable goods to be proved by tangible direct affirmative and in controvertible evidence relating to receipt of raw of raw material inside factory premises and non-accounted, thereof in statuary record, utilization of such raw material for clandestinely manufacture of finished goods with reference to installed capacity, consumption of electricity, labour employed and payment made to them, amount received from the consignee, statement of consignee receipt of sale proceed by consigner and its disposal. All these things are not in the present care."
Statements of many persons are relied upon in the show cause notice. Appellant requested for cross examination of the concerned persons but nobody was made to appear for cross examination.
3.3 Authorized representative reiterated the findings recorded in the impugned order.
4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments.
4.2 Impugned order records the findings as follows:
"29. I have carefully gone through the show cause notice, written submissions made by the parties and other case Excise Appeal Nos.70218-70223 of 2016 25 records. I observe that the issues to be decided in the present case are as under:
(i) whether the CENVAT credit amounting to Rs.
59,225/- involved on the raw material (flavors and saffrons) found short is recoverable from M/s Pankaj Tobacco Pvt. Limited under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A (4) of the Central Excise Act, 1944, interest is demandable from them under Rule 14 of Cenvat Credit Rules, 2004 read with Section 1 IAA of the Central Excise Act, 1944, Penalty is imposable upon them in terms of Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944
(ii) whether the duty amounting to Rs. 75153/- involved on the excisable goods namely Scented Patti found is recoverable from M/s Pankaj Tobacco Pvt. Limited under Section 11A(4) of the Central Excise Act, 1944, interest is demandable from them on the above under Section 11AA of the Central Excise Act, 1944, and Penalty is imposable upon them in terms of Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944
(iii) whether duty amounting to Rs. 2, 29,955/- on the goods cleared ciandestinely related to the GRs is demandable from M/s Pankaj Tobacco Pvt. Limited under section 11A (4) of the Central Excise Act, 1944, interest is demandable from them under Section 11AA of the Central Excise Act, 1944, and Penalty is imposable upon them in terms of Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944.
(iv) whether the duty amounting to Rs. 1,50,02,965/- on the goods cleared during the period December 2012 to April 2013 clandestinely is demandable from M/s Pankaj Tobacco Pvt. Limited under section 11A(4) of the Central Excise Act, 1944, interest is demandable from them under Section 11AA of the Central Excise Act, 1944, and Penalty is imposabie upon them in terms of Rule 25 of the Central Excise Appeal Nos.70218-70223 of 2016 26 Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944
(v) whether the amount of Rs. 48,26,992/- (Rs. 5,00,992/- and Rs. 43,26,000/-) deposited by them during investigation may be appropriated against their aforesaid duty liabilities
(vi) whether penalty is imposable on Shri Pradeep Kumar Arya, Shri Pankaj Kumar Arya, Director of M/s Pankaj Tobacco Pvt. Ltd. in terms of Rule 26 of the Central Excise Rules, 2002.
(vii) whether penalty is imposable on Shri Neeraj Kumar, Authorized Signatory of M/s Pankaj Tobacco Pvt Ltd. in terms of Rule 26 of the Central Excise Rules 2002 as he was knowingly involved directly/ indirectly in suppression of production and clandestine removal of goods, with intention to evade duty
(viii) whether penalty is imposable on Shri Yogendra Kumar Sharma, Proprietor of M/s Om Roadways Corporation, & on Shri Deepak Sharma son of Shri Yogendra Sharma, under Rule 26 of the Central Excise Rules, 2002.
(ix) whether penalty is imposable on M/s Ghatge Patil Transport, Shri B. S. Kothawale, Proprietor of M/s Sri Siddheswar Traders, Shri H. M. Kasar, Proprietor of M/s Shree Sai Agencies, Shri Manoj Kumar Patil. Proprietor of M/s Siddaram Traders, Shri Srinivas Hegde, Proprietor of M/s Vishal Enterprises, Shri N. G. Mohan, Proprietor of M/s Sri Ram Stores, under Rule 26 of the Central Excise Rules, 2002.
2. Now I proceed to decide the above issues one by one. 1 find that various premises were searched on 11.04.2012 by the department. The factory premises of PTPL situated at A-90, Sector 63, was searched under Panchnama proceedings as per Panchnama dated 11/12.04.2012 drawn in the presence of two independent witnesses. The officers physically verified the stock of the Excise Appeal Nos.70218-70223 of 2016 27 finished excisable goods lying in the factory premises of the party. Stocks of the finished goods namely `Aradhna' zafrani patti No. 311 of 50 Gms. W. K., `Pritam' No. 319 (50Gms) Scented patti, `Rajkiran Quiwam' (50Gms) scented patti and 'Kiran' No. 06 scentedpatti were found short by 11.800Kgs, 27.900 Kgs, 2.730 Kgs and 449.75 Kgs respectively, involving Central Excise duty of Rs. 75129/ (i.e. Rs. 6544/- +10444/- +1811/-+56330/ respectively) The physical verification of the stock of raw material/packing material was also conducted by the officers. I find that the goods were not verifiable vis-a-vis book balance as the party was not maintaining any stock account of packing materials, the stock of packing material, i.e. empty tin containers. The input goods namely Raw tobacco was found short oy 5449.74 Kg valuing Rs. 3,26,984/- as per last bill of procurement Similarly flavours and saffron were found short by 1661.505 Kg. and Spice Herbs were found short by 1620.278 Kg, value of the same could not be ascertained as PTPL had not maintained variety wise entries in the stock register. I find that M/s PTPL vide their letter dated 16.12.2014 admitted the shortage of raw materials in the factory premises detected during the search dated 11/12.04.2012 and undertaken to reverse / debit the credit on the quantity found short in the raw material during the stock verification. They further submitted hat PTPL had purchased cenvatable goods of quantity of 325 kgs whereas the qty. of 1375 kgs. of such goods was non-cenvatable. They had availed the Cenvat credit of Rs. 57,500/-+Rs. 1150/-+ Rs.575/- = Rs. 59,225/- vide RG23A Pt.II E/No.1 dated 10.02.2012 on 325 Kgs of the raw material Flavors' found short. Shri Pradeep Kumar Arya, Director of PTPL, in his statement dated 11.04.2012, has stated that he was satisfied with the physical verification of the stock done by the officers in the factory premises. I find that in respect of shortage Excise Appeal Nos.70218-70223 of 2016 28 of Aradhna zafrani patti 300 of 50gms scented patti amounting 11.800 Kg, Pritam No. 310 of 50 gms scented patti amounting 2.730 Kgs, and Kiran No. 06 scented patti amounting 449.75 Kgs. found short from the quantity recorded in the books of finished goods found in the factory premises, Shri Pradeep Kumar Arya stated that the same may be due to shortage of the staff and accordingly, however he was unable to give any satisfactory reply. He further submitted that as regard to zafrani patti No. 311, Pritam No. 319, Rajkiran quiwam and Kiran No. 06 scented there is no shortage, because scented patti is not shown in RG-1 as they keep it under WIP and maintain separate register for scented patti. I find that the party has accepted the shortage of cenvatable raw material involving cenvat credit of Rs 59225/-. Further, I find that the shortage of scented patti involving duty of Rs 75153/- was accepted by the party. The contention of the party that scented patti is not shown in RG-1 as they keep it under WIP and maintain separate register for scented patti is not acceptable as the scented patti is a finished excisable goods and are liable to be recorded in the RG-1 register. In view of above, I find that the central excise duty of Rs 75153/- involved in the scented patti found short in the factory at premises situated at A-90, Sector 63,Noida is recoverable from PTPL under Section 11A(4) of the Central Excise Act, 1944 along with interest under Section 11AA of the Central Excise Act, 1944. I find that the cenvat credit of Rs 59225/- involved in cenvatable flaours found short in the factory at premises situated at A-90, Sector 63,Noida is recoverable from PTPL under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A(4) of the Central Excise Act, 1944 along with interest.
3. During the search of the Residential premises situated at 1-23 Sector-12, Noida by the officers on 11.4.2012, which belongs to Shri . Pradeep Kumar Arya Director of PTPL, copies of 6 (six) GRs bearing serial Excise Appeal Nos.70218-70223 of 2016 29 Nos.14514, 14515, 14516 and 14517 all dated 20.02.2012 (in original), 14505 dated 15.02.2012 and 14508 dated 16.02.2012 (both in Xerox copies) issued by M/s G.G.Carrier, Agra Road, Jaipur were recovered. A follow up action was initiated at local office of M/s G.G Carrier, Agra Road, Jaipur situated at Harola Market, Sector 5, Noida on 13.04.2012. It was observed that M/s Hariom Krishna Transport Company Harola Market, Sector-5, Noida was acting as an agent of M/s G.G Carrier. There were no premises of M/s G.G.Carrier. Shri Om Prakash Supervisor of PTPL, stated that the GRs, were issued for dispatch of Pan Masala cartons from the factory premises of PTPL to Bangalore. Those SRs were issued by M/s Hariom Krishna Transport Company, Noida to M/s Krishna Pan House, Bangalore. He further stated that M/s Hariom Traders was not any firm in existence and those goods were sent from the factory premises of PTPL to M/s Krishna Pan House, Bangalore; that each carton contains 200 pouches of 50 Gms of chewing. tobacco of Aradhna Or Pratima' brand, however, he could not explained about the exact those goods were quantity said goods; and value of the that, manufactured by PTPL and cleared from the premises of PTPL on the instruction of Shri Pradeep Kumar Arya, Director of PTPL. Shri Rajneesh Kumar Trehan, owner of M/s Hariom Krishna Transport Company on seeing the 6 No.s of GRs, stated that masala was transported vide those 6 GRs; that, they had sent the said goods i.e. masala from his premises to Punjabi Bagh, New Delhi branch of M/s G.G.Carrier. He further stated that he had sent Pan Masala on these GRs from M/s Hariom Traders, Noida to M/s Krishna Pan House, Bangalore and the Delivery in charge of M/s G.G Carrier, Shri Gupta gave him information about the goods to be booked to Punjabi Bagh, New Delhi. Shri Pankaj Arya on being confronted with the statement dated 11.04.2012 of Shri Om Prakash and the GRs having No. 14505 dated 15.02.2012, 14508 dated 16.02.2012 and Excise Appeal Nos.70218-70223 of 2016 30 14514,14515,14516,14517 (all dated 20.02.2012) submitted that he fully agreed with the statement and put his dated signature on the statement in token of his agreement; he admitted that the said finished goods were cleared clandestinely from their factory premises
(ii) I find that on the basis of details given in 6(six) GRs of M/s G.G.Carrier recovered from the residential premises of M/s PTPL on 11/12.04.2012, the value of the goods has been ascertained as Rs 6,52,800/- and the duty involvement on the said goods has been ascertained as Rs. 2,29,955/-
(iii) M/s PTPL in their written submissions has submitted that there is no evidence direct or corroboratory that goods manufactured by M/s PTPL, were removed ciandestinely to the consignee at Bangalore. The party in the personnel hearing also requested for cross examination of transporter and consignee
(iv) I find that the GRs in question have been recovered from the residence of one of the director of M/s PTPL viz Shri Pradeep Kumar Arya. I find that Shri Om Prakash, Supervisor of PTPL, has confirmed that the GRs, were issued for dispatch of Pan Masala cartons from the factory premises of PTPL to Bangaiore and the goods were manufactured by PTPL and cleared from the premises of PTPL on the instruction of Shri Pradeep Kumar Arya, Director of PTPL. Further, I find that Shri Rajneesh Kumar Trehan, owner of M/s Hariom Krishna Transport Company on seeing the 6 No.s of GRs, stated that masala was transported vide those 6 GRs. He further stated that he had sent Pan Masala on these GRs from M/s Hariom Traders, Noida to M/s Krishna Pan House, Bangalore. I see no motive in the statements of Shri Om Prakash, Supervisor of PTPL who having been the supervisor of PTPL, has the first hand knowledge about the goods. Above admission of Shri Om Prakash negates PTPL's contention that there is no evidence that the goods related to above GR's have been Excise Appeal Nos.70218-70223 of 2016 31 manufactured by them. Further PTPL's request for cross examination of transporter and consignee is not acceptable for the reasons that the person who has been looking after the affairs of the factory and owner of the transport company has stated the obvious. Further,. Shri Pankaj Arya fully agreed with the statement of Shri Om Prakash and put his dated signature on the statement in token of his agreement; he also admitted that the said finished goods were cleared clandestinely from their factory premises In view of above, I find that the goods 'Flavored Chewing Tobacco' in respect of above 6(six) GRs have been manufactured by PTPL and were cleared clandestinely from the factory premises of M/s PTPL to M/s Krishna Pan House, Banglore. Accordingly, the duty Rs. 2, 29,955/- involved on the said goods is demandable from M/s PTPL along with interest.
