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TMI Blog2003 (4) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner. 3. To recapitulate very briefly the issues and facts involved, M/s. Krishna Ganga Spinning Mills Limited (hereinafter referred to as the main applicant) is registered with Central Excise for manufacture of cotton yarn - both cone and hank yarn. As per the allegations in the SCN, some quantities of the raw material, viz., cotton , was not entered in their statutory accounts, but were used in clandestine manufacture and clearance of dutiable cotton cone yarn during 15-10-98 to 18-6-2000 in the guise of exempted hank yarn. Based on the evidences collected consequent to visit to the premises of the main applicant on 21-7-2000, the SCN alleges manufacture and clearance of cotton cone yarn valued Rs. 4,49,55,711/- and proposes to demand duty of Rs. 40,25,813/-. The details of value of clearances and duty thereon available as per Annexures D1, D2 and D4 to the SCN are as under: Annexure Value of Clearances Duty Involved D1 Rs. 97,83,650/- Rs. 9,00,096 D2 Rs. 3,03,64,000/- Rs. 27,18,417/- D4 Rs. 48,08,060.80 Rs. 4,07,300/- Total Rs. 40,25,813/- 4. The SCN proposes to conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The applicant contends that at the foot of Annexure D2 to the SCN, there is a consolidated entry of Rs. 2,00,35,250/- alleged to be value of clearances by the main applicant during June 99 to 12-2-2000. Deduction has been given thereon to the extent of Rs. 14,53,500/- alone, as being sales pertaining to Jan., 2000, on the ground that it is already included in the said Annexure D2. Accordingly, duty has been demanded on a consolidated clearances value of Rs. 1,85,81,750/- (duty of Rs. 17,09,521/-). These figures have been taken, as observed in the Annexure itself, from the diary entry on page (sic.) dt. 21-2-2000 of Shri J. Narasiah, Commission Agent of the main applicant. Applicant points out that the said diary entry of Rs. 2,00,35,250 is also accompanied, with a break up as Rs. 1,34,47,750/- plus Rs. 65,87,500/-, without any indication as to the purpose of, or reason for, the said break-up. It is contented by the applicant that the said value represented the cumulative sales value of Shri J. Narasiah in yarn of various other suppliers, of whose product also he was dealing with, apart from the products of the applicant, during Jan. to 21-2-2000. It is pleaded that the total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the main applicant for sales of Rs. 2,00,35,250/-. This is supported by SYMA Receipt books. It is pointed out that the applicant is not able to correctly tally the total value of clearances of other suppliers, in the private diary with the value of Rs. 1,74,47,750/- on page dt. 21-2-2000. The cumulative value of supplies during 1-1-2000 to 21-2-2000 made by other parties (other than the applicant) is Rs. 1,51,11,912.35 and that made by the applicant is Rs. 14,53,500/-. The amounts written under entry on page dt. 21-2-2000 in the diary are made under the name of the applicant. Further reiteration is made about the statement of Shri J. Narasiah and receipt books of SYMA. 10. The Bench has perused the rival contentions and the relevant records submitted in support. True, the impact of the denial by applicant of duty liability on a value of Rs. 1,34,47,750/-, which is part of Rs. 2,00,35,250/- mentioned in Annexure D2 relates to June 99 to 12-2-2000, amounts to total denial of clandestine manufacture and clearance of cone yarn during June 99 to December 99, as no other demand for this period is raised in the SCN. There is no explanation from the applicant as to why and how they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment dt. 21-7-2000, Shri Narasiah had not been asked, nor had he mentioned, about Shri Narasiah s diary entry of 21-2-2000 relating to supply of yarn worth over Rs. 2 crores, as the investigating officers. might not have by then scrutinized the relevant diary, the Bench also observes that the entry of Rs. 2,00,35,250/- with its break up of Rs. l,34,47,750/- + Rs. 65,87,500/- in the diary does not contain any indication as to what they relate to. Though, Revenue reiterates that the amounts written under entry dt. 21-2-2000 in the diary have been made under the name of the applicant, a close scrutiny of the entry in the said page indicates that under Krishna Ganga Mills is an entry reading 20,000/- received . A line below, and on the right side of the above entry, there is another entry reading 1,34,47,750 65,87,500 2,00,35,250/- . No specific details are written against these figures, indicating them to be the value of yarn received from Krishna Ganga Mills during June 99 to 12th Feb. 2000. Rather, the way it is written, it appears to be some totalling of the preceding figures or preceding page figures. Obviously, it is only based o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,00,35,250/-) under the date 21-2-2000. 