Custom, Excise & Service Tax Tribunal
Akshay Steel Works Pvt Ltd vs Jamshedpur on 24 June, 2025
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
REGIONAL BENCH - COURT NO.2
Excise Appeal No.75760 of 2014
(Arising out of Order-in-Original No.01/Commr/2014 dated 29.01.2014 (issued on
24.02.2014) passed by Commissioner of Central Excise & Service Tax, Jamshedpur)
M/s. Akshaya Steel Works Pvt. Ltd.
(B-37/38, 2nd Phase, Industrial Area, Adityapur, Jamshedpur,
Jharkhand-832109)
Appellant
VERSUS
Commr. of Central Excise & Service Tax, Jamshedpur
(143, New Baradwari, Sakchi, Jamshedpur-831001)
Respondent
With Excise Appeal No.75761 of 2014 (Arising out of Order-in-Original No.01/Commr/2014 dated 29.01.2014 (issued on 24.02.2014) passed by Commissioner of Central Excise & Service Tax, Jamshedpur) Shri Rajender Sachdev, Director (M/s. Akshaya Steel Works Pvt. Ltd.) (B-37/38, 2nd Phase, Industrial Area, Adityapur, Jamshedpur, Jharkhand-832109) Appellant VERSUS Commr. of Central Excise & Service Tax, Jamshedpur (143, New Baradwari, Sakchi, Jamshedpur-831001) Respondent APPEARANCE :
Shri Kartik Kurmy, Advocate for the Appellant Shri S. K. Jha, Authorized Representative for the Respondent CORAM:
HON'BLE MR. R. MURALIDHAR, MEMBER (JUDICIAL) HON'BLE MR. RAJEEV TANDON, MEMBER (TECHNICAL) FINAL ORDER NO.76603-76604/2025 Date of Hearing : 11th June 2025 Date of Pronouncement :24.06.2025 2 E/75760/2014 & E/75761/2014 PER R. MURALIDHAR After visiting the factory premises and undertaking investigation and verification, it was alleged that the appellant has cleared 17930.033 MT of finished goods clandestinely during the period Feb, 2008 to Dec, 2008 and Mar, 2009. A Show Cause Notice was issued demanding Excise Duty of Rs. Rs.8,14,17,461/- along with interest and penalty. The SCN was also issued to the Director proposing to impose penalty on him. After due process, the Adjudicating authority confirmed the demand along with interest and penalty against the appellant company and penalty on the Director. Being aggrieved by the impugned Order in Original, the appellants have filed the present appeal before the Tribunal.
2. The Ld Counsel appearing for the appellant, makes the following submissions:
2.1 The break-up of the demands in respect of various private records seized is as per the following Tables:
TABLE - "A"
Demand based on "Private Diaries" prepared by Sri P.K. Shaw Sl. Period Docum. No. Nature of Qnt. As per Qnty. As Difference Ass. Duty No. Docum. seized per DSA/ Value(Rs.) Demande Docum. ER-1 d (MT) (MT) (Rs.) (1) (2) (3) (4) (5) (6) (7) (8) (9) 1 Feb'08 03/DGCEI/J Private 2184.766 680.855 1503.911 41994014 6920613/-
RU/ASWPL Dairy
/09
2 Mar'08 03/DGCEI/J Private 2755.721 1232.24 1523.481 50811930 7327080/-
RU/ASWPL Dairy
/09
3 April'08 03/DGCEI/J Private 2238.47 790.925 1447.545 43622103 6290307/-
RU/ASWPL Dairy
/09
4 May'08 01/DGCEI/J Private 2571.283 838.675 1732.608 54051283 7794195/-
RU/ASWPL Dairy
/09
5 June'08 01/DGCEI/J Private 2515.316 700.605 1814.711 65517021 9447554/-
RU/ASWPL Dairy
/09
6 July''08 01/DGCEI/J Private 2499.634 871.965 1627.669 61476890 8864968/-
RU/ASWPL Dairy
/09
7 Nov'08 02/DGCEI/J Private 2590.379 361.98 2228.399 60906540 8782723/-
RU/ASWPL Dairy
/09
Total 17355.569 5477.245 11878.324 37,83,79,78 5,54,27,44
1 1
3
E/75760/2014 & E/75761/2014
TABLE - "B"
Demand based on both Private Diaries (by P.K. Shaw) and Loose Sheets (by Contractor, Staff) Sl. Period Doc. No. Doc. No. Qnt. As Qnty. As Difference Ass. Duty No. (Private (Loose Sheets) per per DSA/ Value(Rs.) Demanded Diary) Docum. ER-1 (Rs.) (MT) (MT) (1) (2) (3) (4) (6) (7) (8) (9) (10) 1 Aug'08 02/DGCEI/J 19/DGCEI/JRU 2371.962 878.565 1493.397 54355290/- 7838033/-
RU/ASWPL/ /ASWPL/09 09 2 Sept'08 02/DGCEI/J 18/DGCEI/JRU 2124.336 583.59 1540.746 51577283/- 7437444/- RU/ASWPL/ /ASWPL/09 09 3 Oct'08(01- 02/DGCEI/J 16/DGCEI/JRU 994.265 168.300 825.965 27447645/- 3957950/- 10-2008 to RU/ASWPL/ /ASWPL/09 14-10-2008) 09 Total 5490.563 1630.455 3860.108 133380218/- 19233427/- TABLE - "C"
Demand based only on "Loose Sheets" prepared by Contractor staff Sl. Period Docum. No. Nature of Qnt. As per Qnty. As Difference Ass. Duty No. Docum. Docum. per DSA/ Value(Rs.) Demanded (MT) ER-1 (Rs.) (MT) 1 Oct'08(15- 16/DGCEI/JRU/ Loose 653.260 282.060 371.200 12335348/- 1778757/-
10-2008 to F/ASWPL/09 Sheets
31-10-
2008)
2 Dec'08 17/DGCEI/JRU/ Loose 2306.601 552.35 1754.251 46807055 4821127/-
ASWPL/09 Sheets
Total 2959.861 834.410 2125.451 59142404 6599884
2.2 The appellant manufactures Rolled products like Angles and Channels. They also undertake the job-work for other manufacturers like Tata Steel, SAIL and Adhunik Alloys Ltd, etc. 2.3 For manufacture of their final product they use M.S. Ingots, M.S. Billets (Concast Billets) as their raw materials. They purchase M.S. Billets (Concast Billets) of 05 meters to 06 meters length weighing approximately 470 Kg per piece. They also purchase M.S.Ingots of size 1.2 meters to 1.4 meters length weighing approximately 102 kg per piece.
