Custom, Excise & Service Tax Tribunal
M/S Raizo Plasto Pvt. Ltd vs Cce, Rohtak on 24 April, 2017
bCUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SCO 147-148, SECTOR 17-C, CHANDIGARH-160017
SINGLE BENCH
COURT NO.1
Appeal No. E/719-720/2007
[Arising out of the Order-in-Original NO. 40/CE/2006 dated 17.11.2006 passed by the CCE (Appeals), Rohtak]
Date of Hearing: 21.03.2017
Date of Decision : 24.04.2017
For Approval & signature:
Honble Mr. Ashok Jindal, Member (Judicial)
M/s Raizo Plasto Pvt. Ltd.
Suinder Raizada Appellants
Vs.
CCE, Rohtak Respondent
Appearance Shri. Surjeet Bhadu, Advocate- for the appellant Shri. H. Singh, AR- for the respondent CORAM: Honble Mr. Ashok Jindal, Member (Judicial) Final Order No:
Per Ashok Jindal:
The appellants are in appeal against the impugned orders.
2. The brief facts of the case are that the appellants are registered with Central Excise Department for manufacturing of PVC Pipes and availing Modvat facility. On 09.06.1998, the Preventive officer searched the premises of the appellants and recovered certain documents vide panchnama. Thereafter, the officers visited the factory premises of M/s Raizo Plasto Pvt. Ltd. along with Shri Surinder Raizada, Director of the company. On demand Shri Surinder Raizada failed to produce the statutory excise records of the factory. He did not reply to the satisfaction of the officers as to where the records were lying. He only stated that the whereabouts of the records were only known to his accountant Shri Sunil Aggarwal who was not available at that time. Physical stock taking of the goods both finished as well raw materials was conducted and were detained vide detention memo dated 09.06.1998 and handed over to appellant for safe custody. The statutory records were produced by the appellant. The records were not found to be pre authenticated as required under Rule 52A and Rule 53 of erstwhile Central Excise Rules, 1944. He further stated that he and his mother were the directors of the company that only directors were authorised signatories of the company for excise purpose, that invoices were issues under his signatures only that he was aware of the fact that the Central Excise records were required to be pre authenticated by the Central Excise officers but he did not get it done. The balance shown in the excise records were not found tallied with the balances recorded on physical stock taking. It was alleged that on scrutiny of various private and other records resumed from the factory premises and registered office of the appellant, the appellants were involved in clandestine clearance of PVC pipes by resorting to parallel invoices with the intention to evade central excise duty. Follow up action was conducted at the place of 35 firms having dealing with the appellant and records relating to supply of goods by the appellant were resumed and their statements were recorded. Thereafter, the statement of Sh. Surinder Raizada, Director of the firm, was recorded who stated that he and his mother were the directors in the company and both of them were the authorised signatories; that invoices were issued by him only. They started commercial production in 1995 and stopped production in Jan 2000 following take over by the Haryana Financial Corporation as he was mechanical engineer with no business back ground that because of competition in the market they could not sell their product viably and were incurring losses; that then somebody advised them to manufacture the goods and remove the same without accounting for the same in the records and remove without payment of duty. He was forced to adopt that because of business compulsion, that they had been doing the same for few months from last 1997 to May 1998 only, that since they were new to those things it resulted in mistake like over writing, cutting and hand written serial numbers, sometime original copy of invoice and office copy for excise purpose were prepared separately that in the parallel invoices being issued by them the actual sale was of high value whereas in the office copy nominal cash sales was shown and they had done so with few parties that payments of goods cleared by them clandestinely were being received in cash without issue of any cash receipt that as regards some weighment slips of pipes recovered from them, the sale of pipes might have been shown in records on the dates mentioned in the weighment slips and if no invoice was issued on those days then same would have been cleared clandestinely. He further stated that M/s Raizo Chemicals ltd. owned by his father Shri. Raizada S.S Vaid located at 346 Vikas nagar, Hissar was also dealing in chemicals and karyana goods that some of the recovered documents might also be related to that firm; that private ledger book containing 385 pages in which some accounts of the parties had been mentioned belonged to his father only and had no relation with his firm that as the books were written by his father so only he could explain about the same; that their ledger was the one which was recovered from them in loose ledger pages containing page 100 to 109. He further stated that in his statement on 10.12.2001, he stated that he used to give information to Shri. Riazada S.S. Vaid about the affairs of the company.
