Custom, Excise & Service Tax Tribunal
Shri Vinay Bansal & Ors vs Cce-Meerut-I on 27 February, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
R.K. PURAM, WEST BLOCK NO. 2, NEW DELHI-110066
COURT NO. III
Date of Hearing: 27/02/2015
Appeal No. E/303-305/2006-EX [DB]
[Arising out of order-in-original no. 44/Comm./Meerut-01/05 dated 28th October, 2005 passed by Commissioner of Central Excise, Chowk, University Road, Mangal Pandey Nagar, Meerut]
1.
Whether Press Reporter may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3.
Whether their Lordships wish to see the fair copy of the order?
4.
Whether order is to be circulated to the Department Authorities?
M/s. Shamli Paper Mills Ltd.,
Shri Vinay Bansal & Ors. Appellant
Vs.
CCE-Meerut-I Respondent
Appearance: Shri A.P. Mathur, Advocate for the appellant Shri Pramod Kumar, JCDR for the respondent.
Coram: Honble Shri Rakesh Kumar, Member (Technical) Honble Shri S.K. Mohanty, Member (Judicial) Final Order No. 51095-51097/2015 Per: Rakesh Kumar
1. The officers of Central Excise Meerut-I on receipt of intelligence about duty evasion by M/s. Sikka Paper Mills Limited, Saharanpur Road, Shamli, District Muzaffarnagar (hereinafter referred to as M/s. Sikka), visited their unit on 24/04/2003 and at that time, they also visited the unit of the sister concern M/s. Shamli Paper Mills, Saharanpur Road (hereinafter referred to as M/s. Shamli). Both the premises were searched. Both the units are owned by two different private limited companies whose common Director is Shri Vinay Bansal. Both the units are located at adjoining plots, are manufacturing the same final product-printing and writing paper and both were availing of exemption under notification 6/01-CE which exempts the clearances of paper and paper board upto 3500 MTs in a financial year subject to condition that the paper/paper board is made from pulp containing not less than 75% by weight of pulp made from non conventional raw material, i.e., material other than bamboo, hard wood, soft wood, seeds (other than sarkanda) and rags. At the time of search, while the factory of M/s. Sikka was functioning and there was an excess stock of 16.03 MTs of writing and printing paper, the factory of M/s. Shamli was closed and according to the department, the condition of the factory of M/s. Shamli indicated that the same was not in working condition for a long time. There was no power connection in the M/s. Shamli, though one generator of 380 KVA was found. After enquiry into this matter, the departmental officers were of the view that M/s. Shamli was not functioning and only part of the production of paper by M/s. Sikka was being shown as production by M/s. Shamli to enable M/s. Sikka to wrongly avail the exemption under Notification No. 6/01-CE in excess of the limit of 3500 MTs in a year. It is on this basis that show cause notice dated 25/8/2001 was issued to M/s. Sikka, M/s. Shamli, Shri Vinay Bansal, Director of both the units for - (a) recovery of Central Excise Duty amounting to Rs. 68,72,658/- from M/s. Sikka in respect of clearances of kraft paper, writing and printing shown to have been made from M/s. Shamli during period from 18/09/2001 to 31/3/2003 by wrongly availing the exemption under notification No. 6/01-CE which were alleged to have been manufactured by M/s. Sikka, (b) recovery of interest under section 11AB of the Central Excise Act, 1944 on the above mentioned duty; (c) imposition of penalty on M/s. Sikka under section 11AC and penalty on M/s. Shamli under Rule 26 of the Central Excise Rule, 2002 and (d) imposition of penalty on Shri Vinay Bansal, Director of both the units under Rule 26 of the Central Excise Rules, 2002.
2. The above show cause notice was adjudicated by the Commissioner vide order-in-original dated 28/10/2005 by which the above mentioned duty demand of Rs. 68 ,72,654/- was confirmed against M/s. Sikka under proviso to section 11A (1) of Central Excise Act, 1944 along with interest on this duty under section 11AB and besides this, while penalty of equal amount was imposed on M/s. Sikka under section 11AC, penalty of Rs. 5 lakh was imposed on M/s. Shamli under Rule 26 of the Central Excise Rules, 2002 and penalty of Rs. One lakh was imposed on Shri Vinay Bansal under Rule 26 ibid.
