Customs, Excise and Gold Tribunal - Mumbai
Rajesh Casting Pvt. Ltd. And Dodani ... vs Commissioner Of Central Excise on 21 April, 2004
Equivalent citations: 2004(95)ECC284
ORDER Archana Wadhwa, Member (J)
1. Vide the impugned order. Commissioner of Central Excise has demanded duty of Rs. 10,46,503.17 against M/s. Rajesh Casting Pvt. Ltd on the finding of clandestine manufacture and removal of their final products. In addition, personal penalty of Rs. 1 lakh has also been imposed under Rule 173-Q of Central Excise Rules, 1944. Further the Commissioner has arrived at a finding that a part of the said clandestine removal of ingots was received by second appellant M/s. Dodani Steel Ind., who have utilized the same for manufacture of their final product i.e. CTD Bars and have removed the same clandestinely during the period 1.3.90 to 29.9.90. Accordingly, duty of Rs. 74,399.85 has been confirmed against the said appellant along with imposition of personal penalty of Rs. 10,000/-.
2. Shri Hardik Modh, Ld. Advocate appearing for the first appellant M/s. Rajesh Casting Pvt. Ltd. submits that the matter was taken up by them before the designated authority in terms of provisions of KVSS and as such the appeal filed before the Tribunal is deemed to have been withdrawn. He submits that, even though dispute has not been finally settled in terms of above said Scheme, but fairly agrees that, in terms of the Supreme Court's decision in the case of Gulam Ahmed (SIC) (142) E.L.T. 286 (S.C.), the appeal filed before Tribunal cannot be revived. In view of the foregoing, appeal of M/s. Rajesh Casting Pvt. Ltd. is deemed to have been withdrawn.
3. As regards the other appellant, Shri. Anil Balani, Ld. Advocate submits that entire case of Revenue is based upon the inward register maintained by the appellant at the factory gate. According to Revenue, such inward register shows receipt of excess quantity of M.S. ingots than what was reflected in GP-1 issued by Rajesh Castings. The Ld. Advocate submits that, during the relevant period, the appellant was working under Notification 202/88 dated 20.5.88, which exempted their final products from payment of duty if manufactured out of duty paid ingots. He submits that inasmuch as they were enjoying the exemption under the said Notification, there was no occasion or reason for them to receive clandestine goods from M/s. Rajesh Casting Pvt. Ltd. He further submits that such difference in the receipt register and the weight shown in the dispatch documents of M/s Rajesh Casting Pvt. Ltd. is attributable to so many factors. The weight of the truck, when it is weighed empty, and then weighed after loading, and the difference of these two weights, is mentioned in the receipt documents. Similarly, when the trucks loaded with the material are weighed at Weighbridge and the difference is again recorded, as the quantity received in the receipt register. The appellant has drawn the attention of the adjudicating authority to some of the entries where the weight recorded in the receipt register is less than the weight recorded in the dispatch document. As such, he submits that difference in the receipt register cannot be made the basis for arriving at a finding against them that they were receiving ingots and utilizing the same in the manufacture of CTD Bars and clearing them clandestinely. He also submits that receipt register reflects the total weight and some of the trucks, apart from carrying ingots, may also be carrying other materials. As regards the statement of partner of M/s Dodhani Steel Inds., he submits that the said statement was not made voluntarily and was taken by the Revenue under duress, as is evident from the fact that the same was written in the hand of Central Excise Officers. He also submits that the said statement was given by M/s. Dodani on showing entries in the inward receipt record and without verifying the actual aspect. In support of his above submission, Ld. Advocate has referred to Tribunal's decision in the case of Sharma Chemicals v. CCE - 2001 (130 E.L.T. 271 (Tri. Kolkata), Hindustan Lever Ltd. v. CCE - 1996 (87) E.L.T.385 (Tri.), Saheli Synthetics Pvt. Ltd. v. CCE - 1999 (113) E.L.T. 1000 (Tri.), Sri Jayajyothi & Co. Ltd. v. CCE - 2002 (141) E.L.T. 676 (Tri.Chennai), CCE v. Sangamitra Cotton Mills (P) Ltd. - 2004 (163) E.L.T.472 (Tri. Chennai) as also to another decision of the Tribunal in the case of CCE v. Supreme Fire Works Factory, Sivakasi - 2004 (163) E.L.T.510 (Tri. - Chennai). The Ld. Advocate has further contended that, in any case, they were availing Notification No. 202/88, according to which their final product is exempted if manufactured out of duty paid inputs presuming though denying that inputs were received by them without payment of duty, the same would become duty paid after confirmation of demand of duty against Rajesh Casting Pvt. Ltd. and settlement of dispute under KVSS. As such, he submits that the demand of duty against them is required to be set aside.
4. Countering the arguments, Shri Hitesh Shah, Ld. SDR for the Revenue submits that the entries made in the receipt register, showing receipt of excess weight of ingots than what is reflected in the duty paying documents, has been admitted by the partner of the appellant. He further submits that the payment for excess receipt of input was being made by cash, whereas the balance amount was being made by cheque. This fact is sufficient enough to hold against the appellant, that they were utilizing the excess quantity of ingots received in the manufacture of their final product, which, in turn, was being cleared to their customers without payment of duty. As regards the claim to the exemption Notification No. 202/88, it has been submitted that the amount paid under Section 88 of the Finance Act 1998 i.e. under KVSS is not duty but only the settlement amount paid under different law and such settlement is only 50% out of confirmed amount against manufacturer. As such he submits that the conditions of the Notification No. 202/88 cannot be held to be satisfied.
5. We have considered the submissions made by both the sides. The appellant's main grievance is that demand of duty in respect of their final product CTD Bars has been confirmed against them on the sole fact of receipt of excess inputs from the ingots supplier and entries made in their receipt register. We find that apart from the above fact, there is no other evidence on record for receiving and utilizing the excess quantity of ingots. The appellant have given explanation as regards, the difference between the weight, as recorded in the duty paying documents of Rajesh Casting Pvt. Ltd., and the entries in the in receipt register. Our attention has been drawn to some entries, where the less quantity of ingots is reflected in the receipt register. It is also the appellant's case that the truck may be carrying some other goods in which case, the entire load of the truck gets reflected in the receipt register which is a private record being maintained by them at the factory gate. The ratio of the decision referred by the Ld. Advocate is the entries made in such private records cannot be made the basis for arriving at adverse conclusions against the assessee in the absence of any corroborative evidence. The appellants have strongly argued that even if the receipt of ingots is accepted, there is nothing to show that the same were used in the manufacture of CTD Bars i.e. their final product. They could have cleared the ingots as such also. There is nothing in the statement to show that such ingots have been used for further manufacture of bars which were cleared without payment of duty.
6. In this view of the matter, we are of the opinion that the above entries may lead to doubt against the appellant but cannot take the place of legal evidence. As such, we set aside the confirmation of demand of duty and imposition of penalty against the second appellant, M/s Dodani Steel Industries. We are not examining the appellant's claim of entitlement of Notification No. 202/88.
7. The appeal of the appellant M/s. Rajesh Casting Pvt. Ltd. stands dismissed as deemed to have been withdrawn and the appeal of M/s. Dodani Steel Inds. Ltd. is allowed with consequential relief, if any.
(Pronounced in open Court)