4. (i) I find that on 17.04.2013, on the basis of specific information received regarding the clandestine removal of 'flavoured Chewing Tobacco' by PTPL, a vehicle/truck Swaraj Mazda Registration No. UP-16 E-4970 was intercepted by the officers near Padam Petrol Pump, Sector- 63, Noida which was found to be loaded with 63 cartons of flavoured Chewing Tobacco. The driver of the truck Shri Umesh Yadav stated that those 63 cartons of flavoured Chewing Tobacco were loaded by him from the factory premises of PTPL. Shri Umesh Yadav produced Tax/Sale Invoice Nos. 01 & 02 both dated 17.4.13 and Challan/Transfer Invoice Nos. 01 & 02 both dated 17.4.13 in respect of 63 cartons of flavoured Chewing Tobacco issued by M/s PTPL along.with Bills/Cash Memo No. 317, 318 & 319 all dated 17.04.2013 issued by M/s Vishwakarma Trading Co., Bhardwaj Market, Barola Noida in respect of same 63 cartons of flavoured Chewing Tobacco. Tax/Sale Invoice No. 01 dated 17.04.2013 and Challan/Transfer Invoice No. 01 dated 17.04.2013 found to be issued to M/s Sai Agency, 299, Mangalwar Peth Madhav Excise Appeal Nos.70218-70223 of 2016 32 Nagar, Sangli, Maharashtra for sale of 47 cartons (6000 Pcs) of Aradhna No.311 brand of flavoured chewing tobacco valued at Rs.2,57,214/-. Further Tax/Sale Invoice No. 02 dated 17.04.2013 and Challan/Transfer Invoice No. 02 dated 17.04.2013 was issued to M/s Mohan Agency, Gopi Kishan Nagar, Near Santoshi Mata Mandir, Jalna, Maharashtra for sale of 33 cartons (6600 Pcs) of Aradhna No.311 brand of flavoured chewing tobacco valued at Rs. 3,25,614/- These Tax/Sale Invoices and Challan/Transfer Invoices were found not accompanied by any transport documents
(ii) Bills/Cash Memo issued by M/s Vishwakarma Trading Co., found to be issued to M/s Hemant Kesar & Co., 1474, Rishala Road, Sangheshwar Tower, Madhav Nagar, Sanghi for sale of 30 cartons of manufactured tobaccc valued at Rs. 1,19,700/-, M/s Bharat Trading Co., Begum Bazar, Hyderabad for sale of 20 cartons of manufactured tobacco valued at Rs. 77,520/-and M/s R.K Trading Co., Sainath Ganj, Begum Bazar, Hyderabad for sale of 13 cartons of manufactured tobacco valued at Rs. 53,352/- respectively. These bills/Cash Memos were also accompanied with Bilty / Way Bill No 2416335, 2416333 and 2416334 all dated 17.4.13 issued by M/s Ghatge Patil Transport Ltd., H.O. 517-E, Pune-Bangalore Road, Kolhapur. Apart from the aforesaid papers, driver Shri Umesh Yadav could not produce any valid Central Excise duty paying documents
(iii) Further, on verification of Flavoured Chewing Tobacco/ Zarda loaded on the truck it revealed that out of the 63 cartons -
13 cartons were of Aradhna Brand Tobacco Special-311, each carton having 20 packets and each packet contained 10 tin containers i.e. total 13*20*10 = 2600 tin container (each of 50 gms. of M.R.P. Rs. 85/-), total M.R.P. Rs. 2,21,000/-, after abatement of 55% Ass. Value Rs. 99,450/-
Excise Appeal Nos.70218-70223 of 2016 33 50 cartons were of Aradhna Brand Zafrani Patti No. 311 Super pouch, each carton having 20 packets and each packet contained 11. pouches i.e. total 50*20*11 = 11000 pouches (each 50 gms. M.R.P. Rs. 63/-). total M.R.P. Rs. 6,93,000/-, after abatement of 55% Ass. Value Rs. 3, 11,850/-.
Total 63 cartons of flavoured chewing tobacco, involving total Assessable Value of Rs. 4,11,300 involving central excise duty amounting to Rs. 3,21,965/-
(iv) Shri Umesh Yadav has stated that on the instructions of Shri Deepak Sharma, owner of the Vehicle/Truck, he took the unloaded vehicle/truck from M/s Ghatge Patil Transport Ltd., Jehangirpuri, Delhi to PTPL, Noida where 63 cartons of flavoured chewing tobacco were loaded; that Shri Deepak Sharma, owner of the Vehicle/Truck who was present at PTPL gave him Bills and Way Bill/Bilty in respect of 63 cartons of flavoured chewing tobacco; that he transports the goods of PTPL in his vehicle around 4 to 5 times in a month from Noida to the premises of M/s Ghatge Patil Transport Ltd., Jehangirpuri, Delhi; that each time Shri Deepak Sharma, Owner of the Vehicle/Truck hands him over the Bills both pertaining to PTPL and M/s Vishwakarma Trading Co., Noida and that on transit the bills pertaining to PTPL are taken back by Shri Deepak Sharma and goods are transported on the bills of M/s Vishwakanna Trading Co. Noida to the premises of M/s Ghatge Patil Transport Ltd. Jahangirpuri, Delhi from where they are sent to the final destinations.
(v) I find that the factory premises of PTPL was also searched on 17.04.2013 in the presence of Shri Pankaj Kumar, Director & Shri Deepak Kumar, Accountant of PTPL. On verification, no Central Excise Invoice was found to be issued on 17.04.2013 by M/s PTPL and the last Excise Invoice was found issued on 16.03.2013. The verification of the name of manufacturer printed upon the pouches/Tin Excise Appeal Nos.70218-70223 of 2016 34 Containers contained in 63 cartons of Flavoured Chewing Tobacco revealed that the same were manufactured by M/s PTPL. Thus, 63 cartons of Flavoured Chewing Tobacco of Aradhna Brand Tobacco Special-311 and Aradhna Brand Zafrani Patti No. 311 valued at Rs. 4,11,300/- involving Central Excise duty of Rs 3,21,965/- manufactured by M/s PTPL were seized. Since the vehicle/truck Swaraj Mazda Registration No. UP-16 E-4970 valued at Rs 1,50,000./- was being used for transportation of clandestinely cleared goods which were liable to central excise duty, the same was also seized
(vi) During search of factory premises of PTPL on 17.04.2013, stock of raw material and packing material was also taken and the following shortage in the stock of raw material and packing material was found:-
Sr. Name of Item Quantityfound Value (in Duty @ 12.36% No. short Rs.) (in Rs.) 1 Empty tin containers of 50 Gms and 200 Gms 59579 in No 5,56,178/- 68744/- 2 Raw Tobacco 2495 Kgs 1,53,630/-
3 Essence & Flavors 2137.171 Kgs 8,75,510/- 1,08,213/- 4 Spices 269.227 Kgs 32,216/- 3982/-
5 Silver foil 0.425 Kgs. 24,969/- 3086/-
TOTAL 184025/-
(vii) I find that during the follow up search operations of M/s Ghatge Patil Transport, C-9, SMA Industrial Area, Jhangirpuri, Delhi two consignments of flavoured chewing tobacco of Aradhna Brand Zafrani Patti No. 311 Super of 20 cartons each were recovered. Shri Kanwar Singh Yadav, Branch Manager of M/s Ghatge Patil Transport informed that the said consignments were booked by Shri Yogendra Kumar Sharma, Proprietor of M/s Om Roadways Corporation, Main Noida Dadri Road, Salarpur, Bhangel, Nr. Police Station, Phase II, Noida. Shri Kanwar Singh Yadav further produced Bill/Cash Memo Nos. 311 & 312 both dated 15.4.13 issued by M/s Vishwakarma Trading Co. Bhardwaj Market, Barola, Noida along with respective Billy/Way Bill Excise Appeal Nos.70218-70223 of 2016 35 Nos. 2416326 & 2416327 both dated 15.4.13. The verification of the consignments revealed that each carton contained 20 packets, each packet contained 11 pouches of Aradhna Brand Zafrani Patti, total 8800 pouches (40*20*11) each of M.R.P. Rs. 63/-, total M.R.P. value Rs.
5,54,000/-, Ass. Value Rs. 2,49,480/- which involved Central Excise duty of Rs. 1,95,293/-. Further, the verification of the name of manufacturer printed upon the pouches contained in 40 cartons of Flavoured Chewing Tobacco of Aradhna Brand Zafrani Patti No. 311 revealed that the same were manufactured by M/s PTPL. I find that no excise invoice for ciearance of finished goods had been issued by M/s PTPL after 16.03.2013, therefore, the consignments recovered at the premises of the transporter M/s Ghatge Patil Transport on 18.04.2013 were the clandestinely cleared finished goods. The consignments of finished goods i.e. 63 cartons of Flavoured Chewing Tobacco along with vehicie/truck Swaraj Mazda Registration No. UP- 16 E-4970 and finished goods i.e. 40 cartons of Flavoured Chewing Tobacco were released provisionally by the Additional Commissioner (Pc Div-ll), Central Excise, Noida on the request of the parties
(viii) Shri Neeraj Kumar, authorised Signatory and responsible for Central Excise related formalities of the factory confirmed that the above- said 63 cartons of flavoured chewing tobacco which were seized by the officers along with the Vehicle/Truck Swaraj Mazda Registration No. UP- 16E/4970 on 17.04.13, were loaded and cleared from M/s PTPL without issue of excise invoice; that, M/s Vishwakarma Trading Co. was a non-existent firm, the bills of which were used by M/s PTPL to transport clandestinely cleared consignments of Zarda; that, the two consignments of Aradhna Brand flavoured chewing tobacco of 20 cartons each (Total 40 cartons) seized on 18.04.2013 from the premises of M/s Ghatge Patil Transport, C-9, SMA Industrial Excise Appeal Nos.70218-70223 of 2016 36 Area, Jhangirpuri, Delhi covered under the bills of M/s Vishwakarma Trading Co., Bhardwaj Market, Barola, Noida were also manufactured and cleared from M/s PTPL without issue of excise invoice; that, admitting their liability, they will voluntarily deposit the duty involved on the consignment that were seized on 17.4.2013 and 18.4.2013. I find that Shri Pankaj Kumar, Director of M/s PTPL in his statement agreed with the contents and facts narrated by Shri Neeraj Kumar, Authorised Signatory. of the M/s PTPL.
(ix) Shri Yogendra Kumar Sharma, Proprietor of M/s Om Roadways Corporation stated that they were the Booking agent for M/s Ghatge Patil Transport Ltd., C- 9, SMA Industrial Area, Jehangirpuri, Delhi and that that all work related to his transport company was looked after by his son Shri Deepak Sharma. Shri Deepak Sharma admitted that they were booking agent for M/s Ghatge Patil Transport Ltd. and that for booking of goods they were supplied Bilty Book and Challan Book by M/s Ghatge Patil Transport. 1 find that Shri Deepak Sharma also admitted that papers pertaining to said the 63 cartons of flavoured chewing tobacco which were seized along with the truck having Registration No. UP-16E/4970 on 17.4.13 were given to him by Shri Neeraj Kumar, Authorised Signatory of M/s PTPL; that the said papers contained Invoices of M/s PTPL as well as of M/s Vishwakarma Trading Co; that on the basis of said papers he prepared Bilties and handed over the same to Shri Umesh Yadav, Driver of the vehicle. Shri Deepak Sharma also stated that he used to take back the bills of M/s PTPL in transit from the driver of the vehicle for returning the same to Shri Neeraj Kumar and the goods were further transported on the bills of M/s Vishwakarma Trading Co. Shri Deepak Sharma also stated that sometimes booking was on the papers of M/s PTPL also but he had no knowledge whether the same were Excise Invoices or not. Shri Deepak Sharma stated that as per directions of Shri Neeraj Kumar, he used to take back the Excise Appeal Nos.70218-70223 of 2016 37 Invoice from driver for returning the same to M/s PTPL. I find that Shri Deepak Sharma agreed with the statement dated 17.4.2013 of Shri Umesh Yadav, Driver of Vehicle/Truck Reg. No. UP-16E /4970
(x) In his statement dated 28.04.2014, Shri Deepak Sharma further submitted that the consignment pertaining to GRs / way bills dated 03.05.2013 and 21.11.2013 produced by M/s Ghatge Patil Transport Ltd. to the department, through which the goods i.e. tobacco and zarda were supplied by M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises, Noida, were loaded from M/s PTPL, and the bills in the name of above consignors have been handed over to us by M/s PTPL. He further confirmed that they have only booked the consignment of M/s PTPL in the name of M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises, Noida.
