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TMI Blog2010 (4) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise duty on the goods manufactured. Further this is not a case of mere shortage/excess of stock but Department has conducted investigation to prove the excess production - the onus has shifted to the appellants to show that they had accounted for all the goods produced in the RG-1 register. Central Excise duty is leviable on the manufacture. The taxable event is manufacture and not removal or sales - demand upheld. CENVAT credit - aluminium ingots - Held that: - Once again the onus of proving that they have accounted for all the goods produced, shifts to the appellants and they have failed to discharge this burden. They want the department to show challanwise details of goods transported or not transported. There are several decisions of Hon’ble Supreme Court and High Courts wherein it has been held that in such clandestine activities, only the person who indulges in such activities knows all the details and it would not be possible for any investigating officer to unearth all the evidences required and prove with mathematical precision - demand upheld. Penalty on partner of company - Held that: - he himself admitted that he was aware of clandestine removal and als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imhan, learned advocate, appearing for the appellant and Shri S.K. Mall, learned S.D.R., appearing for the Revenue. 3. The first issue is demand of Rs. 67,51,495/- being the Cenvat credit availed on aluminium wire rods and wire bars. 3.1 The first submission of the appellants is that the Commissioner has relied upon the allegations raised in the show cause notice dated 28-7-2004 issued to M/s. Pankaj Extrusions Ltd. and a number of registered dealers wherein one of the registered dealers namely M/s. Anish Metals Pvt. Ltd. had issued 130 invoices without actually supplying any inputs. Since the Commissioner holds that the same dealer had supplied some of the disputed wire rods to the appellants and hence Commissioner holds that it is extremely doubtful that the appellants would have received the same. In this connection it has to be noted that it was not the Commissioner who took up this issue and got the copy of show cause notice and considered it during the process of adjudication. In para 4.1 of the Order-in-Original Commissioner has observed that appellants wanted a common hearing in respect of the show cause notices issued to them and others. Further, in para 7.2 he has o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in-charge who was in the factory for six years have stated that the wire rods have not been received in the factory at all and appellants would like to submit that both these statements are not to be relied upon. The defence given by the appellants is that extrusion furnace was not being supervised by him. Therefore, he could not have been aware of the receipt of aluminium wire rods and bars. However, Shri U.P. Patel as regards unaccounted production of aluminium extrusions has clarified and confirmed about the procedure followed for production and accounting of aluminium extrusions. He has also stated that the production of extrusions during the month of June 1999, April 1999 and July 1999 shown in the RG-1 register is less than the actual production and he did not know why the actual production was not reflected in the RG-1 register. If he was not at all concerned with production of extrusion and he was not at all aware of what was happening in the extrusion furnace and the extrusion press, Shri Urjit Patel would not have explained the statement relating to April, June and July 1999 to the officers while recording the statements. These three statements were part of the documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wire rods and wire bars were not received, the production of finished extrusion of 5,61,542 Kgs could not have been possible since after excluding wire rods and bars, the raw-material quantity would come to only 4,47,843 Kgs. The question they ask is how is it possible to produce 5,61,542 Kgs out of 4,47,843 Kgs of raw-materials. Unfortunately, this statement was not presented to the Commissioner and therefore we do not have the benefit of the analysis of this statement by him. Nevertheless it has to be noted that the statement does not take into account the opening balance and closing balance of the raw-materials and it has to be presumed with the figures given are of actual consumption and on this basis we have to proceed further. Further it is also not clear that raw materials received did not include the quantity received for job work. 3.5 According to the statements submitted by the factory to their head office for April, June and July 1999 relating to extrusion products, the final recovery of extrusion in July 1999 was 60%, in June 1999 was 55% and April 1999 was 58%. Actually Shri Patel has stated that the scrap which arises at various stages is recycled and the exact qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced. While the appellants claimed that 5,61,542 Kgs of final product could not have been manufactured from 4,47,843 Kgs appears to be correct, at the same time the claim of the appellants that they manufactured only 5,61,542 Kgs out of raw-material of 8,21,595 Kgs also appears to be incorrect. Another fact that supports the case of the Revenue is the fact that the Revenue has been able to recover only three statements relating to the months of April, June and July 1999. In these three months alone the evasion of central excise duty comes to Rs. 10,96,768/-. The correctness of this figure will be examined at the appropriate place but the fact remains that all the quantity of extrusions produced has not been accounted for by the appellants. Further the evidence of Shri K.B. Chowdhary of M/s. Ekta Roadways also shows that he never transported any ingots to Pankaj Extrusions after job work and that forms another part of the case. When we look at all these aspects, the fact that emerges is that Shri Urjit Patel was stating the truth when he said that he never saw wire rods and bars coming into the factory. What happened to the wire rods and bars purchased by the appellants is somethin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atements of Shri U.P. Patel Shri P.N. Shah. It was also submitted by the learned advocate that Shri P.N. Shah never admitted non receipt of wire rods and excess production. According to him Shri P.N. Shah s statement I have carefully through the contents of both the statements of Shri U.P. Patel alongwith its enclosures and has further placed my dated signatures thereon, in token of its correctness does not amount to admission of clandestine removal or excess production. On the other hand learned DR read out portion of another paragraph of the same statement to show that there was clear admission as under : At the time of removal of the same, no C. Excise invoice has been prepared and no Central Excise duty has been discharged by us at the time of the clearances. Further, I have also verified the above figures of production, clearances with our statutory books and I confirm that corresponding entries are not reflected in our statutory records. Moreover, I am also being shown another worksheet viz., Worksheet No. 4, which is showing the details of Modvat Credit availed by our Company on the Wire Rods/Bars shown to have been received by us and consumed in the manufacturing pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d contain same details. 