Custom, Excise & Service Tax Tribunal
Anant Steels Pvt Ltd vs Indore on 27 September, 2018
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Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. 1
Ex. A. Nos. 52974, 53011, 53022, 53025, 53056, 53058 & 53103 of 2016
(Arising out of order-in-Original No.42/PR. Commissioner/Ind/ CEX 2016
dated 26.08.2016 passed by the Principal Commissioner, Central Excise,
Customs & Service Tax, Indore).
DATE OF HEARING: 20.06.2018
DATE OF DECISION: 27.09.2018
M/s Anant Steels Pvt. Ltd. ..... Appellants
Dinesh Kantilal Rathi
Mayank Bansal
Vinayak Kasturchand Kangaonkar
M/s Rajuri Steel Pvt. Ltd.,
M/s Balaji Metal Company
Yogesh Shah
(Rep. by Sh. Rupesh Kumar, Sh. Jitin Singhal &
Sh. D. R. Godekar, Advocates)
VERSUS
CCE&ST, Indore ..... Respondent
(Rep by Sh. R. K. Mishra, DR) CORAM : HON'BLE MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR. BIJAY KUMAR, MEMBER (TECHNICAL) Final Order Nos.53042 -53048/2018s PER: ANIL CHOUDHARY :
The appellants have challenged the Order-in-Original No. 42/Pr.Commr/Ind/CEX/2016 dated 26.09.2016 passed by the Principal 1 2 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 Commissioner, Central Excise, Customs & Service Tax, Indore, by way of filing the following Appeals:
(a) Appeal No. E/52974/2016 - M/s Anant Steel Pvt. Ltd.
(b) Appeal No. E/53022/2016 - Shri Mayank Bansal
(c) Appeal No. E/53011/2016 - Dinesh Kantilal Rathi
(d) Appeal No. E/53025/2016 - Vinayak Kangaonkar
(e) Appeal No. E/53056/2016 - Rajuri Steel Pvt. Ltd.
(f) Appeal No. E/53058/2016 - Balaji Metal Company
(g) Appeal No. E/53013/2016 - Yogesh Shah
2. The issue in these appeals is as to whether the appellant Anant Steel Private Limited (ASPL for short) have suppressed their production and have resorted to clandestine removal of the finished goods. Brief facts of the case are that M/s Anant Steel Pvt. Ltd. is engaged in the manufacture of MS Ingots and TMT Bars falling under Chapter 72 of the First Schedule to the Central Excise Tariff Act, 1985. A search was conducted on 05.02.2012 at the factory and office premises of ASPL as well as certain other premises on the basis of some intelligence that ASPL was involved in central excise duty evasion by resorting to suppression of actual quantum of production of MS Ingots/TMT bars and, thereafter, clandestine removal of TMT bars, under parallel set of central excise invoice. During the course of searches, various documents were recovered by the department being 178 nos. parallel invoices, private records in the form of Weighment Register, Dispatch Diary, Material Receipt Slips, Files etc. seized vide Panchnama dated 05.02.2012 and statements of various persons were recorded. Relying upon the same, a show cause notice dated 04.08.2014 was issued to ASPL along with other appellants, making following allegations: -
2.1 ASPL had suppressed in house production of 13728.170 MTs of MS Ingots as it appeared from the scrutiny of Weighment Register of Ingots 2 3 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 maintained by Shri Mithilesh Singh, Kanta Clerk, and not entered in the statutory records.
2.2 ASPL had suppressed purchase and receipt of 9872.260 MTs of Billets/MS Ingots, which were procured from various suppliers of Indore, Bhopal and Aurangabad, the details of which were reflected in documents found in File No. 9 but not entered in statutory records.
2.3 ASPL had consumed said quantity of 23600.430 MTs [13728.170 MTs + 9872.260 MTs] of MS Billets/MS Ingots in the manufacture of 21049.224 MTs of TMT bars and 1371.185 MTs of Mis-Rolls and cleared the said TMT bars without payment of duty of Rs.7,68,37,421/-. As per the SCN, this demand was inclusive of central excise duty of Rs.73,19,311/- on the quantity of 2158.990 MTs of TMT bars/Mis-Rolls cleared during the month of February 2011 to November 2011 under 139 parallel sales invoices and central excise duty of Rs.49,66,727/- involved in 1227.110 MTs of TMT bars found short in physical stock on 05.01.2012 as well as central excise duty of Rs.2,76,51,589/- on 7143.037 MTs of TMT bars cleared without payment of duty during the period 01.10.2011 to 03.01.2012.
2.4 ASPL had cleared 39 consignments of TMT Bars/Mis-Rolls quantified at 1391.165 MTs under 39 parallel sales invoices during the month of December 2010 and January 2011 without payment of central excise duty of Rs.42,00,203/-.
2.5 ASPL had manufactured and cleared 827.715 MTs of TMT bars without payment of duty of Rs.17,41,470/- which were manufactured out of 880.75 MTs of MS Scrap procured clandestinely during the month of July 2009. The duty was calculated in the SCN by taking average rate per MT assessable value of TMT 3 4 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 bars cleared by ASPL during the month of July 2009 as ascertained from the sales invoices of July 2009.
2.6 ASPL had manufactured and cleared 3603.871 MTs of TMT bars/Miss-
Rolls during the period 29.04.2010 to 12.07.2010 without payment of central excise duty of Rs.1,08,92,504/- ascertained from the entries reflected in Executive Diary recovered from its factory but not reflected in its statutory records.
2.7 ASPL had manufactured and cleared 6104.400 MTs of TMT bars in the open market to independent buyers but showed in the statutory records as sale of MS Ingots to M/s Shreyash Enterprises, Jalna being proprietorship firm of Shri Vinayak Kangaonkar - appellant in Appeal No. E/53025/2016, under 396 central excise invoices during the period 2010-11 and 2011-12 [December 2011] and, thus, evaded central excise duty of Rs. 35,28,567/-. It was further stated in the SCN that this was done by ASPL in connivance with M/s Rajuri Steels Pvt. Ltd., Jalna - appellant in Appeal No. E/53056/2016, under a well hatched strategy to pass on the fraudulent cenvat credit to M/s Rajuri Steel Pvt. Ltd. through a Sham firm in the name and style of M/s Shreyash Enterprises.