(xi) Shri Naveen Kumar Kaul, Supervisor, M/s Ghatge Patil Transport Limited, in his statement, submitted that finished goods of M/s Pankaj Tobacco Pvt. Ltd., Noida were booked by their agent Shri Yogendra Kumar Sharma and his son Shri Deepak Sharma of M/s Om Roadways Corporation; that the finished goods of M/s PTPL, Noida were mainly booked on the bills of either M/s PTPL, M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, Ms Pooja Traders, Noida and M/s Aamir Enterprises, Noida; that he confirmed that all the consignments of Tobacco / Zarda booked on the bills of M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises, Noida were loaded from the factory of M/s PTPL, A-90, Sector-63, Noida; that all these bookings were on "TO PAY"
Excise Appeal Nos.70218-70223 of 2016 38 basis and payments were received by them at the destination from the consignee.
(xii) I find that Shri B. S. Kothawale, Propreitor of M/s Sri Siddheshwar Traders submitted that his firm used to purchase Aradhna Brand Zarda manufactured by M/s PTPL, Noida, both on bills and without bills. The unaccounted consignments of Aradhna Brand Zarda were delivered to them at Solapur on the bills of M/s Vishwakarma Trading Company, through transport M/s Ghatge Patil Transport Ltd. The payments in respect of consignment of Zarda received on the bills of M/s PTPL, Noida, were made mostly through cheque and draft. The payments in respect of cnsignment of Zarda received on the bills of M/s Vishwakarma Trading Co. were made in cash to Shri Neeraj Kumar or to Shri Pankaj Kumar Arya of M/s PTPL; that he also confirmed that they always purchased Aradhana Brand Zarda manufactured by M/s PTPL, Noida in Tin containers of 50 gms both on bills and without bills. After being shown way bills / bilties No. 2416297 dated 23.03.2013 and bills / bilties No.2416227 dated 18.02.2013 as submitted by M/s Ghatge Patil Transport Ltd., reflecting details of Zarda consignments transported by them on the bills of M/s Vishwakarma Trading Co., Noida, and statements of Shri Neeraj Kumar dated 23.04.2013, he confirmed the consignments related to them and agreed with the statements of Shri Neeraj Kumar
(xiii) Shri M.D. Kasar, Proprietor of M/s Shree Sai Agencies submitted that his firm used to purchase Aradhna Brand Zarda manufactured by M/s PTPL, Noida, both on bills and without bills. The unaccounted consignments of Aradhna Brand Zarda were delivered to them at Madhavnagar on the bills of M/s Vishwakarma Trading Company, through transport M/s Ghatge Patil Transport Ltd.
The payments in respect of consignment of Zarda received Excise Appeal Nos.70218-70223 of 2016 39 on the bills of M/s PTPL, Noida, were made mostly through cheque but occasionally it was made in cash also. The payments in respect of consignment of Zarda received on the bills of M/s Vishwakarma Trading Co. and M/s Rishabh Trading company were made in cash only to Shri Neeraj Kumar or to Shri Pankaj Kumar Arya of M/s PTPL; that they always purchased Aradhana Brand Zarda manufactured by M/s PTPL, Noida in Tir containers of 50 gms both on bills and without bills. After being shown way bills bilties No. 2416262 dated 04.03.2013 and bills / bilties No.2416299 dated 23.03.2013 as submitted by M/s Ghatge Patil Transport Ltd., reflecting details of Zarda consignments transported by them on the bills of M/s Vishwakarma Trading Co. Noida, and statements of Shri Neeraj Kumar dated 23.04.2013, he confirmed the consignments related to them and agreed with the statements of Shri Neeraj Kumar
(xiv) Shri Manoj Kumar Patil, Proprietor of M/s Siddaram Traders submitted that his firm used to purchase Aradhna Brand Zarda manufactured by M/s PTPL, Noida both on bills and without bills The unaccounted consignments of Aradhna Brand Zarda were delivered to them at Bijapur on the bills of M/s Vishwakarma Trading Company and M/s Rishabh Trading Co through transport M/s Ghatge Patil Transport Lid. The payments in respect of consignment of Zarda received on the bills of Ms PTPL, Noida, were made mostly through cheque but occasionally it was made in cash also. The payments in respect of consignment of Zarda received on the bills of M/s Vishwakaiina Trading Co. and M/s Rishabh Trading company were made in cash only to Shri Neeraj Kumar or to Shri Pankaj Kumar Arya of M/s PTPL; that he also confirmed that they always purchased Aradhana Brand Zarda manufactured by M/s PTPL, Noida in Tin containers of 50 gms both on bills and without bills. After being shown way bills/bilties No. 7174907, 7174908, 7174909. 7174910 dated 12.02.2013, 7174926 dated Excise Appeal Nos.70218-70223 of 2016 40 16.03.2013 and 7174930, 7174931 dated 23.03.2013, as submitted by M/s Ghatge Patil Transport Ltd., reflecting details of Zarda consignments transported by them on the bills of M/s Vishwakarma Trading Co. ,Noida, and 7174686 dated 21.12.2012 (of M/s Rishabh Trading Company) and statements of Shri Neeraj Kumar dated 23.04.2013, he confirmed the consignments related to them and agreed with the statements of Shri Neeraj Kumar.
(xv) Shri Shrinivas Hegde, Propreitor of M/s Vishal Enterprises submitted that his firm used to purchase Aradhna Brand Zarda manufactured by M/s PTPL, Noida, both on bills and without bills. The unaccounted consignments of Aradhna Brand Zarda were delivered to them at Hubli on the bills of M/s Vishwakarma Trading Company, through transport M/s Ghatge Patil Transport Ltd. The payments in respect of consignment of Zarda received on the bills of M/s PTPL, Noida, were made mostly through cheque but occasionally: it was made in cash also. The payments in respect of consignment of Zarda received on the bill's of M/s Vishwakarma Trading Co. was made in cash only to Shri Neeraj Kumar or to Shri Pankaj Kumar Arya of M/s PTPL; that he also confirmed that they always purchased Aradhana Brand Zarda manufactured by M/s PTPL, Noida in Tin containers of 50 gms both on bills and without bills. After being shown way bills / bilties No. 7174916 dated 07.03.2013 and bills / bilties No.7174682 dated 12.12.2012, 7174683 dated 13.12.2012, 7174684 dated 15.12.2012 as submitted by M/s Ghatge Patil Transport Ltd., reflecting details of Zarda consignments transported by them on the bills of M/s Vishwakarma Trading Co. Noida, and statements of Shri Neeraj Kumar dated 23.04.2013, he confirmed the consignments related to them and agreed with the statements of Shri Neeraj Kumar.
Excise Appeal Nos.70218-70223 of 2016 41 (xvi) Shri N.G. Mohan, Proprietor of M/s Shri Ram Stores submitted that his firm used to purchase Aradhna Brand Zarda manufactured by M/s PTPL, Noida, both on bills and without bills. The unaccounted consignments of Aradhna Brand Zarda were delivered to them at Davangere on the bills of M/s Vishwakarma Trading Company through transport M/s Ghatge Patil Transport Ltd. The payments in respect of consignment of Zarda received on the bills of M/s PTPL, Noida, were made mostly through cheque but occasionally it was made in cash also. The payments in respect of consignment of Zarda received on the bills of M/s Vishwakarma Trading Co. was made in cash only to Shri Neeraj Kumar or to Shri Pankaj Kumar Arya of M/s PTPL; that he also confirmed that they always purchased Aradhana Brand Zarda manufactured by M/s PTPL, Noida in Tin containers of 50 gms both on bills and without bills. After being shown way bills / bilties No. 7174913 dated 27.02.2013 and bills / bilties No.7174681 dated 12.12.2012, 7174685 dated 17.12.2012, 7174699 dated 16.01.2012 as submitted by M/s Ghatge Patil Transport Ltd., reflecting details of Zarda consignments transported by them on the bills of M/s Vishwakarma Trading Co. Noida M/s Pooja Trader, Aamir Enterprises and M/s Rishabh Trading Co., and statements of Shri Neeraj Kumar dated 23.04.2013, he confirmed the consignments related to them and agreed with the statements of Shri Neeraj Kumar.
(xvii) I find that Shri Pankaj Arya s/o Shri Pradeep Kumar Arya, Director M/s PTPL, in his statement dated 19.12.2014, confirmed that the finished goods of M/s PTPL, Noida were booked with M/s Ghatge Patil Transport Limited, Delhi, through Shri Yogendra Kumar Sharma and his son Shri Deepak Sharma of M/s Om Transport Co. Noida. The finished goods of M/s PTPL, Noida were mainly booked on the bills of either M/s PTPL, Noida or M/s Vishwakarma Trading Company, Bhardwaj Market, Near Excise Appeal Nos.70218-70223 of 2016 42 Water Tank, Barola, Noida-ll, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises Noida; that the GRs / Way bills submitted by M/s Ghatge Patil Transport Limited., Delhi pertains to the consignments of Tobacco / Zarda booked on the bills of M/s Vishwakarma Trading Co. Noida, M/s Rishabh Trading Co. Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises, Noida which were cleared clandestinely from the factory of M/s PTPL, A-90, Sector-63, Noida; that GRs May bills submitted by M/s Ghatge Patil Transport Ltd, Delhi on which finished goods manufactured by M/s PTPL, Noida, were cleared without payment of duty pertain to the period January, 2012 to April 2013. During this period, they were packing 200 Tin containers of 50 gms each of MRP Rs. 85, in each carton and 220 pouches of 50 gms, each of MRP Rs. 63, were packed in each carton; the Aradhna Brand Zarda cleared by them are in Tin containers of 50 gms but the customers like Amit Agency / Trading, Aurangabad, Bharat Trading, Hyderabad, Siddaram Traders, Bijapur, and Modern Tobacco/ Zarda, Latur have always purchased Aradhna Brand Zarda chewing tobacco in 50 gms pouch only; that he agreed that all the persons i.e. M/s Sri Siddheshwar Traders, shop No. 11, Kumbharwar shopping centre, Solapur, M/s Shree Sai Agencies, 299, Satakar Chal, Mangalwar Peth, Madhavnagar, Sangli, M/s Siddaram Traders, Shah Peth, Bijapur, M/s Vishal Enterprises, Aditi Chamber, Hugaroni, Karnataka, M/s Shri Ram Stores, C.V Complex, Station Road, Davangere, Karnataka, are customers of M/s PTPL, Noida who used to purchase Aradhan Brand Zarda manufactured by M/s PTPL, Noida both on the bill and without bills. The unaccounted consignments of Aradhna Brand Zarda were delivered to them on the bills of M/s Vishwakarma Trading Company Bharadwaj Market, Near Water Tank, Barola, Noida-Il, through transport M/s Ghatge Patil Transport Ltd., C-9, Excise Appeal Nos.70218-70223 of 2016 43 SMA Industrial Area, Jehangirpuri, Delhi -33. The payments in respect of consignment of Zarda received on the bills of M/s PTPL, Noida, were received through cheques only. The payments in respect of consignment of Zarda received on the bills of M/s Vishwakaiina Trading Co were received in cash; that he have seen the quantification chart and admitted with the duty liability amounting to Rs. 1,50,02,965/- for the period December, 2012 to April 2013; that he also submitted that admitting the duty liability he had deposited Rs. 43 Lakhs till 19.12.2014 (xix) I find that the party has submitted that the contention that the subject goods were removed from the factory without payment of duty does not appear to be correct. It is not clear how the transporter booked the goods in the name of other person when goods were from PTPL as stated by him. The party has requested for cross examination. It has been submitted that from details in Annexure-B it is noticed that goods mentioned were dispatched to different consignees whose confirmation of receipt do not appear reflected in the Annexure-B, therefore, the demand of duty calculated in the Notice does not appear to be correct. As regards interest and penalty it is submitted that when demand is doubtful the imposition of penalty and demand of interest does not appear justified. The party has submitted that major part of the demand made in the Notice are based on transport documents recovered from the transporter M/s Ghatke Patil Transport Ltd and from other premises and there is no evidence to show the manufactured of goods alleged to be removed clandestinely without payment of duty. It is a settled law that liability arises when there is manufacture. It has been submitted that there is no evidence to establish that there was some manufacture in the factory of the notice, there is no evidence of receipt of excess raw- materials or other inputs including packing materials use for the manufacture of the goods which were cieared Excise Appeal Nos.70218-70223 of 2016 44 without payment of duty and in the-absence of manufacture of goods, demand of duty not justified. The party has submitted that document recovered from third party not admissible in reliable evidence without proper corroboration as to extra raw material procured or financial transaction. It has been submitted that the documents were not recovered from the factory of the notice and the onus to show the noticee cleared the goods under cover of those documents lies on the revenue. It has been submitted that there is nothing in the S.C. Notice to show that the goods alleged to be clandestinely removed were cieared from the factory of the Noticee. The party cited some cases in their favour (xx) (a) I find that the 63 cartons( 13 cartons of Aradhna Brand Tobacco Special- 311 & 50 cartons of Aradhna Brand Zafrani Patti No. 311 Super pouch), of total Assessable Value of Rs. 4,11,300 involving central excise duty amounting to Rs. 3,21,965/- has been seized along with truck no. UP-16E /4970.The driver of the truck confirmed the goods were loaded from the premises of PTPL. The verification of the name of manufacturer printed upon the pouches/Tin Containers contained in 63 cartons of Flavoured Chewing Tobacco revealed that the same were manufactured by M/s PTPL.During search of factory premises of PTPL or 17.04.2013, shortage in the stock of raw material and packing material was found During the follow up search operations of M/s Ghatge Patil Transport, two consignments of flavoured chewing tobacco of Aradhna Brand Zafrani Patti No. 311 Super of 20 cartons each were recovered having ass. Value Rs. 2,49,480/- involving Centrat Excise duty of Rs. 1,95,293/-. Further, the verification of the name of manufacturer printed upon the pouches contained in 40 cartons of Flavoured Chewing Tobacco of Aradhna Brand Zafrani Patti No. 311 revealed that the same were manufactured by M/s PTPL. I find that no excise invoice for clearance of finished goods had been issued by M/s PTPL after 16.03.2013 therefore, the Excise Appeal Nos.70218-70223 of 2016 45 consignments seized along with truck and recovered at the premises of the transporter M/s Ghatge Patil Transport on 18.04.2013 were the clandestinely cleared finished goods. Shri Neeraj Kumar, authorised Signatory of the factory confirmed that the above-said goods were manufactured and cleared from M/s PTPL without issue of excise invoice Shri Pankaj Kumar, Director of M/s PTPL in his statement agreed with the contents and facts narrated by Shri Neeraj Kumar, Authorised Signatory of the M/s PTPL.
