Custom, Excise & Service Tax Tribunal
Shri Rajiv Sharma, Manager vs C.C.E., Kanpur on 29 October, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066. COURT - II Appeal Nos.E/2326-2328/2005-EX[SM] [Arising out of Order-in-Original No.03/Comr/MP/2005, dated 31.03.2005 passed by C.C.E., Kanpur] M/s. Agmotex Ltd. Shri Shishir Agarwal, Director Shri Rajiv Sharma, Manager : Appellants Vs. C.C.E., Kanpur : Respondents
Present for the Appellants :
Shri Hemant Bajaj, Advocate Present for the Respondents :
Ms. Ranjana Jha, DR Coram: Honble Mr.D.N.Panda, Judicial Member Date of Hearing : 10.09.2014 Date of Decision : 29.10.2014 FINAL ORDER NOs.54149-54151, DATED: 29.10.2014 PER: D.N.PANDA These appeals are against the duty demand of Rs.47,47307/-, comprising demand of Rs.18,17,159/- and 29,30,148/- from M/s. Agmotex with equal amount of penalty under Rule 25 of Central Excise Rules, 2002 read with section 11AC followed by interest on duty demand. The duty amount of Rs.18,17,159/- related to the allegation of discovery of parallel invoices from the factory of the appellant and the duty demand of Rs.29,30,148/- related to the demand arose out of clandestine removal of goods alleged to have been made suppressing production as found from the slips recovered in the course of search. Further, penalty of Rs.3,00,000/- was imposed on Shri Shishir Agarwal, Director and penalty of Rs.1,00,000/- was imposed on Shri Rajiv Sharma, Manager. Both the penalties were imposed under Rule 26 of Central Excise Rules, 2002 .
2. When the investigating team made a visit to the factory of the appellant on 20.09.2002, they recovered certain invoices therefrom which disclosed the goods alleged to have been cleared by the appellant clandestinely. That resulted in raising demand of Rs.18,17,159/-. Similarly, certain slips were found, which showed the details of date-wise production of PV shirting relating to the period November, 2001 to April, 2002. Such details of production were suppressed by the appellant and not recorded in the statutory registers. That was quantified making through verification to the RG-I register. The quantity and value appearing in the production slips not found place in statutory record resulted in suppression of production of PV shirtings to the tune of 12,20,895.20 metres during the period from 08.11.2001 to April, 2002. During the said period considering the entries in the RG-I register and the clearances made, the goods clandestinely cleared were valued at Rs.1,83,13,428/- involving central excise duty of Rs.29,30,148/-.
3. The aforesaid outcome of the investigation gave rise to the adjudication.
4. Ld. adjudicating authority found that evasion of duty to the aforesaid extent on two counts was established on record. So far as the recovery of parallel invoices is concerned, he reached to his conclusion in para 21 of the order holding that 23 parallel invoices were the cause for evasion of duty of Rs.18,17,159/-. Similarly, examining the slips found, he found that those slips really contained the production of the respective dates, but did not find place in RG-I register. Accordingly, that resulted in evasion of duty of Rs.29,30,148/-.
5. Shri Hemant Bajaj, ld. counsel for the appellant submitted that:-
(i) The same officer, who issued the Show Cause Notice, he adjudicated the demand, which is contrary to law.
(ii) The documents recovered remained disputed and the originals were not produced before the appellant.
(iii) The opinion of the hand-writing experts placed by the appellant was discarded.
(iv) The slips appearing at page 181 and page 238 to 262 has no relevance to the demand raised during the adjudication is arbitrary.
6.1 On the other hand, ld. JCDR submitted that parallel invoices were recovered from the factory of the appellant and the person from whose custody those were recovered did not disown the same for which ld. adjudicating authority has rightly raised the demand on the basis of 23 parallel invoices with the duty evasion of Rs.18,17,159/-.
6.2 So far as the adjudication made on the basis of slips were concerned, it was submitted on behalf of Revenue that those slips related to the appellant itself and Revenue made every effort to establish its case from the entries made on the slips by the person in-charge of the concerned activity and that remained uncontroverted.
6.3 So far as issue of Show Cause Notice and adjudication is concerned, it was submitted by Revenue that there is no bar in law to adjudicate the matter by the same officer who issues Show Cause Notice.
6.4 So far as the recovery of documents is concerned, it was submitted that following the course of natural justice, the appellant was brought home to the allegation in the Show Cause Notice thoroughly enclosing the copies of relied upon documents and there was no denial of natural justice.
6.5 It was also submitted by Revenue that all documents seized in the course of search were found to be belonging to the appellant having been established by the hand-writing experts and those were prepared under the hand-writing of the concerned employees of the company. That became evidence against the appellant.