2.8 M/s Balaji Metal Company - appellant in Appeal No. E/53058/2016 and Shri Yogesh Shah - appellant in Appeal No. E/53103/2016 and partner in M/s Balaji Metal Company had knowingly and intentionally abetted ASPL in evasion of central excise duty under the parallel invoices of M/s Balaji Metal Company. The said firm was not engaged in actual trading but was created by Shri Yogesh Shah to facilitate clandestine clearances of ASPL under their parallel sales invoices.
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Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 2.9 Shri Mayank Bansal - appellant in Appeal No. E/53022/2016, and Director of ASPL was well aware of the affairs of ASPL as stated in the SCN and, he himself hatched a strategy to use parallel set of invoices for clandestine removal of excisable goods for which he had created M/s Balaji Metal Company. 2.10 Shri Suresh Sharma [proprietor of M/s Yash Road Carrier] Shri Vinayaka Kangaonkar [proprietor of M/s Shreyash Enterprises] - appellant in Appeal No. E/53025/2016, M/s Rajuri Steels Pvt. Ltd. - appellant in Appeal No. E/53056/2016 and Shri Dinesh Rathi -appellant in Appeal No. E/53011/2016 and Director of M/s Rajuri Steels Pvt. Ltd. had knowingly and intentionally abetted ASPL in evasion of central excise duty in which Shri Suresh Sharma had provided bogus transport bilties/GR. Shri Vinayaka Kangaokar had created a sham firm namely M/s Shreyash Enterprises, to pass on fraudulent cenvat credit to M/s Rajuri, Shri Dinesh Rathi who in connivance of ASPL had hatched a ploy to create M/s Shreyash to avail bogus cenvat credit on excisable goods, without physical receipt of excisable goods.
3. Accordingly, all the appellants were called upon to show cause as to why:
3.1 The central excise duty of Rs. 9,72,00,165/- payable on TMT Bars cleared by ASPL without payment of duty should not be demanded and recovered from it in terms of section 11A(4) [erstwhile proviso to section 11A] of the Central Excise Act, 1944 by invoking the extended period of 5 years along with interest under the relevant provisions of the said Act.
3.2 The mandatory penalty equal to the central excise duty in respect of duty demanded, should not be imposed on ASPL under section 11AC(1)(a) of the Central Excise Act 1944 read with Rule 25 of the Central Excise Rules, 2002.5 6
Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 3.3 32976.375 MT TMT Bars valued Rs. 94,79,17,806/- clandestinely cleared by ASPL should not be confiscated under Rule 25 of the Central Excise Rules 2002 and as the said goods are not available for confiscation why a redemption fine should not be imposed in lieu of confiscation of goods. 3.4 Penalty should not be imposed on Shri Mayank Bansal, M/s Balaji Metal Co, Shri Yogesh Shah - Partner of M/s Balaji Metal Co., Shri Suresh Sharma - Proprietor of M/s Yash Road Carrier, Shri Vinayak Kangaonkar - Proprietor of M/s Shreyash Enterprises, M/s Rajuri Steels Pvt. Ltd. and Shri Dinesh Rathi - Director of M/s Rajuri Steels Pvt. Ltd., under Rule 26 of the Central Excise Rules, 2002.
4. During the course of adjudicating proceedings, replies were filed by the appellants viz., ASPL, Shri Mayank Bansal, M/s Balaji Metal Co., Shri Yogesh Shah, Shri Vinayak Kangaonkar, M/s Rajuri Steels Pvt. Ltd. and Shri Dinesh Rathi. In addition, ASPL had also filed written submissions. The basic contentions raised by the appellants before the Commissioner were as under: -
(a) ASPL did not have the capacity to manufacture the quantity of ingots mentioned in the weighment register. To support the same, ASPL had placed on record the Chartered Engineer's Certificate, Electricity bills showing consumption of electricity, invoices issued by Electrotherm who is the manufacturer of two furnaces installed in ASPL's factory showing the capacity, letter issued by Pollution Control Board, MP.
(b) Demand on the basis of entries in private records could not be made the sole basis for sustaining the allegations of clandestine manufacture and removal and, that too, when ASPL had never directed any person/employee to maintain such private records. ASPL has brought on record sufficient material to establish that the said private records were 6 7 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 fabricated by disgruntled employees/ex-employees of ASPL who were dismissed from their services due to irregularities committed by them, to implicate it in false case of duty evasion. In support, ASPL had also relied upon the fact that its premises were subject to thorough search by the officers of department on 13.10.11 and none of the said private records were found during the course of the said search even though the said private records pertained to prior period.
(c) ASPL had never cleared TMT bars under parallel set of invoices as could be established from the fact that the department during the course of search had found the original copies of such invoices. The said invoices were prepared by the employees of ASPL for enhancing the bank credit limit as could be appreciated from the fact that out of the total 178 parallel invoices, 174 were issued upto the financial year ending March 2011 and out of the said 174, 134 pertained to February 2011. ASPL had also brought on record the evidence in the form of confirmation from the persons whose names were stated in the said parallel invoices and who had categorically denied of having received any goods under the said parallel invoices and the said persons having informed the said fact to the department, during the course of investigation.
(d) Even though allegation had been made against ASPL regarding clandestine manufacture and clearance of huge quantities of TMT bars but the SCN did not indicate any investigation from the alleged purchaser of such clandestinely manufactured TMT bars, how the said quantity was transported and, through which transporter.
(e) The statements of the following persons recorded during the course of investigation and referred to and relied upon in the SCN were not voluntary in view of submissions made by ASPL in its WS and, therefore, could not be relied upon. It was submitted by ASPL that in case the adjudicating authority wish to rely upon the statements then a reasonable opportunity should be afforded to ASPL to cross-examine following persons:7 8
Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016
(i) Shri Mithilesh Singh - retracted his statement.
(ii) Shri R.K. Mahapatra - retracted his statement.
(iii) Shri Himanshu Singh - retracted his statement
(iv) Shri Anil Sharma - retracted his statement
(v) Shri Sandeep Changan
(vi) Shri Abu Asad
(vii) Shri Sandeep Sharma
(viii) Shri Ram Pal Sharma
(ix) Shri Deepesh Mahapatra
(x) Shri Manoj Huddar
(f) The other appellant Shri Mayank Bansal, Director of ASPL denied any clandestine activities in ASPL and further submitted that he had never admitted any clandestine manufacture and clearance of TMT bars, etc. Other remaining appellants had also denied their involvement in the clandestine activities as referred to in the SCN. Other remaining appellants had also denied their involvement in any illegal activities referred in the SCN and had also made request for cross-examination of the persons whose statements were relied upon against them in the SCN.