2.4 The appellants also receive M.S. Billets (Concast Billets) from their principals for Job Work. The Concast Billets supplied for Job Work are of 9 meters to 12 meters length weighing 1100 Kg to 1500 Kg per piece.4
E/75760/2014 & E/75761/2014 2.5 The long length Concast Billets (raw materials) undergo Primary and Secondary Cuttings. Initially they are first cut into pieces of 3-4 meter length for easy handling and then shifted to the raw material yard. After this, a secondary cutting work is undertaken before feeding the Concast Billets into the Reheating Furnace, it is further cut in to sizes of 0.4 meter to 0.98 meter each weighing between 30 kg to 130 kg depending upon the size and section of the final product intended to be rolled. Once the raw material is thus cut according to size and specification of the intended final product, the same cannot be used for any other final product.
2.6 The M.S. Ingots purchased by them are also cut into feed length cutting (Blanking) of 0.4 meter to 1.2 meter each weighing 25 Kg to 102 Kg‟s depending upon the size and section of the final products intended to be rolled. The M.S. Ingot are cut at one stage only.
2.7 During the period under dispute, the receipts are as under :
(a) 7922.980 MT of Concast Billets of 9 meter to 12 meter length for Job Work from their principals
(b) 1119.420 MT Concast Billets of 5 meter to 6 meter length each were purchased
(c) 6236.125 MT of M.S Ingots of 1.2 meters to 1.4 meters length each were purchased
(d) Thus the total quantity of raw materials received is 15278.525 MT.
2.8 Upon receipt of raw materials on their own account and also on Job Work account, the appellants have recorded for the same in their RG 23A Part-I and claimed CENVAT Credit in RG 23A Part-II and also showed the same in the ER-1 returns. Copies of the RG 23 A Part I, ER 5 E/75760/2014 & E/75761/2014 1 etc have been enclosed in the Paper Book submitted along with the present appeal.
2.9 The appellant claims Cenvat Credit for the inputs used in the job- work undertaken for SAIL, Tata Steels, as the job-work undertaken amounts to manufacture. Angles, Rolling items are manufactured, which are properly accounted for in the DSA Register and in the ER 1 Returns. They are cleared on payment of Excise Duty. Copies of the Job-work orders given by Tata Steels and SAIL are enclosed in the Paper Books submitted along with the Appeal.
2.10 For undertaking the job-work of primary and secondary cutting, the appellant has engaged the services of the contractor Ramashankar Singh by way of a Work Order dated 1.1.2008. Copy of the work order given to him is enclosed. Copies of their Invoices and records maintained by the appellant‟s Supervisor have also been enclosed along the with the Paper Books of the appeal.
2.11 The cut billets and ingots are fed to the reheating furnace. After this,the semi-hot billets and ingots are converted into MS Flats, Angles, Bars and Rods of different dimensions and sizes.
2.12 During the search operations from their factory-cum-office premises, the DGCEI officers seized the following documents, which have been used for quantification of the demand :
"Private Diaries"
(i) Doc. No.01/DGCEI/JRU/ASWPL/09 (Page 524, Vol.-II),
(ii) Doc. No.02/DGCEI/JRU/ASWPL/09 (Page 551, Vol.-II)
(iii) Doc. No.03/DGCEI/JRU/ASWPL/09 (Page 584, Vol.-II) "Loose Sheets"
(iv) Doc. No.16/DGCEI/JRU/ASWPL/09 (Page 611, Vol.-II),
(v) Doc. No.17/DGCEI/JRU/ASWPL/09 (Page 661, Vol.-II)
(vi) Doc. No.18/DGCEI/JRU/ASWPL/09 (Page 714, Vol.-III)
(vii) Doc. No.19/DGCEI/JRU/ASWPL/09) (Page 772, Vol.-III) 6 E/75760/2014 & E/75761/2014 2.13 Pradeep Kumar Shaw, the Quality Control Supervisor, in his Statement dated 16-12-2009 (Q. No. 34, Page 398, Vol.-II)) stated that in his "Private Diaries" (Doc. No.01/DGCEI/JRU/ASWPL/09, 02/DGCEI/JRU/ASWPL/09 and 03/DGCEI/JRU/ASWPL/09) he had merely copied the figures mentioned in "Loose Sheets" (Doc. No. 16/DGCEI/JRU/ASWPL/09,17/DGCEI/JRU/ASWPL/09, 18/DGCEI/JRU/ASWPL/09 and 19/DGCEI/JRU/ASWPL/09) prepared by the contractor staff and therefore he had no personal knowledge of the content of thereof.
2.14 Statements of Sri Rajender Sachdev, Director of the Appellant Company was also recorded on dated 22-11-2011, 12-12-2011, 13-12- 2012, 14-12-2011, 17-01-2012, 20-01-2012 and 15-03-2012 (Page 476, Page 482, Page 484, Vol.-II). Sri Rajendra Sachdev, Director, in his statement dated 22-11-2011 stated that he was not aware of maintenance of said "Private Diary" and "Loose Sheets" and therefore he cannot explain the contents thereof 2.15 Statements of Sri Abhijit Kumar Chatterjee, General Manager of the Appellant Company was recorded on dated 28-05-2010, 02-06- 2010, 11-06-2010, 14-06-2010, 18-04-2011. He is responsible for day- to-day production activities. Two Shop floor Foremen Sri R.S. Rai and Sri R. B. Singh, report to him.
2.16 No Statements from the Shop Foremen were recorded.
2.17 On the basis of "Private Diaries", "Loose Sheets" cited above, the Show Cause Notice dated 20-12-2012 was issued alleging that during February, 2008 to December, 2008 the appellants have suppressed production of 17,863.883 MT of their final product which were purportedly clandestinely removed without payment of duty. It was further alleged that 5(Five) nos. of fake parallel invoices were purportedly used by the Appellant for removal of 66.150 MT of final products without payment of duty of Rs.1,56,709/- during March‟2009. The show cause demanded excise duty of Rs.8,14,17,461/-
7E/75760/2014 & E/75761/2014 (Rs.8,12,60,752/- + Rs.1,56,709/-) along with interest and penalty on the company and penalty on the Director.
2.18 It is alleged that the "Loose Sheets" seized on the day of search on 02-04-2009 contains day wise "total production" of final product manufactured by the Appellant during August‟2008 to October‟2008 and December‟2008.