(b) 1 find that Shri Deepak Sharma stated that the consignment pertaining to GRs / way bills dated 03.05.2013 and 21.11.2013 produced by M/s Ghatge Patil Transport Ltd. to the department, hrough which the goods i.e. tobacco and zarda were supplied by M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders Noida and M/s Aamir Enterprises, Noida, were loaded from M/s PTPL, and the bills in the name of above consignors have been handed over to them by M/s PTPL. Shri Naveen Kumar Kaul, Supervisor, M/s Ghatge Patil Transport Limited, confirmed that all the consignments of Tobacco / Zarda booked on the bills of M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises, Noida were loaded from the factory of M/s PTPL, A-90, Sector-63, Noida. find that the purchasers of above goods viz Shri B. S. Kothawale. Propreitor of M/s Sri Siddheshwar Traders, Shri M.D. Kasar, Proprietor of M/s Shree Sai Agencies, Shri Manoj Kumar Patil, Proprietor of M/s Siddaram Traders, Shri Shrinivas Hegde, Propreitor of M/s Vishal Enterprises, Shri N.G. Mohan, Proprietor of M/s Shri Ram Stores confirmed that they have received consignments of unaccounted consignments of Aradhna Brand Zarda from PTPL. The payments in respect of above consignment of Zarda was Excise Appeal Nos.70218-70223 of 2016 46 made in cash only to Shri Neeraj Kumar or to Shri Pankaj Kumar Arya of M/s PTPL. I find that Shri Pankaj Arya, Director M/s PTPL, confirmed that the GRs / Way bills submitted by M/s Ghatge Patil Transport Limited, Delhi pertains to the consignments of Tobacco / Zarda booked on the bills of M/s Vishwakarma Trading Co. Noida, M/s Rishabh Trading Co. Noida, M/s Pooja Traders, Noida and Ms Aamir Enterprises, Noida which were cleared clandestinely from.the factory of M/s PTPL, A-90, Sector- 63, Noida, without payment of duty during the period January, 2012 to April 2013. I find that he had seen the quantification chart and admitted with the duty liability amounting to Rs. 1,50,02,965/- for the period December, 2012 to April 2013.l find that PTPL admitting the duty liability, had deposited Rs. 43 Lakhs till 19.12.2014.
(c) I find that the party's contention that the consignment pertaining to GRs / way bills dated 03.05.2013 and 21.11.2013 produced by. M/s Ghatge Patil Transport Ltd. to the department, were not removed from the factory. without payment of duty is not correct for the reason that the authorized signatory of the party who has been looking after work related to manufacturing and clearance of excisable goods and the director of PTPL has admitted unequivocally that the excisable goods viz Flavoured Chewing Tobacco on above GRs / way bills dated 03.05.2013 and 21.11.2013 have been cieared without excise invoices and without payment of excise duty. It has been admitted by the party and their representative that in order to evade excise duty, excisabie goods were booked in the name of traders mentioned above. Further, buyers of above goods have categorically confirmed that Flavoured Chewing Tobacco has been purchased from PTPL without bills and payment for the same was made in cash to the director or authorized signatory. I find that the party's request for cross examination in the case is intended to prolong the proceedings and cannot be acceded to in view Excise Appeal Nos.70218-70223 of 2016 47 of preponderance of evidence which proves that the excisable goods were cleared clandestinely without payment of excise duty. I find that the party's contention that major part of the demand made in the Notice are based on transport documents recovered from the transporter M/s Ghatke Patil Transport Ltd and from other premises and there is no evidence to show the manufactured of goods alleged to be removed clandestinely without payment of duty is not correct as the transporter and authorized signatory has confirmed that the goods were manufactured, loaded and cleared from PTPL duly confirmed by the driver. As for the contention that there is no evidence of receipt of excess raw-materials or other inputs including packing materials use for the manufacture of the goods, 1I find that shortage of raw material was detected at PTPL in the search by the departmental officers as discussed above. I find that party's contention that documents recovered from third party not admissible in reliable evidence without proper corroboration as to extra raw material procured or financial transaction is not tenable for the reason that clandestine removal of excisable goods have been admitted by their director and authorized signatory and corroborated by the buyers and the transporter. The onus in respect of above has been discharged by the department. (d) I find that the cases cited by the party is distinguishable from the instant case for the reason that the cases cited by the party related to demand raised only on the basis of evidence from the transporter or third party without any corroborative evidence whereas in the instant case the evidences collected from third party have been corroborated by the transporter who has transported goods from the factory of the party to M/s Ghatge Patil and by the authorized signatory who has been dealing with the manufacture and clearance of excisable goods, by the director of the party looking after the affairs of the party and by the buyers of the excisable Excise Appeal Nos.70218-70223 of 2016 48 goods. i find that different legal foras have held repeatedly that: "Realizing the difficulties faced by investigating agencies in gathering evidences in a modern, technologically advanced times, the Hon'ble Supreme court has held that "(the prosecution) was not required to meet every hypotheses put forward by the accused"- Bhagwan Das V/s State of Madhya Pradesh (2002) 4 SC 85. In the same judgment, the Hon'ble court further held that "proof beyond reasonable doubt" was only in the nature of guidelines and that "if no innocent should be punished, no guilty should aiso be allowed to go Scot free"
Commenting on the quality of evidence to be collected during investigation, the Hon'ble. Supreme Court made following observations in the case of Collector of Customs V/s D. Bhoormull [A1R (1974) SC 859 quoted in the case 1996 (4) ECR 689 EC]:- "Smuggling is clandestine conveying of goods to avoid legal duties Secrecy and stealth being its covering guards, it is impossible for the preventive Department to unravel every link in the process. Many facts relating to this illicit business remain in the special or peculiar knowledge of the person concerned in it". ---the Department is not required to prove its case with mathematical precision of a demonstrable degree for, in all human affairs, absolute certainty is a myth and all exactness is a fake. El Dorado of absolute proof being unattainable, the law accepts for it, probability as a working substitute. The law does not require the prosecution to prove the impossible. All that it requires is the establishment of such degrees of probability that a prudent man may on its basis, believe in the existence of the fact in issue".
(xxi) In the light of above discussion, I find that consignments of Tobacco / Zarda related to GRs / Way bills Excise Appeal Nos.70218-70223 of 2016 49 submitted by Ms Ghatge Patil Transport Limited, Delhi were cleared clandestinely on the bills of M/s Vishwakarma Trading Co. Noida, M/s Rishabh Trading Co. Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises Noida from the factory of M/s PTPL, A-90, Sector-63, Noida, without payment of duty during the period January, 2012 to April 2013. I find that the duty liability amounting to Rs. 1,50,02,965/- for the period December, 2012 to April 2013 related to above goods cleared clandestinely is recoverable from PTPL under section 11A(4) of the Central Excise Act, 1944, along with interest at applicable rates under Section 11AA of the Central Excise Act, 1944.
5. (i) Above facts clearly brought out that PTPL were indulging in suppression of production and clandestine removal of finished goods in a well.planned and systematic manner with intent to evade payment of Central Excise duty From the scrutiny of the seized records, confessional statements of various persons including the Directors and employees of the company, their transporters and buyers, it is clear that PTPL adopted a well planned modus operandi for evasion of Central Excise duty. The excisable goods manufactured in the factory of PTPL .were clandestinely removed and transported to M/s Ghatge Patil Transport, Delhi with the help of M/s Om Road ways Corporation, Noida without payment of duty. They managed the booking of the offended goods on the basis of fabricated bills either of PTPL or of non existence firms like M/s Vishwakarma Trading Company Noida, M/s Rishabh Trading Company, Noida, M/s Pooja Traders, Noida and M/s Amir Enterprises, Noida. They also managed the transaction of their sale proceeds by way of cash transactions with their buyers. I find that M/s PTPL have been suppressing their production and ciearing their finished goods clandestinely. The detection of shortage of raw materials and packing materials clearly substantiate the charges of unaccounted production and their clandestine clearance. It is evident Excise Appeal Nos.70218-70223 of 2016 50 that M/s PTPL was not in a position to explain the shortages of raw material and their packing materials. The seizure of two consignments outside the factory premises clearly indicates that they have a modus operandi to clear their goods clandestinely. The consignment of 63 cartons of chewing tobacco intercepted and seized near padam petrol pump, sector-63, Noida was found cleared from the factory premises without any duty paying document but on the basis of bill/ cash memo No.s 317,318 and 319 all dated 17.04.2013 issued by a non-existent firm M/s Vishwakarma Trading Co.. The second consignment of 40 cartons of flavored chewing tobacco was seized at M/s Ghatge Patil Transport, C-9, SMA Industrial Area, Jahangirpuri, Delhi, was cleared from the factory clandestinely under the garb of bill/ cash memo No. 311 and 312 both dated 15.04.2013 issued by M/s Vishwakarma Trading Co. In the statement dated 23.04.2013, Shri Deepak Shama son of Shri Yogendra Kumar Sharma, authorized signatory of Om Transport Co., Noida, stated that he was receiving the clandestinely removed consignment of PTPL alongwith related documents from Shri Neeraj Kumar. The documents included invoices raised by PTPL and invoices raised by M/s Vishwakarma Trading Company which was nonexistent firm, for the same consignment and in turn, he was giving the documents to the drivers of the vehicles owned by M/s Om Transport Co. After booking and during transportation of such consignment, the invoice raised by PTPL was returned to Shri Neeraj Kumar Therefore, the goods were transported to the consignee on the invoices of M/S Vishwakarma Trading Company. Shri Deepak Sharma submitted that the documents related to the consignments at the time of clearance were given by Shri Neeraj Kumar to him which were further handed over to the driver of the vehicle and further during the course of transportation such documents were taken back from the driver by Shri Deepak Kumar and again supplied to Shri Neeraj Kumar. The Excise Appeal Nos.70218-70223 of 2016 51 payments in respect of consignment of Zarda, cleared on the bills of M/s Vishwakarma Trading Company were in cash by Shri Neeraj Kumar. In his statement dated 23.04.2013, Shri Neeraj Kumar also confirmed hat the above-said 63 cartons of flavoured chewing tobacco which were seized by the officers along with he Vehicle/Truck Swaraj Mazda Registration No. UP- 16E/4970 on 17.04.13, were loaded and cleared from M/s PTPL without issue of excise invoice; that, M/s Vishwakarma Trading Co. was a non-existent firm, the bills of which were used by Ms PTPL to transport clandestinely cleared consignments of Zarda; that, the two consignments o Aradhna Brand flavoured chewing tobacco of 20 cartons each (Total 40 cartons) seized on 18.04.2013 from the premises of M/s Ghatge Patil Transport, C-9, SMA Industrial Area, Jhangirpuri, Delhi covered under the bills of M/s Vishwakarma Trading Co., Bhardwaj Market, Barola, Noida were also manufactured and cleared from M/s PTPL without issue of excise invoice.