6.6 The appellant has not provided the relevant slips in the paper book but has drawn attention to different documents at page 181 onwards as well as page 338-362, which are irrelevant. Ld. adjudicating authority considered the relevant evidence and granting due opportunity to the appellant to explain its case made the adjudication resulting in demand of Rs.29,30,148/- on the count of detected slips.
7. Heard both sides and perused the record.
8.1 So far as recovery of parallel invoices are concerned, that was undisputed to be belonging to the appellant. The pulpable plea of different hand-writing over the documents was not proved. When hand-writing experts known to law opined against the appellant, there was no necessity to rely upon any other expert, who was not recognised by law. Therefore, appellants plea of hand-writing experts opinion was not considered has no relevance when the concerned employees in their statement admitted to have knowledge about such incriminating evidence against the appellant. The parallel invoices not being found to be irrelevant and not liable to be discarded, exhibiting quantum of clearance mentioning the value thereon unaccounted, ld. adjudicating authority made correct evaluation of such evidence as unaccounted transactions on the relevant date and raised the demand thereon. The contents of the invoices escaped accounting causing loss of revenue to the extent of Rs.18,17,159/-. Ld. adjudicating authority has worked out very clearly the loss of revenue with precision taking the aggregate value of 23 parallel invoices in para 21 of the adjudication order. He has categorically recorded in para 20 that the invoices were recovered from the factory and were prepared by employees of the appellant company, which was confirmed by them to have prepared the same. The appellant could not rule out unaccounted transactions exhibited by such invoices. The settled position of law being that possession follows the title, clandestine clearance of goods made through the invoices not finding place in statutory record were bound to be contributory to the evasion of duty of the aforesaid amount. Therefore, the demand relating to parallel invoices is confirmed.
8.2 So far as demand of Rs.29,30,148/- arose out of RUD-II to the Show Cause Notice is concerned, that relates to the loose slips discovered in the course of investigation. These slips recorded production made by appellant on different dates. Such fact was not rebutted showing irrelevancy thereof in evidence leading any evidence to the contrary. The appellant could not repel the allegation of Revenue that such slips resulted in evasion of duty to the above extent. Nothing could be either proved to demonstrate that those slips were not recovered from the factory nor there was absence of live link between the slips and the appellant. Also, contents of the slips showing the nature of goods manufactured by the appellants could not be ruled out. Investigation found that the slips were intimately connected with the activities of appellant and contents thereof demonstrating the clearances of excisable goods not finding place in the production register of appellant could not be ruled out by appellant.
8.3 It was plain and simple case of deliberate omission of production figures appearing in the slips unrecorded in the statutory record resulting in evasion of duty. Appellants plea that those were not related to appellant failed to succeed when author of the slips confirmed that the goods appearing therein were being manufactured by appellant and duty thereon not paid. Even the examination and cross-examination did not speak in favour of the appellant as is clear from para 28 and 29 of adjudication order.
8.4 Appellant did not challenge estimation of value of goods escaped dutiability by the detected slips. Therefore, duty evasion of Rs.29,30,148/- was established.
8.5 So far as penalty of Rs.47,47,307/- imposed on the appellant M/s. Agmotex Ltd. is concerned, looking into the evasion caused making clearances unaccounted through parallel invoices, penalty of Rs.18,17,159/- is confirmed and penalty of Rs.29,30,148/- related to unaccounted clearance as was established by incriminating slips is also confirmed for no evidence came to record to prove irrelevancy thereof. Accordingly, aggregate penalty of Rs.47,47,307/- is confirmed.
8.6 In adjudication, Shri Shishir Agarwal, Director and Rajiv Sharma, Manager have faced penalty of Rs.3,00,000/- and Rs.1,00,000/- respectively under Rule 26 of Central Excise Rules, 2002. It may be stated that without human intervention, no artificial juridiction person shall cause evasion. There is always human element involved in committing evasions. Therefore, both the appellants are liable to penalty for their involvement and intimate connection with the loss of Revenue caused. However, considering the quantum of penalty imposed on them as disproportionate and penalty of Rs.47,47,307/- imposed on the appellant company is confirmed, penalty imposed on these persons is reduced. Accordingly, there shall be penalty of Rs.1,00,000/- and Rs.50,000/- on Shri Shishir Agarwal, Director and Rajiv Sharma, Manager respectively.
9. In the result, appeal of M/s. Agmotex Ltd. is dismissed and appeals of Shri Shri Shishir Agarwal, Director and Shri Rajiv Sharma, Manager are partly allowed.
(Pronounced in the open Court on 29.10.2014) (D.N.PANDA) JUDICIAL MEMBER SSK
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Appeal Nos.E/2326-2328/2005