2.19 It is further alleged that the "Private Diaries" maintained by Sri Pradeep Kumar Shaw, Quality Control Supervisor also contains date wise "total production" quantities of final products manufactured by the Appellant during the period February‟2008 to October‟2008 (01-04- 2008 to 14-10-2008), and November‟2008 2.20 The Ld Counsel submits that the "Private diaries" and "Loose sheets" on the basis of which the entire demand is raised in the instant case relates to processing of raw material and not for the production of the final product. In these Private Diaries and Loose Sheets, the quantity is entered into based on the ultimate size of the finished goods. Since the finally cut Billets and Ingots can be used on in respect of the specific size of the finished goods, the size of the finished goods is given in these sheets for easier identification. However, the Dept. has proceeded on the assumption that the finished goods are emerging at this stage itself and treated the same as such and raised the demand on such quantifies.
2.21 In the SCN, it is observed that entries in the said "Private Diaries"
and "Loose Sheets" matches with the entries in the Raw Material Account (RG-23A Part-I) which purportedly shows that the said "Loose Sheets/Private Diaries" relates to processing of raw materials. This would clarify that these two documents speak about the raw materials and not about the alleged clandestine manufacture of the finished goods.
2.22 In the course of physical stock taking on 02-04-2009 the investigating officers found Concast Billets of 6 meters to 9 meters and 8 E/75760/2014 & E/75761/2014 also the primary cut Billets of 3-4 meters Length and also stock of feed length Billets/M.S Ingots of 0.68 meters to 0.86 meters were also found which proves the aforesaid process of raw material processing.
2.23 P.K. Shaw in his Statement dated 16-12-2009 (Q. No. 34) stated that in his "Private Diaries" he had merely copied the figures mentioned in "Loose Sheets" prepared by the contractor staff and therefore he had no personal knowledge of the content of thereof.
2.24 As a matter of fact, the Loose Sheets contain the details of daily output of the Contractor towards the cutting job-work undertaken by them. The Daily sheets of the Loose Sheets when compared with the Bills raised by the Contractor would clarify that the Loose Sheets pertains to the job-work of cutting and hence cannot be presumed to be the quantity of clandestinely manufactured finished goods.
2.25 In spite of such clear statement given by P K Shaw, the makers of the Loose Sheets, that is, the Contractor was never examined nor any statement was recorded from him.
2.26 It is submitted that the figures in „pieces‟ and in „Metric Ton‟ as mentioned in the "Private Diaries" and "Loose Sheets" does not relate to production of final product but relates to processing of raw material. while determining the physical stock after the stock taking, department has itself applied sectional weight to piece counted in stock taking on 02-09-2009 and stock of finished goods in metric ton is determined (Page 358, Vol.-II).
2.27 By multiplying the standard sectional weight (BIS standards) with the pieces as mentioned in the "Loose Sheets/Private Diaries" it would be seen that calculated quantities of final product in Metric Ton is much on the lower side in the Private Record / Loose Sheets as compared to final products as recorded in their RG-I/DSA. Thus, it is clear that the metric ton quantity in Private Record / Loose Sheets does not relate to finished goods.9
E/75760/2014 & E/75761/2014 2.28 When the formula adopted by the Revenue for ascertaining the weight of the number of pieces [as per BIS standards] is applied to the Private Records / Loose Sheets, the same do not match with that of the finished goods. This shows that the Private Records / Loose sheets are not towards the finished goods, but only towards the raw materials. The sample calculation is as per the following Table :
Sample calculation on sectional weight basis Sl. Doc. No. Date Descp. of Standard sectional No. of pieces Calculated Weight as No. Final Product weight (BIS as per Loose weight (MT) mentioned in as per Private Standard) of each Sheets/Private (5 x 6) the Private Diaries & Pcs as adopted by Diaries (MT) Diaries/ Loose Sheets department for Loose Sheets physical stock (MT) taking (1) (2) (3) (4) (5) (6) (7) (8) 1 03/DGCEI/J 25.02. Angle 50x5 23.520 940 22.109 47.940 RU/ASWPL 2008 /F/09 2 03/DGCEI/J 04.03. 22Octa 15.573 693 10.792 52.954 RU/ASWPL 2008 /F/09 3 03/DGCEI/J 04.04. Flat 130x12 68.578 636 43.615 80.26 RU/ASWPL 2008 /F/09 4 01/DGCEI/J 10.05. Octa 22 15.573 864 13.455 66.019 RU/ASWPL 2008 /F/09 5 01/DGCEI/J 11.06. Flat 130x12 68.578 605 41.489 62.355 RU/ASWPL 2008 /F/09 6 01/DGCEI/J 17.07. Round 25 23.100 863 19.935 59.709 RU/ASWPL 2008 /F/09 7 19/DGCEI/J 21.08. Angle 75x6 40.800 701 28.601 71.502 RU/ASWPL 2008 /F/09 8 18/DGCEI/J 08.09. Flat 110x10 51.810 852 44.142 70.087 RU/ASWPL 2008 /F/09 9 16/DGCEI/J 13.10. 29 Octa 27.052 649 17.557 65.005 RU/ASWPL 2008 /F/09 10 02/DGCEI/J 19.11. Octa 32 39.900 774 30.883 77.422 RU/ASWPL 2008 /F/09 11 17/DGCEI/J 26.12. Octa 22, 25 15.573 749 11.664 60.114 RU/ASWPL 2008 /F/09 Total 284.242 713.367 2.29 The Cross-examination of Sri P K Shaw and Sri Sudhir Khanna was sought. Without subjecting them to Section 9D procedure and without giving the opportunity to cross-examine these persons, the Adjudicating authority has at Page 12 and 13 of the OIO has fully relied on their purported statements. No reason has been adduced as to why the cross-examination request was not considered. This vitiates the evidentiary value of the Recorded Statements of these persons. The Ld Counsel relies on the following case laws:10
E/75760/2014 & E/75761/2014
(i) G.Tech Industries Vs. UOI reported in 2016 (339) E.L.T. 209 (P & H) (Para 14, 15, 16, 19)
(ii) M/s Hi-Tech Abrasives Ltd. Vs. CCE, Raipur, reported in 2018 (362) E.L.T 961 (Chhattisgarh) (Para 9.5) 2.30 On a specific query from the Bench as to whether there is any documentary evidence towards their request for cross-examination, the Ld Counsel cites Page 7 of the Order, about their request for cross-
examination.
