Customs, Excise and Gold Tribunal - Delhi
Rajasthan Foils Pvt. Ltd. vs Commissioner Of Central Excise on 14 January, 2005
Equivalent citations: 2005(100)ECC53, 2005(183)ELT101(TRI-DEL)
ORDER P.S. Bajaj, Member (J)
1. These appeals have been directed against the common order-in-original dated 10-3-2004 vide which the adjudicating authority (Commissioner of Central Excise) had confirmed the duty and imposed penalty as detailed therein on the appellants.
2. The appellant No. 1 is a company engaged in the manufacture of aluminium foils, while appellant No. 2 was Director and others were employees of the company, at the relevant time. The duty against the company has been confirmed for having removed the finished goods during the period in dispute i.e. 31-1-1999 to 19-2-2000 in a clandestine manner without payment of duty as well as under the cover of parallel invoices. Some part of the duty amount has been confirmed against the company in respect of the scrap cleared by it without payment of duty. Against other appellants, penalties have been confirmed for having assisted the company in the clandestine removal of goods as well as scrap.
3. The learned Counsel has contended that there is no tangible evidence on record to prove the clandestine manufacture and removal of the finished goods as well as scrap by the company during the period in dispute and that the documents detailed at Sl. Nos. 1 to 5 of the resumption memo dated 19-2-2000 allegedly recovered from the factory premises of the company, did not provide any conclusive proof in that regard and had been wrongly relied upon by the adjudicating authority. The impugned order according to the Counsel, had been based on assumptions and presumptions drawn from inadmissible documents and the oral statements of the witnesses specially of Shri L.K. Jha, Shri Rajesh Soni and Shri Sudershan Rout who were never subjected for cross-examination during the course of adjudication in spite of request of the company. The impugned order therefore, deserves to be set aside.
4. On the other hand, the learned SDR has reiterated the correctness of the impugned order and contended that the adjudicating authority for confirming the duty and penalty against the appellants had rightly relied upon the documentary and oral evidence.
5. We have heard both the sides and gone through the record.
6. From the record, we find that the company is engaged in the manufacture of aluminium foils/sheets. The factory premises of the company was inspected by the Central Excise officers on 19-2-2000 and certain notebooks detailed at Sl. Nos. 1 to 5 of the resumption memo prepared on the date, at the spot, were seized. The entries contained in these notebooks had been tabulated in chart marked Annexure A, to the show cause notice which according to the Revenue, depicted details of clearances in condensed manner during the period in dispute to various buyers and also of the material sent for weighment and the raw material received for the manufacture of the goods during that period by the company. All the entries detailed in Annexure A, had also been shown in Annexure B. The details of the raw material received by the company had been given in Annexure C prepared from the notebook mentioned at Sl. No. 4 of the resumption memo. But it is quite evident even from the impugned order itself that certain entries made in all the five seized notebooks tallied with the invoices issued under Rule 52A, by the company at the time of clearances of the goods. The entries in the notebooks mentioned at Sl. Nos. 4 and 5 of the resumption memo, pertains to goods sent for weighment by the company to the Dharamkanta and from these entries, it could not be inferred that these goods were cleared to the buyers without payment of duty specially when there is no evidence/statement of any buyer of having received the goods without cover of invoice or payment of duty from the company. In the entries of notebook mentioned at Sl. No. 4 of the resumption memo, at pages 20 to 40, only the names of the customers in short, quantity of the aluminium foils and figures showing certain amount in rupees equal to the quantity in kg., had been detailed and these had been tabulated in Annexure B, but no evidence has been collected whatsoever to connect these entries with a particular customer/buyer to whom the goods were allegedly cleared by the company during the period in dispute. No material/evidence has been collected from the transporter M/s. Baba Transport Company through whom the goods were allegedly booked on the basis of GRs in question. Only statement of Shri Vijaypal Singh, Proprietor of that transport company was recorded on 2-5-2001 who simply stated that he used to arrange the trucks from outside as and when required by the company for transportation of the goods and had been getting Rs. 25/- as commission from the driver of the vehicle. He had nowhere admitted that the goods booked did not accompany the invoices. No statement of any driver of the vehicle had been recorded who transported the goods. Shri Vijaypal Singh himself had no knowledge about the destination at which the goods were sent by the company.