4.4 July Statement : This statement is found in page 15-18 of the file A/32. This is a statement which shows the actual production of billets. In this statement there are columns for date, ingots, aluminium scrap, metal scrap, L.E.+P. outs, Mg, LM-6, total charged metal and finished goods (billets). All the columns from ingots to charging metal are totaled to arrive at the total quantity melted and billets produced is given in the last column. In the month of July total charged metal was 1,04,349.5 Kgs and production was 98,497 Kgs of billets. The statement also shows the total charged material and finished goods produced and the percentage of loss. In July it was 5.6%. Coming to the second part of the statement, this statement gives the details such as number of billets used, weight of the billets used, which is shown as 97,653 Kgs as against 98,497 Kgs produced, it also gives the but-weight, and weight, total scrap generated at the press and finished goods produced. According to this statement in July 1999, 97,653.30 Kgs billet was used and 63,401.88 Kgs was the recovery from the press in the form of extrusions which works out to 64.98%. Thereafter the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly stated that this statement is handed over to the excise clerk and sent to the head office and he has no idea whatsoever as to how much has been accounted for. 4.6 The quality of the statements which has already been discussed above clearly shows that this is not a statement prepared by an ordinary contract worker but by a professional who, had control over the whole activity of extrusions. Shri Urjit Patel has been able to explain this statement and apparently he was fully aware of the whole production process. This is another aspect which lends credence to the statements of Shri Patel and reliability of his statements. Needless to say these statements are meant for management and they show the different types of materials used, scrap generated at various stages efficiency of the machinery and the final production figures. However other than stating that statements of Shri U.P. Patel and Shri P.N. Shah can not be relied upon and the three statements recovered reflect production of semi-finished goods. There is no other defence presented and in the absence of an alternate plea, we have to hold that production worked by Department is correct. It was also contended that depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount after retaining his commission. Admittedly in respect of quantity not carried by Ekta Road Carriers, no physical movement of goods took place and only transport documents were prepared. Thus we find that the demand is based on the production records maintained at Shri U.P. Patel, the statement of Shri K.B. Chowdhary of Ekta Road Carriers and the statement of partner Shri P.N. Shah. None of the statements have been retracted till date. The seized documents have also not been questioned. The defence of the appellants is that they have made entries in the job work register and Form-IV register. They have also submitted that they have requested for cross examination of Shri K.B. Chowdhary of Ekta Road Carriers in respect of the show cause notice issued to Pankaj Extrusions Ltd. They also submitted that Shri K.B. Chowdhary has not stated that they have never transported ingots from the appellants premises to Pankaj Extrusions Ltd. Therefore the department cannot make an allegation and reject the job work register and challans. The department has to prove its case in respect of each and every consignment. We are unable to understand the defence arguments advanced by them. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any investigating officer to unearth all the evidences required and prove with mathematical precision, the evasion or the other illegal activities, in this connection we find that decision of Hon ble Supreme Court in the case of Systems Components Pvt. Ltd. cited by the learned DR relevant and we derive support from the observation of Apex Court. Therefore we have to hold that this demand of Rs. 9,48,135/- is maintainable. 5.2 Under these circumstances, we uphold the Commissioner s order as regards the demand for irregular Cenvat credit of Rs. 67,51,495/- and the duty demand of Rs. 9,48,135/- and the demand for duty of Rs. 10,96,768/-. 6. A penalty of Rs. 25,00,000/- has been imposed on Shri P.N. Shah, the partner of the company. Shri P.N. Shah has himself admitted that he was in-charge of day-to-day affairs of the firm. Further he has also admitted that he was aware of clandestine removal and also non-accountal of full production made in the factory. Under these circumstances, he has been rightly penalized by the Commissioner. Therefore the penalty on Shri P.N. Shah has to be upheld. However, taking note of the fact that the total amount of duty involved approximately is Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal. The advocates are considered to be officers of the court and have obligation to promote justice and effective operation of the judicial system. They are required to assist the court in implementation of the law. The Tribunal generally does not look into the number of adjournments sought and whenever adjournment is sought the request is accepted keeping in mind that advocates are officers of the court and would perform the functions expected of them sincerely and would not seek adjournment on frivolous grounds. It is also generally presumed that they would assist the court in ensuring that provisions of the law are not violated. To be fair it has to be stated that generally the departmental representatives also do not object to requests for adjournments. The fact that the case has been adjourned on so many occasions would not have come to our notice but for the interest we took in checking up as to why it took more than four years after the Tribunal allowed early hearing for the final order to be passed. Oft repeated statement justice delayed is justice denied is not only applicable to the individual but also to the government as well. In this case it is the Revenue which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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