Custom, Excise & Service Tax Tribunal
Cce, Raipur vs M/S. M.S.P. Steel & Power Ltd on 11 April, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
BENCH-SM
Excise Appeal No.E/2281/2007-EX[SM]
[Arising out of Order-in-Appeal No.111/RPR-I/2007 dated 30.04.2007 passed by the Commissioner (Appeals-I) Customs & Central Excise, Raipur].
CCE, Raipur Appellant
Vs.
M/s. M.S.P. Steel & Power Ltd. Respondent
Present for the Appellant :Shri.Sanjay Jain, DR Present for the Respondent :None Coram: HONBLE MR. D.N. PANDA, JUDICIAL MEMBER Date of Hearing/Decision:11.04.2014 FINAL ORDER NO. 51793/2014 DATED:11.04.2014 PER: D.N.PANDA None present for the respondent.
2. Revenue submits that when physical verification resulted in shortage of 1236.240 M.T. of Sponge iron valued at Rs.1,28,56,896/- involving duty evasion of Rs.20,57,103/- and Education Cess of Rs.41,442/- and no good reason in respect of such shortage advanced by respondent, ld. Commissioner (Appeals) finding fault with investigation result let off the evader. Investigation found out following material suggesting the case of evasion:-
14. During the course of visit to the Notice factory, certain records/documents/computer Pen drive laptop/ also withdraw by the officer these revealed were scrutinized which related as under:
(i) Examination of the file No. A/1-1 containing truck movement cum dispatch advice reveals that in a few cases the vehicle no., quantity of goods, party name (consignee) mentioned in the dispatch advices do not tally with the similar details mentioned in the invoices for example, dispatch advice (page No. 723) is in the name of M/s Jagdamba Sponge, Raigarh for a quantity of 31.470 MT by vehicle no. CG13A 5887 whereas invoice no.1017 dated 02/07/2005 mentioned at the back of the dispatch advice has been issued in favour of M/s. Prakash Industries, Champa for a quantity of 29.430 MT. Again the invoice is numbered with hand machine in black ink as against the invoice with pre-printed Sr. No. in red ink used by the noticee. This is indicative of the fact that the noticee is resorting to parallel invoicing to evade Central Excise duty. Similarly, delivery advice at page No. 323, 321 & 301 are in the name of M/s Shobha Ispat, Raigarh, M/s Harsh Vinimay, Raigarh and M/s Shree Consultant, Raigarh respectively whereas invoices dated 1604 dated 23.08.05, 1601/1602 dated 24.08.05, 1423 dated 08.08.05 (mentioned at the back of the Despatch advice) are in the name of M/s Siddhi Vinayak, M/s Ram Steel & alloys Jalna and M/s Siddhi Vinayak Alloyes P. Ltd., Jalna respectively.
(ii) Dispatch Register (A/1-2 & A/6 6) documents which support the contention that the noticee is evading duty by removing finished goods (clandestinely) under cover of parallel invoices. The said register contains detail like Sr. No. Date, party name (Consignee), name of the transporter, vehicle no. challan (invoice) no., vehicle in/out time, material name and quantity. In a number of cases vehicle no., in time, party name, material name have been mentioned but no invoices could be found. In some other case invoices are there, but name of the party differs. In a few more cases the quantity differs. The foregoing facts go on to prove that the noticee is certainly issuing parallel invoices to evade duty. This contention is further strengthened by the fact that there have been mentions of a single invoice against two/three removals. For example, the noticee has written in the register to have cleared sponge iron under cover of invoices no. 1362/1363 three times (page 21 Sr. No. = dated 27.07.2005, Sr. No. 1&3 dated 28.07.2005 and Sr. No. 05 dated 29.07.05)on three different dates. Similarly invoices no. 1307, 1209, 1311, 1314, 1315, 1316, 1364 and 1365 have been mentioned twice. In yet another case (page no. 7, Sr. 3&4 dated 18.08.05) the noticee has completed the register by the vehicle no party name (consignee), transporters name, invoice no. (1570 & 1571), vehicle in/out time, material name (SI Lumps), quantity alongwith a remark Cancel. However, no cancelled invoices could be found. On the other hand, invoice no. 1570 and 1571 (both hand machine numbered in black ink as against pre-printed invoices in red ink) have been issued in favour of M/s Jailaxmi Castings, Aurangabad.
(iii) File No. A/1-3 (Miscellaneous loose papers) Contains few delivery orders issued by the noticee wherein details like date, approx. tonnage of material to be removed, vehicle no, destination, material name, name of the party have been mentioned. Facts contained in the delivery orders corroborated the findings at (i) & (ii) in as much as in some cases no invoices were found, in some other cases the name of the party, quantity, vehicle no. and invoice no. differs indicating removal of goods under cover of parallel invoices.
(iv) File No. A/2-5 Consolidated report : recovered from the Raw Material Division of the noticee contains details like vehicle no., party name, gross weight, tare weight, net weight, material name etc. of incoming as well as out going materials. Examination and cross verification of the said documents vis-`-vis invoices of the relevant period reveals that the noticee have not issued Central Excise invoices against clearances of quite a few consignment of sponge iron.