3. M/s. Sikka, M/s. Shamli and Shri Vinay Bansal filed appeal before the Tribunal against the above order of the Commissioner. The Tribunal vide final order no. 799-801/2011-EX dated 15/9/2011 dismissed the appeals. Against this order of the Tribunal, the appellant filed appeals before the Honble Allahabad High Court. These appeals were filed before the High Court pleading that the Tribunal has not considered the grounds which has been raised in the memorandum of appeal. Honble High Court vide order dated 15/5/2012 dismissed the appeals with direction that the appellant may seek remedy before the Tribunal in accordance with the law. In this regard, the order of Honble Allahabad High Court is reproduced below:
Heard the learned counsel for the appellants and Sri R.C. Shukla learned counsel for the respondent in Central Excise Appeal No. 593 of 2012 and Central Excise Appeal No. 594 of 2012 and Sri Siddarth Shukla, learned counsel for the respondent in Central Excise Appeal No. 595 of 2012.
These three appeals have been field under section 35G of the central excise Act, 1944 against common order dated 15.09.2011 passed by Customs Excise & Service Tax Appellate Tribunal (the Tribunal) by which three appeals filed by the above mentioned three appellants have been dismissed.
Sri A.P. Mathur, learned counsel for the appellants submits that although in memo of appeal several grounds were taken and were also pressed before the Tribunal but there is no consideration of the aforesaid grounds which were pressed before the Tribunal.
It is well settled that if the appellant comes with the case before higher Court that grounds urged have not been considered, his remedy is to approach to the same Court for consideration. It is for the same Court/Tribunal to consider as to whether any ground which has been pressed ahs been omitted from consideration.
In view of the above discussions, these appeals cannot be entertained. The appellants may seek remedy in accordance with law.
These appeals are dismissed subject to above observations.
4. Accordingly, the appellant filed applications for restoration of appeal before the Tribunal. The Tribunal vide miscellaneous order no. 969-971/2012 EX-BR dated 31/8/2012 recalled its final order dated 15/9/2011 and restored the appeals to their original number. The Tribunal vide order dated 21/5/2013 also directed the Commissioner to permit the inspection and supply of certain non-relied upon documents, the supply of which had been requested by the appellant but which had been not supplied. The details of these documents are mentioned in para 3 of the Tribunals miscellaneous order dated 21/5/2013. The documents as per the Tribunals order dated 21/5/2013 have been supplied.
5. Heard both the sides.
6. Shri A.P. Mathur, Advocate, ld. Counsel for the appellants pleaded that the tribunal in its earlier order dated 15/9/2011, had dismissed the appeal mainly on the following points:
(1). At the time of officers visit to factory of M/s. Shamli, it was closed and from the condition of the factory, it appeared that it was not working since a long time.
(2). There was no power connection in the factory of M/s. Shamli and while the appellant claimed that there were 2 DG Sets, each of 380KVA, only one DG Set was available and in respect of that DG Set also, there was no record of purchase of diesel for running the same.
(3). Though M/s. Shamli under their letter dated 18/9/2001 to Assistant Labour Commissioner had intimated regarding closure of their unit from September, 2001 and they had deposited their contribution towards employees provident fund up to February, 2001 only, and this show that their factory was not at the end of February, 2001 and, though the appellant claim that they had been running their factory by hiring contract labour, no evidence in this regard has been produced.
6.1 Sh. A.P. Mathur pleaded that in respect of each of these points specific pleas had been made in the grounds of appeal but the same have not been considered.
6.2 In respect of the findings in the Tribunals order that there is no evidence of purchase of diesel for running the DG Sets, he points out to ground no. 2 in the grounds of appeal and with regard to the hiring of contract labour after February, 2001, he pointed out to the facts stated in ground no. 21 & 22. He also pleaded that from the appellants premises, among the seized documents, there were the documents regarding purchase of diesel and also the documents regarding hiring of the contract labour and these documents, though not relied upon by the department, had been asked for by the appellant but the same had not been supplied and that the same have been supplied only in pursuance of the Tribunals order dated 21/5/2013. He pleaded that these documents had neither been considered in the adjudication proceedings accordance with the proceedings before the Commissioner nor by the Tribunal.
6.3 With regard to the finding in the Tribunals order that at the time of officers visit to the factory, from the condition of the factory of M/s. Shamli, it appeared that the same was closed since a long time, he pleaded that the M/s. Shamli had closed the unit since March, 2003 on account of financial difficulties and various other problems and in this regard they had given the intimation to the department under their letter dated 13/4/2003. He also pleaded that the copy of this letter dated 13/3/2003 of M/s. Shamali is also on record and is enclosed with the memorandum of appeal. He pleaded that this letter had not been considered by the Tribunal while in view of this letter, no adverse conclusion can be drawn from the non-functioning of the factory at the time of officers visit on 24/4/2003. He also pleaded that he had requested for cross-examination of the officers who had participated in the search of the factory but the same was not allowed by the Commissioner.
6.4 He, therefore, pleaded that the final order passed by the Tribunal, which has already been recalled, had been passed without considering the grounds of appeal and the documents placed on record.
7. Shri Pramod Kumar, ld. JCDR defended the impugned order by reiterating the findings of the Commissioner in it. He, however pleaded that opportunity for inspecting the non-relied upon documents sought by the appellant had been given to them as is clear from para 14 & 15.2 of the impugned order-in-original, but the appellants had not co-operated with the adjudicating authority in this regard and from their conduct, it appeared that they were interested only in delaying the proceedings and were not interested in inspection and obtaining copies of the non-relied upon documents sought by them.
8. We have considered the submissions from both the sides and perused the records. Earlier, the appeals filed by the appellant had been dismissed on the following three grounds:
(1) At the time of officers visit to the factory of M/s. Sikka and M/s. Shamli on 24/4/2003 only while the factory of M/s. Sikka was functioning and the factory of M/s. Shamli was found closed and from its condition, it appeared that it was not working for a long time.
(2) There was no electricity connection in the factory of M/s. Shamli since 3/7/1998 and out of the two DG Sets installed only one was in working condition and in respect of that DG Set also, there was no evidence of purchase of diesel for running the same.
(3) the services of staff in the factory of M/s. Shamli had been terminated since May/June, 2001 and their PF contribution had also been made only up to February, 2001 and besides this, M/s. Shamli under their letter dated 18/9/2001 to Assistant Labour Commissioner had intimated the closure of the unit. There was no evidence produced by M/s. Shamli to show the running of their factory after May/June, 2001 by hiring the contract labour.
8.1. It is in view of the above circumstances that the Tribunal in the earlier order had held that during the period of dispute, i.e., during period from September, 2001 to 31st March, 2003, the factory of M/s. Shamli was not working and only the goods produced in the factory of M/s. Sikka were being shown to have been manufactured and cleared from the factory of M/s. Shamli.
9. However, it is the contention of the appellants that factory of M/s. Shamli was functioning during period of dispute and there is record of production. It has been pleaded that though there was no power connection in the factory of M/s. Shamli there were 2 DG Sets each of 380 KVA each and at the time of officers visit on 24/4/2003 while one DG Set was in working condition and the other was under repairs. With regard to the purchase of diesel it has been pleaded that the diesel was being purchased from M/s. Dee Cay Traders and was being delivered at their premises under GRs and that in this regard Shri Vinit Kumar of M/s. Super Oils had confirmed the delivery of HSD at the appellants premises on various occasions. It had been pleaded that the records regarding purchase of raw material and diesel had been recovered from the appellants premises besides the record regarding payment made to the labour contractors and the details of the tax deducted at source in respect of the payment made to the labour contractors.
10. It is seen that the Tribunal vide miscellaneous order dated 21/5/2013 had directed the appellant to make an application to the adjudicating authority to permit inspection of the following documents under seizure and supply the copies of the same:
(1) Manufacturing records showing manufacture for the period from 18/9/2001 to March, 2003.
(2) Records showing intimation of the goods manufactured to excise authorities.
(3) Evidence showing employment of the contractors and the copy of the agreement, therefore, (4) Evidence showing remuneration paid to the contractors and TDS made from the payment to the contractor (5) Evidence relating to purchase of raw material and diesel (6) Evidence relating to transport of diesel purchased and receipt of such goods in the factory and the used thereof.
(7) Evidence showing returns filed before the sales tax authorities and sales tax paid for the goods sold (8) Evidence relating to licence of the contractor whether valid till 16/8/2013 (9) Different returns filed by the appellant during impugned period before labour Commissioner PF Commissioner and ESI Authority.
10.1. The above documents recovered from the appellants premises had not relied upon. But in response to the Tribunals directed dated 21/5/2013, the same have now been supplied to them.
11. We are of the view that since the above documents had neither been considered by the Commissioner at the stage of the adjudication nor had been considered by the Tribunal, it would be proper to remand this matter to the Commissioner for de-novo adjudication after considering the above mentioned non-relied upon documents which have now been made available to the appellant and after considering the appellants plea on the basis of these documents. It is only after taking into accounts the above documents and considering the appellants plea based on these documents, that the Commissioner must give his findings on the point as to whether the factory of M/s. Shamli was being run with DG sets and whether after May, June, 2001 the manufacturing operations were being conducted with the help of contract labour. As regards, the Commissioners finding that at the time of officers visit to the factory of M/s. Shamli on 24/4/2003 the same was in very bad shape and non working condition, the Commissioner must decide this point after considering their letter dated 13/4/2003 regarding closure of the factory and also permitting cross-examination of the officers who had searched the factory and of pancha witnesses, if the request for their cross-examination is made by the appellant. The impugned order is, therefore, set aside and the matter is remanded to the Commissioner for de-novo adjudication in terms of one above directions.
(Rakesh Kumar) (S.K. Mohanty)
Member (Technical) Member (Judicial)
Ritu