3. The statement of Shri. Raizada S.S. Vaid father of the Director was recorded who stated that he has running the unit namely M/s Raizo Plasto Pvt. Ltd. at Hansi that his son was financially independent since 1994, that his wife Mrs. Sapna Raizda was also director in M/s Raizo Plasto Pvt. Ltd. But she was not actively involved in the business activities of the company and the entire business activity was being looked after by Shri Surinder Raizada. He further stated that during the search in 1998, some of his private records were also taken away that his wife Mrs. Sapna Raizada was also running a firm in the name and style of M/s Raizada Chemicals under her proprietorship which used to manufacture detergent powder and also trading in chemicals that some of the records resumed by the excise officers also related to that firm that the resumed ledger copy containing 385 pages had been totally written by him and contained his personal records as well as some records of M/s Raizo Chemicals that the said ledger book has nothing to do either with M/s Raizo Plasto Pvt. Ltd. or Mr. Surinder Raizada because of independence of their business. Further on 05.12.2001, he stated that the said ledger book of 385 pages contained accounts of different financial institutions like banks and Haryana Financial Corporation (HFC) of M/s Raizo Plasto Pvt. Ltd. He also revealed that he was keeping a track of the financial position and liabilities of the company by maintaining these accounts with the help of Shri. Surinder Raizada who used to provide the details. He further disclosed that the cash amount had been received by them from the regular buyers of M/s Raizo Plasto Pvt. Ltd. as mentioned in the cash account of the ledger and the same has been written by him as was conveyed to him by Sh. Surinder Raizada and that further clarification in this regard could be furnished by him only. He further denied that he was any knowledge about the details of other accounts of the regular buyers. He also stated that the accounts might be related to the trading activities of M/s Raizo Chemicals. The case has been booked against the appellants that the appellants were engaged in the activity of clandestine removal of goods. Consequently, by invoking extended period of limitation, the duty was demand along with interest and penalties were also imposed on both the appellants. Aggrieved from the said order, the appellants are before me.
4. The Ld. Counsel for the appellant submits that the period involved in the month of April 1997 to June 1998. The duty has been demanded on the following allegations:
(a) Stock of PVC resin was short by 2.525 MT involving Modvat credit of Rs. 19,938.00/-.
(b) Stock of calcium carbonate was short by 51.800 MT involving Modvat credit of Rs. 69,930.00/-.
(c) Stock of PVC pipes weighing 25.165 MT valued at Rs. 6,29,120/- involving duty of Rs. 94,369.00 is liable for confiscation as found excess from the recorded balance of 19.545 MT.
(d) Irregularity in records as the records were not pre authenticated
5. He submits that initially a show cause notice was issued on 01.12.1998. The said show cause notice was contested by the appellant and this Tribunal vide Final order No. 1458/2007-SM(BR) dated 05.10.2007 held that as on dated of raid there was:-
(i) No shortage of raw material
(ii) No excess of final product
(iii) It was not case of revenue that the PVC pipes were meant for clandestine removal.
(iv) No penalty imposed for irregularity in records.
6. The said order has not been challenged by the Revenue, therefore, the said order has been attained finality and the same has not been considered by the adjudicating authority in their defence.
7. He further submitted that the basic requirements of evidence to prove clandestine removal of the goods has been examined by this Tribunal in the case of M/s Arya Fibers Pvt. Ltd. Vs. CCE reported in 2014 (311) ELT 529 (tri.) and demand in this case has been raised solely on the basis of statement of the director of the appellant who has stated in some of cases they cleared goods without payment of duty. However, no clearances were put to him in specific or no mode of such removal was got confirmed from him. Therefore, there is no basis as to how much clearance was so called clandestine. He further submitted that there is no evidence with regard to:-
(i) the statement of 35 buyers of appellant was recorded and records were resumed, however, none of the said statement or record finds its place in show cause notice or order in original which clearly means that all the buyers has denied any clandestine receipt.
