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TMI Blog2011 (5) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... Star Limited, either in terms of invoice numbers and their dates, or in terms of vehicle numbers mentioned in the invoices or in terms of quantities of goods said to have been supplied. decided in favour of Assessee. - E/3872 TO 3875 OF 2003 - Final Order No. A/399-402/2011-WZB/C-II(EB) - Dated:- 5-5-2011 - Shri R.M.S. Khandeparkar, Shri P.R. Chandrasekharan, JJ. Appearance: Shri V.M. Doiphode, Advocate for the appellants Shri V.K. Singh, Authorised Representative (SDR) for the respondent Per: P.R. Chandrasekharan: These appeals are directed against the Order-in-Appeal No: PD/93 to 96/Th-II/03 dated 29/09/2003 passed by the Commissioner of Central Excise (Appeals), Mumbai - VI. 2. The facts of the case are as follows: (a) M/s Navdeep Engineering, PIDCO plot no.16, Village Mahim, Palghar, dist - Thane, were engaged in the activity of "drawing of Copper tubes". On basis of an intelligence received by Directorate General of Anti Evasion ( Central Excise ), Zonal Unit, Mumbai, a case of evasion of Central Excise duty was investigated against M/s Navdeep Engineering ( NE in short). Investigation in the matter revealed that,- i) M/s. NE, had clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red from M/s. NE, under the provisions of Section 11AB of the Central Excise Act, 1944; B) Show cause notice was also issued to M/s. Sapna Coils, (i) as to why modvat credit amounting to Rs. 1,33,774/-(Rupees One lakhs thirty three thousand seven hundred seventy four only) which was fraudulently and wrongly availed, on the basis of the central excise invoices issued by M/s. NE, without receiving the copper tubes in their factory, should not be disallowed and recovered under the provisions of Rule 57(I), read with proviso to Section 11A(1) of the Central Excise Act, 1944; (ii) penalty equal to the credit disallowed as determined under clause (iii) of sub - rule (1) of Rule 57I, should not be imposed under the provisions of Rule 57 (I) (4) of the Central Excise Rules, 1944; and (iii) interest, should not be recovered, under the `provisions of Rule 57 (I) (5) of the Central Excise Rules, 1944; C) the land, building, machinery, materials, conveyance or any other things used in connection with the manufacture, production, storage, removal or disposal of the goods in question, belonging to M/s. NE and Sapna . Coils, should not be confiscated under the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 173Q(2) of Central Excise, 1944, as he was of the view that the quantum of penalties imposed are enough to meet the ends of justice. (ix) imposing penalty of Rs. 1,00,000/- (Rupees One Lakhs only) on Shri Subhash Chandra Sharma and Rs. 50,000/- (Rupees Fifty Thousand only) each on S/ Shri Manoj Sharma and Shitala Prasad Sharma under the provisions of Rule 209A of Central Excise Rules 1994. 4. An appeal was filed against the above order of the Joint Commissioner. In his Order in Appeal dated 29-9-2003, the Commissioner (Appeals ) confirmed the (i) demand of Central Excise duty of Rs. 5,12,863/- and penalty of Rs. 5,21,598/- against the appellants. Interest was also ordered under Section 11 AB of Central Excise Act, 1944 for the period 28/09/96 to 22/07/97. A Penalty of Rs. One lakh was imposed on Shri Subhash Chandra Sharma, proprietor under Rule 209A of the Central Excise Rules, 1944. An amount of Rs. 8,735/- is confirmed on M/s. Navdeep Engineering on the shortage of goods under proviso to Section 11 A (1) of the said Act, 1944. As regards M/s. Sapna Coils Private Limited, the impugned Order-in-Appeal has confirmed the demand of recovery of Modvat credit of Rs. 1,33, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 623.500 kgs of copper tubes in respect of Invoice No. 2 of Navdeep Engineering. As regards Invoice No. 3 dated 02/06/1995 of Navdeep Engineering, the corresponding entries in the Blue Star register is Invoice No. 04 dated 02/07/1995 and the vehicle No. is GRU 7434 and the quantities mentioned are 959 kgs. and 1056 kgs. In the case of Invoice No. 5 dated 27/06/1995 of Navdeep Engineering, the corresponding entry in the Blue Star inward gate register is Invoice No. 2 dated 27/06/1995 and the vehicle No. is MH-04-C-8924 and the quantity indicated is 285 kgs. Similarly, in the case of invoice No. 7 dated 06/07/1995 of Navdeep Engineering the vehicle No. indicated is MH-04-C-9435 and the quantity of copper tube supplied is 950.500 kgs. The corresponding entry in the Blue Star register as alleged in the notice is Invoice No. 8 dated 13/07/1995 and the vehicle No. is MH-04-C-3479 and the quantity indicated is 634 kgs.Thus they submit that a comparison of the entries made in the Blue Star inward gate register do not tally at all with the invoices of M/s. Navdeep Engineering either in terms of invoice numbers or vehicle numbers or in respect of quantities mentioned. Similarly, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued to Neha Refrigeration on respect of clearance made by them. Though this order has been challenged by the department before the Hon'ble High Court of Bombay, there is no stay and the appeal is still pending disposal. The advocate further contends that the seized records Nos. 2, 4 and 6 are described in the show cause notice as private purchase registers by Mr. Subhash Chandra Sharma in his statement dated 26/10/1998. However, in the subsequent statement dated 29/10/1998, it has been stated that the entries in the seized records pertains to copper tubes sold by him. When the seized records are purchase registers as admitted in the show cause notice, the entries in the said register cannot be said to be pertaining to sale of copper tubes to M/s. Blue Star, M/s. Shriram Refrigeration and M/s. Kelvinator of India Ltd., etc. Thus the statement given by Shri Subhash Chandra Sharma are inconsistent and such statements cannot be considered as admissible evidence. They have further argued that the shortage of copper tubes was found to be 375 kgs. in the adjudication order and the alleged shortages could be processing loss over a period of 8 years when the appellants were in prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mand can be made on M/s. Sapna Coils Pvt. Ltd. In the light of these submissions they contend that the department has not proved the case and accordingly, requested that the orders lower appellate authority be set aside. 6. The learned DR, on the other hand, submits that as regards the jurisdiction of the officers of Directorate General of Central Excise Intelligence, for issue of show cause notice, they are already vested with the powers of Central Excise officers vide Notification No. 215/86-CE dated 27/03/1986. Therefore, the show-cause notice has been issued by the competent authority and is valid. The learned DR would also submit that on scrutiny of the purchase registers and seized records Nos. 2, 4 and 6 seized from Sapna group of companies, pertaining to transactions of M/s. Navdeep Engineering, it was noticed that the entries made in the private registers tallied with the particulars such as date, quantity mentioned in the Central Excise invoices raised by M/s. Navdeep Engineering to M/s. Sapna Coils; however, these goods were sent to companies like M/s. Blue Star Ltd., M/s. Shriram Refrigeration, M/s. Kelvinator India Limited against the invoices raised by M/s. Neha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... teels Pvt. Ltd. 1996 (82) ELT 441. He also submits that Section 11AB came into force w.e.f. 28/09/1996 and, therefore, the interest liability has been confirmed correctly by the appellate authority. Lastly, he submits that in quasi-judicial proceedings, charges are not required to prove beyond reasonable doubt and if they are proved on the basis of pre-ponderance of probability, it is sufficient. 7. We have carefully considered the rival submissions. 8.As regards the first charge of the defence that the show cause notice has been issued without any authority, the same is unfounded as notification No. 215/86-CE dated 27-3-1986 as amended conferred on the officers of the Directorate General of Anti-evasion specified therein with the powers of corresponding Central Excise Officers throughout the territory of India. Thus the Deputy Director of Anti-evasion Directorate was competent to issue the show cause notice, as rightly contended by the Ld. DR. 9. The main charge in the show cause notice against the appellants is that M/s. Navdeep Engineering had cleared re-drawn copper tubes to M/s. Sapna Engineering and Sapna Coils on payment of duty at lower values and these goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the factory, merely on the basis of shortage between the book balance and the physical stock, the demand can not be sustained. 10. Coming to the reliance placed by the department on the statements of Mr. Subhash Chandra Sharma, Mr. S.P. Sharma and Mr. Manoj Sharma, demands cannot be confirmed on the basis of statements alone. Confessional statements purported to have been made before an authority would require a closer scrutiny, especially if they have been retracted subsequently. It is a well settled legal position that "courts must seek corroboration of the purported confession from independent sources" as held by the apex court in the case of Francis Stanly @ Stalin vs. Intelligence Officer, Narcotic Control Bureau, Trivandrum [MANU/SC/8783/2006] and Assistant Collector of Central Excise, Rajamundry vs. Duncan Agro Industries Ltd.[MANU/SC/0486/2000] .In the instant case, it is seen that there are no corroborative evidences forthcoming and whatever evidence has been adduced by the department by way of gate register of M/s Blue Star, does not corroborate the case of the department. Accordingly confirmation of demand, merely based on the statements of Mr. S.C. Sharma, Mr. S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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