Custom, Excise & Service Tax Tribunal
M/S. Safex Chemical India Ltd vs Cce, Rohtak on 15 September, 2017
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SCO 147-148, SECTOR 17-C, CHANDIGARH 160 017 COURT No. II APPEAL No. E/469-472/2007 [Arising out of Order-in-Appeal No. 347-350/NS/RTK/2006 dated 29.11.2006 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon.] Date of hearing: 29.05.2017 Date of decision: 15.09.2017 For approval and signature: Honble Mr. Devender Singh, Member (Technical) ======================================
1. M/s. Safex Chemical India Ltd.,
2. Sh. Mohinder Paul Bajar, Manager (Admn.),
3. Sh. Gulshan Kumar, Accountant,
4. Sh. S.K. Jindal.
:
Appellant(s) VS CCE, Rohtak :
Respondent(s) ====================================== Appearance:
Sh. Vashu Nigam, Advocate for the Appellant(s) Sh. Tarun Kumar, AR for the Respondent(s) CORAM:
Honble Mr. Devender Singh, Member (Technical) Final Order No. /2017 Per : Devender Singh The appellants are in appeal against the impugned order.
2. The brief facts of the case are that the appellants are engaged in manufacture of Pesticides, Insecticides, Bio-Fertilizer and other Fertilizers falling under Chapter 38 and 31 of Central Excise Tariff. On the basis of an intelligence, Central Excise officers conducted checks in the factory premises on 21.09.2001. During the checks, certain records were resumed from the factory and at their Delhi Sale Depot in the follow-up searches. Examination of these records revealed that one sale invoice book of their depot bearing SI. No. 213 dt. 09.09.2001 to 225 dt. 19.09.2001 recovered and resumed from their factory on 21.09.2001 in which duplicate invoices of the same serial number 217, 220, 223 and 224 having different dates, quantity/value and names of the consignees were found. Thus there were two invoices each of Sr. No. 217, 220, 223 & 224. The said invoice book recovered from the factory was without pre-printed serial number and serial numbers were affixed with manual numbering machine. It was also found that in between serial number 220 dt. 15.09.2001 and 221 dt. 19.09.2001 one set (4 copy) of invoice was left blank. It was further found that no sale of goods to their Depot was made by the factory in respect of goods covered by the following invoices of the said book, which were claimed to have been issued by their Depot. These invoices were resumed from the factory premises on 21.09.2001. The assessable value of goods cleared clandestinely on these invoices was calculated be Rs. 33,27,015/- involving Central Excise duty of Rs. 5,32,322/- as per details given in the table below :
S. No. Invoice No./Date Qty./Value in Rs.
Name of the consignees C. Ex. Duty Involved (Rs.)
1. 214 dt. 10.09.2001 4,07,540.00 M/s Safex Chemicals India Ltd., Hubli.
65,206.00
2. 215 dt. 10.09.2001 5,04,580.00
-do-
80,733.00
3. 217 dt. 11.09.2001 2,71,770.00 M/s Safex Chemicals India Ltd., Giddarbaha (PB) 43,483.00
4. 218 dt. 14.09.2001 2,37,500.00 M/s Aggarwal Sales Corp. Hubli.
38,000.00
5. 220 dt. 14.09.2001 1,00,900.00 M/s Safex Chemicals India Ltd., Giddarbaha (PB).
16,144.00
6. 220 dt. 15.09.2001 2,32,500.00 M/s Aggarwal Sales Corp. Hubli.
37,200.00
7. 221 dt. 16.09.2001 7,96,720.00 M/s Safex Chemicals India Ltd., Hubli.
1,27,475.00
8. 222 dt. 17.09.2001 3,66,845.00 M/s Safex Chemicals India Ltd., Hubli.
58,695.00
9. 224 dt. 17.09.2001 1,37,250.00 M/s Safex Chemicals India Ltd., Giddarbaha (PB).
21,960.00
10. 225 dt. 19.09.2001 2,71,410.00
-do-
43,425.00 Total 33,27,015/-
5,32,322.00/-
The statements of Sh. Mohinder Paul Bajar, Manager of the party, Sh. S.K. Jindal, Managing Director, Sh. Harish Chander, Chemist, Sh. Janardan Sharma Production Manager and Sh. Gulshan Kumar, Accountant and authorized signatory were recorded. A show cause notice was issued, which was adjudicated wherein the demand of Rs. 30,80,848.00/- along with interest thereon confirmed and penalty of Rs. 30,80,848/- was imposed on the appellant No. 1 under Section 11AC of Central Excise Act. Personal penalty of Rs. 1,50,000/- was imposed on Sh. S.K. Jindal, Managing Director of the appellant No. 1 and penalty of Rs. 1,00,000/- on Sh. Mohinder Paul Bajar, Manager (Administration) and Rs. 15,000/- on Sh. Gulshan Kumar, Accountant. The appellants went in appeal and all the appeals were rejected by the ld. Commissioner (Appeals). Aggrieved from the same, the appellants have filed this appeal.
3. Ld. Advocate for the appellants submits that the adjudicating authority and appellate authority have done selective reading of the batch registers in that the entries wherein the batch register was lesser than RG-1 register have been ignored. He further stated that the Ld. Commissioner (Appeals) has given no finding on the statement of the chemist. He argued that batch register is a private document and hence not a reliable evidence. He relied upon the followings case laws:
(i) Centurian Laboratories vs. Commissioner of Central Excise, Vadodara 2013 (293) ELT 689 (Tri. Ahmd)
(ii) Arya Fibres Pvt. Ltd. vs. Commissioner of Central Excise, Ahmedabad II 2014 (311) ELT 529 (Tri. Ahmd)
(iii) Flevel International vs. Commissioner of Central Excise 2016 (332) ELT 416 (Del.)