5. The Principal Commissioner being the adjudicating authority, adjudicated the SCN vide the Order-in-Original dated 26.08.2016 by upholding the allegations against appellants and, consequently confirming the central excise duty demand of Rs.9,72,00,165/- against ASPL along with interest and imposed following penalties on the appellants: -
ASPL - Rs.9,72,00,165/- u/s 11AC
Sh. Mayank Bansal - Rs.60,00,000/- u/r 26
M/s Balaji Metal Co. - Rs.17,50,000/- u/r 26
Sh. Yogesh Shah - Rs.17,50,000/- u/r 26
Sh. Vinayak Kangaonkar- Rs.12,50,000/- u/r 26
M/s Rajuri Steels Pvt. Ltd- Rs.12,50,000/- u/r 26
Sh. Dinesh Rathi - Rs.12,50,000/- u/r 26
6. Aggrieved by the said Order-in-Original dated 26.08.2016, the appellants are before this Tribunal.
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Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016
7. We have heard learned counsel for the appellants S/Shri Rupesh Kumar with Shri Jitin Singhal representing ASPL and Sh. Mayank Bansal and Shri D.R. Dandekar, Consultant appearing for the remaining appellants. We have also heard learned AR Shri R.K. Mishra, who reiterated the findings of the Commissioner in the Order-in-Original and, in addition have read certain paragraphs from the cross-objection filed by the department which were nothing but reply of the department to the grounds stated by ASPL in their appeal memorandum. We have also perused the entire evidence placed on record by all the parties. The entire central excise duty demand, which has been confirmed by the Commissioner, can be segregated in the following manner:
(a) CED of Rs. 7,68,37,422/- on 21049.224 MTs of TMT Bars and 1371.185 MTs of Mis-Rolls, allegedly manufactured out of:
(i) 13728.170 MTs of MS Ingots, as revealed from private record [Weighment Register] which contain details of suppressed production of Ingot for the period 01.02.11 to 05.01.12;
(ii) 9872.260 MTs of MS Billets/MS Ingots procured clandestinely from various suppliers of Indore, Bhopal and Aurangabad Commissionerate, for period 05.02.11 to 05.01.12.
(b) CED of Rs.42,00,203/- on 1391.165 MTs of TMT Bars/Mis-Rolls clandestinely cleared under 39 parallel sales invoices during Dec.'10 and Jan.'11.9 10
Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016
(c) CED of Rs. 17,41,470/- on 827.715 MTs of TMT bars manufactured out of 880.75 MTs of MS Scrap, procured clandestinely during the month of July 2009 as reflected in private record i.e. Material Received Slips.
(d) CED of Rs. 1,08,92,504/- on 3603.871 MTs of TMT bars/Miss-Rolls cleared clandestinely as reflected in private record i.e. Executive Diary during the period of 29.04.10 to 12.07.10.
(e) CED of Rs.35,28,567/- on 6104.400 MTs of TMT bars cleared clandestinely in the open market to independent buyers under the guise of MS Ingots shown sold to M/s Shreyash Enterprises, Jalna.
8. We have perused the allegations made in the SCN and the findings recorded by the Commissioner in the adjudication order and observe that the entire case of the department is based on the private records seized from the factory premises of ASPL as well as the statements of various persons recorded during the course of investigation.
9. Shri Rupesh Kumar, learned counsel for ASPL, while referring from the reply and written submissions in the adjudication proceedings, had strenuously argued that both the seized documents as well as the statements have wrongly been relied upon to make out a false case against ASPL. He submitted, while referring to the seized documents, that the same are unrelated and do not belong to ASPL, as ASPL did not even have the capacity to manufacture the quantity shown to have been allegedly cleared in the seized documents, as well as electricity consumption data placed on record before the Ld. Commissioner. It was also submitted that ASPL was not aware about the existence of the said 10 11 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 documents and, it had never instructed any person to maintain any such private record. He further submitted that all the clearances of MS Ingots and TMT bars were duly reflected in their statutory records and the same were cleared upon payment of appropriate central excise duty. He draws our attention to the fact that all the said private records pertained to the period from July 2009 to January 2011. ASPL's factory was subject to search by the departmental officers on 14.10.2011, during which the entire factory premises was duly searched and stock taking had taken place. However, at that time none of these seized records were found in the factory premises, as is clear from the Panchnama dated 14.10.2011, which clearly establishes that all the private records were prepared and/or planted after the said search by certain disgruntled ex-employees of ASPL, in connivance with the current employees. We have perused the said panchnama and observe that the factory premises of ASPL was duly searched and stock taking had taken place, however no incriminating documents, as seized in the present proceedings, were found. It was submitted that some ex-employees of ASPL whose services were terminated due to gross mis-conduct had connived with other employees and fabricated documents so as to enable the department to make out a case against ASPL. In support, ASPL had also placed on record before the Commissioner 'call detail records' of some of the ex-employees which showed that they were in constant touch with departmental officers, immediately after termination of their services. The Commissioner is incorrect in observing that if the records could not be found on earlier search, but found at later search the same would not make the recovered records untrue and fake. But, these facts, in our view, create reasonable doubt regarding the authenticity of the seized private records, as they relate to period prior to Oct 2011. Therefore, 11 12 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 Commissioner could not have solely relied upon these documents without testing the genuineness of the details stated therein by conducting investigation with the persons who were named in the said documents. We further observe that the investigation is also totally silent on this aspect and not even a single person whose name was found mentioned in the said private records, to whom ASPL has been alleged to have supplied TMT bars or the name of the transporters whose details were found mentioned in the said private records were issued summons for the purpose of recording their statement, so as to use it as corroboration. Some of the parties whose names were mentioned in the private records submitted their ledger accounts to the department during the course of investigation, copies of which were filed by ASPL in the adjudicating proceedings. The Ld. Commissioner has totally overlooked this vital aspect while confirming the demand based on entries reflected in the said private records and, instead recorded a perverse finding contrary to records by holding that the charges of clandestine removal have been corroborated by various evidences placed on record in the form of statement of transporter, broker, supplier, seller party etc. who in their respective statements had admitted/corroborated clandestine removal, which, in our opinion, has vitiated the entire proceedings.