(ii) No enquiry has been made from any transporter to show alleged movements of goods.
(iii) No excess/shortage of Raw material is proved. Rather Honble Tribunal has held there was no shortage or excess.
(iv) No excess/shortage of final product is proved. Rather Honble Tribunal has held there was no shortage or excess.
(v) No instance of actual removal of goods from factory is detected.
(vi) No finished goods are detected outside factory.
(vii) Although, the Revenue had names of all buyers of appellant, but no instance of alleged sale is proved.
(viii) No proof of receipt of sale proceeds. Cash receipts found in the factory of appellant were duly accounted and benefit has been allowed by adjudicating authority in the order in original.
(ix) No investigation regarding consumption of electricity.
(x) No cash found at factory or head office of the appellant.
(xi) No freight paid found either for raw material alleged to have been use or for alleged final product.
(xii) No links established with ledger and alleged clearance or manufacture.
(xiii) Annexure A to show cause notice calculated demand by mentioning goods sold to ---- whereas, there is no evidence of such sale.
(xiv) Statement of director recorded after 3 years that to when his factory was closed much earlier to statement. He was not put records of the company at the time of recording statement.
(xv) The said statement dated 12.10.2001 and 10.2.2001 was retracted by the Director vide his letter dated 11.12.2001. This fact of retraction was mentioned in reply to show cause notice dated 14.10.2006. The order in original does not dispute the fact of retraction.
xvi) allegation of irregularities of the records such as non authentication etc. was already set aside by Honble Tribunal vide its Final order No. 1454/2007-SM(BR) dated 05.10.2007 as mentioned above.
xvii) In case of clandestine removal and excess manufacture, electricity consumption could be one of the major factor to substantiate the stand. In the present case, the department has made no efforts to test and confirm the electricity consumption of the appellant.
xviii) It is a settled proposition of law that clandestine removal cannot be confirmed merely on assumptions and presumptions and the same has to be substantiated with complete chain of corroborative evidences. In the present case, department has failed miserably on this count. Few of the cases on this legal principle are as under:
CCE, Meerut Vs. R.A. Castings Pvt. Ltd., 2011 (269) ELT 337 (All.). Upheld by Honble Supreme Court in 2011 (269) ELT A108 (SC).
Century Metal Recycling Pvt. Ltd. Vs. CCE, Delhi-IV, 2016 (333) ELT 483 (Tri. Del.) M. Veerabadhran Vs. CCE, Chennai, 2005 (182) ELT 389 upheld by Honble Supreme Court in 2006 (197) ELT A34 (C).
8. He submitted that as the Revenue has failed to prove their case with corroborative evidence, therefore, the impugned order is to be set aside in the light of the decisions of M/s R.A. Castings Pvt. Ltd., 2011 (269) ELT 337 (All.). which has been affirmed by the Honble Apex Court in 2011 (269) ELT A108 (SC), Century Metal Recycling Pvt. Ltd. Vs. CCE, Delhi-IV, 2016 (333) ELT 483 (Tri. Del.) and M. Veerabadhran Vs. CCE, Chennai, 2005 (182) ELT 389 which has been affirmed by Honble Supreme Court in 2006 (197) ELT A34 (C).
9. He further submitted that the demand cannot be raised solely on the basis of statement of the Director as held in the case of M/s Nissan Thermoware Pvt. Ltd. 2011 (266) ELT 45 (Guj), M/s Nachiketa Paper Mills reported in 2008 (225) ELT 194 (P&H) and M/s Mahavir Metal Industries reported in 2014 (313) ELT 581 (tri. Ahm.).
