9911796707
TMI Blog2012 (12) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... which were cleared clandestinely without payment of duty appears to be on strong footing. The appellant have not shown the purchase of scrap/sponge iron valued at Rs. 4,43,89,566/- during November 2008 - January 2009 period is their books of account. Therefore, the department justified in presuming that this scrap/sponge iron was used in unaccounted manufacture of M.S. ingots which were cleared without payment of duty and without issue of invoicing. The fact that the appellant had declared an unaccounted income of Rs.85 lakhs for 2007-2008 to Income tax authorities also indicates that they were having substantial unaccounted sales. The presence of a truck fully loaded with scrap, found in the appellant's factory also indicated that they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - and (b) a truck with registration No. HR 68 7637 loaded with 1.725 M.T. of kabari scrap was found which was not accompanied by any bill. The Cenvat credit of Rs.1,20,551/- involved on the 70 M.T. of HM scrap found short was debited in the Cenvat credit account on the same day. 1.2 In course of search of the factory, some loose paper were found from the table of Shri S.P. Gupta, which were taken over by the officers. The loose papers were studied by the investigating officers with the help of Shri S.P. Gupta. The loose papers contained the details of the cash payments made for purchase of scrap and also the details of cash payments received for the period from November 2008 to January 2009. The name of the persons to whom the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e iron. 1.3 It appeared that from unaccounted purchase of 2595 M.T. of scrap/sponge iron, 2466 M.T. of M.S. Ingots valued at Rs.5,83,50,492/- valued at Rs.5,83,50,492/- had been manufactured which had been cleared clandestinely without payment of duty. The duty involved on these M.S. Ingots was Rs. 84,14,141/-. 1.4 During investigation, it was also learnt that the appellant company during 2007-2008 had voluntarily disclosed unaccounted income of Rs.85 lakhs to the Income Tax Department. This also indicated that the appellant company was indulging in evasion of duty during 2007-2008 also. The duty involved on the goods cleared clandestinely during 2007-2008 was estimated to be Rs. 12,25,700/-. 1.5 In view of the above investigation, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d towards this demand; (b) penalty of Rs. 86,63,220/- was imposed on the appellant company under Section 11AC; and (c) penalty of Rs. 20 lakhs was imposed on Shri Jiwan Singla under Rule 26 of the Central Excise Rules, 2002. 1.7 Against the above order of the Commissioner, these appeals have been filed alongwith stay applications. 2. Heard both the sides. 3. Shri J.M. Bansal, Advocate, the learned Counsel for the appellant, pleaded that the allegation of clandestine manufacture and clearance of 2466 MTs of M.S. Ingots during period from November 2008 to January 2009 is without any basis as neither the appellant have capacity to manufacture the quantity of M.S. Ingots alleged to have been manufactured by them during Novembe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that:- (a) on the date of officers' visit to the factory, one truck loaded with Kabari scrap, without any bills had been found in the factory premises; (b) Shri S.P. Gupta, Authorised Signatory of the appellant company in his statement has clearly admitted to purchase of Kabari scrap from open market without any bills; (c) the purchases of scrap detailed in the loose papers recovered from the table of Shri S.P. Gupta were not reflected in the books of account of the appellant company; and (d) the appellant company for the year 2007-2008 had voluntarily disclosed unaccounted income of Rs. 85 lakhs to income tax authorities, which is also a clear evidence of under reporting of production and sales by the appellant. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admittedly been written by Shri S.P. Gupta and the purchase of the M.S. scrap/sponge iron valued at Rs. 4,43,89,566/- during November 2008 - January 2009 period has not been denied. The appellant have not shown that these purchase of scrap/sponge iron were reflected is their books of account. Therefore, the department appears to be justified in presuming that this scrap/sponge iron was used in unaccounted manufacture of M.S. ingots which were cleared without payment of duty and without issue of invoicing. The fact that the appellant had declared an unaccounted income of Rs.85 lakhs for 2007-2008 to Income tax authorities also indicates that they were having substantial unaccounted sales. The appellant's plea that average power consumption ..... X X X X Extracts X X X X X X X X Extracts X X X X
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