(ii) It is evident that the finished excisable goods manufactured by PTPL were booked on the bills of either of M/s Pankaj Tobacco Pvt Ltd, Noida or M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company, Noida M/s Pooja Traders, Noida and M/s Amir Enterprises, Noida. M/s PTPL had adopted a modus-operandi to the effect that they cleared the goods under the cover of fake tax / sale invoice of PTPL with bill /cash memo of 'nonexistent films like M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company, Noida M/s Pooja Traders, Noida and M/s Amir Enterprises, Noida. The goods cleared clandestinely were accompanied with these documents and in the transit the fake tax/ sale invoices were destroyed and the bill/ cash memos of nonexistent firms were used for further transport to destinations. Further, the GRs, resumed during search of premises situated at 1-23, Sector-12, Noida on 11/12.04.2012 were issued for dispatch of Pan Masala cartons from the factory Excise Appeal Nos.70218-70223 of 2016 52 premises of PTPL to Bangalore. Those GRs were issued by M/s Hariom Krishna Transport Company, Noida to M/s Krishna Pan House, Bangalore. In his statement dated 12.04.2012, Shri Om Prakash, Supervisor of PTPL stated that M/s Hariom Traders was not any firm in existence and those goods were sent from the factory premises of PTPL to M/s Krishna Pan House, Bangalore; and those goods were manufactured by PTPL and cleared from the premises of PTPL on the instruction of Shri Pradeep Kumar Arya, Director of PTPL. The events establish that M/s PTPL was habitual in the act of evading of central excise duty on the finished goods manufactured by them and cleared clandestinely.The quantification chart prepared on the basis of GRs / way bills submitted by M/s Ghatge Patil Transport Co, has been shown to Shri Pankaj Kumar, Director of M/s PTPL during recording of his statement on 19.12.2014, inter-alia he stated hat- "I have seen the quantification chart and have signed the same in token of my agreement. I agree that M/s Pankaj Tobacco Private Limited, A-90, Sector-63, Noida have cleared finished goods without payment of duty amounting to Rs. 1,50,02,965/- during the period December, 2012 to April, 2013. Admitting my duty liability, I have voluntarily deposited Rs. 43 Lacs till date."
(iii) From the above facts, itis crystal clear that PTPL deliberately violated the provisions of Central Excise Laws and defrauded the exchequer by not paying the Central Excise duty on the finished goods so cleared by them clandestinely as they were not maintaining proper account of finished goods. They did not maintain any account of their packing material. The raw material input goods were found short. Unaccounted details of clearance of excisable goods were also resumed from other residential premises of the Director of the party. Shortage and excess detected in the finished goods, raw materials and packing materials during stock taking of PTPL also confirm that PTPL was Excise Appeal Nos.70218-70223 of 2016 53 engaged in the unaccounted manufacture and clandestine clearance of Chewing Tobacco from their factory. I find that the party has violated the provisions of Rule 4,6,8,11 & 12 of the Central Excise Rules, 2002. In view of above, I find that PTPL is liable for penalty in terms of Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944
6. I find that copies of 6 (six) GRs bearing serial Nos.14514. 14515,14516 and 14517 all dated 20.02.2012 (in original), 14505 dated 15.02.2012 and 14508 dated 16.02.2012 (both in Xerox copies) issued by M/s G.G.Carrier, Agra Road, Jaipur were recovered from the Residential premises situated at 1-23, Sector-12, Noida which belongs to Shri Pradeep Kumar Arya Director of PTPL. I find that Shri Om Prakash. Supervisor of PTPL, stated that the GRs, were issued for dispatch of Pan Masala cartons from the factory premises of PTPL to Bangalore; that, those goods were manufactured by PTPL and cleared from the premises of PTPL on the instruction of Shri Pradeep Kumar Arya, Director of PTPL. Shri Rajneesh Kumar Trehan, owner of M/s Hariom Krishna Transport Company on seeing the 6 No.s of GRs, stated that masala was transported vide those 6 GRs; from his premises to Punjabi Bagh, New Delhi branch of M/s G.G.Carrier. Shri Pankaj Arya, other director of PTPL on being confronted with the statement of Shri Om Prakash and the GRs submitted that he fully agreed with the statement and put his dated signature on the statement in token of his agreement; he admitted that the said finished goods were cleared clandestinely from their factory premises. I find that Shri Pradeep Kumar in his reply have submitted that he is not looking after day to day work of the factory, there is nothing in the Notice which show that he was directly involved in the activity of clandestine removai of the chewing Tobacco with intend to evade payment of duty, there is no evidence to show that the alleged clandestine Excise Appeal Nos.70218-70223 of 2016 54 removal from the factory was with his consent therefore, imposition of penalty under rule 26 as proposed is not justified. I find that GRs on which goods have been cleared clandestinely have been recovered from the residence of Shri Pradeep Kumar Arya. Shri Om Prakash, Supervisor of PTPL, has categorically stated hat the dispatch of Pan Masala cartons from the factory premises of PTPL to Bangalore was made on the instruction of Shri Pradeep Kumar Arya, a fact which is agreed to by other director Shri Pankaj Arya. In view of above hold that Shri Pradeep Kumar Arya was knowingly involved in clandeastine clearance of excisable goods and is therefore, liable to penalty in terms of Rule 26 of the Central Excise Rules, 2002.
7. I find that Shri Pankaj Kumar Arya, son of Shri Pradeep Kumar Arya, Director of M/s PTPL, was looking after the work of purchase production, sale administration and taxation pertaining to M/s PTPL. He was actively involved in suppression of production and clandestine removal of goods manufactured by PTPL. In his conclusive statement recorded under section 14 of the Central Excise Act, 1944 on 19.12.2014, he admitted that PTPL had cleared finished goods without payment of duty and he was involved with booking of consignments with M/s Ghatge Patil Transport Company through Shri Yogendra Sharma and his son Shri Deepak Sharma of Om Transport Co. Noida. Further, the purchaser of goods clandestinely removed, have confirmed that they have made payment of above goods to Shri Pankaj Kumar Arya in cash. I find that Shri Pankaj Kumar Arya in his reply has submitted that the allegation of suppression of production and clandestine removal without payment of duty has not been specified in the Notice, what was the quantity of production and how much raw materials were procured for manufacture of suppressed quantity and to whom the goods were sold, is not detailed in the S.C Notice, what role he played in Excise Appeal Nos.70218-70223 of 2016 55 evasion duty is not clear from the Notice. 1I find that reply of Shri Pankaj Kumar Arya is not tenable as he himself was looking after work of purchase, production, sale, administration and taxation and he agreed with the statement of his employee viz authorized signatory Shri Neeraj Kumar. In view all these facts, I hold that Shri Pankaj Kumar Arya is liable for penalty under rule 26 of C.E.Rules, 2002.
8. I find that Shri Neeraj Kumar, Authorised Signatory of M/s PTPL, was looking after Central Excise related formalities of the factory and supervise the activities like maintenance of stock registers of raw material and finished goods, issuing invoices, filling returns etc pertaining to M/s PTPL. He was actively involved in this case as he has abetted evasion of Central Excise duty by PTPL. He was knowingly concerned in production, storage, clearance and transportation of non duty paid excisable goods cleared from PTPL and instrumental for booking of the offended goods.on the basis of fabricated bills either of PTPL or of M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company, Noida, M/s Pooja Traders, Noida and M/s Amir Enterprises, Noida. In the statement dated 23.04.2013, Shri Deepak Sharma son of Shri Yogendra Kumar Sharma, authorized signatory of Om Transport Co., Noida, stated that he was receiving the clandestinely removed consignment of PTPL along with related documents from Shri Neeraj Kumar. The documents included invoices raised by PTPL and invoices raised by M/s Vishwakarma Trading Company which was a non-existent firm, for the same consignment and in turn, he was giving the documents to the drivers of the vehicles owned by M/s Om Transport Co. After booking and during transportation of such consignment, the invoice raised by PTPL was returned to Shri Neeraj Kumar. Therefore, the goods were transported to the consignee on the invoices of M/s Vishwakarma Trading Company. Shri Deepak Sharma Excise Appeal Nos.70218-70223 of 2016 56 submitted that the documents related to the consignments on the time of clearance were given by Shrí Neeraj Kumar to him which were further handed over lo the driver of the vehicle and further during the course of transportation such documents were taken back from the driver by Shri Deepak Kumar and again supplied to Shri Neeraj Kumar, The payments in respect of consignment of Zarda, cleared on the bills of M/s Vishwakarma Trading Company were received in cash by Shri Neeraj Kumar I find that Shri Neeraj Kumar in his reply, submitted that he was the authorized signatory of the company and a sincere employee doing work allotted to him, his duties were as required by the employer, he has no independent role in the working of the company, therefore, the allegation that he knowingly involved himself in suppression and clandestine removal of the goods, is not correct. 1 find that Shri Neeraj Kumar was the authorized signatory of the company looking after the clearance of excisable goods and therefore, was aware about the central excise law; still he chooses to involved himself in clandestine clearance of excisable goods. Above facts clearly establish the lead role played by Shri Neeraj Kumar along with his employer Shri Pankaj Kumar Arya in clandestine clearance of excisable goods and evasion of central excise duty. In view all these facts, I hold that Shri Neeraj Kumar is liable for penalty under rule 26 of C.E.Rules, 2002
9. I find that Shri Umesh Yadav has stated that Shri Deepak Sharma, owner of the Vehicle/Truck gave him Bills and Way Bil/Bilty in respect of 63 cartons of flavoured chewing tobacco; that each time Shri Deepak Sharma, Owner of the Vehicle/Truck hands him over the Bills both pertaining to PTPL and M/s Vishwakarma Trading Co., Noida and that on transit the bills pertaining to PTPL are taken back by Shri Deepak Sharma and goods are transported on the bills of M/s Vishwakanna Trading Co., Noida to the premises of M/s Ghatge Patil Transport Ltd., Excise Appeal Nos.70218-70223 of 2016 57 Jahangirpuri, Delhi from where they are sent to the final destinations. Shri Yogendra Kumar Sharma, Proprietor of M/s Om Roadways Corporation stated that they were the Booking agent for M/s Ghatge Patil Transport Ltd., C-9, SMA Industrial Area, Jehangirpuri, Delhi and that that all work related to his transport company was looked after by his son Shri Deepak Sharma. Shri Deepak Sharma admitted that they were booking agent for M/s Ghatge Patil Transport Ltd. and that for booking of goods they were supplied Bilty Book and Challan Book by M/s Ghatge Patil Transport. I find that Shri Deepak Sharma stated that he used to take back the bills of M/s PTPL in transit from the driver of the vehicle for returning the same to Shri Neeraj Kumar and the goods were further transported on the bills of M/s Vishwakarma Trading Co. Shri Deepak Sharma stated that as per directions of Shri Neeraj Kumar, he used to take back the Invoice from driver for returning the same to M/s PTPL. Shri Deepak Sharma further submitted that the consignment pertaining to GRs / way bills dated 03.05.2013 and 21.11.2013 produced by M/s Ghatge Patil Transport Ltd. to the department, through which the goods i.e. tobacco and zarda were supplied by M/s Vishwakarma Trading Company Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises, Noida, were loaded from M/s PTPL, and the bills in the name of above consignors have been handed over to him by M/s PTPL. I find that Shri Deepak Sharma has submitted that his father Sh. Yogendra Sharma, is proprietor of M/s Om Roadways Corporation, who are engaged in transport business. They were the booking agent of M/s Ghatke Patil Transport Ltd. on whose behalf consignment are booked and sent to the principal transporter. They are transporting for intermediate distance on behalf of principal transporter, therefore, it is totally wrong to say that they were actively involved in the case of M/s P.T.P.L and abated in evasion of Central Excise Duty by P.T.P.L. That there is no evidence on Excise Appeal Nos.70218-70223 of 2016 58 record that clandestine removal of excisable goods by M/s P.T.P.L. was in our knowledge as proper covering documents of the consignment were supplied by M/s P.T.P.L. all goods booked were delivered to the principal transporter M/s Ghatke Patil Transport Ltd. Shri Deepak Kumar does not appear for personnel hearing.l find that the contention raised by Shri Deepak Kumar about their ignorance of the clandestine nature of goods and lack of evidence on record is not sustainable for the reason that he has admittedly involved in taking back the bills of M/s PTPL in transit from the driver of the vehicle for returning the same to Shri Neeraj Kumar and the goods were further transported on the bills of M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M's Aamir Enterprises, Noida as discussed above. I find that Shri Deepak Sharma was actively involved in the clandestine removal of excisable goods as he was involved in transporting excisable goods from the factory to the premises of Ms Ghatge Patil Transport Ltd. In view of above, I hold that Shri Deepak Sharma is liable for penalty under rule 26 of C.E. Rules, 2002
10. I find that Shri Kanwar Singh Yadav, Branch Manager of M/s Ghatge Patil Transport, informed that the said consignments were booked by Shri Yogendra Kumar Sharma, Proprietor of M/s Om Roadways Corporation. 1 find that Shri Yogendra Sharma, Prop. M/s Om Roadways Corporation, has submitted that they are booking agents for M/s Ghatke Patil Transport Ltd., C-9, SMA Industrial Area, Jahangirpu.i, Delhi. It was stated that all work to transport co., is looked after by my son Sh. Deepak Sharma. There is no evidence on record that he was in the knowledge of clandestine removal of excisable goods which were liable for confiscation. Moreover, whatever documents were supplied by M/s P.T.P.L. for the covering of excisable goods. the same were given to M/s Ghatke Patil Transport Ltd. while Excise Appeal Nos.70218-70223 of 2016 59 delivering the goods to them. Shri Yogesh Kumar does not appear in personnel hearing. I find that the submissions made by the party is not tenable for the reason that Shri Yogendra Kumar has been running a propepreitorship business and engaging his son during the course of his activity. He has contended that his son was looking after the business related to M/s Ghatge Patil Transport is not acceptable for the reason that he being a propereiter of the business and must be aware of all the transactions carried out by the firm. In addition to above, the person being his son cannot said to be going solo without having obtained a tacit approval of the his father and owner of the business. In view of above facts, find that Shri Yogesh Kumar was actively involved in this case as he appeared to have abetted in evasion of Central Excise duty by PTPL. He was concerned in transportation of excisable goods which he knew were liable for confiscation. He has not submitted any reply in his defence. In view of above, 1 hold that Shri Yogendra Kumar Sharma, Proprietor of M/s Om Roadways Corporation is liable for penalty under rule 26 of C.E.Rules, 2002.