7. From the perusal of the impugned order (para 2.17), it is also evident that entries in the notebook mentioned at Sl. No. 4 of the resumption memo, regarding the clearances of the goods (1897 kgs of aluminium foils) during the period 31-1-1999 to 19-2-2000, were found to be correct as those clearances was made by the company against the invoices issued under Rule 52A. However, the observations of the adjudicating authority that the balance quantity of the aluminium foils, as recorded in the seized notebooks, were cleared without payment of duty, cannot be accepted for want of any tangible evidence to corroborate the same. The testimony of Shri L.K. Jha, Shri Sudershan Rout and Shri Rajesh Soni, authorized signatory/employees of the company regarding the clearances of the final goods without payment of duty and receipt of raw material detailed in the note mentioned at Sl. No. 5 in the resumption memo, without documents, could not be relied upon as none of them was tendered for cross-examination, as requested by the company during the adjudication. Their statements were recorded at the back of the company and as such, did not carry any legal weight/value for having failed to appear for cross-examination for testing their veracity.
8. Regarding receipt of raw material, the details had been shown in annexure C. The raw material was received by the company from M/s. Rakhi Agency and entries at Nos. 35, 37, 55, 56, 76 and 90 had tallied with the entries in the RG 23 A Part I register as even observed by the adjudicating authority. Regarding the other entries, no material has been brought on record to prove the actual receipt of the raw material by the company from the supplier in a clandestine manner. The Director of the appellant company did not admit the clandestine receipt of the raw material and clearances of the final products without payment of duty. The reports obtained from the AC and DC of the concerned area, regarding clearances of the goods by the company to the buyers, during the disputed period, by the adjudicating authority, did not advance the case of the Revenue and even could not be used against the company. These reports were collected at the back of the company and could not be read in evidence without affording to the company an opportunity to challenge the correctness of the same. Secondly, even according to these reports, the goods were supplied by the company against invoices which tallied with the entries made in the notebooks detailed in the resumption memo and tabulated in annexures A to D. Even the report given by the AC of the Sales Tax Department, vide letter dated 11-5-2000 about the vehicles of the company which crossed their check post, showed the entries tabulated in annexures A and D showing the clearances of the goods, were correct.
9. Regarding the clearances of the goods through parallel invoices Nos. 95 and 96 in a clandestine manner, there is no cogent and convincing evidence on the record. Both these invoices are dated 19-2-2000 and were issued from the invoice book, on the date when the Central Excise Officers visited the factory premises of the company and even at that time, sufficient balance was standing in RG 23 Part II, maintained by the company and that amount was sufficient to cover the duty amount. In fact, the actual clearance of the goods on 19-2-2000, under both the invoices, by the company, does not stand proved from any tangible evidence. No buyer of the goods covered by these invoices, had been identified.
10. The company had placed on record the certificate issued by M/s. Rakhi Agency Ltd. from whom they had purchased the raw material, and the entire raw material purchased from that company, had been entered in form IV register. The company had also produced the chart showing the details of the consignments of the goods to M/s. Capseal under the cover of the invoices.
11. Similarly regarding the clearances of the scrap weighing 3718 kgs. during the period in dispute by the company without payment of duty, neither any details had been given in the show cause notice nor any evidence has been collected in that regard. The names of the buyers to whom the scrap was sold without payment of duty, had not been disclosed. It is well settled that charge of clandestine manufacture and removal of the goods against any assessee, cannot be based and confirmed on the basis of assumptions and presumption. Such a charge has to be proved by adducing cogent/convincing and tangible evidence. The Revenue in our view, in the instant case, has failed to substantiate this charge against the company and as such, confirmation of duty and imposition of penalty on it, as detailed in the impugned order, cannot be sustained and are set aside. Consequently, the imposition of penalties on the other appellants Nos. 2 to 4, cannot be maintained and are set aside.
12. In the light of the discussion made above, the impugned order is set aside in toto against all the appellants and the appeals of the appellants are allowed with consequential relief as per law.