10. Another issue raised by the counsel for ASPL is that the Commissioner ought not to have relied upon the statements of various persons including employees referred to in the SCN until and unless the veracity of the same is permitted to be tested by way of grant of cross-examination of the said persons even though ASPL had given justifiable reasons for the same coupled with the fact that some of them had retracted their statements. The Commissioner, in the impugned OiO, while rejecting the request of cross-examination observed that 12 13 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 mere retracting the statement will not result into losing the credibility of the same and, further observed that the request for cross examination was made only in their written submissions filed during the course of hearing on 21.03.16 and, not initially at the time of filing the reply. Ld. Commissioner concluded that the same is nothing but an attempt to delay the adjudication proceedings. We find that Commissioner has committed an error in rejecting the request of ASPL for cross-examination, by concluding that the same was an attempt to delay the adjudication proceedings. We have come to this conclusion by noting the fact that ASPL has prayed for cross-examination on 21.03.2016 i.e. during the pendency of adjudication proceedings whereas, the adjudication order came to be passed only on 26.08.2016 i.e. after five months of the request. Further, it is now settled law that in case the adjudicating authority wants to rely upon the statements recorded during investigation, such witnesses have to be examined in adjudication proceedings and an opportunity of cross-examination has to be granted. In the absence of cross-examination, no reliance could have been placed on such statements. In this regard, we are guided by the judgment of the Hon'ble Allahabad High Court in the case of CCE v Kurele Pan Products Pvt. Ltd. - 2014 (307) ELT 42 (All) wherein it has been held as under: -
"6. It is settled principles of law that if the authority wants to rely upon the statement of any witness, the opportunity of cross-examination ought to have been given to enable the party to prove its case and non-providing of the opportunity of cross-examination amounts to violation of the natural justice and in the absence of denial of natural justice, such statements cannot be relied upon. In the case of Basudev Garg v CC [2013 (294) ELT 353 (Del.)], the Division Bench of the Delhi High Court has held that the statement against the assessee cannot be used without giving them opportunity of cross-examination. Cross-examination is a valuable right of the accused/noticee in quasi-judicial proceedings, denial of which can have adverse consequences for them."13 14
Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 Similar view is also expressed by the Hon'ble Supreme Court in Andaman Timber Industries vs. CCE, Kolkata-II - 2015 (324) ELT 641 (SC.).
11. Now we will deal with the arguments of both sides vis a vis the OiO passed by the Commissioner on the basis of demand based on respective private records. One of such private record is 'weighment register' which was seized from factory premises of ASPL. As per the SCN, the entries reflected therein pertained to manufacture and captive consumption of MS Ingots by ASPL, to further manufacture TMT Bars. As per the SCN, the entries reflected in the weighment register regarding manufacture of and clearance of MS Ingots were not shown in the statutory records by ASPL and the same were cleared captively by ASPL without payment of central excise duty and/or used in the manufacture of TMT bars which were cleared clandestinely without payment of duty. To support the said allegation reliance has been placed by the department on the statements of Mithilesh Singh-Kanta clerk in ASPL, dated 05.01.12, who is stated to be one of the authors of weighment register. Relying upon the entries recorded in the weighment register, it was alleged in the SCN and affirmed by the Commissioner that ASPL had manufactured on an average 113.275 MTs of MS Ingots per day. The learned counsel Mr. Rupesh Kumar, relying upon the invoices issued by Electrotherm - who had manufactured and supplied the two furnaces to ASPL, one in the year 2001 of capacity 4 MT/day and second in the year 2002 of capacity 4 MT/day, the electricity consumption bills, the chartered engineer's certificate regarding the capacity of the said two Furnaces, the Pollution Control Board Certificate, have contended that the maximum production which could take place from the said two furnaces could at the most be 64 MTs/day. He submitted that none of the said evidences have been rebutted 14 15 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 or shown to be false by the department in the adjudicating proceedings. He further contended that one of the two furnaces capacity was enhanced to 7MT/day only in September 2011 and, taking this enhanced capacity also the maximum production of MS Ingots could be 81 MT/day from September, 2011. Therefore, when ASPL did not even have the capacity to manufacture the quantities as reflected in the weightment register, this itself establishes the stand of ASPL that the said private record is a forged & fabricated document prepared by Shri Mithilesh Singh on the instructions and under influence of ex-employees, whose services were terminated in ASPL by the management due to their gross misconduct. The learned Advocate has also drawn our attention to certain pages of the said weighment register to show that on various occasions, the per day production in the said weighment register was shown as high as 248MTs which is not possible even as per the findings recorded by the Commissioner in para 96(ii) of the OiO wherein he had observed that "..ASPL were in a position to take a yield of 112 MTs per day from these furnace which was very close to their average daily production of 113.15 MTs ascertained from the seized weighment register of ingots". It was further submitted that Shri Mithilesh Singh whose statement has been relied upon heavily in the SCN, had already been retracted by him. Next day by filing affidavit before the Commissioner, declaring therein that he had deliberately prepared forged weighment register by making random false entries regarding the quantity of production and clearance of MS Ingots, and for the said purpose he was paid money. Reliance has also been placed on the following case laws viz., Fact Paper Mills Ltd v CCE, Bhavnagar - 2014 (314) ELT 449 as affirmed by the Gujarat High Court reported in 2015 (322) ELT 283 (Guj.), CCE, Mumbai v Air Carrying Corp (I) Pvt. LTd. - 2009 (248) ELT 175 15 16 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 (Bom), Aditya Cement & Ors v CCE, Jaipur - MANU/CE/1016/2017 and Synthetic & Chemicals Ltd. v CCE - 1997 (89) ELT 793 (T).