11. I find that M/s Ghatge Patil Transport, C-9, SMA Industrial Area Jehangirpuri, Delhi-33, were actively involved in facilitating transport of clandestinely cleared excisable goods through Ms Om Roadways Corporation. I find that two consignments of clandestinely cleared excisable goods were recovered from their premises. They were knowingly concerned in storage and transportation of non duty paid excisable goods cleared from PTPL and instrumental for booking of the offended goods on the basis of fabricated bills either of PTPL or of M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company, Noida, M/s Pooja Traders, Noida and M/s Amir Enterprises, Noida. I find that M/s Ghatke Patil in their reply submit that no concrete evidence is adduced by the department to prove that they were fully aware of the non-duty paid Excise Appeal Nos.70218-70223 of 2016 60 nature of the tobacco/zarda which were handed over to them for transportation. It has been submitted by them that from none of the statements/documents recorded/relied upon in the show cause cum demand notice anywhere it is coming out that they were knowingly involved in the transaction and had clear idea that, the tobacco/zarda which they have transported/kept in our premises for further transportation were non-duty paid and hence were liable to be confiscated. No statement of any of their representative is recorded to find out whether they were involved in the transaction knowingly Further, in the statements recorded of various other parties also nowhere there is indication about their guilty knowledge. In such circumstances merely because they have transported the tobacco/zarda, one cannot conclude that they fully knew the non-duty paid nature of the said tobacco/zarda and still agreed to store and transport the said tobacco/zarda. They also cited case laws in their favour. M/s Ghatke Patil does not appear for personnel hearing. i find that the party's contention that they were not fully aware about the nature of goods transported by them is not acceptable for the reason that it is a well known fact that tobacco/zarda is evasion prone commodity and the party being an experienced transporter bound to have verified the credentials of the customers. 1 find that Shri Naveen Kumar Kaul, Supervisor, M/s Ghatge Patil Transport Limited, has stated that finished goods of M/s Pankaj Tobacco Pvt. Ltd., Noida, were booked by their agent Shri Yogendra Kumar Sharma and his son Shri Deepak Sharma of M/s Om Roadways Corporation; that the finished goods of M/s PTPL, Noida were mainly booked on the bills of either Ms PTPL, M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises, Noida; that he confirmed that all the consignments of Tobacco / Zarda booked on the bills of M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, M/s Excise Appeal Nos.70218-70223 of 2016 61 Pooja Traders, Noida and M/s Aamir Enterprises, Noida were loaded from the factory of M/s PTPL, A-90, Sector-63, Noida. Above facts shows that M/s Ghatge Patil Transport Limited were aware. that the goods in question were being cleared from a factory yet they do not bother to ensure to have proper invoices related to goods. I find that cases cited by the party are not applicable to the instant case. In view of above, I find that they were involved in transporting, removing depositing, keeping and concealing of excisable goods which they knew were liable for confiscation. Therefore, I hold that M/s Ghatge Patil Transport Company is liable to imposition of penalty under Rule 26 of the Central Excise Rules, 2002
12. I find that Shri B. S. Kothawale, Propreitor of M/s Sri Siddheshwar Traders admitted that his firm used to purchase Aradhna Brand Zarda manufactured by M/s PTPL, Noida, without bills. He confirmed that the unaccounted consignments of Aradhna Brand Zarda were delivered to them at Solapur on the bills of M/s Vishwakarma Trading Company, through transport M/s Ghatge Patil Transport Ltd. Jt has also been confirmed by him that the payments in respect of consignment of Zarda received on the bills of M/s Vishwakarma Trading Co. were made in cash to Shri Neeraj Kumar or to Shri Pankaj Kumar Arya of M/s PTPL. He confirmed the receipt of Zarda consignments on way bills / bilties No. 2416297 dated 23.03.2013 and bills / bilties No.2416227 dated 18.02.2013 as submitted by M/s Ghatge Patil Transport Ltd., on the bills of M/s Vishwakarma Trading Co., Noida. I find that Shri B.S. Kothawale was aware that the goods related to above way bills, bilties were cleared clandestinely by PTPL, that's why he made payment for the same in cash. I find that Shri B. S. Kothawale neither submitted any reply to notice nor avail the opportunity of personnel hearing. In view of above, 1 find that Shri B. S. Kothawale had knowingly involved in he transaction of excisable goods cleared clandestinely by M/s Excise Appeal Nos.70218-70223 of 2016 62 PTPL and is therefore, liable for penalty under rule 26 of C.E.Rules, 2002.
13. I find that Shri M.D. Kasar, Proprietor of M/s Shree Sai Agencies admitted that his firm used to purchase Aradhna Brand Zarda manufactured by M/s PTPL, Noida, without bills. The unaccounted consignments of Aradhna Brand Zarda were delivered to them at Madhavnagar on the bills of M/s Vishwakarma Trading Company, through transport M/s Ghatge Patil Transport Ltd. It has been stated by him that the payments in respect of consignment of Zarda received on the bills of M/s Vishwakarma Trading Co. and M/s Rishabh Trading company were made in cash only to Shri Neeraj Kumar or to Shri Pankaj Kumar Arya of M/s PTPL. He confirmed that they have received Zarda consignments on way bills / bilties No. 2416262 dated 04.03.2013 and bills / bilties No.2416299 dated 23.03.2013 as submitted by M/s Ghatge Patil Transport Ltd., on the bills of M/s Vishwakarma Trading Co. Noida. I find that Shri M.D. Kasar was aware that the goods related to above way bills / bilties were cieared clandestinely by PTPL, that's why he made payment for the same in cash. I find that Shri M.D. Kasar neither submitted any reply to notice nor avail the opportunity of personnel hearing. In view of above, I find that Shri M.D. Kasar had knowingly involved in the transaction of excisable goods cleared clandestinely by M/s PTPL and is therefore, liable for penalty under rule 26 of C.E.Rules, 2002
14. I find that Shri Manoj Kumar Patil, Proprietor of M/s Siddaram Traders admitted that his firm used to purchase Aradhna Brand Zarda manufactured by M/s PTPL, Noida, without bills. The unaccounted consignments of Aradhna Brand Zarda were delivered to them at Bijapur on the bills of M/s Vishwakarma Trading Company and M/s Rishabh Trading Co through transport M/s Ghatge Patil Transport Ltd. The payments in respect of consignment of Zarda Excise Appeal Nos.70218-70223 of 2016 63 received on the bills of M/s Vishwakarma Trading Co. and M/s Rishabh Trading company were made in cash only to Shri Neeraj Kumar or to Shri Pankaj Kumar Arya of M/s PTPL. After being shown way bills / bilties No. 7174907, 7174908, 7174909 7174910 dated 12.02.2013,7174926 dated 16.03.2013 and 7174930, 7174931 dated 23.03.2013, as submitted by M/s Ghatge Patil Transport Ltd., reflecting details of Zarda consignments transported by them on the bills of M/s Vishwakarma Trading Co. ,Noida, and 7174686 dated 21.12.2012 (of M/s Rishabh Trading Company), he confirmed the consignments related to them. I find that Shri Manoj Kumar Patil was aware that the goods related to above way bills / bilties were cleared clandestinely by PTPL, that's why he made payment for the same in cash. I find that Shri Manoj Kumar Patil neither submitted any reply to notice nor avail the opportunity of personnel hearing. In view of above, I find that Shri Manoj Kumar Patil had knowingly involved in the transaction of excisable goods cleared clandestinely by M/s PTPL and is therefore, liable for penalty under rule 26 of C.E. Rules, 2002
15. I find that Shri Shrinivas Hegde, Propreitor of M/s Vishal Enterprises admitted that his firm used to purchase Aradhna Brand Zarda manufactured by M/s PTPL, Noida, without bills.The unaccounted consignments of Aradhna Brand Zarda were delivered to them at Hubli on the bills of M/s Vishwakarma Trading Company, through transport M/s Ghatge Patil Transport Ltd. The payments in respect of consignment of Zarda received on the bills of M/s Vishwakarma Trading Co. were made in cash only to Shri Neeraj Kumar or to Shri Pankaj Kumar Arya of M/s PTPL. After being shown way bills/ bilties No 7174916 dated 07.03.2013 and bills/ bilties No.7174682 dated 12.12.2012 7174683 dated 13.12.2012, 7174684 dated 15.12.2012 as submitted by M/s Ghatge Patil Transport Ltd.,reflecting details of Zarda consignments transported by them on the Excise Appeal Nos.70218-70223 of 2016 64 bills of M/s Vishwakarma Trading Co. Noida, he confirmed the consignments related to them. 1 find that Sh. Shriniwas Hengde has submitted that the goods were purchased under proper documents and payment of the goods was made in cash and by cheques. That the chewing tobacco was purchased in the normal course or trade. It Was never bought to their knowledge that the goods supplied have been clandestinely removed from .the factory of M/s Pankaj Tobacco Pvt Ltd and the duty on the goods have not been paid. We have no knowledge of the clandestine nature of the goods delivered. I find that Shri Shrinivas Hegde did not avail the opportunity of personnel hearing. I find that Shri Shrinivas Hegde was aware that the goods related to above way bills / bilties . were cleared clandestinely by PTPL, that's why he made payment for the same in cash. In view of above, I find that Shri Shrinivas Hegde had knowingly involved in the transaction of excisable goods cleared clandestinely by M/s PTPL and is therefore, liable for penalty under rule 26 of C.E.Rules, 2002.
16. I find that Shri N.G. Mohan, Proprietor of M/s Shri Ram Stores admitted that his firm used to purchase Aradhna Brand Zarda manufactured by M/s PTPL, Noida, without bills. The unaccounted consignments of Aradhna Brand Zarda were delivered to them at Davangere on the bills of M/s Vishwakarma Trading Company through transport M/s Ghatge Patil Transport Ltd. The payments in respect of consignment of Zarda received on the bills of M/s Vishwakarma Trading Co. were made in cash only to Shri Neeraj Kumar or to Shri Pankaj Kumar Arya of M/s PTPL. After being shown way bills / bilties No. 7174913 dated 27.02.2013 and bills / bilties No.7174681 dated 12.12.2012, 7174685 dated 17.12.2012, 7174699 dated 16.01.2012 as submitted by M/s Ghatge Patil Transport Ltd., reflecting details of Zarda consignments transported by them on the bills of M/s Vishwakarma Trading Co. Noida M/s Pooja Trader, Aamir Enterprises and M/s Rishabh Excise Appeal Nos.70218-70223 of 2016 65 Trading Co., he confirmed the consignments related to them. 1 find that Sh. N.G.Mohan has submitted that the allegation that he was involved in the transaction of excisable goods cieared clandestinely by M/s. Pankaj Tobacco Pvt. Ltd, Noida, is not correct. The goods were purchased under proper documents of the trading firm. It was never brought to our knowledge that the goods delivered on the documents of the trading firm were cleared from M/s. Pankaj Tobacco Pvt. Ltd without payment of the duty. It was not in our knowledge that the goods delivered on the bills of trading firms were of clandestine nature. The purchase of the goods was in the normal course of trade.l find that the party did not avail the opportunity of personnel hearing.l find that Shri N.G. Mohan was aware that the goods related to above way bills bilties were cleared clandestinely by PTPL that's why he made payment for the same in cash. In view of above, I find that Shri N.G. Mohan had knowingly involved in the transaction of excisable goods cleared clandestinely by Ms PTPL and is therefore, liable for penalty under rule 26 of of C.E.Rules 2002."