10. He submitted that in the present case, the demand has been raised on presumption of clandestine removal of goods without payment of duty on the basis of a ledger book containing 385 pages involves duty of Rs. 40,25,7814.25.
11. It is his submissions that the said ledger book has been written by late Shri. Raizada S.S. Vaid, the father of the appellant but he confirmed in his statement that book ledger were his personal notings. It was further elaborated in his statement that the ledger was prepared for keeping check on business interest of his wife, Smt. Sapna Raizada who was one of the directors with the appellant company and also running independent proprietary firm in the name of M/s Raizo Chemicals.
12. The director of the appellant firm Sh. Surinder Raizada in his statement categorically submitted that he has no connection with the ledger book containing 385 pages although it was written by his father. It was also confirmed that the ledger contains authors personal information such as bank account expenses made on account of building residential premises, other petty expenses besides vague details of business affairs of appellant company and M/s Raizo Chemicals.
13. In the show cause notice as well as impugned order contents of the ledger has been considered as gospel truth so as to confirm the demand of duty of Rs. 40,25,781/-. It has been admitted that the ledger contains details about other firms. However, confirmed the demand of duty treating the entries as clearances of pipes manufactured by the appellant company.
14. He further submitted that it is relevant to note that entry made in ledger neither reflected particulars of the goods, manner of clearances, transportation details, buyers name, recovery from the buyers. Therefore, in the absence of the details referred above, it is erroneous to presume that the entries made in the ledger were related to clearances of pipes manufactured by the appellant company. It is equally relevant to note neither the author of said documents nor any representative of the company at any stage admitted the clearances made therein as clandestine removal made by the appellant without payment of duty.
15. The appellant even submitted a comparable detail of manufacturing record i.e. RG-I and entries made in the above mentioned ledger, in order to substantiate that rough/estimated entries were made in the ledger and the entries made there were not at all reflected true and correct picture.
16. On perusal of comparative chart referred above shows that either exact of indicative figures of two records are comparable. In most of the cases the estimated entries made in ledger were cleared by the appellant company after payment of central excise duty. Therefore, the demand of duty confirmed by the adjudicating authority by considering the figures mentioned in the ledger as clandestine removal of pipes manufactured by the appellant is unsustainable in law.
17. It is his further submissions that the adjudicating authority has failed to appreciate that various names such as M/s Khera Chemicals, M/s K.k. Bhinder etc. given in the ledger document were not at all connected with the appellant and during the course of last five years not even a single transaction was carried out which the aforementioned parties. In the light of the fact that it is an admitted fact that entries shown in ledger also pertains to Raizo Chemical, therefore, it is erroneous to assume that all the entries in respect of the parties are of plastic pipes and that too removal without payment of duty.
18. He submitted that in the show cause notice reliance was placed on the statements of 35 firms, to whom appellant alleged to have clandestinely removed plastic pipes, so as, to raise demand of duty on the basis of ledger document. The appellant on certain persuasion could manage to get statement of few of the parties allegedly their purchaser, however, still could not manage to get statement of all the so called purchaser of plastic pipes. Perusal of statements of such purchasers either reflect that they purchase duty paid material or they did not dealt with the appellant company in any manner. This fact was produced before the adjudicating authority, but the same has not been considered.
19. With regard to the statement /investigation carried out in respect of 35 firms on the ground that follow up action in relation to these 35 firms has not been relied upon in the show cause notice. Reasoning has further extended that enquiries with the buyer would not bear any fruitful result because the buyer and seller have mutual interest. In the light of contrary stand taken in the show cause notice and impugned order, the assumption made by the adjudicating authority in regard to entries made in ledger book cannot be made basis for confirming demand of duty in this regard.
20. The above explanation is fortified by the fact that investigation authorities as well as the adjudicating authority have failed to establish the manner and method of manufacture and clearance of huge quantity of plastic pipes, therefore, on the basis of assumption demand cannot be confirmed.