12. We find merits in the submissions made by the learned counsel for ASPL that the demand of excise duty, confirmed on the basis of entries reflected in weighment register, without rejecting the evidences placed on record by ASPL regarding the capacity of production of the two furnaces installed in its factory, is not sustainable. ASPL had purchased the said two furnaces from M/s Electrotherm on 22.12.01 and 05.01.02 and, as per the invoices the capacity of the said two furnaces were 4MT each. ASPL had got the capacity of one of the furnaces enhanced to 7MT/day, as per invoice dated 03.09.11 of the manufacturer M/s Electrotherm. The entries recorded in the weighment register is for the period 01.02.2011 to 05.01.2012. Thus, for the entire period covered in the weighment register except four months, ASPL had the two furnaces of production capacity of 4MT/day each. Taking into consideration power constraints as well as the fact that the furnaces cannot remain in operation of 24 hours continuously, and the same have to be stopped for the purpose of cooling for at least 5-6 hours as well as other factors like break down, maintenance, power fluctuations, etc., the furnace of 4 MT/day could take at the most 5-8 heats which could yield at the most 32 MTs [4 MT x 8 heats] each day and the furnace of 7MT could take at the most 5-7 heats which could yield at the most 49 MT [4 MT x 7 heats] each day. In such circumstance, on or before 03.09.11, the maximum quantity of ingot which ASPL could manufacture in a day was 64 MTs [2 furnaces x 32MT] and thereafter 81 MTs [1 furnace x 32MT +1 furnace x 49 MT]. Therefore, when the maximum possible production in a day from the two furnaces could be 81 MTs even as per the enhanced capacity, it is not 16 17 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 possible for ASPL to manufacture and clear 113.275 MTs of MS Ingots per day, which is taken as an average per day production as per the entries made in the alleged weighment register. We find that even though ASPL had produced chartered engineer's certificate certifying the capacity of production along with manufacturer's invoice and Pollution Control Board Certificate, which clearly corroborates the stand of ASPL, that it did have even the capacity to manufacture the quantities of Ingots recorded in the weighment register. The department has not brought on record any evidence to show that the said documents were not genuine. Even the Commissioner has chosen to totally overlook the said evidence and relied upon the said weighment register even though Shri Mithilesh Singh who was author of the said weighment register had stated on affidavit that he had prepared the said weighment register by recording random entries to implicate ASPL, for which he was paid money. For a moment, we are not concluding that the facts stated in retraction made by Shri Mithilesh Singh in the form of affidavit are true and correct. But the same raises serious doubts about the evidentiary value of entries made in the said weighment register and, therefore, the Commissioner ought to have taken into consideration documents placed on record regarding the capacity of production of the two furnaces in question, which clearly establishes that ASPL could not manufacture the quantity of MS Ingot reflected in the weighment register, on the basis of which the demand of duty has been confirmed upon it. The Tribunal, in the case of Fact Paper Mills Ltd. v CCE, Bhavnagar - 2014 (314) ELT 449 (T), while dealing with the allegation of clandestine manufacture and removal under similar circumstance, had set aside demand by holding that the allegation of clandestine manufacture in not sustainable when the assessee did not even have the capacity to manufacture 17 18 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 the quantity of excisable goods alleged to be cleared clandestinely. It was observed by the Tribunal as under: -
"10. We find that in Volume No. I Page 538, there is a certificate given by one of the chartered engineers which is dated 1-12-2004, which indicates about the production capacity of machines installed by the main appellant. On perusal of the said certificate, we find that the said chartered engineer has specifically stated that the machine installed in the factory premises of the main appellant even if it is run on three continuous processed plants, the production of finished goods that could be achieved is 20 MTPD of a particular basic weight range of 200 GMS to 600 GMS. On perusal of the said certificate, we find that the quantity of production which is sought to be allegedly manufactured by the appellant and clandestinely removed after detecting the clearances recorded in statutory records, would amount to almost 33 to 33 MTPD of the paper or paper board. It is in our view, seems to be incorrect from the fact that the Chartered Engineer had given a certificate which indicates production capacity of 20MTPD, the quotation and the invoice of the supplier of the machinery also indicates that the production capacity of the machines is only 20 MTPD as per the order placed by the appellant. If the production and installed capacity of the appellant is only 20 MTPD, then the calculation arrived at by the Department does not seem to match that the amount of production sought to be allegedly clandestinely removed."
The said decision of the Tribunal has been affirmed by the Hon'ble Gujarat High Court as reported in 2015 (322) ELT 283 (Guj.). As production capacity of the two furnaces do not corroborate the entries recorded in the weighment register, the demand based on the said weighment register is not sustainable. We further find that the department had not verified the capacity of production of ASPL during the course of investigation. On the other hand, ASPL has produced before adjudicating authority the chartered engineer's certificate and manufacturer's invoices. In case the adjudicating authority had doubts in disbelieving the chartered engineer's certificate or the manufacturer invoices, the said persons could have been called for examination/cross-examination under section 14 of the Central Excise Act, 1944, to ascertain the genuity of the said two documentary evidence. However, the said evidences remained unrebutted during the adjudicating proceedings and, therefore, could not have been ignored 18 19 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 by the Commissioner while dealing with the said issue as held by the Tribunal in the case of Synthetics & Chemicals Ltd. v CCE, Kanpur - 1997 (89) ELT 793 (T) and in the case of CCE, Mumbai v Air Carrying Corp (I) Pvt. Ltd. - 2009 (248) ELT 175 (Bom).
13. We are surprised to find that the Commissioner in the adjudication order, instead of dealing with the contentions and evidence led by ASPL, has tried to justify the entries recorded in weighment register, by merely relying upon the retracted statement of Shri Mayank Bansal. Oral evidence cannot override the documentary evidence brought on record. Further, once the Commissioner has taken the average daily production of 113.15 MT from the two furnaces, the same would clearly mean that some days the production could be more than 113.15 MT and other days it could be less. During the course of hearing appellant have demonstrated that as per the said weighment register on some days the prduction of ingots has been shown to be more than 200 MT, going upto 248MT as well, which is not possible even going by the case of the department. For this reason also, the demand of duty on the basis of weighment register is not sustainable.