2.31 It is also submitted that the appellants have manufactured goods on job-work basis for TATA Steel and SAIL. These are accounted for in the RG 1 records. The appellants submitted that the production of goods on behalf of these parties are required to be considered in the total production and clearance. However, while quantifying the demand, the same has not been considered. This has resulted in inflated demand of about Rs.4.73 crores. This point made by the appellant at the Adjudication stage is recorded at Page 60, but no finding has been given by the Adjudicating authority. The appellant submits that during this period they have cleared 7323.715 MT final products Octagon and Hexagon for Tata Steel and SAIL, involving Excise Duty of Rs.4,59,58,471 and Waste and Scrap of 497.010 MT involving Duty of Rs.13,85,490, Totaling Excise Duty of Rs.4,73,43,961 has not been considered, which has resulted in the inflated demand of over Rs.8.12 crores.
2.32 The Raw material received and uses for production have been properly accounted for in the RG 23 A Part I account, as can be seen from the following Table :
Break-up of raw materials received and final products manufactured on own A/c.
Sl. Month Description of Qty. purchased as Qty. Issued as per RG23A
No. Raw Material per RG 23A Part-I Part I for production
(1) (2) (4) (5)
1 Feb'08 to Dec'08 M.S.Ingots 6236.125 6059.240
11
E/75760/2014 & E/75761/2014
2 Feb'08 to Dec'08 Billets 1119.420 1022.550
Grand Total 7355.545 7081.790
2.33 In respect of 5 fake parallel invoices on which the demand has been confirmed, it is submitted that the period pertains to March 2009, whereas the allegations are in respect of the period February 2008 to December 2008. If they are accepted as fake, there would be no question of movement of these goods, which is required to be proved to demand the duty. The Duty involved is to the extent of Rs.1,56,709 only. In view of the quantum of the duty, they are agreeable to pay this amount to so as to close this minor issue.
2.34 After making submissions about the presumptions and assumptions made out from the seized „Loose Sheets‟ and „Private Diaries‟, the Ld Counsel submits, the entire case has been built-up based on these seized documents and the recorded statements mentioned above. He submits that no corroborative evidence has been adduced by the Revenue. It is submitted that :
(i) there is no evidence of clearance or transportation of the huge 17930.033 MT of the impugned goods for which at-least 1992 Trucks of 9 MT capacity is required. In the instant case, there is no evidence of even a single lorry;
(ii) No enquiry is made with buyers;
(iii) No enquiry is made with transporter of finished goods;
(iv) there is no evidence of out of account production of impugned goods;
(v) there is no evidence of extra use of labour for production of finished goods;
(vi) there is no evidence of extra/out of account payment of wages to production labours;12
E/75760/2014 & E/75761/2014
(vii) there is no evidence of receipt of unaccounted for raw materials;
(viii) there is no evidence of transportation of raw material. No enquiry is made with transporter;
(ix) there is no evidence of consumption of any extra electricity/fuel required for manufacture of the impugned goods;
(x) there is no evidence of flow back of huge funds of Rs.57 Cr.
as alleged;
(xi) The shortage of 22.341 MT of finished goods which is just 0.12% and shortage of 455.256 MT of raw material which is just 3% is detected which are negligible and does not corroborate the charge;
(xii) there is no confession of guilt.
2.35 The Appellant relies on the following case laws :
(i) Arya Fibres Pvt. Ltd. Vs. CCE (2014) 311 ELT 529 (Tri.-Ahmd.) (Para 40);
(ii) Sharda Re-Rollers Pvt. Ltd. Vs. CCE reported in 2025 (5) TMI 1281 - CESTAT - Kolkata (Para 4, 5, 7, 11, 12)
(iii) Continental Cement Company Vs. UOI (2014) 309 ELT 411 (All.) [Para 12];
(iv) CCE Vs. Prism Pigments & Colours P.Ltd reported in 2009(235) E.L.T 420(Guj.)
(v) M/s Hi-Tech Abrasives Ltd. Vs. CCE, Raipur, reported in 2018 (362) E.L.T 961 (Chhattisgarh) (Para 12.2) 13 E/75760/2014 & E/75761/2014 2.36 It is also submitted that the entire demand in the instant case is barred by limitation.
The Appellant most humbly submits that the dispute in the instant case relates to February‟2008 to December‟2008 and March‟2009 whereas the Show Cause Notice is issued on dated 20-12-2012 i.e. beyond the normal period of limitation of one year under Sec. 11A(1), hence the entire demand in the instant case is barred by normal period of limitation of one year.
The materials brought on record are vague, general and self- contradictory and inadmissible in evidence.
There is no corroboration of the said "Loose Sheet/Private Diaries" based on independent investigation.
It is fairly well settled that proviso to Sec 11A(1) is an exception and not a rule and the same cannot be invoked unless department succeeds in making out a clear case of ingredients visualised by the Legislature under proviso to Sec 11A(1).
3. In view of the above submissions, the Ld Counsel prays that the appeal may be allowed both on merits as well as on account of time-bar
4. The Ld AR representing the Revenue submits that Search was conducted in the factory of the appellant on 2.4.2009. During the stock taking, shortages were found in the Raw materials and finished goods stocks. A very detailed verification and investigation was taken up. The Revenue came across several documents like the „Loose Sheets‟ and the „Private Diaries‟. These documents clearly show the details like the dimension of the finished goods manufactured. Therefore, the same cannot be taken as the description pertaining the raw materials. Statements were recorded from various persons like Sri P K Shaw who was maintaining the Private Diary and has admitted that this diary 14 E/75760/2014 & E/75761/2014 pertains to the production details of the finished goods. His statement gets corroborated by the Statements recorded by Sri Sudhir Khanna and Sri Rajender Sachdev [Director].
5. On a specific query from the Bench as to how the quantification was demand was arrived at, he submits that the quantities recorded in the Private Diaries and Loose Sheets were compared with the recorded quantities of clearances in the RG 1. When it was found that the quantities under the Private Diaries and Loose sheets were much higher, the differential quantity between these figure has been arrived at as clandestinely manufactured / cleared goods. Hence, he says that the confirmed demand is not based on assumptions and presumptions, but is based on proper collating of the information. He further submits that such statements were recorded on several occasions based on the documentary evidence found by Revenue. Hence, the SCN was issued on 20.12.2012 by invoking the extended period provisions, which is fully applicable in the present case, in view of the clandestine nature of the clearance.