21. He further submitted that in the show cause notice as well as the impugned order reliance has been place on mixing register to show that appellant company have carried out mixing of raw material during the relevant material whereas there was no production of finished goods as per RG-1. In this regard, attention is invited to so called mixing register so as to show that the said document nowhere reflects manufacture and clearance of plastic pipes. The said documents nowhere merely shows mixing of raising with fillers, which can be retained for long as there is not prescribed self life for such mixture. The said document merely reflects removal of raisings and fillers from godown. It is relevant to note that the quantity raised in the mixing register is much lower than the quantity of the raw material existing on the existing date during the relevant period. It is not the case of the revenue that the quantity mentioned in the mixing register was over and above the quantity recorded in RG-23A part-1. Therefore, the reliance was placed on mixing register is not indicative in any manner of manufacture and removal of plastic pipes without payment of duty. In absence of any evidence regarding purchase of excess raw material, transportation of excess raw material, manufacture of pipes, removal of pipes and receipt of consideration against alleged removal, it is not correct to hold that quantity reflect in ledger book was manufactured and cleared without payment of duty by the appellant company.
22. Further, the veracity of contents of ledger book is also in doubt, as the various entries reflected therein such as bank transaction pertaining to various banks are not matching with the bank statements for the respective period. Appellant produced bank statements before the adjudicating authority to show that the contents of ledger book are not reflecting correct picture as thre is variation even in transaction such as bank loan figures, bank accounts etc. therefore, reliance placed on ledger documents even on above given explanation to hold demand of duty is highly irrational and illogical.
23. It is his contention that the Ld. Commissioner (A) has relied upon the statement of late Shri Raizada Vaid so as to confirm that contents of ledger book were based on information given by Mr. Surinder Raizada, Director of the appellant company. Firstly, it is the matter of record that certain entries which are existing in RG-1 register are also available with the ledger document and secondly, it is an admitted fact that entries relating to business transactions, Raizo Chemicals was also available in ledger. Therefore, the statement made by late Shri Raizada Vaid is not confirming that entries recorded in the ledger pertain to clandestine removal of plastic pipes manufactured by the appellant company. Further, the statement made by Shri Surinder Raizada, Director of the appellant company is of no assistance to the Revenue to hold that they have made clandestine removal of the plastic pipes without payment of duty.
24. He also relied on the decision of M/s Bearing Manufacturing Company Vs. CCE, Vadodara, 2000(123) ELT 1148 to say that charges of clandestine removal based only private records of an employee made for his own purpose are not sustainable unless corroborative evidences are found. Similar, view was taken in Savitri Concast reported in 2015 (329) ELT 213 (Tri. Del.), Someshwara Cement & Chem Ltd. reported in 2005 (191) ELT 1062 and Andhra Cement Ltd. reported in 2005 (191) ELT 1046.
25. Demand based on weighment slips:
It is his submissions that the demand has been confirmed on the basis of weighment slips recovered during the search of factory. It is his submissions that they have removed the goods mentioned in weighment slips after payment of duty and as their name or invoice No is not given, therefore, it is difficult to co-relate. However, a close scrutiny of weighment slips, ledger book and statute records that the appellant has cleared the goods with payment of duty. The adjudicating authority has wrongly mentioned the director of the appellant admitted the clandestine removal of the goods under the said weighment slips. In fact, the director has specifically stated that the goods were cleared on payment of duty on all weighment slips, if there is not corresponding invoice, goods may be cleared clandestinely. At the same time, it is relevant to note here that the said statement was taken after a gap of almost 3 years and without having access to records. Therefore, the said statement is not reliable. He further submitted that while calculating the demand in regard to weighment slips, the value has been taken of Rs. 40/- per Kg which is totally arbitrary and without any basis. The value of goods cleared by the appellant during that period is Rs. 20 per kg, especially when the appellant has produced the evidence. Moreover, the weighment slips did neither bear any name or particular of appellant nor details of the goods. The truck number mention on the said slips have not been investigated by the Revenue. Two slips out of 10 slips were of Ghazibad and Hissar which cannot have any relation with appellant. Nothing is on record to show whether the slips related to sale or purchase. If the slips pertained to purchase of raw material, there cannot be any demand in respect of the same.
