Custom, Excise & Service Tax Tribunal
Hanuman Ispat Private Limited vs Raipur on 24 June, 2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. - IV
Excise Appeal No. 51504 of 2018 [SM]
[Arising out of Order-in-Appeal No. BHO-EXCUS-002-APP-418-17-18 dated
15.02.2018 passed by the Commissioner, Central Excise, Raipur]
M/s.Hanuman Ispat Privat Limited ...Appellant
Village Sondra, Siltara Industrial Area,
Phase- II, Raipur (C.G.) 493111
VERSUS
Commissioner of Customs & Central Excise ...Respondent
Central Excise Building, Tikrapara, Raipur - 492001.
Excise Appeal No. 51509 of 2018 [SM] [Arising out of Order-in-Appeal No. BHO-EXCUS-002-APP-419-17-18 dated 15.02.2018 passed by the Commissioner, Central Excise, Raipur] Suresh Gupta ...Appellant M/s. Hanuman Ispat Pvt. Ltd.
Village Sondra, Phase-II, Siltara Industrial Area, Raipur (C.G.) 493111 VERSUS Commissioner of Customs & Central Excise ...Respondent Central Excise Building, Tikrapara, Raipur - 492 001.
APPEARANCE:
Shri Abhas Mishra, Advocate for the Appellant Shri P.r. Gupta & Mr. K. Poddar, Authorised Representatives for the Respondent Coram: HON'BLE MR. RACHNA GUPTA, MEMBER (JUDICIAL) FINAL ORDER No. 50795-50796/2019 DATE OF HEARING : 09/05/2019 DATE OF DECISION: 24/06/2019 RACHNA GUPTA Appellants herein are the manufacturers of MS ingots falling under Chapter 72 of Central Excise Act, 1985. Acting upon his 2 Excise Appeal No. 51504 of 2018 [SM] Excise Appeal No. 51509 of 2018 [SM] specific information that M/s.Pankaj Ispat Ltd., Raipur (PIL in short) is indulged in the clandestine procurement of raw-material production and clearance of MS ingots and TMT Bars, flats, challans etc., that the Central Excise Officers of Headquarter Preventive Branch, Raipur visited the premises of M/s. PIL inspected and verified the documents and also verified the stock of raw-material as well as the finished goods on 12.04.2012. Shortage of 1066.615 M.T. M.S. Ingots valued at Rs.3,57,31,603/- and that of 9695 MT TMT Bar valued at Rs.3,64,290/- was noticed. The incriminating documents were recovered vide Panchnama dated 12.04.2012. Statement of Director of M/s.PIL, namely, Shri Pankaj Aggarwal was recorded on 19.09.2012 and 02.10.2012 under Section 14 of Central Excise Act. The Scrutiny of documents and further investigation revealed that the suppliers of unaccounted raw- material to M/s.PIL and their customers of furnished goods included manufacturers /dealers commission agents etc., who all were alleged to have evaded payment of Central Excise Duty, while facilitating M/s. PIL to remove the finished goods clandestinely. It was also observed that during the period 2010-11 and 2011-12 M/s. PIL had purchased unaccounted raw-material i.e. MS ingots from the appellant herein. Resultantly, a show cause notice No.21159 dated 28th December, 2015 was served upon the appellant proposing the recovery of Central Excise duty of Rs.5,93,822/- from them alongwith the interest and the penalty not only on the appellant company but also upon the authorized signatory thereof i.e. Shri Suresh Gupta. The said proposal was 3 Excise Appeal No. 51504 of 2018 [SM] Excise Appeal No. 51509 of 2018 [SM] initially confirmed vide order No.42 dated 20.02.2017. Being aggrieved, an appeal was preferred before this Tribunal.
2. We have heard Mr. Abhas Mishra, ld.Counsel for the appellants and Mr.P.R. Gupta & Mr. K. Poddar, Authorised Representative for the Revenue.