14. The central excise duty has also been confirmed on TMT bars manufactured out of 9872.260 MTs of MS Billets/MS Ingots which, as per the allegation in SCN (and upheld by the Commissioner) were procured by ASPL clandestinely from various suppliers of Indore, Bhopal and Aurangabad, without recording the same in their input registers. For the said purpose, the learned DR appearing for the department has placed reliance on File No. 09 seized from the factory premises of ASPL and explained by Shri Rampal Sharma (employee) in 19 20 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 his statement recorded during investigation. He submitted that the entries reflected in the said file contained the details of parties from whom ASPL had purchased the MS Billets/MS Ingots during the period 05.02.2011 to 05.01.2012. The Commissioner, in the OiO, has observed in para 96(i) that due investigation was conducted with M/s Venus Alloys (one of the suppliers), transporters who had transported the raw materials to ASPL's factory, the broker Shri Sunil Changan and Shri Kamal Rathi - who had been primarily brokering the deals of ASPL with the various raw material suppliers, etc. He had also observed that the payments to such suppliers were made in cash and the said quantities were not recorded in the statutory records and were used in the manufacture of TMT bars which were cleared without payment of duty. It has been argued by Shri Rupesh Kumar, Advocate that the demand has been confirmed only on the basis of assumption and presumption without any material corroboration. It was argued that even though reliance has been placed on entries made, reflected in File No. 09, however, there was no corroboration of the said entries by any of the named parties reflected in the said File No.09. He submitted that the said File No. 09 did not belong to ASPL, nor any of the entries recorded therein relates to their business. It was further submitted that seizure of the said File No. 09 could at the most raise suspicion. Further, suspicion, howsoever strong, cannot take the place of proof of clandestine removal, as held the Hon'ble Supreme Court in the case of Oudh Sugar Mills Ltd v UOI - 1978 (2) ELT J172 (SC).
15. We further find that there is no corroborative evidence on record in the form of capacity determination, electricity consumption, receipt of raw material, etc. to establish manufacture of any clandestine quantity. Therefore, duty is levied only on presumption and assumption, as such, is fit to be set aside. We 20 21 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 have also perused the said File No. 09 and appreciated the entries made therein. We find that on each page of File No. 09, the names of various persons/firms have been stated viz., Girish Chaudhary, Mandsaur, Kamal Rathi, Abhay Agarwal, Mandideep, Suchita Rathi, Bharti Rathi, Vinod Nirmanyia, Shorya Steel, Kaushik Dewas, Sardar Ispat, Mantri, have been mentioned. However, none of the said named persons/firms have been called by the department for confirmation of the respective entries, except Shri Kamal Rathi, whose statement was recorded on 18.03.13 and referred to in SCN. However, Shri Kamal Rathi has also not supported the case of the department and, in his said statement, upon being asked as to whether he had arranged for supply of 7692.835 MTs of Ingots/Billets to ASPL, he replied in negative by stating that his job was merely to arrange for the goods and did not know whether the arrangement between seller and buyers was on bill or without bill. He further stated that he had not received any commission on 7692.835 MTs of Ingots which clearly establishes that he had not supplied the said quantity, as otherwise, he would have insisted upon payment of commission on the said quantity. The Commissioner has recorded a perverse finding, that investigation with the transporters have corroborated the allegations. We find that there is not even a single statement of the transporters referred to or relied upon in the SCN. Further the finding recorded by the Commissioner regarding payment made by ASPL to persons/firms named is also not correct, as during the entire investigation department has not found any unexplained or unaccounted cash.
16. For the purpose of corroborating the allegation that ASPL had manufactured MS Ingots as reflected in weighment register as well as purchased the same from market (as reflected in File No. 09) without entering the said 21 22 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 quantities in the statutory records, had utilized the same in the manufacture of clandestinely removed TMT Bars, the Commissioner has placed reliance on 139 parallel invoices pertaining to the period February 2011 and March 2011, which were seized from factory of ASPL. The learned DR, relying upon the same, submitted that there is clear corroboration of the fact of clandestine manufacture and removal of TMT Bars. However, the learned counsel for ASPL submitted that no TMT bars were cleared on the said parallel invoices which were prepared only for the purpose of availing the enhanced bank credit facility, as also stated by Shri R.K. Mahapatra while retracting his statement. In support, the learned counsel pointed out that out of 178 invoices, 134 pertained to February 2011, alone showing clearances of 2083.425 MTs of TMT bars and as per the weighment register, ASPL had manufactured 3507.835 MTs of Ingots in February 2011. It was further submitted that ASPL had shown production of 2289.555 MTs of MS Ingots in its statutory records which would mean that the suppressed quantity of MS Ingots would be 1218.280 MTs. It was also pointed out that as per the SCN, ASPL had purchased 896.790 MTs of Ingot from other manufacturers out of which around 294.945 MTs were accounted for in its statutory records which would mean that ASPL had suppressed the quantity of 601.845 MTs of purchased MS Ingots. In this manner, the total suppressed quantity of ingots available with ASPL was 1820.125 (1218.280 + 601.845) MTs and, if the allegations made in the SCN were correct it would mean that ASPL had utilized the said suppressed quantity of MS Ingots in the manufacture of 2083.425 MTs of TMT bars which were clandestinely cleared under 134 parallel invoices which is not possible. We find merits in the said submission of ASPL as it cannot be possible for anyone to manufacture and clear 2083.425 MTs of TMT 22 23 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 out of 1820.125 MTs of clandestinely manufactured/procured MS Ingots. Further, most of the parallel invoices seized from the factory premises were found in original which also supports the stand of ASPL that no clearances were made under the said parallel invoices. This, in our view, clearly supports the case of ASPL that they had neither clandestinely manufactured MS ingots nor clandestinely purchase MS ingots and no quantity of TMT bars were cleared under the said 139 parallel invoices. In this view of the matter we are not going into the issue raised by ASPL that the parallel invoices were prepared only for the purpose of enhancing bank credit limit even though we observe that out of 178 parallel invoices, 174 parallel invoices were issued upto the financial year ending March 2011.
