Custom, Excise & Service Tax Tribunal
Cce, Ludhiana vs M/S.Renny Steel Castings (P) Ltd on 29 June, 2011
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
PRINCIPAL BENCH
COURT-1
Central Excise Appeal No.2004 of 2005
(Arising out of Order-in-Appeal No.01/CE/Appl/Ldh/2005 dated 14.1.05 passed by the CCE (A), Ludhiana)
For approval and signature:
Honble Honble Mr. Justice R.M.S.Khandeparkar, President
Honble Mr.M.Veeraiyan, Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should 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 Departmental authorities?
CCE, Ludhiana Appellant
Vs.
M/s.Renny Steel Castings (P) Ltd. Respondent
Present for the Appellant: Shri R.K.Verma, SDR Present for the Respondent: Shri S.Malhotra, Advocate Coram:Honble Mr.Justice R.M.S.Khandeparkar, President Honble Mr.M.Veeraiyan, Member (Technical) Date of Hearing: 29.06.2011 Date of Decision: 29.6.2011 ORDER NO._______________ PER: M.VEERAIYAN This is an appeal by the department against the order of the Commissioner (Appeals) No.01/CE/Appl/Ldh/2005 dt.14.1.05 by which order of the original authority dt.7.4.04 dropping the demand of Rs.31,93,380/- was upheld.
2. Heard both sides.
3. Relevant facts, in brief, are that the officers intercepted one truck on 20.05.96 which was returning to the factory of the respondents after delivering a consignment of ingots to a party M/s.Saeco Iron and Steel Mills. The person in the vehicle was carrying back the original, duplicate and triplicate copies of invoice no.085 dt.20.05.96 under which the consignment was cleared from the factory. This gave the impression that the respondents may be using fake and parallel invoices. The goods which were delivered to the M/s.Saeco Iron and Steel Mills were seized and separate proceedings were initiated in relation to the said seized goods. In follow up, certain private documents were recovered form a room situated near the boundary wall within the premises of the factory. The documents included photocopies of 21 invoices issued by the respondents, 19 octroi receipts (six in original plus 13 photocopies) and one copy book (super deluxe) having 74 pages out of which certain pages were found written and the rest were blank. Shri John Masih working as kanda in charge in the factory and one Avatar Singh claimed to be working as a contractor were reported to have maintained those private records. Verifications were also conducted with the transport authority about the vehicle numbers mentioned in the documents. The authorized signatory Shri Dinesh Kumar Mishra merely accepted recovery of these documents from a room near the wall inside the factory premises. He also submitted that he could not say anything about the notebook. There were discrepancies in the time of issuance and time of removal mentioned in the photocopies of 21 invoices. The enquiries were also conducted from the municipal corporation and the copy of octroi receipts relating to movement of vehicles mentioned in the private records were recovered. On the basis of investigation a show cause notice was issued proposing a demand to the extent of Rs.32,64,395/- and proposing penalty on the respondent company and the director of the respondent company. The respondents contested the show cause notice. The original authority dropped the demand of Rs.31,93,380/-. He has doubted the documents recovered from Shri John Masih who was only a kanda in charge and therefore he was not expected to maintain heat records of the furnace of the factory. He has also held that no evidence was adduced regarding the engagement of Shri Avtar Singh to work as thekedar. He also doubted the evidentiary value of the photocopies of the documents recovered. He also took note of the fact that the entries made in the notebooks which were recovered from John Masih were not authenticated by any director of the company and not corroborated by any other evidences. The order of the original authority in dropping the demand as above stands upheld by the Commissioner (Appeals), on appeal by the department.
4. Ld.DR took us through the grounds of appeal. He submitted that that the private records were seized from the premises of the factory; that the entries in the records have been duly explained by Shri John Masih. The fact of return of empty trucks with the original, duplicate and triplicate copies of invoice no.085 dt.20.5.96 clearly indicate transportation using parallel invoices. He also drew our attention to the discrepancies in the vehicle numbers in the invoices issued by the respondent company.
5. Ld.Advocate for the respondents strongly supported the order of the Commissioner (Appeals) which upheld the order of the original authority.
6.1 We have carefully considered the submissions from both sides and perused the records. It is on record that when the officers visited the factory premises on 20.5.06, there was no discrepancy of stock noticed. There was no seizure of any consignment while being transported without excise invoices. What has been alleged is that a consignment has been sent alongwith invoices and the same were delivered to one M/s.Saeco Iron and Steel Mills and the invoices in original, duplicate and triplicate were brought back alongwith empty trucks. This may lead to a suspicion that perhaps the invoices were meant to be used for transportation of the goods once again. Suspicion cannot take the place of evidence.
6.2 The department alleged recovery of private records which were maintained by Shri John Masih/Shri Avtar Singh. How Shri John Masih was concerned with maintaining the heat records of the furnace has not come out during investigation. Shri John Masih was only a kanda in charge. In an affidavit dt.16.9.02, he had stated that he had no exact knowledge about the production of the goods in the factory. Further, there is no evidence relied upon to show that Shri Avtar Singh was contractor working for the respondent- company. It has been claimed that there was no written contract between Shri Avtar Singh and the company for engaging Shri Avtar Singh as contractor. In view of the matter as above, the authorities below have rightly held that the private records said to have been maintained by them cannot be relied upon.
6.3 It is not the case of the department that these entries were got explained by the authorized signatory or the director or any other responsible person of the company. It is also not the case of the department that the entries mentioned in the private records were corroborated by conducting investigation with the transporters or the recipient of allegedly clandestinely removed goods. It is not the case of the department that evidence was produced in respect of any particular invoice that consignments have been cleared more than once using such invoice. The department having recovered private documents, in our considered opinion, failed in conducting investigation in the relevant direction.
6.4 It is not a case that any authorised person of the company admitted to unaccounted production and clandestine removal and therefore the officers felt that there was no need for further investigation. The authenticity of the documents seized and the veracity of the entries made therein have not been corroborated by any meaningful investigation, even though show cause notice has been issued nearly after 3 and half years after the commencement of investigation. If the private records indicate the position as claimed by the department it is a clear case of failure to gather necessary evidence to support the allegation.
6.5 As already mentioned there was no difference in stock found by the officers on the date of visit. The authenticity of documents relied upon and the locus standi of the persons who have explained the documents have not been bought out. There is no admission of unaccounted production and clandestine removal by any of the authorised persons. There is no corroborative evidence relied upon in support of entries in the private records sought to be relied upon especially when their authenticity is in serious doubt.
7. Under these circumstances, we hold that the original authority has rightly appreciated the evidences and dropped the demand and the Commissioner (Appeals) has rightly upheld the order of the original authority.
8. There are no valid grounds adduced by the department to interfere with the concurrent findings by the original authority and the Commissioner (Appeals) which are in favour of the assessee.
9. The appeal by the department, is therefore, rejected.
(JUSTICE R.M.S.KHANDEPARKAR) PRESIDENT (M.VEERAIYAN) MEMBER (TECHNICAL) mk 7