6. Heard both the sides. Perused the appeal papers and written and oral submissions made by both the sides.
7. We find that the appellant is buying M S Ingots and Concast Billets which have huge length and hence the same can not be directly fed to the Reheating Furnace. The receipt of such raw materials, both for their own usage as well as for the usage for job-work for TATA and SAIL is being recorded by the RG 23 A part I records, for which they have submitted the documentary evidence. One such sheet is extracted below:
15E/75760/2014 & E/75761/2014
8. There is no allegation that the inward goods are not accounted for. The appellant has produced the documentary evidence that the Ingots and Concast Billets are given on job-work to Ramashankar Singh. We have gone through the work order to this effect, which is reproduced below :
16E/75760/2014 & E/75761/2014
9. We have also gone through the records kept by this Contractor [which are the „loose sheets‟ relied upon by the Revenue]. Copy of the 17 E/75760/2014 & E/75761/2014 loose sheets have been compared with the Invoice raised by him is also compared. They are extracted below :
18E/75760/2014 & E/75761/2014 19 E/75760/2014 & E/75761/2014 20 E/75760/2014 & E/75761/2014 21 E/75760/2014 & E/75761/2014
10. From the above extracts, it is seen that in the „loose sheets‟ , the dimensions of the finished goods like 20 „O‟ Round, 18x3, Angle, 65x6 Flat etc. is mentioned. This sheet also gives the output per hour and cumulative cutting per day. On this output for the day, the monthly invoice is 22 E/75760/2014 & E/75761/2014 prepared by the Contractor. This Invoice is annexed with the daily output sheet‟s details. We have checked a few entries which are tallying with the daily sheets. The rate given to the contractor is for the cutting of the Raw material only as has been seen from the contract given to him. From these documents no evidence emerges that the activity taken up by him is on account of the finished goods.
11. We have taken a look of the sample calculation table provided by the appellant. A few entries are reproduced below :
Sl. Doc. No. Date Descp. of Standard sectional No. of pieces Calculated Weight as No. Final Product weight (BIS as per Loose weight (MT) mentioned in as per Private Standard) of each Sheets/Private (5 x 6) the Private Diaries & Pcs as adopted by Diaries (MT) Diaries/ Loose Sheets department for Loose Sheets physical stock (MT) taking (1) (2) (3) (4) (5) (6) (7) (8) 1 03/DGCEI/J 25.02. Angle 50x5 23.520 940 22.109 47.940 RU/ASWPL 2008 /F/09 2 03/DGCEI/J 04.03. 22Octa 15.573 693 10.792 52.954 RU/ASWPL 2008 /F/09 3 03/DGCEI/J 04.04. Flat 130x12 68.578 636 43.615 80.26 RU/ASWPL 2008 /F/09
12. When the standard weight per Angle / Flat taken by the Revenue as per BIS standards is applied in respect of the number of pieces given the loose sheets / private diaries and the weight mentioned is compared, the same does not match. The quantity mentioned in the loose sheet / diary is much higher than the weight that would pertain to Angles / Flats. Therefore, this also would indirectly prove / indicate that the quantity mentioned therein is that of the raw materials M S Ingots / Concast Billets rather than that of the finished goods.
13. We have perused the statements of P K Shaw and Rajendra Sachdeva. The relevant portion is extracted below:-
23E/75760/2014 & E/75761/2014 24 E/75760/2014 & E/75761/2014 25 E/75760/2014 & E/75761/2014 26 E/75760/2014 & E/75761/2014
14. It is seen from the statements that the quantity shown in the Loose Sheets/Private Diary tallies with RG-23A Part-I [page 480 and 394 extracted above], which is meant for recording usage of Raw Materials. Therefore, it was for the Revenue to point out as to why this should be treated as finished goods. Considering the fact that appellant is required to account for the usage of Raw Material in the finished 27 E/75760/2014 & E/75761/2014 goods. We do not find that any co-relation effort was made to check the input-output ratio to negate the appellant‟s claim that what is reflected in the loose sheets/private diary is raw material and not finished goods. The Table given at Para 2-32 (part of the submissions by the appellant) shows that the Raw Materials received and used have been accounted for.
15. We also see that while statements have been recorded from various persons, the statement of the Contractor Ramashankar, who was actually carrying the primary and secondary cutting job-work has not been recorded. This would have been the most important evidence for the Revenue to prove that the cutting undertaken by him was for the finished goods and not for the raw materials, the premise based on which the Revenue has proceeded in this case. Non summoning of this person and recording of his statement by asking specific questions to him, would prove to be a costly error on the part of the Revenue.
16. Coming to the Statements recorded by P K Shaw and Sri Sudhir Khanna, it is on recorded that the appellant has Sudhir Khanna‟s Statement was recorded after mid-night on 2/3.04.2009, in the presence of DGCEI personal, he was tired and exhausted and the statement was dictated by the officials. The appellant has sought cross- examination of both these persons. Here it would be relevant to go through the provisions of Section 9D of the CEA 1944, which are extracted below :
"9D. Relevancy of statements under certain circumstances.
(1) A statement made and signed by a person before any Central Excise Officer of a gazetted rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains,
(a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or 28 E/75760/2014 & E/75761/2014
(b) whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable; or when the person who made the statement is examined as a witness in the case before the Court and the Court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice.
(2) The provision of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this Act, other than a proceeding before a Court, as they apply in relation to a proceeding before a Court."
17. The Hon‟ble Punjab and Haryana High Court in the case of . G-TECH INDUSTRIES Versus UNION OF INDIA - 2016 (339) E.L.T. 209 (P & H) , has held as under :
8. As already noticed herein above, sub-section (1) of Section 9D sets out the circumstances in which a statement, made and signed before a Gazetted Central Excise Officer, shall be relevant for the purpose of proving the truth of the facts contained therein. If these circumstances are absent, the statement, which has been made during inquiry/investigation, before a Gazetted Central Excise Officer, cannot be treated as relevant for the purpose of proving the facts contained therein. In other words, in the absence of the circumstances specified in Section 9D(1), the truth of the facts contained in any statement, recorded before a Gazetted Central Excise Officer, has to be proved by evidence other than the statement itself. The evidentiary value of the statement, insofar as proving the truth of the contents thereof is concerned, is, therefore, completely lost, unless and until the case falls within the parameters of Section 9D(1).
9. The consequence would be that, in the absence of the circumstances specified in Section 9D(1), if the adjudicating authority relies on the statement, recorded during investigation in Central Excise, as evidence of the truth of the facts contained in the said statement, it has to be held that the adjudicating authority has relied on irrelevant material. Such reliance would, therefore, be vitiated in law and on facts.
18. In the case of Hi-Tech Abrasives Ltd Vs CCE Raipur - 2018 (362) ELT 961, the Chattisgarh High Court has held as under :
29E/75760/2014 & E/75761/2014 9.2 At this juncture, we need to notice the provision contained in Section 9D which provides that sub-section (1) shall, as far as may be, applied in relation to the proceedings under the Act, other than the proceeding before the court, as they apply in relation to proceeding before the Court. This provision when read in juxtaposition, the small clauses (a) and (b) under sub-section (1), requirement of law of recording of examination as witness would be in relation to the proceedings before the adjudicating authority.