17. The SCN has also tried to corroborate the allegation of clandestine manufacture and removal of MS Ingots and TMT bars, as reflected in the weighment register and File No. 9, by placing reliance on File Nos. 1 and 2 seized from the residence of Shri Deepesh Mahapatra (employee) as well as File Nos. 7 and 8 seized from the diggy of two scooters. We find that the SCN has tried to corroborate one private record with another private record, without establishing the authenticity of the said private records. The learned counsel for ASPL is correct in pointing out that even though the seized documents contained named persons, still, nothing is on record to show as to whether any inquiry was conducted from the said named persons to corroborate the allegation of clandestine removal against ASPL. In the absence of any such independent corroborative evidence, we hold that the department has not, in the present case, discharged its onus of establishing clandestine activities of ASPL. This Tribunal has been taking consistent view that entries in the private record of production at 23 24 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 the most raise a doubt but do not prove the charge in the absence of other corroborative evidence, like installed capacity of factory, raw material utilization, labour employed, power consumed, goods actually manufactured and packed etc. Further, the charge of clandestine manufacture and removal cannot be based on private records unless the same are corroborated through some other independent evidence which is totally missing in the present case as no person named in the private records was inquired or investigated to confirm the authenticity of the entries recorded in the said documents We are duly guided by following precedent decisions viz., Sharma Chemicals v CCE, Calcutta - 2001 (130) ELT 271 (T); T.G.L. Poshak Corporation v CCE, Hyderabad - 2002 (140) ELT 187 (T); Opel Alloys (P) Ltd. v CCE, Ghaziabad - 2005 (182) ELT 64 (T); CCE, Ludhiana v Rakesh Nayyar - 2010 (255) ELT 234 (P&H); Gupta Synthetics Ltd. v CCE, Ahd. - 2014 (312) ELT 225 (T); Rajasthan Foils Pvt. LTd. v CCE, Jaipur - 2005 (183) ELT 101 (T); Suzuki Synthetics Pvt. Ltd. v CCE - 2015 (318) ELT 487 (T); Gupta Synthetics Ltd. v CCE - 2014 (312) ELT 225 (T)].
18. The learned DR has also placed reliance on the two statements dated 26.04.2012 and 20.07.2012 of Shri Rampal Sharma (employee) recorded during investigation, who had explained the entries made in File No. 09. The learned counsel for ASPL, while referring to the reply and written submission filed before the Commissioner in the adjudication proceedings, has submitted that ASPL has disputed the contents of the statements of Shri Rampal Sharma and totally disowned the entries reflected in the said File No. 09 and, submitted that no reliance could be placed by the Commissioner on the statements of Shri Rampal Sharma, as the opportunity to cross-examine Shri Rampal Sharma was not afforded to ASPL. We find merits in the said submissions of the learned 24 25 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 counsel for ASPL and hold that the Commissioner has committed error in law in relying upon the statement of Shri Rampal Sharma without giving due opportunity to ASPL in the form of cross examination. In the absence of cross- examination, no reliance could have been placed on the statement of Shri Rampal Sharma as the same is hit by Section 9D of the Act and as held by Hon'ble Allahabad High Court in the case of CCE v Kurele Pan Products Pvt. Ltd. - 2014 (307) ELT 42 (All), CCE, Meerut-I v Parmarth Iron Pvt. Ltd. - 2010 (260) ELT 514 (T), Basudev Garg v CC - 2013 (294) ELT 353 (Del.).
19. Now coming to the central excise demand of Rs.42,00,203/- confirmed against ASPL on TMT bars, alleged in the SCN to have been cleared on 39 parallel invoices pertaining to the period Dec.'10 to Jan.'11 which as per the Commissioner was duly corroborated by the entries recorded in the 'executive/dispatch diary' resumed from the residential premises of Shri Deepesh Mahapatra. We have seen the said parallel invoices vis a vis the 'executive/dispatch diary'. Strangely, the names stated in the invoices are different from the names recorded in the said executive/dispatch diary. The simple way available to the department to discharge the onus was to inquire from the persons/firms named in the parallel invoices as well as executive/dispatch diary. However, we find that no such inquiry was conducted from any of the persons/firms whose names were reflected in executive/dispatch diary. On the other hand, most of the parallel invoices were in the name of M/s Balaji Metals who, in their statement recorded during the course of investigation, had clearly denied having received any goods under the said parallel invoices. Further, the parallel invoices were issued in the name of Balaji Metals which is located at Pithampur whereas the persons/firms reflected in the executive/dispatch diary are 25 26 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 from Bediya/Indore and, therefore, it is not possible to clear goods on the basis of parallel invoices issued for Pithampur to Bediya/Indore. The parallel invoices also contained the details of transporter, still no investigation was conducted with the said transporters whose details were reflected in the parallel invoices, so as to establish the alleged clandestine removal by ASPL. In the absence of the same, the Commissioner was not justified in confirming the demand of duty on the quantities reflected in the said 39 parallel invoices. The same is fit to be set aside.
20. The Commissioner has further confirmed a duty demand of Rs.17,41,470/- against ASPL on the TMT bars and the basis of the "Material Receipt Slips" which were also recovered from the seized File No. 09, showing procurement of scrap from various scrap dealers. We find that the said material receipt slips only shows procurement of scraps with the name of the scrap dealers. It nowhere shows that the said scrap was used by ASPL to manufacture Ingots, wherefrom ASPL had manufactured and clandestinely cleared TMT bars. Mere recovery of material receipt slips of the year 2009 without any investigation or affirmation from any independent source cannot be the basis to confirm the allegation of clandestine removal, which is a serious charge. We have already held that ASPL did not even have the capacity to manufacture the quantity of TMT bars as alleged, other than what was shown by it in the statutory records which were cleared upon payment of duty. In the absence of any evidence of manufacture of ingots and any further evidence of manufacture of TMT bars out of the said ingots, demand of duty of Rs.17,41,470/- is not justified.
26 27
Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016
21. Now coming to the duty demand of Rs.1,08,92,504/- confirmed by the Commissioner on 3603.871 MTs of TMT bars alleged to be cleared during the period 29.04.2010 to 12.07.2010, on the basis of the entries reflected in the 'executive diary' seized from the office premise of ASPL as well as two statements dated 31.03.2012 and 0605.2013 of Shri Manoj Huddar who was working as accountant in the office of ASPL during the period February 2010 to December 2011. We find that ASPL has, since the beginning, taken the stand that it had not authorized or directed any of its employee to maintain any kind of private record or to indulge into any illegal activities. We find that the said executive diary was prepared in the handwriting of Shri Manoj Huddar who was removed from employment by ASPL due to mis-conduct. However, there were contradictions in his two statements in as much as in the first statement he stated that the diary was written by him on the basis of information provided by one Titu from the factory, whereas, in the second statement he stated that the diary was written by him on the basis of information received from employees of M/s Balaji Metal Co. Ltd. Further, the said diary contained exhaustive information in the form of name of the brokers, name of the buyers, telephone numbers, still nothing has been brought on record, not any investigation was conducted in this regard to corroborate the entries in the said diary. Shri Huddar had also stated that he was directed to maintain the said diary by Smt. Neera Bansal (Director), however, no question was put to Smt. Neera Bansal in this regard. The counsel for ASPL submits that thereafter though Smt. Neera Bansal was issued summons which were duly complied with and Smt. Neera Bansal had presented herself, whereupon her statement was recorded wherein she had clearly explained how the entries in the said diary could not be related to ASPL. The said statement 27 28 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 being not in favour of department, reliance was not placed by department. We also note that even though certain entries in the executive diary were made in the name of Shri Yogesh Shah of M/s Balajee Metal, still Shri Shah was not even confronted with the said executive diary, even though his statement was recorded during the course of investigation. It was under these circumstances, ASPL during the course of adjudicating proceedings, had prayed for opportunity to cross-examine Shri Manoj Huddar. However, the Commissioner, on one had had denied the opportunity to ASPL to cross examine Shri Huddar and, on the other hand, has relied upon the contents of the said diary to confirm the huge demand against ASPL which, we hold, is not permissible as per settled law.
