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TMI Blog2006 (10) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... the year 1997-98 under Rule 9(2) of the Act, imposing penalty of Rs. 43,22,840/- on M/s. Everest Diamond Tools under Rule 173Q(1), and ordering them to pay interest at the rate of 20% per annum on the delayed payment of evaded excise duty under Rule 11AB of the Act and also imposing penalty of Rs. 5,00,000/- (Rupees five lacs only) upon each of the partners Shri Kanjibhai G. Gujarat, Shri Vallabhbhai D. Disora, Shri Jayantibhai N. Ansodaria, Shri Arvind Bhai H. Sanghvi, and further confiscating the land and buildings, 27 pieces of diamond scalvcs valued at Rs. 4,83,000/, 19 pieces of diamond scalves valued at Rs. 2,41,000/- with option to redeem in both the cases, as well as imposing penalty on each of the customers under Rule 209A of the Central Excise Rules, 1944, namely, Shri Rachhodbhai Madhabhai Rizia, Shri Vinubhai (Vinodbhai) M. Rizia, Shri Pareshbhai Vagani, Shri Bharatbhai, Popatbhai Patel, Shri Ghanshyambhai Narsinghbhai Patel, Shri Himmatbhai Bachubhai Satani and Nagjibhai Ambabhai Patel. 2. The appellant M/s. Everest Diamond Tools was engaged in the manufacture of impregnated diamond scalves falling under chapter heading 6801.00 of the Schedule to the Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that these were manufactured by the appellant's factory during the last 7 to 8 months and sold to different parties in cash and that these had come back for grinding work. Kanjibhai L. Patel admitted that the actual value of impregnated diamond scalves at the time of clearance was Rs. 2,5,000/- per piece and that they were ready to pay the central excise duty thereon. Kanjibhai L. Patel also decoded writings, as noted in paragraph 15 of the impugned order. There were some loose papers from which it appeared that the factory had sold 67 pcs. of impregnated diamond scalves valued at Rs. 16.76 lacs, and 77 pcs. of impregnated diamond scalves removed during December 1997 to January 1998, without issuing bills. Kanjibhai L. Patel admitted that all these excisable goods were removed without obtaining central excise registration and without payment of excise duty. During the course of checking, a diary was recovered by the officers on which words, "Narmda No. 4 andar-ni-diary" were written, and on page No. 1 thereof, the words "andar-ni-diary" "1-A" were written by a sketch pen. The diary was recovered from an 'almirah' kept in the first floor of the premises. It was disclosed by the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y central excise registration and no central excise duty was paid on them. The Central Excise officers also searched the premises of M/s. Patel Sales Corporation on 20-2-1998 and recovered sale bills and Kachcha papers from the said premises in respect of which partner of that firm Chimanbhai Patel had stated that he had purchased impregnated diamond scalves and sold the same to the local party. From the statement of Bharatbhai Popatbhai Patel, Nagjibhai Ambabhai Patel, Ghanshyambhai Narsinghbhai Patel and Himmatbhai Bachubhai Satani, it transpired that they had purchased impregnated diamond scalves from the factory without cover of central excise invoices and without payment of excise duty. The other partners of the appellant-firm in their statements agreed with the contents of the panchas names dated 20-2-1998 and 21-2-1998 and the statement made by Kanjibhai. 3.1 On the basis of the material on record, the adjudicating authority came to a finding that all partners of M/s. Everest Diamond Tools, by way of collusion and suppression of facts, had indulged in the activity of manufacturing, transporting, depositing or in any other manner indulged in manufacturing and removing e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices and various affidavits of buyers showed the value of the goods ranged from Rs. 9,000/- to Rs. 12,000/- per piece. It was then argued that reliance on the diary and loose papers recovered from the premises of the appellant was not justified, because mere recovery of such papers without any supporting evidence was of no consequence. He placed reliance on the following decisions in support of his contentions that the Commissioner should not have relied on the loose papers and diary recovered from the appellant's premises :- (1) CCE v. Dhanavilas (Madras) Snuf Company reported in 2003 (153) E.L.T. 437 (2) K. Rajagopal v. CCE reported in 2002 (142) E.L.T. 128 (3) I. Gurusamy v. CCE reported in 2002 (145) E.L.T. 616 (4) Rajasthan Foils Pvt. Ltd. v. CCE reported in 2005 (183) E.L.T. 101 (5) Ganga Rubber Industries v. CCE reported in 1989 (39) E.L.T. 650 (6) Kashmir Vanaspati Pvt. Ltd. v. CCE reported in 1989 (39) E.L.T. 655 (7) Ashwin Vanaspati Industries v. CCE reported in 1992 (59) E.L.T. 175 (8) Shabroc Chemicals v. CCE reported in 2002 (149) E.L.T. 1020 (9) Ess Vee Polymers Pvt. Ltd. v. CCE reported in 2004 (165) E.L.T. 291 (10) Rama Shyama Papers Ltd. v. CCE - 2004 (16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry evidence to support the findings reached against the appellant. He submitted that the Revenue officers had no reason to prepare any false statements of the partners or take the statements under duress and that the facts disclosed during the search were duly recorded in the panchnamas which were prepared in the presence of independent witnesses. He also submitted when there was clear admission by the managing partner Kanjibhai about the value of the goods, there was, in fact, no reason for the Commissioner to reduce the value from Rs. 25,000/- to Rs. 17,000/- per piece. He submitted that, it appears that the Commissioner took a lenient view in the matter on the aspect of valuation without giving any valid reason to discard the admission made by Kanjibhai that, the actual price of the impregnated diamond scalves was Rs. 25,000/- per piece. He submitted that the decision of the Commissioner was not based merely on the statement of Kanjibhai but there was other evidence also which showed that the appellant had manufactured the excisable goods without obtaining the registration and removed them without payment of any central excise duty. In short, he supported the impugned decisions. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivity carried out by the appellant-firm for manufacturing impregnated diamond scalves. The machinery (was found totally in running condition hydraulic press, lathe machine, grinding machine, balancing machine); and there was also furnace and a diesel generator set of Kirloskar Company having the capacity of 75 KWA installed in the factory premises. There was one semi-diamond floor machine installed which was meant for testing of impregnated diamond scalves manufactured in the factory. The said partner Jayantibhai disclosed that the purchasing of raw material required for manufacture of diamond scalves, namely, MS rod, aluminium pulley, bosh, synthetic diamond powder, cobalt powder, tungsten powder, bronze powder etc. was looked after by their partner Kanjibhai Limbabhai Patel, who was the "main partner" of the firm. It has also come on the record that Kanjibhai Limbabhai Patel had also reached there and introduced himself before the panchas as a partner of the firm. The earlier proceedings of panchnama were explained to him with which he agreed. Kanjibhai Limbabhai Patel also disclosed that the appellant-firm was manufacturing diamond scalves since 1-3/4 years from May 1996 and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown in the invoices was much less, there was no further proof required to corroborate the admitted position. An admitted fact need not be put to proof by other evidence. The allegation that admission of Kanjibhai was taken under duress has no foundation at all and there are no particulars alleged for showing the nature of duress or coercion. The managing partner of the factory was a seasoned person, and there is no reason to infer any coercion or duress at the time when the facts were recorded in the panchnamas in the presence of the other partner and two independent panch witnesses. However, the fact that the Revenue has not challenged the finding of the Commissioner on the reduced value of the goods worked out at Rs. 17,000/- per piece, will not provide the appellant a ground against such a lenient view taken by the Commissioner. However, since he has based his opinion on one of the bills which showed the value at Rs. 17,000/- per piece which was much less than the correct value of Rs. 25,000/- admitted by the managing partner Kanjibhai's, it cannot be said that entire version of Kanjibhai should have been discarded in view of his not accepting the disclosure of the higher valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 as against 578 pieces shown in Annexure 'C' and after making the necessary adjustment of the "scalves", the figure of the clandestinely removed diamond "scalves" during the year 1977-98 has been worked out at 2404. The partners in their respective statements admitted that they had manufactured diamond "scalves" without having central excise registration and they were sold to various customers without payment of central excise duty and without cover of central excise invoices. The main partner Kanjibhai had disclosed in his statement the names of four other partners as Vallabhbhai Govindbhai Gujarati, Maheshbhai Dahyabhai Dihora, Jayantibhai Nanjibhai Asodaria and Arvindkumar Harilal Sanghvi. It appears from their surnames that these partners are not related by blood and there is no reason to infer that the other partners did not know about the nature of the manufacturing activity and removal of goods from the factory. All the partners were jointly and severally liable for the activities of the appellant-firm and ordinarily they would be fully aware of the clandestine activities of the manufacture and removal of the product by their firm. Therefore, even if Kanjibhai was the main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i and Shri R.K. Rao, Superintendent, who were incharge of the investigation has no basis, because, admittedly no statements of these officers were recorded and therefore there was no question of cross-examining them. If at all, the appellants could have cited them as their own witnesses, which admittedly was not done. 9. For the foregoing reasons, we find ourselves in complete agreement with the reasoning adopted by the adjudicating Commissioner in the impugned order, and his findings. The penalties imposed are just and adequate and warrant no interference. At this stage, the learned counsel for the appellants submits that the value determined may be treated as the price-cum-duty. This submission has not been made at any stage. However, the valuation which is worked out despite the admitted market value of Rs. 25,000/- obviously did not include any duty component because the goods were manufactured without any excise registration and were cleared clandestinely; and even the customers also stated that they did not pay any duty in respect of these goods which were manufactured by the appellant without any excise registration. All the appeals are, therefore, dismissed. (Dictate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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