9.3 A conjoint reading of the provisions therefore reveals that a statement made and signed by a person before the Investigation Officer during the course of any inquiry or proceedings under the Act shall be relevant for the purposes of proving the truth of the facts which it contains in case other than those covered in clause
(a), only when the person who made the statement is examined as witness in the case before the court (in the present case, Adjudicating Authority) and the court (Adjudicating Authority) forms an opinion that having regard to the circumstances of the case, the statement should be admitted in the evidence, in the interest of justice.
9.4 The legislative scheme, therefore, is to ensure that the statement of any person which has been recorded during search and seizure operations would become relevant only when such person is examined by the adjudicating authority followed by the opinion of the adjudicating authority then the statement should be admitted. The said provision in the statute book seems to have been made to serve the statutory purpose of ensuring that the assessee are not subjected to demand, penalty interest on the basis of certain admissions recorded during investigation which may have been obtained under the police power of the Investigating authorities by coercion or undue influence.
9.5 Undoubtedly, the proceedings are quasi criminal in nature because it results in imposition of not only of duty but also of penalty and in many cases, it may also lead to prosecution. The provisions contained in Section 9D, therefore, has to be construed strictly and held as mandatory and not mere directory. Therefore, unless the substantive provisions contained in Section 9D are complied with, the statement recorded during search and seizure operation by the Investigation Officers cannot be treated to be relevant piece of evidence on which a finding could be based by the adjudicating authority. A rational, logical and fair interpretation of procedure clearly spells out that before the statement is treated relevant and admissible under the law, the person is not only required to be present in the proceedings before the adjudicating authority but the adjudicating authority is obliged under the law to examine him and form an opinion that having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. Therefore, we would say that even mere 30 E/75760/2014 & E/75761/2014 recording of statement is not enough but it has to be fully conscious application of mind by the adjudicating authority that the statement is required to be admitted in the interest of justice. The rigor of this provision, therefore, could not be done away with by the adjudicating authority, if at all, it was inclined to take into consideration the statement recorded earlier during investigation by the Investigation officers. Indeed, without examination of the person as required under Section 9D and opinion formed as mandated under the law, the statement recorded by the Investigation Officer would not constitute the relevant and admissible evidence/material at all and has to be ignored. We have no hesitation to hold that the adjudicating officer as well as Customs, Excise and Service Tax Appellate Tribunal committed illegality in placing reliance upon the statement of Director Narayan Prasad Tekriwal which was recorded during investigation when his examination before the adjudicating authority in the proceedings instituted upon show cause notice was not recorded nor formation of an opinion that it requires to be admitted in the interest of justice. In taking this view, we find support from the decision in the case of Ambica International v. UOI rendered by the High Court of Punjab and Haryana.
Reliance has been placed by the Counsel for the Revenue on the decision in the matter of Commissioner of Central Excise v. Kalvert Foods India Private Limited (Laws (SC) 2011 838) = 2011 (270) E.L.T. 643 (S.C.). That decision turned on its own facts. In para 19 of the judgment, it was concluded as below :
"19. We are of the considered opinion that it is established from the record that the aforesaid statements were given by the concerned persons out of their own volition and there is no allegation of threat, force, coercion, duress or pressure being utilized by the officers to extract the statements which corroborated each other. Besides the Managing director of the Company of his own volition deposition the amount of Rs. 11 lakhs towards excise duty and therefore in the facts and circumstances of the present case, the aforesaid statement of the Counsel for the Respondents cannot be accepted. This fact clearly proves the conclusion that the statements of the concerned persons were of their volition and not outcome of any duress."
Accordingly, on the first and second question of law, we hold that the statement of the Director could not be treated as relevant piece of evidence nor could be relied upon without compliance of Section 9D of the Act. The two questions of law accordingly, stand answered in that manner.
19. Therefore, in the present case, particularly viewing the fact that the appellant has also sought the cross-examination, the Recorded 31 E/75760/2014 & E/75761/2014 Statements relied upon by the Revenue, get vitiated and they lose their evidentiary value.
20. We have gone through the job-work contracts given to the appellant by Tata Steel and SAIL. The relevant portions of sample contract is extracted below :
32E/75760/2014 & E/75761/2014 33 E/75760/2014 & E/75761/2014
21. From the above documents it is evident that the appellant is undertaking job-work of manufacturing the Angles / Flats on behalf of these companies. For the raw materials received, he avails the Cenvat Credit and on the finished goods they are paying the Excise Duty. The party has claimed that a substantial portion of the total demand, that is 34 E/75760/2014 & E/75761/2014 out of alleged clandestine removal of 17930 MT of Rolled Products [Finished goods], the normal clearance of 7323.715 MT is on account of their despatches to these parties. While they have made such a claim before the Adjudicating authority [without quantifying], the Adjudicating authority has not considered this point raised, which involves Excise Duty of over Rs. 4.73 crores. In the Order-in-Original, the Adjudicating Authority has not come out with any contrary statement that the quantification was done after considering this aspect.
22. Now coming to the appellant‟s stand about non-production of any corroborative evidence, we find from the records, indeed there is no documentary evidence relied upon by the Revenue towards the huge cash purchase that would be required to convert finished goods to the extent of 17930 MTs clandestinely. The raw materials received and used have been accounted for in RG 23A Part I. No statements have been recorded from the purported sellers of the raw materials, buyers of the finished goods, no details any vehicle movement, statement of vehicle owner / drivers have been recorded. In the search seizure operations, there is nothing to indicate that any private records towards cash in- flow / out-flow has been found. No doubt, the Revenue is not required to 100% pin point the clandestine removal by way of documentary evidence, but substantial evidence is necessary since the charge of clandestine manufacture and clearance is very serious. We have seen from the records that from the beginning the appellant has been sticking to their submission that the goods referred to in the loose sheets / private records, pertain to their raw materials M S Ingots and Concast Billets. No serious efforts have been made by the Revenue to bring in proper evidence to the effect that they have consumed excess raw materials, electricity etc. so as to manufacture the finished goods clandestinely and subsequently clear the same clandestinely. As we have observed, the Revenue failed to record the statement of the contractor engaged in the cutting work by the appellant. The other statements have got vitiated in view of the non-following of Section 9D procedure.