26. With regard to demand based on loose sheets:
It is the submissions of the Ld. Counsel is that on the basis of loose copies of ledger folio recovered during the search and contents written therein confirmed that these documents do not depict the clear picture of the business operation of the appellant. Firstly, the entries made in the ledger folios reflect that entry pertaining to period June 1997 to April 1998 by single person in single handwriting with single figure have been recorded. Visual examination of these ledger folios show that entries have been made with stroke of one pen by one person and even amount mentioned therein is a single figure of Rs. 20,000/- or Rs. 10,000/-. This show that the entries made in the ledger document are not reflective of true and correct accounts of the appellant company. This fact is corroborative by ledger account of the M/s Reliance Industries Limited was also maintained, which has not been taken into account for the purpose of demand of duty in the present instance. The appellant after verifying the old records at its end, realize that entries made in the loose ledger sheets recovered during the search were in fact trial entries made by one accountant who was interviewed by the company in June 1998 and during the interview, he was asked to show his accounting skills by making entries in loose ledger sheets. That is the reason, all the ledger folios contains entries, apparently by a person in one go and that to containing a one specific figure on most of the pages in a sequence. Therefore, in event of such a doubt about veracity of the information contained in loose ledger, it is erroneous to presume that the appellant manufactured plastic pipes and cleared without payment of duty and made in the entries in the ledger book. In absence of description of products given in the ledger folios and manner/method of manufacture and clearance of goods allegedly removed without payment of duty, it is illegal to demand duty on the basis of entries shown in the loose sheets recovered from factory premises during the search, therefore, the demand is not sustainable.
27. With regard to demand confirmed on the basis of 13 parallel invoices.
It is his submissions that the appellant has been shown of original invoice with office copy of the invoice. None of the office copy of invoice was resumed from factory or from the head office of the appellant. Original copy of invoice is always sent to the buyer. The show cause notice specifically states that the revenue has not relied upon any resumption, search or the statements of 35 buyers. Thus, the original invoices cannot be resumed from buyers also. It is admitted that no record was resumed from buyers, therefore, there is no source of said compared invoices which has no evidentiary value. The appellant took specific plea that in some of the invoices, issuing persons are not their employees but the same was brushed aside by adjudicating authority. In the show cause notice names of the alleged buyers have been mentioned but no enquiries has been made with such buyers. The chart of alleged 13 invoices is mentioned relates to the period of which no invoices were resumed in panchnama dated 09.06.1998. as per said panchnama invoice number 176 to 225 were resumed relating to the year 1997-98 invoice mentioned at sr. No. 4,5 & 8 also does not match with the so called resumed invoices. Thus, it is only one invoice no. 190 dated 26.02.1998 involving duty of Rs. 8,080/- which falls within the resumed record as per panchnama., therefore, no evidence of clandestine removal. The cutting in invoices will not have any significance.
28. There was one demand of paper marked A/c cleared up to 21.11.1997 involving duty of Rs. 91370/-.
The director of the appellant denied any clandestine sale in regard to the same. The director stated that the said slip is not in his handwriting and does not contain name of any firm. Also, the matter pertained to very old period therefore, he did not remember details of the same upon seeing the slip. Therefore, there was no admission of the appellant on this account.
29. He further submitted that the demand of Rs. 21,707/- has been raised on the basis of one letter dted 27.05.1998 allegedly written by M/s Aggarwal Pipe store on the account that the amount shown therein did not tally with Central Excise record relating to clearances made to M/s Aggarwal Pipe Store.
30. He submitted that neither any enquiry is made at M/s Aggarwal pipe store nor any statement is recorded. And the director stated in his statement that M/s Aggarwal pipe store has two sister concerns and the quantity mentioned may have related to such related firms. Since the matter was quite old, he did not remember the same in detail. Second, the show cause notice issued to the appellant by invoking extended period of limitation which is not sustainable in the light of the decisions in the case of Shreeji Colourchem Industries Vs. CCE reported in 2013 (294) ELT 615 (Tri.) and Kothari Products ltd. reported in 2008 (229) ELT 12 (SC), therefore, he prayed that penalty on the appellant is not warranted.