3. It is submitted on behalf of the appellant that the Department has raised a wrong recovery relying upon a third party evidence i.e. documents recovered from M/s. PIL. No investigations in the form of search or recoveries from the appellant premises were made.
There is no other corroborative evidence on record to prove the allegations as have been confirmed by the adjudicating authority below. Order is, accordingly, prayed to be set aside. Appeal is, therefore, prayed to be allowed. They have relied upon the following case laws for their support:-
1. Continental Cement Company Vs. Union of India - 2014 (309) ELT 411 (All.)
2. Raipur Forging Pvt. Ltd. Vs. CCE, Raipur-I - 2016 (335) ELT 297 (Tri.-Del.),
3. CCE & ST, Raipur Vs. P.D. Industries Pvt. Ltd. - 2016 (340) ELT 249 (Tri.-Del.)
4. CCE & ST, Ludhiana Vs. Anand Founders & Engineers -
2016 (331) ELT 340 (P&H).
5. Commissioner of C.Ex., Indore vs. Prag Penta Chem Pvt. Ltd. - 2018 (360) E.L.T. 1025 (Tri.-Del.).
6. Rudra Ventures Pvt. Ltd. vs. Commissioner of C.Ex., Ludhiana - 2016 (344) E.L.T. 472 (Tri. - Chan.) 4 Excise Appeal No. 51504 of 2018 [SM] Excise Appeal No. 51509 of 2018 [SM]
4. Per-contra, ld. D.R. for the Department has submitted that the Officers of Headquarters, Preventive Branch had conducted massive investigation and searches in the premises of M/s.PIL and recovered voluminous incriminating documents sufficiently proving that the appellants have supplied unaccounted raw-material to M/s.
PIL. The order under challenge has discussed the clear involvement of the appellant facilitating the clandestine removal of the finished goods of M/s. PIL. There is no infirmity in the order under challenge. Same is, accordingly, prayed to be set aside.
5. After hearing both the sides, since the sole challenge to the order is its reliance upon third party evidence, it is necessary to check the evidentiary value of the third party evidence. The relevant case law in the case of Bajrangbali Ingots & Steel Pvt. Ltd. & Suresh Agarwal vs. CCE, Raipur in Appeal No. E/52062 & 52066/2018 heard on 16.11.2018, which is held as follows:-
9. The law i.e. as to whether the third party records can be adopted as an evidence for arriving at the findings of clandestine removal, in the absence of any corroborative evidence, is well established. Reference can be made to Hon'ble Allahabad High Court decision in the case of Continental Cement Company Vs. Union of India - 2014 (309) ELT 411 (All.) as also Tribunal's decision in the case of Raipur Forging Pvt. Ltd.
Vs. CCE, Raipur-I - 2016 (335) ELT 297 (Tri.-Del.), CCE & ST, Raipur Vs. P.D. Industries Pvt. Ltd. - 2016 (340) ELT 249 (Tri.-Del.) and CCE & ST, Ludhiana Vs. Anand Founders & Engineers - 2016 (331) ELT 340 (P&H). It stand held in all these judgements that the findings of clandestine removal cannot be upheld based upon the third party documents, unless there is clinching evidence of clandestine manufacture and removal of the goods.
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Excise Appeal No. 51504 of 2018 [SM] Excise Appeal No. 51509 of 2018 [SM]
6. There is no other evidence or document in the form of stock verification of the raw-material of the appellant and the material supplied to M/s. PIL nor any evidence about usage of any transportation by the appellants for transporting the alleged quantity of raw-material to M/s.PIL. In absence thereof the documents recovered from M/s.PIL cannot be held against the appellant.
7. In the result, the order confirming the recovery has no legal basis to sustain. Accordingly, is hereby set aside. Appeal stands allowed.
[Order pronounced in the open Court on 24/06/2019] (RACHNA GUPTA) MEMBER (JUDICIAL) Anita