35E/75760/2014 & E/75761/2014
23. Coming to the aspect of non-corroboration by way of other evidence, the case law of Hon‟ble Allahabad High Court in the case of Continental Cement Co. Vs. UOI [2014 (309) E.L.T. 411 (All.), would be useful for reference. The High Court has held as under :-
"12. Further, unless there is clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. On careful examination, it is found that with regard to alleged removals, the department has not investigated the following aspects :
(i) To find out the excess production details.
(ii) To find out whether the excess raw materials have been purchased.
(iii) To find out the dispatch particulars from the regular transporters.
(iv) To find out the realization of sale proceeds.
(v) To find out finished product receipt details from regular dealers/buyers.
(vi) To find out the excess power consumptions.
13. Thus, to prove the allegation of clandestine sale, further corroborative evidence is also required. For this purpose no investigation was conducted by the Department.
14. In the instant case, no investigation was made by the Department, even the consumption of electricity was not examined by the Department who adopted the short cut method by raising the demand and levied the penalties. The statement of so called buyers, namely M/s. Singhal Cement Agency, M/s. Praveen Cement Agency; and M/s. Taj Traders are based on memory alone and their statements were not supported by any documentary evidence/proof. The mischievous role of Shri Anil Kumar erstwhile Director with the assistance of Accountant Sri Vasts cannot be ruled out.
15. In view of the above, we are of the opinion that when there is no extra consumption of electricity, purchase of raw materials and transportation payment, then manufacturing of extra goods is not possible. No purchase of raw material out side the books have been proved.
16. In the light of the above discussions and considering the totality of the case, we are satisfied that no case is made out for extra so called clandestine sale of the Portland Cement to the said parties. We are satisfied that the first appellate authority has rightly deleted the addition and cancel the penalties. Hence we hereby set aside the impugned order passed by the Tribunal and restore the order passed by the first appellate authority, along with the reasons mentioned herein.
36E/75760/2014 & E/75761/2014
17. In the result, all the appeals filed by the appellants are hereby allowed ."
24. In the case of Arya Fibres Pvt. Ltd. & Others Vs. CCE Ahmedabad-II [2014 (311) E.L.T. 529 (Tri. - Ahmd.), it has been held :
"9. It is well settled that the charge of clandestine manufacture of the dutiable goods and removal thereof without discharging the duty liable by an assessee, cannot be established on assumptions and presumptions. Such a charge has to be based on concrete and tangible evidence. In this context, reference may be made to Oudh Sugar Mills Ltd. v. Union of India - 1978 (2) E.L.T. (J 172) (S.C.), wherein the Apex Court has observed that demand of duty cannot be raised on the strength of assumptions and presumptions. There should be sufficient evidence of the removal of the goods alleged to have been manufactured and cleared without payment of duty. The charge of clandestine removal must be based on tangible evidence and not on inferences involving unwarranted assumptions. This very principle of law had been applied by the Tribunal in a number of cases and out of those, few are, Amba Cement and Chemicals v. CCE - 2000 (115) E.L.T. 502 (Tribunal) = 2000 (90) ECR 265, Gurpreet Rubber Industries v. CCE - 1996 (82) E.L.T. 347 and Madhu Foods Products v.
CCE - 1995 (76) E.L.T. 197."
25. In the case of CCE, Chennai-I vs. Indian Steel & Allied Products 2016 (344) E.L.T. 292 (Tri.-Chennai), Bench has held as under:-
"14. In this regard, the Hon'ble High Courts and the Tribunal in various decisions consistently held that clandestine manufacture and removal of excisable goods is to be proved by tangible, direct and affirmative and incontrovertible evidences. The Hon'ble Allahabad High Court in the case of CCE v. R.A. Castings Pvt. Ltd. (supra) on the identical issue upheld the Tribunal's order and dismissed the Revenue appeal. The said High Court's decision stands affirmed by Hon'ble Supreme Court as reported in Commissioner v. R.A. Castings Pvt. Ltd. - 2011 (269) E.L.T. A108 (S.C.). The Tribunal in the recent decision in the case of Mahesh Silk Mills v. CC, Mumbai - 2014 (304) E.L.T. 703 (Tri.-Ahmd.), has relied the Tribunal's decision in the case of Nova Petrochemicals v. CCE, Ahmedabad [Final Order Nos. A/11207-11219/2013, dated 26-9-2013] [2014 (311) E.L.T. 529 (Tribunal)], wherein the 37 E/75760/2014 & E/75761/2014 Tribunal laid down the fundamental criteria to be established by revenue which is reproduced as under :-
"8. Similarly, in the matter of Nova Petrochemicals v. CCE, Ahmedabad-II, this Tribunal in its Final Order Nos. A/11207-11219/2013, dated 26-9-2013 this bench has held as under in Para 40 :
"After having very carefully considered the law laid down by this Tribunal in the matter of clandestine manufacture and clearance, and the submissions made before us, it is clear that the law is well-settled that, in cases of clandestine manufacture and clearances, certain fundamental criteria have to be established by Revenues which mainly are the following :
(i) There should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions;
(ii) Evidence in support thereof should be of :
(a) raw materials, in excess of that contained as per the statutory records;
(b) Instances of actual removal of unaccounted finished goods (not inferential or assumed) from the factory without payment of duty.
(c) Discovery of such finished goods outside the factory
(d) Instances of sales of such goods to identified parties.
(e) receipt of sale proceeds, whether by cheque or by cash, of such goods by the manufacturers or persons authorized by him;38
E/75760/2014 & E/75761/2014
(f) use of electricity for in excess of what is necessary for manufacture of goods otherwise manufactured and validity cleared on payment of duty
(g) statements of buyers with some details of illicit manufacture and clearance;
(h) proof of actual transportation of goods, cleared without payment of duty
(i) links between the document recovered during the search and activities being carried on in the factory of production; etc. Needless to say, a precise enumeration of all situations in which one could hold with activity that there have been clandestine manufacture and clearances, would not be possible. As held by this Tribunal and Superior Courts, it would depend on the facts of each case. What once could, however, say with some certainty is that inferences cannot be drawn about such clearances merely on the basis of notebooks or diaries privately maintained or on mere statements of some persons may even be responsible official of the manufacture or even of its Directors/partners' who are not even permitted to be cross-examined, as in the present case, without one or more of the evidence referred to above being present."
The guidelines laid down by the Tribunal in the above case for establishing clandestine removal is squarely applicable to the present case. Whereas in the instant case none of the above evidences or any one evidence has been established by Revenue to prove the clandestine manufacture and removal.