31. On the other hand, the ld. AR opposed the contention of the Ld. Counsel and submits that demand is mainly issued on following issued.
(a) Parallel Invoices: Parallel invoices were recovered from the appellants premises where in the original invoices were having different buyers and as per office copy, the buyer is different. A table of all such invoices with specific names of different buyers have been mentioned and the copies of these invoices were handed over to the appellant as RUD. The statement of Shri Surinder Raizada, Director was also shown the copies of these invoices, wherein he only raised objection in respect of one invoice no. 164 dated 20.12.1997 issued to M/s Garg Pipe store, Tohana. For remaining invoices, he gave general reply that due to losses, they had started clandestinely removing the goods. When parallel invoices bearing same sr. Nos., but issued to different buyers with recovered copy showing less clearance/less value and less duty was recovered that cant show any other intention, but clandestinely removal of goods. The Ld. Counsel has questioned their recovery and relied on various decisions, it is stated that their existence is not challenged anywhere. He relied on the case of Columbia Electronics ltd. reported in 202 (143) ELT 635 (Tri. Del.).
(b) He further submits that the demand on account of weighment slips of the Dharamkant were recovered showing weighment of PVC pipes by the appellant without accounting for same in their statutory records. The existence of the GRs have also never been challenged and Shri Surinder Raizada, Director admitted the clearance without payment of duty in his statement and the statement was never retracted, therefore, the demand is to be confirmed.
(c) With regard to ledger book 385 pages:- He submits that ledger book was admittedly maintained by the father of Sh. Surinder Raizada, who has admitted that he was keeping a track of the financial positions and liabilities of the company by maintain these accounts with the help of Shri. Surinder Raizada, who conveyed the details and some of the sale details mentioned in the ledger were tallied with the details in ledger records but some were not denied. The adjudicating authority has correctly discussed and the appellant has never denied the existence of this register as well as the fact that some of the entries of the accounts maintained were tallying with the statutory records. Therefore, the demand on that account is sustainable. He also relied on the decision of System & Components Pvt. Ltd. reported in 2004 (165) ELT 136 (SC) to say that it is a basic and settled law that what is admitted need not be proved. He relied on the case of K.l. Pavunny reported as 1997 (90) ELT 241 (SC) to say that the Apex Court held that statement of accused, if found to be voluntary, can form the sole basis for conviction. The Honble Tribunal in the case of Nabha Steels Ltd. reported in 2004 (169) ELT 345 (Tri. Del.) has held that the respondent are bound by the admission made by their director. Further in the case of Parveen Kumar & Co. reported in 2015 (328) ELT 220 (tri. Del.) has held that once fraudulent intent to evade is manifested and later confessed, proving such evasion by other activities which are not recorded, will be giving a bonus to the evaders. In that circumstances, the impugned order is to be upheld.
32. Heard both the sides and considered the submissions.
33. After hearing both the sides, I find that demands has been confirmed on the basis of following documents.
(a) Ledger book recovered from Shri. Raizada Vaid father of the Shri Surinder Raizada, Director
(b) On the basis of parallel invoices recovered during the course of investigation
(c) On the basis of weighment slips recovered during the course of investigation
34. I find that the ledger book has been recovered from the father of the Shri. Surinder Raizada who stated that he was maintaining personal records and to the records the account of the firm of his wife Mrs. Sapna Raizada, proprietor of M/s Raizo Chemicals and also recording the financial position of the appellant company. The records recovered does not pertain to M/s Raizo Plasto Pvt. Ltd. no description of the goods was found, there is only presumption is that on the basis of the statement recorded during the course of investigation that these entries pertains in the ledge book maintained by Shri. Raizada S.S. Vaid pertains to the business activity by the appellant company. No concrete evidence has been produced by the Revenue to rely on the entries of the said ledger books with regard to the purchase of raw material or removed of finished goods, how the said finished goods sold outside the factory, to whom sold how received the sale proceeds, use of electricity for excess manufacture of goods. No investigation was conducted with regard to above discussed issue. Moreover, the statement of buyers were recorded but the same has not been relied and not provided the copies of the same to the appellant, shows that those statements of buyers were in favour of the appellants. As no contrary evidence in support of the allegedly recovered ledger has been produce by the Revenue. Therefore, the charge of clandestine removal is not sustainable on the basis of the ledger book.