14. As a result, the Bench observes that the demand of duty of Rs. 17,09,521/- on the turnover of Rs. 1,85,81,750/-, out of which the Revenue is prepared to delete only a turnover of Rs. 52,31,500/- involving a duty of Rs. 4,81,298/-, deserves to be dropped in entirety. Hence, out of the duty of Rs. 27,18,417/- indicated in Annexure D2 to SCN, duty demand of Rs. 10,08,896/- alone is sustainable. 15. Further, over and above the duty liability admitted as detailed above, out of the amount of demand proposed in the SCN and detailed in the Annexures to the SCN, the applicant also points out a calculation mistake in Annexure D2. It is submitted that in respect of the turnovers of 17-1-2000, 28-1-2000 and 25-2-2000, duty due has been worked out in the said Annexure @5% + 15% adv., instead of 8% + 15% adv., because of which there is a less demand to the tune of Rs. 75,071/-. The applicant volunteers to pay the same also, if the less demand is confirmed by Revenue. 16. Therefore, the admitted duty liability due on the gross turnover value alleged in the SCN comes to Rs. 23,29,953/- [Rs. 12,45,986/- (as mentioned in para 6 of this Order) + ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Central Excise Act, the applicant contends that the onus of proving that the seized cash represents the sale proceeds of the offending goods is on the Revenue. It is further contended that the said onus has not been discharged by them and the proposed confiscation is only on the basis of admission statements obtained under coercion, without any independent corroborative evidence. It is further highlighted that the official cash book of the applicant indicates a closing cash balance of Rs. 4,87,386/- as on 20-7-2000. It is claimed that, prima facie, out of the seized amount of Rs. 15,79,943/-, this amount is not liable for confiscation. It is also pleaded that when the officers visited the main applicant s premises in the morning of 21-7-2000, apart from the aforesaid cash, they also seized 20 filled up blank demand draft (DD) slips and also stopped applicant s employee from filling up any more DD slips. It is pointed out that the said slips indicate the amount, names of the buyers of the goods co-relatable to the invoices, as well as the ledgers, and the reverse portion of the SBI slip indicates a total of Rs. 7,48,815/- and of Andhra Bank, a total of Rs. 4,30,858/-. It is, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the applicant had already paid Rs. 5 lakhs during the course of investigation itself, and the seized cash of Rs. 15,79,942/- has also been retained by the department from 21-7-2000. 23. Considering that the duty liability (Rs. 20,53,273/-) settled by this Bench as due from the applicant has been admitted in full, rather admitted in excess (as Rs. 21,57,519/-), though apparently due to error, and the main applicant has extended complete cooperation in the instant proceedings before the Bench, the applicant deserves immunity from prosecution from Central Excise Act, 1944. They also deserve immunity from penalty under the Central Excise Act and the Rules framed thereunder. With regard to request for immunity from interest, the Bench would like to place on record, even at the cost of repetition, that the applicant has volunteered to bring to light the calculation mistake of Revenue and undertook to pay more duty as a consequence, and in the process also committed another mistake of his own and admitted and paid duty in excess of the correct amount settled in this order, and has also suffered for more than two years from a wrongful wresting away of Rs. 15,79,943/- by Revenue on an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to indicate the specific Acts under which prosecutions is being contemplated or initiated against them. (iii) The Indian currency of Rs. 15,79,943/- seized from the premises of M/s. Krishna Ganga Spinning Mills Limited is held not liable for confiscation, and is directed to be released to them forthwith. (iv) Immunity is also granted to the following co-applicants from penalty under the Central Excise Rules, 1944 and also from prosecution under the Central Excise Act, 1944. 1. Shri G. Punniah Chowdhary, M/s. Krishna Ganga Spinning Mills Ltd. 2. Shri P. Parameshwar Rao, M/s. Krishna Ganga Spinning Mills Ltd. 3. Shri J. Narsaiah, M/s. Krishna Ganga Spinning Mills Ltd. 4. Shri K. Mahendranath, M/s. Krishna Ganga Spinning Mills Ltd. 5. Shri S. Balaiah, M/s. Krishna Ganga Spinning Mills Ltd. 6. Shri J. Nagarjuna, M/s. Krishna Ganga Spinning Mills Ltd. 7. Shri Shankar Agarwal, M/s. Krishna Ganga Spinning Mills Ltd. 8. Shri M. Yadagiri, M/s. Krishna Ganga Spinning Mills Ltd. 26. All the above immunities are granted in terms of Sec. 32K of the Central Excise Act, 1944. The said immunities shall stand withdrawn if it is brought to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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