26. In view of the above detailed discussions and analysis, we conclude that the confirmed demand on the appellant company does not legally sustain on merits. We set aside the confirmed demand of 39 E/75760/2014 & E/75761/2014 Rs.8,12,60,752 [Rs.81417461 - Rs.156709 (in respect of 5 fake invoices not being contested on merits], on merits and allow the appeal.
27. The appellant has submitted that the Show Cause Notice has been issued on 20.12.2012 for the alleged clearances made during the period February 2008 to December 2008 and March 2009. Hence, the same is time-barred. We find that the unit was visited by the officials on 02.04.2009. The two documents, viz., the private diaries and loose sheets were resumed on the same day. Statement of Sudhir Khanna, Manager, Pradeep Kumar Shaw, Quality Control Supervisor was recorded on the same day. Further statements have been recorded in 2009 and 2010. Thus all the documentary evidence used for quantifying the demand was very much available with the Revenue latest by 2010. But still they have waited till 20.12.2012 to issue the Show Cause Notice. Nothing is coming up in the SCN was what kind of investigation and follow up verification was being undertaken by the Revenue during the intervening period. Mere recording of the statement of the Director multiple times from 22.11.2011 to 15.03.2012, that is much later than the visit date of 2.4.2009, does not prove that this was on account of continued investigation. The quantification of demand is based on the Private Diaries and Loose Sheets resumed on 2.4.2009. Once the Dept. has knowledge of the contravention, the SCN has to be issued within the time frame.
28. The Tribunal in the case of SUVIDHA ENGINEERS INDIA LTD.Vs COMMISSIONER OF C. EX., NOIDA (2013 (32) S.T.R. 735 (Tri. - Del.) has held as under:-
7. We find that appellants were paying Service Tax on the activities with effect from 16-6-2005 and filing returns. It is on record that appellants vide their letter dated 5-9-2005 submitted month wise details of all payments received by them against HVAC works for the period 1-7-2003 to 15-6-
2005. Once the details of value of taxable services were available to the Department on 5-9-2005, there is no reason to invoke the extended period. Show Cause Notice in this case has been issued on 30-10-2007 demanding Service Tax for the period 1-7-2003 to 15-6-2005. We are therefore of the view that Department was free to issue the show cause notice to the appellants within one year after details of value of taxable 40 E/75760/2014 & E/75761/2014 services were made available to the department. We therefore hold that show cause notice in the present case in time-barred.
Affirmed by High Court :
2017 (50) S.T.R. 268 (All.) COMMISSIONER OF C. EX., CUS. & S. TAX Versus SUVIDHA ENGINEERS INDIA LTD.
15. Having heard learned counsel for both sides at length and having perused the entire facts on record and the judgment of the Tribunal, we are of the opinion that the Tribunal too has taken a similar view wherein it records in para 7 that the assessee through their letter dated 5-9-2005 had submitted month-wise details of all payment received by them against HVAC works for the period from 1-7-2003 to 15-6-2005. Once the details of the value of taxable services were available to the department on 5-9-2005, the Tribunal came to the conclusion that there was no reason to invoke the extended period under the proviso to Section 73(1) of the Finance Act, 1994.
Affirmed by the Supreme Court :
Commissioner v. Suvidha Engineers India Ltd. 2018 (11) G.S.T.L. J83 (S.C.) The Supreme Court Bench comprising Hon'ble Mr. Justice J. Chelameswar and Hon'ble Mr. Justice S. Abdul Nazeer on 16-8-2017 after condoning the delay dismissed the Diary No. 21565 of 2017 filed by Commissioner of Central Excise, Customs & Service Tax against the Judgment and Order dated 8-2-2017 of Allahabad High Court in Central Excise Appeal No. 82 of 2014 as reported in 2017 (50) S.T.R. 268 (All.) (Commissioner v. Suvidha Engineers India Ltd.). While dismissing the petition, the Supreme Court passed the following order :
"Heard.
Delay condoned.
We do not see any ground to interfere with the impugned order. The special leave petition is accordingly dismissed.41
E/75760/2014 & E/75761/2014 Pending applications, if any, shall also stand disposed of."
2008 (224) E.L.T. 326 (Tri. - Chennai) PRASAD POLYPACK COMPANY Vs COMMISSIONER OF C. EX., CHENNAI-IV
3. xxxxxxxxxxxxxx. The Hon'ble High Court further held, on the facts of the case of Bripanil Synthetics (supra), that the extended period of limitation was not invocable against the assessee as show-cause notice dated 31-8-2001 was issued to them by the department after completing investigations as early as in August, 1996. The facts of the present case seem to be comparable. The Central Excise officers visited the assessee's factory in July, 1998 and gathered all the material facts. The show-cause notice was, however, issued three-and-a-half years later. No material is available on record to indicate that the department was preoccupied with further investigations during the intervening period. On the other hand, the show-cause notice is based exclusively on facts gathered by the officers in July, 1998. The ratio of the Hon'ble High Court's judgment, which took into account the Hon'ble Supreme Court's judgment in Nizam Sugar Factory, is therefore squarely applicable to the facts of the present case. Accordingly, we set aside the demand of duty (differential) as time-barred. As a consequence and in view of the fact that the admitted duty liability was discharged long before the issue of the show-cause notice, the penalty on the appellants is also vacated.
Commissioner v. Prasad Polypack Company 2013 (298) E.L.T. A72 (Mad.) The Madras High Court Bench comprising Hon'ble Ms. Justice R. Banumathi and Hon'ble Mr. Justice K. Ravichandrabaabu on 27-2-2013 dismissed the CMA No. 2062 of 2008 filed by Commissioner of Central Excise, Chennai-IV against the CESTAT Final Order No. 2/2008, dated 27-12-2007 as reported in 2008 (224) E.L.T. 326 (Tri. - Chennai) (Prasad Polypack Company v. Commissioner).
12. Applying the ratio of the above decision, we are of the view that when the Tribunal has recorded the factual finding that there was no suppression of facts and as such no substantial question of law is involved in the appeal and the appeal is dismissed. However, there is no order as to costs."
42E/75760/2014 & E/75761/2014
29. Therefore, we find that the demand is also hit by time-bar. We set aside the entire demand on account of time-bar and allow the appeal.
30. Since the demand against the appellant is found not be sustainable and has been set aside, we also set aside the penalty imposed on the Appellant Director.
31. Thus the appeals stand allowed. The appellant would be eligible for consequential relief, if any, as per law.
(Pronounced in the open court on 24/06/2025.) Sd/-
(R. Muralidhar) Member (Judicial) Sd/-
(Rajeev Tandon) Member (Technical) Pooja