35. The Ld. AR has relied on the various case laws to say that as the appellant has admitted clandestine removal of the goods, therefore, the duty can be demanded. I find that the appellant had made inculpatory statement but merely the statement is not sufficient to allege the charge of clandestine removal of goods. In fact, that statement should be corroborated by some evidence which revenue have failed to do so. Therefore, the demand on the basis ledger book or ledger /loose sheets recovered during the course of investigation are not sustainable. Moreover, the ledger book is maintained by third party for his personal use, therefore, the demand is not sustainable relying on the decision in the case of M/s Bearing Manufacturing Company (supra) wherein this Tribunal observed as under:
10. According to that, some of the entries are exactly tallying with the RG 1 entries for production and clearances varietywise. This conclusion supports the case of the appellant that there is no defect in maintaining the RG 1 register. There is no clear and specific finding which entries are tallying and what is the difference regarding the entries which are not tallied. The above conclusion is made on the basis that the private record maintained is correct. Another observation that further entries in the private note book not tallied with the RG 1 entries indicates that the goods have been illicitly removed by the assessee without payment of Central Excise duty and without accounting in the RG-1 in 1990-91 and 1991-1992. This conclusion is without any basis. Mere non tallying of the entry does not conclude the clandestine removal. These are the only documents he has considered to come to the positive finding regarding clandestine removal.
36. Further the demand has been confirmed on the basis of parallel invoices. I find that the original copy of the invoices would have been recovered from the buyers of the goods but the statement/documents recovered from the buyers were not relied upon documents. Moreover, it has been recorded by the adjudicating authority in the impugned order that no records were resumed. There is no evidence of the sources of the original invoices, therefore, the clearances of basis of parallel invoices cannot be confirmed. Moreover, it is alleged that parallel invoices have been issued but no investigation was conducted at the end of the buyers whose names were reflecting in the parallel invoices. In that circumstances, the demands cannot be confirmed on the basis of parallel invoices recovered during the course of investigation. Therefore, the demand on account of parallel invoices is not sustainable.
37. Further, the demand has been confirmed on the basis of weighment slip, I have seen that the weighment slip produced by the appellant these weighment slip does not have any contents of the goods, whether the finished goods or raw material or there is no evidence to corporate that these weighment slip pertains to the clandestine removal of the goods by the appellant. In the absence of any positive evidence the demand on the basis of weighment slip cannot be confirmed against the appellant.
38. On going through the impugned order, I find that the demand sought to be confirmed against the appellant on the basis of investigation was conducted and documents recovered, but no proper investigation was conducted and the adjudicating authority tried to make out the case of clandestine removal of goods on the basis of assumption and presumption that without bringing the positive evidence on record. Therefore, the demand against the appellant is not sustainable.
38. Further, I find that initially the show cause notice was issued to the appellant on account of shortage of raw material as well as finished goods but the said allegation was turned down by this Tribunal and no appeal has been filed by the Revenue against the said order. In that circumstances, the show cause notice was issued for clandestine removal of goods is not sustainable in the absence of any corroborative evidence.
With these observations, I hold that the demand of duty is not sustainable. Consequently, the penalties on the appellants are not imposable.
In result, the impugned order is set aside. The appeals are allowed with consequential relief, if any.
(Order pronounced on 24.04.2017 ) Ashok Jindal Member (Judicial) rt 24 E/719-720/2007 M/s Raizo Plasto Pvt. Ltd. & Surinder Raizada Vs. CCE, Rohtak