In all he above cases neither there is mention of the name of the consignee nor the quantity of material removed. However, these are certainly evidence indicative of the fact that the noticee is evading Central Excise duty by removing goods clandestinely.
15. Data from the computers/Thumb Drives/ Laptop were retrieved under Panchnama dated 10.09.05, dated 18.10.05 and 30.12.05 under the provisions of Section 36B of the Central Excise Act, 1944. Examination /Cross verification of the computerized documents retrieved from the computer of Engineering Section of the SID, documents retrieved from the thumb drive seized from the possession of Shri Anand Twan, Production Incharge of SID and also the documents retrieved from the thumb drive of the control room of the SID vis-`-vis the RG-I reveals that the noticee have not accounted for the production of Sponge Iron of 28.08.05, 29.08.05 and 30.08.05 totaling to 495MT in their books of records. Had they accounted for the said 495 MT of Sponge Iron in their RG-I, the book balance as on 03.09.05 (opening balance) would have been 495 Mt more than it was on the same date and the shortage so detected by the officers would have been 495 MT more i.e. 1731.240 Mt valued at Rs. 1,80,04,898/- and involving Central Excise duty amounting to Rs. 2880783/- and Ed. Cess of Rs. 57616/- against a shortage deceted of 1236.240 Mt valued at Rs. 1,28,896/- on which the noticee has voluntarily paid the duty amount of Rs. 20,57,103/-and Cess Rs. 41142/- 03.09.05.
3. Ld. Commissioner (Appeals) without examining the physical examination report and also the data recovered from the computer as well as laptop simply agreed with the assessee to hold that the allegations by investigation is baseless. Revenue accordingly prayed that the adjudication order may be restored.
4. Heard Revenue and also examined the adjudication order as well as appellate order.
5. The material facts with evidence brought out by investigation as depicted in the preceding paragraphs appears to have force and truth, not being discarded by Respondent. Statements recorded brought out evidence to support the case of investigation. There was neither any hypothesis nor any presumption made by investigation. Investigation made its story of evasion believable bringing out the manner of causing evasion backed by cogent evidence depicted as aforesaid. The electronic record (computer data) proved the modus operandi of the respondent. Fabrication of the records proved evasion of excise duty. This is vividly clear from para 15 of the adjudication order. When the deficiency of stock was found by investigation and that remained unexplained, that is enough to make allegation of unaccounted removal of such goods. No evidence was there to show reason of evacuation of stock. Honble High Court of Madras in the case of Alagappa Cement Pvt. Ltd. vs. CEGAT reported in 2010 (260) ELT 511 (Mad.) held that non-existence of stock is sufficient ground to hold clandestine removal.
6. It is shocking to read the order passed by ld. Commissioner (Appeals) who worked hard to grant relief on pulpable grounds making suppositions and assumption with total disregard to the law and statutory records. The goods manufactured when did not find place in statutory records and incidence of manufacture being event of levy, non-accountal of the goods imputes the respondent to the charge of clandestine removal. It is not necessary for the investigation to prove its case with mathematical precision. Burden of proof was not discharged by the respondent to explain when the goods found their destination. Not only the physical verification result but also other evidence gathered by investigation as stated here in before lend credence to the case of Revenue demonstrating premeditated design of evasion of duty made by the respondent. It appears that the respondent had made systematic approach to cause evasion as is revealed from para 14 and 15 of the adjudication order.
7. Ld. Appellate authority has simply criticised the show cause notice in para 10 of his order expecting Revenue to discharge the burden of proof when it has already discharged the onus of proof bringing out the allegation. There is no necessity for Revenue to prove or locate the place where the clandestinely removed goods got their berth or shelter when there appears no flaw in the course and result of investigation nor there appear any legal infirmity in the adjudication. Quality of evidence gathered by investigation is cogent and credential. That self speaks the modus operandi followed.
8. Ld. Commissioner (Appeals) was guided by misplaced sympathy in terms of para 10 of his order to hold that there was no flow back of the fund out of realisation of the alleged goods. It is not necessary for Revenue to prove the disposal of extinct goods when it questioned non-existence thereof on the date of visit. Non existence of the goods at the time of physical verification is goods ground to charge clandestine removal thereof following the ratio laid down in Alagappa Cement Case (Supra). When there are overwhelming evidence of non-existence of the goods, sanctioning of evasion shall be a bonus to evader which can be said following the ratio laid down by Honble High Court of Haryana and Punjab in the case of CCE vs. International Cylinders reported in 2010 (255) ELT 68 (H.P.). Ld. Commissioner (Appeals) burdening his order with so many decisions totally buried the elementary Jurisprudence that all excisable manufactured goods should be accounted for and physically available for the notice of the law unless disposed in accordance with law. By his own hypothesis he proceeded to grant relief to an evader with the total disregard to the statutory provisions and rule of rationale.
9. In view of aforesaid evidence, observations and also the ratio laid down by both the High Courts, appeal of Revenue is allowed.
10. It would be proper to request ld. CDR to mark a copy of this order with his comments to the learned Member (L & J) of CBEC for the needful.
[Dictated & Pronounced in the open Court].
(D.N.PANDA) JUDICIAL MEMBER Anita 1 8