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2020 (1) TMI 317 - AT - Central ExciseClandestine removal - non-accountal of production as well as raw material - suppression of production of Ingots - parallel invoices - demand on the basis of documents recovered in the form scrap purchase slips weighment slips parallel invoices suppressed electricity consumption - reliance placed on confessional statements - On finding that majority of the clandestine removals by the appellants were made to M/s Gasha Steels investigation was extended to M/s Gasha Steels and SCNs were issued to both the parties. HELD THAT - We find from the statements of different persons that most of the clearances were made to M/s Gasha Steels in fact the SCN at Para No. 38 categorically avers that from the above it is found that M/s MA Steels Ltd. had removed a total quantity of 15898.175 MT of MS Ingots by way of sale and without payment of duty to M/s Gasha Steels Pvt. Ltd. during the period from March 2004 to February 2006 (up to 14.02.2006) . We find that other than M/s Gasha Steels only two other parties like M/s Scot Free Steel Ltd. and M/s Lal Steel Ltd. have been mentioned in the SCN. No name of any other purchaser is ever whispered. Learned Commissioner has concluded that M/s Gasha Steels have clandestinely removed 2112.154 MT of CTD/TMT bars and 44.0032 MT of scrap cleared without payment of duty. We find that if the learned Commissioner finds that M/s Geisha Steels have only received about 2406.52 MT of MS Ingots form the appellants as against the alleged removal of 15898.175 MT of MS Ingots by the appellants to M/s Gasha Steels he cannot confirm duty on the alleged removal of 16274.565 MT of MS Ingots totally by the appellants. Commissioner finds that out of alleged 15 898.175 MT of Ingots only 2406.52 MT of MS Ingots are proved to have been removed by the appellants to M/s Gasha Steels - If the clandestine receipt by M/s Gasha Steel is not established logical conclusion is that clandestine clearance by the appellants is not also established to that extent. The inconsistency becomes more glaring when we note that both the orders are passed on the same day. We find that the appellants cannot be victimised for the inconsistency. The adjudicating authority has given contradictory conclusions in the two cases and the department has not appealed against the other order passed in respect of M/s Gasha Steels. Therefore we confirm the demand to the extent of allegations in respect of clearances to other units and to the extent the adjudicating authority found to be to be acceptable in the case of clearances to M/s Gasha Steels. Penalties imposed on Managing Director and Director of the appellants - HELD THAT - Smt. K.K. Hajira MD had no role in the day to day activities of the company. No role played by her has been brought on record to establish that her acts of omission and commission have rendered the goods liable for confiscation and that she was actively involved in the duty evasion resorted to by the appellant. Therefore we find that no case has been made to impose penalty on her - As regards the penalty imposed on Sh. Yousuph Mekkoth Director of the appellants we find that the penalty imposed is already very low. Looking into the role played by Sh. Yousuph Mekkoth Director in the facts of the case we find that no case is made out to interfere with the impugned order therefore the penalty imposed on Sh. Yousuph Mekkoth Director is sustainable. Appeal is allowed by way of remand to the adjudicating authority restricting the demand to 2, 782.91 MT of Ingots - We direct that for the purposes of calculation of duty lowest value per MT over the years as discussed in the SCN shall be taken in to account - Penalty under Section 11 AC shall be restricted to be equal to the amount of duty so calculated.
Issues Involved:
1. Alleged clandestine removal of MS Ingots by the appellants. 2. Demand of duty and penalties imposed on appellants and associated parties. 3. Inconsistency in the adjudication of similar cases involving the same set of evidence. 4. Validity of evidence and quantification of duty evasion. Issue-wise Detailed Analysis: 1. Alleged Clandestine Removal of MS Ingots: The appellants, M/s M.A. Steels, were accused of unaccounted production and clearance of MS Ingots. Preventive officers discovered unaccounted production and raw materials during a visit on 14-2-2006. Statements from key personnel and searches at associated premises revealed excess stocks and parallel invoices, indicating unaccounted receipt and clearance of ingots. The investigation concluded that the appellants suppressed production of 16,274.565 MT of ingots, leading to a show cause notice demanding duty of ?3,63,32,351 and proposing penalties and confiscation of seized goods. 2. Demand of Duty and Penalties: The Commissioner confirmed the duty demand with equal penalty under Section 11AC of the Central Excise Act, 1944, and imposed fines and penalties on the appellants and associated parties. The appellants argued that the same evidence was used in a separate case against M/s Gasha Steels, where the Commissioner found insufficient evidence to support the full extent of alleged clandestine removal. This inconsistency was highlighted as a basis for challenging the duty demand and penalties. 3. Inconsistency in Adjudication: The appellants contended that the same set of evidence led to different conclusions in the cases against them and M/s Gasha Steels. The Commissioner, in the case of M/s Gasha Steels, found that only 2406.52 MT of MS Ingots were proved to have been received from the appellants, contradicting the alleged removal of 15,898.175 MT. The appellants argued that this inconsistency indicated that the evidence was insufficient to sustain the full duty demand against them. 4. Validity of Evidence and Quantification of Duty Evasion: The Tribunal noted that the evidence included documents, weighment slips, parallel invoices, and statements from various individuals. While the Commissioner in the case of M/s Gasha Steels found that only a portion of the alleged clandestine removals was substantiated, the duty demand against the appellants was not proportionately reduced. The Tribunal concluded that the duty evasion should be restricted to 2782.91 MT (2406.52 MT to M/s Gasha Steels plus 376.39 MT to other units like M/s Scot Free and Lal Steels). The case was remanded to the adjudicating authority for recalculating the duty based on the lowest value per MT over the years. Penalties: The Tribunal found no basis for imposing a penalty on Smt. K.K. Hajira, MD, as her involvement in the day-to-day activities was not established. However, the penalty on Sh. Yousuph Mekkoth, Director, was upheld due to his active role in the duty evasion. Conclusion: The appeal was allowed in part, with the duty demand restricted to 2782.91 MT of ingots, and the case was remanded for recalculating the duty and penalty. The penalty on Smt. K.K. Hajira was set aside, while the penalty on Sh. Yousuph Mekkoth was upheld. The Tribunal emphasized the need for consistency in adjudicating cases based on the same set of evidence.
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