4.3 From the facts as narrated above it is evident Appellant 1 has through well devised mechanism by way of issuance documents in name of non existent firms namely,- M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M's Aamir Enterprises, was clandestinely clearing their finished goods to their customers located across the country in Maharastra, Karnataka etc. Against the goods cleared against invoices made in name of the fictitious companies they were receiving the payament in cash. Where they were clearing the goods on the invoices issued in their name they were receiving the payment by cheque.
4.4 The buyers of goods, M/s Sri Siddheshwar Traders, shop No.11, Kumbharwar shopping centre, Solapur (Maharashtra), M/s Shree Sai Agencies, 299, Satakar Chal, Mangalwar Peth, Excise Appeal Nos.70218-70223 of 2016 66 Madhavnagar Sangli, M/s Siddaram Traders, Shah Peth, Bijapur, M/s Vishal Enterprises, Aditi Chamber, Hugaroni, Karnataka, M/s Shri Ram Stores, C.V.Complex, Station Road, Davangere Karnataka have in their statements recorded under Section 14 of the Central Excise Act, 1944 have stated that they were reciving the clandestinely goods and were making the payments against the goods so received in cash. They also admitted that they were receiving the goods from the Appellant 1 through Ghatge Patil Transport Company.
4.5 Undisputedly the searches were conducted at various location including the factory premises of the Appellant 1, and various residential premises owned by them and their Directors i.e. Appellant 2 and Appellant 3. Searches were also conducted at the premises of the agent of transporter booking the consignments of appellant 1 and also at the premises of the transporter namely Ghatg Patil Transport Company.
4.6 During the searches conducted at the factory premises of the appellant of 11/12.04.2012 discepranicies were noted in the stock of the finished goods and raw materials. Appellant's admitted to the disceprancies after recording their satisfaction with method of stock taking. While the investigations in the matter were still going on, a Swaraj Mazda Truck having Registration No up-16E 4970, was intercepted by the officers on 17.04.2013 which was carrying the the goods clandestinely cleared by the Appellant. Driver of the truck Shri Umesh Yadav produced two sets of invoices, in respect of the goods in the truck. One set of invoices were issued in the name of Appellant 1 and the Second Set was issued in the name of the fictitious company M/s Vishwakarma Trading Company, Noida. The document issued in the name of fake entity were accompanied with the transport documents prepared by the Ghatge Patil Transport Company, and there were no transport documents in respect of the invoices issued in name of Appellant 1. Investigations revealed that the invoices were issued in the name of appellant were to Excise Appeal Nos.70218-70223 of 2016 67 cover up the transport of the goods to the godown of transporter and were taken back by the booking agent, Appellant 4 and from the transporter godown goods were transported on the documents issued in the name of fake company alongwith the transport documents prepared by the transporter M/s Ghatge Patil Transport Company.
4.7 As a follow up of the interception of truck on 17.04.2013, factory premises of the Appellant were searched on 17.04.2013 and the premises of transporter on 18.04.2013. During search of the factory premises of Appellant 1, disceprancies were again noticed in the stocks of finished goods and raw materials, these disceprancies were accepted by the Appellant 1. It was also accepted that Appellant 1 did not issued any invoice in its name on 17.04.2013 to transport the goods loaded on intercepted truck.
4.8 During the search of the premises of transporter Ghatge Patil Transport Company two clandestinely cleared consignments by the Appellant were found and were also seized.
4.9 The seized goods and truck were subsequently released provisionally after execution of B-11 bonds and cash security in form of Fixed Deposits.
4.10 Appellant 6 in his statement dated 23.04.2013 stated that he is the owner of two trucks Registration Nos. UP 16E-
4970 and UP 13T-2127;
they were the Booking agent for M/s Ghatge Patil Transport Ltd., C-9, SMA Industrial Area, Jehangirpuri, Delhi all work related to his transport company was looked after by his son Shri Deepak Sharma.
4.11 Appellant 4 son of Appellant 6, in his statement dated 23.4.2013 admitted that they were booking agent for M/s Ghatge Patil Transport Ltd. C-9, SMA Industrial Area, Jehangirpuri, Delhi-33 Excise Appeal Nos.70218-70223 of 2016 68 for booking of goods they were supplied Bilty Book and Challan Book by M/s Ghatge Patil Transport, regarding the 63 cartons of flavoured chewing tobacco which were seized along with the truck having Registration No. UP-16E/4970 on 17.04.13 admitted that papers pertaining to said the 63 cartons of flavoured chewing tobacco were given to him by Appellant 5, Authorised Signatory of Appellant 1, these papers contained Invoices of Appellant 1 as well as of M/s Vishwakarma Trading Co;
on the basis of said papers he prepared Bilties and handed over the same to Shri Umesh Yadav Driver of the vehicle.
he used to take back the bills of Appelalnt 1 in transit from the driver of the vehicle for returning the same to Appellant 5 and the goods were further transported on the bills of M/s Vishwakarma Trading Co.
sometimes booking was on the papers of M/s PTPL also but he had no knowledge whether the same were Excise Invoices or not. Shri Deepak Sharma.
as per directions of Shri Neeraj Kumar, he used to take back the Invoice from driver for returning the same to Appellant 1/ Appellant 5.
agreed with the statement dated 17.04.2013 of Shri Umesh Yadav, Driver of Vehicle/Truck Reg. No. UP-16E /4970 4.12. In his statement dated 28.04.2014, Appellant 4 further submitted that:
the consignment pertaining to GRs way bills dated 03.05.2013 and 21.11.2013 produced by M/s Ghatge Patil Transport Ltd. to the department, through which the goods i.e. tobacco and Zarda were supplied by M/s Vishwakarma Trading Company. Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises, Noida were loaded from premises Excise Appeal Nos.70218-70223 of 2016 69 of Appellant 1, and the bills in the name of above consignors have been handed over to us by them.
they have only booked the consignment of M/s PTPL in the name of M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises, Noida 4.13 Shri Naveen Kumar Kaul s/o Late Shri G. N. Kaul, aged 46 years Supervisor, M/s Ghatge Patil Transport Limited, in his statement under dated 25.04.2014, stated that finished goods of M/s Pankaj Tobacco Pvt. Ltd., Noida, were booked by our agent Appellant 6 and his son Appellant 4;
the finished goods of Appellant 1 were mainly booked on the bills of either Appellant 1, M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises, Noida;
all the consignments of Tobacco / Zarda booked on the bills of M/s Vishwakarma Trading Company, Noida, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises, Noida were loaded from the factory of Appellant 1;
all these bookings were on "TO PAY" basis and payments were received by them at the destination from the consignee 4.14 After identifying the customers to whom the goods of appellant 1 have been transported by M/s Ghatge Patil Transport Company, statements of the customers were recorded on various dates who admitted the factum of receipt of thes aid clandestinely cleared goods by the Appellant 1 in the anme of fake firms, and also the fact that against these goods they used to make payment in cash.
The fact about the clandestine clearance was admiited by the Appellants and Excise Appeal Nos.70218-70223 of 2016 70 4.15 Appellant 3 who is son of Appellant 1 and also the Director with Appellant 1, in his statement recorded on 19.12.2014 stated that the finished goods of Appellant 1 were booked with M/s Ghatge Patil Transport Limited, Delhi, through Appellant 6 and his son Appellant 4 of M/s Om Transport Co. Noida. The finished goods of Appellant 1 were mainly booked on the bills of either Appellant 1 or M/s Vishwakarma Trading Company, Bhardwaj Market, Near Water Tank, Barola, Noida-II, M/s Rishabh Trading Company Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises, Noida; the GRs / Way bills submitted by M/s Ghatge Patil Transport Limited, Delhi pertains to the consignments of Tobacco / Zarda booked on the bills of M/s Vishwakarma Trading Co. Noida, M/s Rishabh Trading Co. Noida, M/s Pooja Traders, Noida and M/s Aamir Enterprises Noida which were cleared clandestinely from the factory of Appellant 1;
GRs /Way bills submitted by M/s Ghatge Patil Transport Ltd, Delhi on which finished goods manufactured by Appellant 1, were cleared without payment of duty pertain to the period January, 2012.to April 2013. During this period they were packing 200 Tin containers of 50 gms each of MRP Rs. 85 in each carton and 220 pouches of 50 gms. each of MRP Rs. 63 were packed in each carton;
the Aradhna Brand Zarda cleared by them in in Tin containers of 50 gms but the customers like Amit Agency / Trading, Aurangabad Bharat Trading, Hyderabad, Siddaram Traders, Bijapur, and Modern Tobacco/ Zarda, Latur have always purchased Aradhna Brand Zarda chewing tobacco in 50 gms pouch only;
he agreed that all the persons i.e. M/s Sri Siddheshwar Traders, shop No. 11, Kumbharwar shopping centre, Solapur, M/s Shree Sai Agencies, 299, Satakar Chal, Mangalwar Peth, Madhavnagar, Sangli, M/s Siddaram Excise Appeal Nos.70218-70223 of 2016 71 Traders Shah Peth, Bijfapur, M/s Vishal Enterprises, Aditi Chamber, Hugaroni, Karnataka M/s Shri Ram Stores, C.V.Complex, Station Road, Davangere, Karnataka, are customers of Appellant 1 who used to purchase Aradhan Brand Zarda manufactured by M/s PTPL, Noida both on the bill and without bills.
The unaccounted consignments of Aradhan Brand Zarda were delivered to them on the bills of M/s Vishwakarma Trading Company, Bharadwaj Market, Near Water Tank, Barola Noida-lI, through transport M/s Ghatge Patil Transport Ltd., C-9, SMA Industrial Area, Jehangirpuri, Delhi -33.
The payments in respect of consignment of Zarda received on the bills of Appellant 1, were received through cheques only.
The payments in respect of consignment of Zarda received on the bills of M/s Vishwakaiina Trading Co. were received in cash;
he has seen the quantification chart and admitted with the duty liability amounting to Rs. 1,50,02,965/- for the period December, 2012 to April 2013;
admitting the duty liability he had deposited Rs. 43 Lakhs till 19.12.2014 4.16 Thus it is evident that the all the threads necessary to establish the case of clandestine clearance have been investigated and interwoven to unearth the scheme of clandestine clearance adopted by the Appellant 1, Appellant 2, Appellant 3, Appellant 4, Appellant 5 and Appellant 6. Each of the appellant was fully aware of the scheme and was playing the role assigned to him. It is also interesting to note that appellant during the period even after search conducted in his premises on 11/12.04.2012, continued with his activity of clandestine clearance. The truck cleared from his premises on 17.04.2013 and intercepted by the officers clearly establishes that Appellants are habitual offenders. In fact the maximum demand in respect of clandestine clearance on the basis of the documents Excise Appeal Nos.70218-70223 of 2016 72 recovered during the search/ investigation at the transporter premises is for the period after the first search conducted on 11/12.04.2012. All the concerened i.e. Appellant 1, Appellant 2, Appellant 3 and Appellant 5 who are engaged in manufacture and clearance of the goods have admitted to their roles and the factum of clandestine clearance by adopting this modus opearndi. Appellant 4 and Appellant 6 who are booking agents of M/s Ghatge Patil Transport Company, to have admitted their roles. Transporter has admitted the factum of transport of the clandeastinely cleared goods on the basis invoices of fictitious entities and the Customers of the appellant have admitted to the receipt of the clandestinely cleared goods and facft of making payment in cash against these goods. All these aspects on the basis of the evidences have been appropriately discussed in th impugned order.