(iv) Gupta Synthetics Ltd. vs. CCE 2014 (312)ELT 225 (Tri. Ahmd)
(v) CCE, Raipur vs. Sidhi Vinayak Sponge Iron (P) Ltd. 2014 (308) ELT 154 (Tri. Del)
(vi) CCE, Ludhiana vs. Nexo Products (India) 2014 (309) ELT 299 (Tri. Del)
(vii) CCE, Ludhiana vs. Nexo Products (India) 2015 (325) ELT 106 (Tri. Del)
4. Ld. AR reiterated the findings in the impugned order. He also mentioned that Sh. Mohinder Pal Bajar continued with the appellant still 2006. He also stated that there was no retraction of any statements and no cross-examination was sought by the appellants of any witnesses.
5. Heard the parties and perused the records.
6. I find that there are two parts of the entire demand:
(i) Demand of Rs. 5,32, 322/- relates to parallel invoices issued by the appellant no.1 and statements of various persons,
(ii) Remaining demand of Rs. 25,48,526/- relates to demand arrived at on the basis of batch register, RG-1 register and various statements.
I find that it is an admitted fact that the appellant had clandestinely cleared the goods worth Rs. 33,27,015/- involving the Central Excise duty of Rs. 5,32,322/-. This is also undisputed that parallel invoices were found from the records resumed from the factory and in follow-up searches at the Delhi sale depot. The fraudulent clearances on these invoices as per the table given on the preceding pages were fairly admitted by the Ld. Advocate during his oral submissions. In para 17 of the adjudication order reproduced below, the role of persons, who were instrumental for these parallel invoices is coming out clearly:
In view of the admission of Sh. Mohinder Paul Bajar as mentions in para 8 to 10 above that in respect of goods covered by said invoice book of their Depot, the goods as per details in table of para 5 above were not sent to their Depot and they did not record the production of goods covered by parallel invoices in RG-1 and that they removed goods clandestinely without payment of duty, submissions of Sh. Bajar that the said invoice book was called for reconciliation appeared to be baseless, devoid of merit and needs no consideration. This is further strengthened from the statement of Sh. S.K. Jindal, M.D., Sh. Gulshan Kumar, Accountant as mentioned in para 15 & 16 wherein they have confirmed the statement of Sh. Mohinder Paul Bajar. Hence, the order of the Ld. Commissioner (Appeals) in so for as it relates to the demand of Rs. 5,32,322/- on account of these fraudulent invoices is upheld. Application for extended period for this demand is also upheld. In respect of this part of demand, the penalty on the appellant of equivalent amount of Rs. 5,32,323/- under Section 11AC is also upheld. Prorata penalties of Rs. 20,000/- on Sh. Mohinder Paul Bajar, Manager and of Rs. 3,000/- on Sh. Gulshan Kumar, Accountant, are therefore imposable under Rule 26 of Central Excise Rules, 2001/2002 for their role in these fraudulent clearances.
7. From the submissions made by the Ld. Advocate, I find that the rest of the demand is mainly based on figures in the Batch Register and the statements of various company officials. While the appellants have pleaded that there was selective reading of the Batch Register and no finding have been given by the adjudicating authority on the statement of the chemist, I also find that the finding of the Ld. Commissioner (Appeals) on the retraction of the statements extracted below, shows that there is element of assumption and presumption while appreciating the evidence:-
Regarding retraction of statements by the appellants, I observe that such contention are always held to be after thought and cannot be legally accepted. I do not fel it necessary to determine whether or not the alleged retractions were actually received on record. The above findings show that there has not been proper appreciation of the appellants claim of retraction by the Ld. Commissioner (Appeals). The appellants have contended that the Batch Register, which is basis of the remainder of the demand, was selectively examined and holistic view of the entries has not been taken. There is no finding on this aspect which has been contended before lower authorities too. In view of the above, the impugned order in so far as it pertains to remaining demand of Rs. 25,48,526/- (i.e. demand in excess of Rs. 5,32,322/-) requires to be examined again by the adjudicating authority. Hence, the demand of Rs. 25,48,526/- is set aside and the matter is remanded to the adjudicating authority for de novo adjudication. In the de novo proceedings, the adjudicating authority will examine the contentions of the appellants particularly about selective reading of the Batch Register and the issue of retraction of the statements in the context of judicial pronouncements.
8. I also find that Sh. S.K. Jindal, Managing Director of the Company has expired on 13.10.2013. The appellants have submitted a copy of the death certificate issued by the Municipal Corporation, Delhi. Accordingly, penalty proceedings against Sh. S.K. Jindal will abate.
9. In the result,
(i) The demand of Rs. 5,32,322/- pertaining to parallel invoices is upheld along with interest. Equivalent penalty of Rs. 5,32,322/- under Section 11AC of the Central Excise Act, 1944 is also upheld.
(ii) Penalties of Rs. 20,000/- on Sh. Mohinder Paul Bajar, Manager and of Rs. 3,000/- on Sh. Gulshan Kumar, Accontant, are upheld under Rule 26 of Central Excise Rules, 2001/2002.
(iii) Impugned order in relation to the remaining demand of Rs. 25,48,526/- is remanded back to the adjudicating authority for fresh adjudication in accordance with law.
(iv) Proceedings against Sh. S. K. Jindal, M.D. will abate.
10. The appeals are disposed of in above terms.
(Order pronounced in the court on 15.09.2017 ) Devender Singh Member (Technical) NS 9 Appeal No. E/469-472/2007-CHD