22. This brings us to the last issue relating to demand of duty of Rs.35,28,567/- on TMT bars alleged to be manufactured and cleared by ASPL during the period 09.10.2010 to 08.06.2011 without payment of duty. The Commissioner has held that ASPL had merely issued invoices (without goods) by showing clearance of 6106.4 MTs of MS Ingots but, in actual, had utilized the said quantity of ingots to manufacture and clear TMT bars without payment of duty. We find that the facts and evidence available on record shows that the invoices were issued by ASPL in the name of M/s Shreyash Enterprises, a proprietorship firm, whose proprietor Shri Vinayaka Kangaonkar had admitted in his statement dated 16.10.12 of having received ingots along with the said invoices which he had further sold to M/s Rajuri Steel Pvt. Ltd., whose Manager Shri Dinesh Rathi had also admitted in his statement dated 08.03.2013 of having received the ingots manufactured by ASPL through M/s Shreyash Enterprises. Once the said quantity of ingots were manufactured by ASPL and cleared to M/s Shreyash Enterprises, who in turn had sold the same to M/s Rajuri Steel Pvt. Ltd. 28 29
Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 and all these entries were duly reflected in their books of accounts and consideration was paid through cheque and there is no evidence regarding receipt of any amount other than the cheque amount, merely because the vehicle nos. were wrongly mentioned in some of the invoices or the non-matching of seal of the check post on the invoices, the same cannot form the basis to demand duty from ASPL or imposition of penalty on Shri Vinayak Kangaonkar, M/s Rajuri Steel Pvt. Ltd. and Shri Dinesh Rathi, by treating the same as sale of TMT bars instead of ingots especially when there is no evidence on record regarding manufacture and clearance of TMTs by ASPL.
23. The Hon'ble High Court of Madhya Pradesh has held in the case of Union of India v M.S.S. Food Products Ltd. - 2011 (264) ELT 165 (MP) that under the Central Excise Act, 1944, excise duty is leviable on manufacture and production of excisable goods and the same is payable at the time of removal. Therefore, to establish the charge of clandestine removal of excisable goods, it is necessary to establish that the excisable goods were produced or manufactured by the assessee concerned and for attracting Section 11A of the Act, it is necessary to establish that the excisable goods were clandestinely removed without payment of duty. The Hon'ble Allahabad High Court in the case of Continental Cement v UOI - 2014 (309) ELT 411 (All) has held that the allegation of clandestine removal is a serious charge which is required to be discharged by the revenue by production of sufficient and tangible evidence. The Hon'ble High Court observed that following factors need to be investigated by the department to establish the charge of clandestine removal:
To find out the excess production details To find out whether the excess raw materials have been purchased.29 30
Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 To find out the dispatch particulars from the regular transporters. To find out the realization of sale proceeds.
To find out finished product receipt details from the regular dealers/buyers.
To find out the excess power consumption.
24. In the present case, no evidence establishing the above factors have been brought on record by the department. There is no evidence regarding the capacity of ASPL to manufacture the quantities as alleged. Further, no inquiries have been conducted from raw material suppliers, transporter or the buyers to establish clandestine manufacture and sale by ASPL. Even though the allegation is that ASPL had, in such manner, sold TMT bars worth Rs. 94,79,17,806/-, no unaccounted money was recovered during the course of search from any of the premises. It has been consistent view of the Tribunal that allegation of clandestine removal cannot sustain merely on the basis of uncorroborated entries in the private record as held in Kashmir Vanaspati (P) Ltd. v CCE - 1989 (39) ELT 655 (T), Raza Textiles Ltd. v CCE - 1989 (44) ELT 233 (T), Hindustan Lever Ltd. v CCE, Raipur - 1996 (87) ELT 385 (T), Krishna & Co. v CCE, Jaipur - 1998 (97) ELT 74 (T), Kothari Pouches Ltd. & Anr v CCE, New Delhi
- 2000 (41) RLT 209 (T), Hindustan Coca Cola Beverages Pvt. Ltd. v CCE, Thane - 2006 (205) ELT 700 (T), Rina Dyeing & Printing Works v CCE, Surat
- 2007 (209) ELT 190 (T) and Kuber Tobacco Products Ltd. v CCE, Delhi - 2013 (290) ELT 137 (T)].
25. In view of abovementioned facts and settled position of law, we hold that the allegation of clandestine manufacture and removal of TMT bars, made in the SCN, on ASPL is merely on assumption and presumption without any material evidence corroborating the said allegation. The demand of duty on ASPL, 30 31 Ex. A. Nos. 52974, 53011, 53022, 53025, 53026, 53058 & 53103 of 2016 therefore, is not sustainable. As demand of duty itself is not sustainable, no interest or penalty could be imposed on ASPL as well as on other appellants on whom penalties were imposed under Rule 26 of the Central Excise Rules, 2002 and for this reason we are not dealing with their appeals separately.
26. We, therefore, set aside the impugned Order-in-Original dated 26.08.2016 passed by the Commissioner and allow all the appeals filed by appellants, with consequential relief.
(Pronounced on 27.09.2018).
(ANIL CHOUDHARY) MEMBER (JUDICIAL) (BIJAY KUMAR) MEMBER (TECHNICAL) Pant 31