4.17 It is settled position in law that once the facts have been admitted the same need not be proved/ established again. In case of System and Component [2004 (165) ELT 136 (SC)] Hon'ble Supreme Court has held as follows:
"5. The Appeal filed by the Department has been disposed of by the Tribunal by holding that the Department has not proved that these parts were specifically designed for manufacture of Water Chilling Plant in question. The Tribunal has noted the Technical details supplied by the Respondents and the letter of the Respondents dated 30th November, 1993 giving details of how these parts are used in the Chilling Plant. The Tribunal has still strangely held that this by itself is not sufficient to show that they are specifically designed for the purpose of assembling the Chilling Plant. We are unable to understand this reasoning. Once it is an admitted position by the party itself, that these are parts of a Chilling Plant and the concerned party does not even dispute that they have no Excise Appeal Nos.70218-70223 of 2016 73 independent use there is no need for the Department to prove the same. It is a basic and settled law that what is admitted need not be proved."
4.18 In the impugned order reliance has been palced on the decision of Hon'ble Supreme Court in the case of D Bhoormull [1983 (13) ELT 1546 (SC)] and it has been observed that the investigation has established the case of clandestine clearance against Appellant 1 within the preponderance of probability as per the test laid down by the Apex Court. The decision in the case of Super Smelters Ltd. [2020 (371) E.L.T. 751 (Tri. - Kolkata)] as the facts of that case are clearly distinguishable. In that case it was held that case could not have been based on the certain loose slips recovered in absence of any corroborative evidences. In present all the evidences establishing till the receipt of clandestinely cleared goods by the customers and payments thereof has been recorded. Further all the documents including the calculation cahrt of the duty evaded was admitted by the Appellants.
4.19 Appellant had asked for the cross examination of the transporter. We find that no statement of the transporter has been relied upon. Transporter was made co-noticee in the matter and he has specifically asserted in the reply to show casue notice dated 24.03.2015 that „even no statement of any of our representative is recorded to find out whether we involved in the transaction knowingly." As no statement of the transporter has been relied upon and he is also the co- noticee in the matter the request for cross examination could not have been acceded to. Certain documents were tendered by the transporter during the search of his premises and during investigation. The transporter did not disputed these documents at all at any point of time. Appelalnts also have admitted to the documents in their statement recorded under Section 14. Section 36A of the Central Excise Act, 1944 provides as follows:
36A. Presumption as to documents in certain cases.--
Excise Appeal Nos.70218-70223 of 2016 74 Where any document is produced by any person or has been seized from the custody or control of any person, in either case, under this Act or under any other law and such document is tendered by the prosecution in evidence against him or against him and any other person who is tried jointly with him, the Court shall,--
(a) unless the contrary is proved by such person, presume--
(i) the truth of the contents of such
document;
(ii) that the signature and every other part of such document which purports to be in the handwriting of any particular person or which the Court may reasonably assume to have been signed by, or to be in the handwriting of, any particular person, is in that person's handwriting, and in the case of a document executed or attested, that it was executed or attested by the person by whom it purports to have been so executed or attested;
(b) admit the document in evidence, notwithstanding that it is not duly stamped, if such document is otherwise admissible in evidence.
4.20 In case of Umiya Chem Intermediate [2009 (239) E.L.T. 429 (Guj.)] Hon'ble Gujarat High Court held as follows:
8. Even if the case is examined on merits, the Tribunal in its order dated 18-3-2005 has after recording the facts of the case and the contentions of the appellant assessee, observed as follows :
"(10) The entire case is based on the incriminating documents found in the premises of the appellants. As per Section 36A of the Central Excise Act, the truth of such documents can be presumed unless the contrary Excise Appeal Nos.70218-70223 of 2016 75 is proved. This Section applies to Department proceedings as well.
(11) One of the partner in his statement given before the Central Excise Officers admits that the goods have been removed clandestinely. This statement has not been retracted. The interpretation sought to be given to the word „Sauda‟ is not acceptable one. It is only an afterthought version. He is not specific in saying that no goods have been delivered. Further, if it was only a Sauda, why was the broker asking for his commission? All commissions are paid only after the transaction is over. The broker sends the bills for his commission only after the deal is fructified. The broker clearly states that he sent the bills for his commission.
(12) The fact that there are discrepancies in the ledger of the broker does not lead to inference that the goods have not been removed from the appellant‟s premises. The appellant wants to prove his innocence on the basis of some factual errors in the ledger of the broker. It is clearly unacceptable.
(13) The Revenue is right in holding that in a case of clandestine removal, it is not necessary for the Department to prove its case to the hilt. Incriminating documents, statements recorded and other evidence of shortage of raw materials amply establish that there is clandestine removal in this case."
9. As can be seen from the findings recorded by the Tribunal, the Tribunal was of the opinion that the incriminating documents found in the premises of the appellant, the statements recorded and the evidence of shortage of material clearly establish that there is clandestine removal of excisable goods. The Tribunal has not accepted the interpretation put forth by the appellant assessee as regards the word „Sauda‟. The Tribunal has, Excise Appeal Nos.70218-70223 of 2016 76 accordingly, after appreciating the evidence on record held in favour of the Revenue.
4.21 In case of M R Tobacco [2006 (202) E.L.T. 64 (Tri. - Del.)] Delhi Bench held as follows:
"8. The learned SDR reiterates the reasons and findings contained in impugned order. He also submitted that the sheets recovered by the visiting officers gave several clues and particulars such as the name of the goods "PANKING", the date of clearance, number of borries removed, the transportation details, timing etc. He also relied on the admission made by the accountant about the clandestine removal of such goods. He submitted that these goods were not entered in RG.1 register and even the reply of the appellants to the show cause notice in respect of para 12 thereof, did not dispute the same. It was also pointed out in his statement that actually at the time of visit of the officers 26 machines were running and that they had in all 40 pouch making machines in their premises and 18 to 20 workers were working in the factories. In this connection, he also referred to another statement of Mahesh Haryana, Accountant recorded on 8-5-2002. In this statement the said Accountant had disclosed the pattern of manufacture and clearances. According to him, the ratio of the total production of gutka („PANKING") was 80% in respect of MRP 50 paise per pouch and 20% in respect of MRP Re.l per pouch. The standard packing in respect of gutka ("PANKING") having MRP 50 paise was also explained in the statement. According to him, one plastic bag contained 55 packets and each packet contained 13 pouches and one bora contained in the plastic bags. It was also argued by the learned SDR that the department has never been arbitrary in working of the demand of duty, as they had based their calculations only in respect of 50 paise per pouch that is in a most reasonable and minimum level. The learned SDR referred to the provisions under Section 36A of Excise Appeal Nos.70218-70223 of 2016 77 the Central Excise Act, 1944 raising presumption as to documents in certain cases and submitted that similar presumption should be applied even to the proceedings under this Act. He relied upon the following decisions :-
(i) Collector of Central Excise, Ahmedabad v. Vidya Wires (P) Ltd. [2002 (149) E.L.T. 1448 (Tri.-Del )]:
Once Managing Director of the assessee firm admitted that 18 boxes of super enameled copper wire had been removed without payment of duty and some of the goods with the labels of the assessee‟s firm had been found in the premises of customer, preponderance of probability in regard to clandestine removal was in favour of department.
(ii) A.K. Engg. Co. v. Commissioner of Central Excise, Calcutta-I [2002 (141) E.L.T. 449]: The charge of clandestine removal is sustainable, when on interception of vehicle transporting goods without payment of duty, totality of evidence by way of statements both of proprietor and manager admitting to manufacture of goods without maintenance of account, removal thereof, including goods bearing brand names of others without payment of duty, and a private note book recovered pointing clearly to quantity of goods removed, with date of removal unmistakenly point to evasion of duty.
(iii) Commissioner of Central Excise, Madras v.
Systems & Components Pvt. Ltd. [2004 (165) E.L.T. 136 (S.C.)]: What is admitted need not be proved,
9. We have perused the case records and heard both sides at length. There is no denial of the fact that ample evidence exists to show the recovery of loose sheets from the premises of the appellants. Though the show cause notice and the order in original refer to them as loose sheets, we Excise Appeal Nos.70218-70223 of 2016 78 find that by referring to the dates and other details contained in them there is a clear continuity interlinking them in a cogent manner. They could have been detached from a note book or exercise book. The continuity is revealed by the running dates starting from 17-1-2002 and ending upto 18-2-2002. We also notice that the starting point in this investigation is the interception of a tempo carrying non-duty paid goods on 19-2-2002. This led to the discovery of the existence of two boras containing contraband and also the recovery of the so-called loose sheets about which the appellants have admitted as goods cleared. In one of the two statements made by the Accountant on 8-5-2002, there is a clear admission that the clearance has taken place in a clandestine manner. It has also been pleaded before us by the learned SDR that while calculating the duty liability, the department has not gone arbitrarily by the production capacity, but by the minute details as stood indicated in the recovered loose slips. Further, we find that the seizures made in transit as well as in the two godowns clearly corroborate with the findings of the impugned order relying on the recovered loose sheets. The statements of Director and Accountant and also the Production Supervisor all go to prove that the appellants were engaged in clandestine removal of excisable goods, as detailed in the loose sheets. Having admitted, saying that the details such as purchase of raw material, sale of finished products and payments thereof etc., were not investigated by the department appears to us as an argument for argument‟s sake. This argument does not make the case weak in any manner because it is settled position in law that the admitted fact need not be proved. Finding no infirmity in the impugned order, we are inclined to go by the reasoning and findings as contained in the impugned order. At this stage of dictation of the present order, the learned counsel interprets and pleads for leniency in the penalty imposed by the authority below as he had invoked the provisions of Excise Appeal Nos.70218-70223 of 2016 79 Section 11AC and imposed a heavy penalty which is equivalent to the duty demanded. We, however, on considering the facts and circumstances of the matter find that there is no warrant for interfering with the impugned order in any way as the penalty imposed is commensurate to the nature of offence. Both the appeals are, therefore, dismissed."
4.22 Affirming this decision as reported at [2008 (228) ELT 171 (Del)], Hon'ble Delhi High Court observed as follows:
"4. It appears that a tempo carrying pan masala/gutka was intercepted by the Anti Evasion Branch of Central Excise, New Delhi on 19th February, 2002. The goods were found to have been clandestinely removed by the Assessee. As a result of follow up investigation, the Revenue found certain loose sheets which, according to the Revenue, showed that there was systematic removal of gutka without payment of duty.
5. It has come on record that statements were recorded of the Director, Accountant and the Production Supervisor of the Assessee. Learned counsel for the Assessee has taken us through the statements and we find, particularly from the statement of the Director, that there is an admission that the loose sheets reflected removal of goods from the factory in a clandestine manner.
6. It has been found as a fact that three godowns of the Assessee were discovered during the search of the premises and it was also found that several machines manufacturing gutka and pouches were actually not in use.
7. Relying upon the evidence collected as a result of the search and seizure operation as well as the follow up investigation, the Revenue concluded that the loose sheets represented clandestine removal of gutka from the factory premises of the Assessee.
Excise Appeal Nos.70218-70223 of 2016 80
8. Learned counsel for the Assessee has contended before us that there is nothing on record to suggest who had written the loose sheets and in the absence of this, the loose sheets cannot be used as incriminating evidence against the Assessee.
9. We find that this matter has been looked into all by the authorities below, who found that the loose sheets were maintained in a systematic and date-wise manner. It was held that the loose sheets could have been detached from a notebook or excise book. The fact that the author of the loose sheets was not identified is of no consequence in view of the admission made by the Director of the firm. In any case, we find that all the authorities have concurrently held that the Assessee had cleared the gutka clandestinely without payment of duty. We do not find any error or illegality in the view taken by all the authorities below and on the merits of the case we do not find that any substantial question of law arises."
4.23 In view of the discussions as above we uphold the charges of clandestine clearance of the goods resulting into evasion of Central Excise Duty as detailed at (1), (2), (3) & (4) in the order portion of impugned order. Demands at (1) and (2) are in respect of shortages detected at the time of search in the premises of the appellant and admitted by them. Demands at (3) & (4) are in respet of clandestinely cleared goods to various customers and also admitted by the Appellant.
4.24 By the impugned order penalties have been imposed on the customers of the Appellant 1, transporter and others who have not filed any appeal. For imposing the penalty Commissioner has in the impugned order discussed the role of each individual separately and have concluded that each was part of conspiracy to evade payment of Central Excise Duty and defraud the exchequer. Appellants being habitual offenders the penalties imposed also do not appear to be on higher side and are upheld Excise Appeal Nos.70218-70223 of 2016 81 4.25 In view of the discussions as above we do not find any merits in the submissions made by the appellants.
5.1 Appeals are dismissed.
(Pronounced in open court on- 28 November, 2024) (P.K. CHOUDHARY) MEMBER (JUDICIAL) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp