Custom, Excise & Service Tax Tribunal
M/S Chandra Cement Ltd vs Cce, Jaipur I on 25 November, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. I DATE OF HEARING : 07/11/2016. DATE OF DECISION : 25/11/2016. Excise Appeals No. 1499-1500 of 2008 [Arising out of the Order-in-Original No. 08/2008 (C. Ex.) dated 18/03/2008 passed by The Commissioner (Appeals), Central Excise, Jaipur.] M/s Chandra Cement Ltd. ] Appellants Shri Rajendra Prasad Goyal, Director ] Versus CCE, Jaipur I Respondent
Appearance Shri Bipin Garg, Advocate for the appellants.
Shri R.K. Manjhi, Authorized Representative (DR) for the Respondent.
CORAM : Honble Shri Justice Dr. Satish Chandra, President Honble Shri Ashok K. Arya, Member (Technical) Final Order No. 55284-55285/2016 Dated : 25/11/2016 Per. Ashok K. Arya :-
M/s Chandra Cement Ltd. and Shri Rajendra Prasad Goyal, Director are in appeal against Commissioner, Jaipurs order dated 19/03/2008 where demand of Rs. 52,96,870/- alongwith interest and penalty of Rs. 53,14,370/- has been confirmed. A penalty of Rs. 5,00,000/- (Rupees Five Lakhs only) has also been imposed on the appellant Shri Rajendra (Prasad) Goyal, Director.
2. Appellants have been represented by Shri Bipin Garg, learned Advocate and the Revenue has been represented by Shri R.K. Manjhi, learned AR.
3. The matter concerns with clearance of cement without payment of duty.
4. The learned Advocate based on the appeal memorandum inter-alia mainly submits as under :-
(i) Commissioner tries to build up the case for the Department by referring to the statement dated 19/11/1999 of Shri Rajendra Goyal, Director. Commissioner mentions that Shri Goyal admitted recovery of incriminating documents and also admitting that he maintained parallel set of invoices deliberately with an intent to evade payment of Central Excise duty and using parallel invoices for clearance of cement without payment of duty
(ii) But the fact remains that these registers are consolidated account of the 4 units including the appellants factory. This account was a sort of personal account of Shri Rajendra Prasad Goyal to keep track of the position (Financial) in regard to him of all the units. M/s Chandra Cement Pvt. Ltd., the appellants was also maintaining its separate Cash Book by computer in the factory. The appellants can authentically assert that the entries in the separate Cash Book will tally with the entries in this Register in the name of Shri Rajendra Prasad Goyal.
(iii) corroborative evidence of clandestine removal has to be produced before such a charge can be sustained even if there has been an admission by the assessee that there are private diaries and registers of the goods have been removed.
(iv) the Department did not extend the enquiries/ investigations to the customers or transporters who transported the cement in the trucks whose registration numbers were dully found recorded in the register.
(v) the allegation of clandestine removal of cement amounting to duty of Rs. 28,51,660/- based on Partywise Register cannot be clearly sustained as the same is duplicated from other allegations like on Cash Book, Parallel Invoices and weightment slips of Dharma Kanta.
4.1 The learned Advocate further submits as follows :-
(i) The allegation that clinker meant for M/s Durga Cement was being received at the factory premises of appellants for manufacture of cement and name of M/s Durga Cement was floated on papers only is not correct at all. The insinuation that M/s Durga Cement (P) Ltd. Narnaul was not functional during the period in question is baseless.
(ii) The fact is that M/s Durga Cement (P) Ltd. was very much in operation as can be confirmed from Sales Tax assessment for the period 1997-98, 1998-99 onwards showing that the unit was very much working and producing cement.
(iii) The Commissioner has in para 43 further endeavoured to find support for his findings by stating that the factory of M/s Durga Cement (P) Ltd., Narnaul was not functional for long; their electricity connection was found disconnected when factory was visited by officers of Department on 30/11/99; there was no D.G. set; there was no raw material and finished goods. It is stated that the visit of officers was made in the presence of independent panchas and Shri Balbir Meghwal, Chowkidar of the unit on 30/11/99.
It is correct that electric power was disconnected in the factory of M/s Durga Cements on 09/10/97 but after that the factory was worked with Diesel Generator, which was installed in the factory from the very beginning. It is not understood how the statement of Shri Meghwal was recorded by the excise officers because it is totally against the facts.
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(iv) In the order-in-original there was mention of/written Do number ki hai, thus trying to get support for his observation that the resumed invoices books were parallel invoices of M/s Durga Cement being used for clearances by the appellants M/s Chanra Cement without payment of duty.
The fact is that the reported legend was written on blank invoice book by the Nepali chowkidar at the factory gate when the same was brought to the factory for use. He was supposed to write that the books pertained to Doosre Plant Ki Kitab Hai whereas he wrote what is now alleged to be foolproof evidence for allegation of evasion of duty.
5. Learned AR for the Revenue has reiterated the findings given by the lower authority.
6. We have carefully considered the facts of the case and the submissions of both the sides.
7. The appellant in his grounds of appeal at page 12 mentions the contents of Annexure A to the show cause notice containing details of alleged evasion of total Central Excise duty of Rs. 53,14,370/-. The contents of said Annexure A given on page 12 of the grounds of appeal are given below :-
Amount (Rs.) Qty. of Remarks cement (M.T.)
(i) 15,52,360/- 7761.8 On basis of Cash Books resumed from appellants factory premises.
(ii) 28,51,660/- 8147.6 On basis of Partywise Register
(iii) 6,93,000/- 1980.0 On basis of Parallel Invoices of M/s Durga Cement (P) Ltd.
Narnaul.
(iv) 1,75,000/- 50 On basis of Parallel Invoice of
M/s Chandra Cement (P) Ltd.
Paniyala
(v) 1,99,850/- 571 On basis of Weighment Slips
Of Dharam Kanta bearing
name of Chandra Cement Ltd.
____________________________________________________
Total 53,14,370/-
Central
Excise
duty
involved
____________________________________________________
7.1 The appellant is trying to refute the charges confirmed by the impugned order taking various kinds of pleadings as defence. The appellants state that clandestine removal has to be sustained by producing corroborative evidence. We find that there are enough corroborative evidences on record sustaining the charges of clandestine removal against the appellants. These corroborative evidences can be cited as follows :-
(i) Cash Books resumed ;
(ii) Parallel invoices resumed ;
(iii) Weighment slips resumed ;
(iv) Registers of parties resumed.
(i) Cash Books resumed :- In case of common Cash Book, which has been produced as an evidence for evasion of duty by the Department the appellants give the defence that said cash book is a composite document containing the details of the appellant company as well as other three companies. However, a mere argument that said cash books/register also belong to three other units do not prove the truthfulness of the mere statement/ defence of the appellant company. Therefore, this defence is only a mere empty statement having no substance.
(ii) Parallel invoices resumed : The appellants defence that Department did not extend the investigation to the customers and transporters do not negate the charge of clandestine removal of the goods held against the appellants. When there are other enough evidences to sustain the charge of clandestine removal, there is no need to further extend the enquiries/investigations to all the customers or transporters in case of the goods namely cement removed clandestinely by the appellants.
(iii) Weighment slips resumed : Appellants argue that their factory namely M/s Durga Cement was in operation, and the Departments allegation that it was closed, is baseless. The appellants argue that the operation of M/s Durga Cement can be confirmed from sales tax assessment for the period 1997-1998, 1998-1999. This argument of the appellants cannot take them very far when the Department during the visit found the factory completely closed and non-functional; founding electricity connection disconnected; did not find any DG set; the machines of the unit were found rusty; there was no manufacturing activity going on; there were no raw material and no finished goods. Against the above findings of the Department, the argument of the appellants that they have confirmed sales tax assessment for two years i.e. 1997-1998, 1998-1999 does not have substance to negate the charge that their factory under the name of M/s Durga Cement (P) Ltd. was non-operational and closed during the said period.
(iv) Registers of parties resumed : The appellants argument is that the wordings mentioned on the invoice book No. 3012350 Do number ki hai was written mistakenly by the Nepali chowkidar, and they state that actual words to be written were yeh Doosre Plant Ki Kitab Hai. This assignment cannot take the appellants very far, when Shri Rajendra Goyal, appellant number two, who is also the Director with appellant number one in his voluntary statement recorded under Section 14 of Central Excise Act admits that said invoices were maintained as parallel for clearance of cement without payment of Central Excise duty.
8. We find that findings given in the impugned order are based on clear cut evidences and, therefore, there is no scope of interference with the findings given in the impugned order. In this regard, we refer to some of the observations made by the Commissioner in the impugned order in paras 40, 41, 43 and 45.
40. I also observe that three invoice books of M/s Durga Cement (P) Ltd. Narnaul (their sister unit) were also recovered from the said premises of the assessee and Shri Rajendra Goyal Director revealed and admitted that all the three books containing invoice Nos. 251 to 300, 301 to 350, 351 to 400 (19/09/1999 to 21/10/1999) were being maintained by them as parallel to the invoices issued under Rule 52A of the Central Excise Rules, 1944 and on the invoice book No. 301 to 350 there was mention of/ written DO NUMBER KI HAI. Further, Shri Rajendra Goyal, Director of the assessee, in his voluntary statement tendered under Section 14 of Central Excise Act, 1944, on 19/11/1999 in unequivocal terms had admitted that these invoices were being maintained by them as parallel and were issued under Rule 52A of Central Excise Rules, 1944 for the clearance of cement manufactured by M/s Chandra Cement Limited, Paniyala, without payment of Central Excise duty. Shri Rajendra Goyal however stated and assured that, they would pay the Central Excise duty whatever become payable in respect of these clearances i.e. cement cleared against invoices of M/s Durga Cement (P) Ltd., Narnaul.
41. The perusal of the show cause notice, clearly transpires that there is evidence to the effect that the assessee had been purchasing clinker from M/s Shree Cement Ltd., Beawar in the name of their sister concern M/s Durga Cement (P) Ltd., Narnaul. Instead of sending the above clinker to Narnaul, the clinker in fact was being received by M/s Chandra Cement Ltd., Kotputli, which ultimately was being used by them for the manufacture of O.P. Cement. The cement so manufactured was cleared by issuing the invoice of M/s Durga Cement (P) Ltd., Narnaul from the factory at Paniyala at NIL rate duty under SSI exemption notification. In this way, I find that the assessee had deliberately attempted in making fake entries in the statutory records of M/s Durga Cement (P) Ltd., Narnaul for receipt of clinker and showing production of O.P. Cement in the records of M/s Durga Cement (P) Ltd. Narnaul despite the fact that the unit was lying closed since long. Moreover, their electricity connection was disconnected by DHBVNI on 09/10/97. This fact was also strengthened from the statement tendered under Section 14 of the Central Excise Act, 1944 by Shri Balbir Meghwal, Chowkidar available at the time of visit, by the Anti Evasion Officers on 30/11/99 wherein he categorically disclosed that the factory is closed since long. ..
43. On appreciation of the evidence, I observe that the only defence that has been put forth by the assessee is that the said so called Cash Book is a composite document containing details of not only of M/s Chandra Cement Ltd., but also of M/s Chintpurni Enterprises at Delhi, M/s Durga Traders, Narnaul and M/s Durga Transport Co., Narnaul and that demand of Rs. 28,51,660/- has been calculated on the basis of Party wise register, in respect of year 1998-99 as per details in Annexure F-1 and supported by Cash Books consolidated entry. This has got no reference of removal of cement from M/s Chandra Cement Ltd. and thus has got no relation to their unit. This argument does not hold water for the reason that from the recovered documents i.e. GR etc. it is proved that the clearance of Cement was effected from the premises of M/s Chandra Cement Ltd., Village Paniyala, as the name and place against the consignor was appearing Paniyala to Delhi. Moreover, even in the Balance Sheet of M/s Chandra Cement Ltd. there was no mention of any trading activity being carried out at this unit. The appreciation of ground reality, which was done by the departmental officers on 30/11/99, when their sister concern M/s Durga Cement (P) Ltd., Narnaul, was visited. During the course of visit it was observed that the factory was not functional for quite long. Their electricity connection was found disconnected. There was no D.G. Set. Machines of the unit were found rustly and no manufacturing activities were going on. There was no raw material and finished goods. The fact that electricity supply stood disconnected since 09/10/97 and there was not D.G. Set installed in the factory etc. clearly establishes that the defence plea taken by the assessee is baseless.
45. The assessee has contested that the so-called cash book is a composite document containing details of not only of M/s Chandra Cement Ltd. but also of M/s Chintpurni Enterprises at Delhi, M/s Durga Traders Narnaul and M/s Durga Transport Co. Narnaul. In this regard I find that at page No. 15 of the recovered private cash book, there is a mention of vehicle No. 3109-200 bags, 3112-200 bags which has been corroborated from the GR No. 167, 168 issued on the same date showing same quantity of Bags of cement in same vehicle No. 3109 and 3112. In these GRs the place of consignor and destination was mentioned as Paniyala to New Delhi. Thus it is proved that all the entries in cash book recovered were for M/s Chandra Cement Limited, Paniyala in respect of clearance of un-recorded cement. Further I find that Shri Rajendra Goyal had also admitted that 47 invoices were issued parallel to the invoices issued under Rule 52A applicable at the material time of which entries were found in the recovered cash book. Thus there is no doubt that the cash book had the record of cement cleared clandestinely from M/s Chandra Cement Ltd.
9. In view of above discussion and by considering the totality of the facts and circumstances of the case, we find no reason to interfere with the impugned order. The same is hereby sustained alongwith the reasons mentioned therein.
10. In the result both the appeals are dismissed.
(Order pronounced in open court on 25/11/2016.) (Justice Dr. Satish Chandra) President (Ashok K. Arya) Member (Technical) PK ??
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11EX/1499-1500 of 2008