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TMI Blog2014 (6) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... geable to Central Excise duty Exemption Notification No. 6/2001-C.E., dated 1-3-2001, exempts from duty, the clearances upto 3500 M.T. in a financial year, of paper and paper board or articles made therefrom manufactured in a factory starting from the stage of pulp, where such pulp contains not less than 75% by weight of pulp made from materials other than bamboo, hardwood, softwood, reeds (other than sarkanda) and rags. Both the units - M/s. Sikka and M/s. Shamli were availing of the duty exemption under this Notification. Three directions of M/s. Sikka and M/s. Shamli were common. 1.2 On visit to the unit of M/s. Sikka, when the stock of the finished goods was checked, stock 16.037 M.T. of writing and printing paper was found to be in excess of balance recorded in the RG-1 register and when the officers asked to Shri S.K. Srivastava, the Authorized Signatory of M/s. Sikka for this, he could not give any explanation for the same. The excess stock of 16.037 M.T. of writing and printing paper was, therefore, placed under seizure. On checking the stock of the news print, the officers found that the shortages of 16.452 M.T. vis-a-vis the balance in the RG-1 register for which al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Vinay Bansal, common Director of both M/s. Sikka and M/s. Shamli on being asked by investigating officer could not clarify as to how huge production of paper had been shown in the name of M/s. Shamli during the period from September, 2001 to March, 2003 when this unit was closed at least since September, 2001 as per the intimation given by this unit to the Assistant Labour Commissioner and which was also evident from the condition of the plant and the fact that there was no power connection since July, 1998 and out of two generators lying in the factory only one was workable and also there was no record of purchase of diesel for running of these generators, but he could not give any satisfactory reply. 1.3 In view of the above investigation, it appeared that M/s. Shamli was not functioning and it is only a part of production of paper by M/s. Sikka which was being shown as the production of M/s. Shamli so as to avail of duty evasion in respect of first clearances of 3500 M.T. in a financial year in respect of both the units. It, therefore, appeared that the goods shown to have been produced in and cleared from M/s. Shamli were not eligible for duty exemption under Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the period of dispute, there was no production in M/s. Shamli and the production of M/s. Sikka was being shown to have been made under the invoices of M/s. Shamli in order to wrongly avail the duty exemption, that though there was no power connection in the unit from July, 1998, there were two generators each of 380 KVA and since the capacity of their plant was 600 M.T., even one 380 KVA generator was sufficient to run the plant, that the other second generator which was found to be non-functional was a standby generator, that the services of the staff had been terminated in September 2001 on account of labour unrest but, thereafter, they have engaged a labour contractor who was supplying the required labour to them, that necessary intimations had been given to the Labour Commission regarding closure of factory due to labour unrest and reopening of the factory subsequently, that just because the department could not locate all the suppliers of the waste paper, it cannot be concluded that they were bogus, that department did not make any inquiry from the transporters in this regard, that the purchase of waste paper by M/s. Shamli had been duly declared by them to Sales Tax an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not functioning since long; and (f) out of 3 suppliers of waste paper two have been found to be non-existent. 2.2.1 He, therefore, pleaded that from the evidence on record it is clear that during the period of dispute, there was no production of M/s. Shamli, but, since substantial production has been shown by this unit, which is claimed to have been cleared by availing duty under Notification No. 6/2001-C.E., it is clear that it is the production of M/s. Sikka which had been cleared under the invoices of M/s. Shamli in order to wrongly avail the duty exemption. 2.2.2 He also emphasised that three Directors of M/s. Sikka and M/s. Shamli are common and thus the persons behind the two units are the same. 3. We have carefully considered the submissions from both the sides and perused the records. 4. The undisputed facts are that both M/s. Sikka and M/s. Shamli manufactured same final products - printing and writing paper as well as news print and both during the period of dispute were availing of the benefit of duty exemption under Notification No. 6/2001-C.E. Shri Vinay Bansal is the common Director of both the units, the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terprises must have been used in the factory of M/s. Sikka. Taking into account the totality of the evidence against M/s. Shamli, we are of the view that the claim that M/s. Shamli was functioning during the period of dispute is difficult to believe, more so, in view of the fact that at the time of officer's visit to the factory on 24-4-2003 from the condition of the plant it appeared that the factory is closed since long and also there was neither any power connection since July, 1998 no any evidence of purchase of diesel for running DG set or engaging contract labour. In view of this, we hold that goods which are shown to have been cleared under the invoices of M/s. Shamli, had actually been manufactured by M/s. Sikka and this has been done by M/s. Sikka to wrongly avail of the exemption under Notification No. 6/2001-C.E. Since from the records it is seen that it is Shri Vinay Bansal who was running both the units and it is he who is the brain behind this duty evasion, the penalty has been rightly imposed on him. In view of above discussion, we do not find any infirmity in the impugned order. The appeals are dismissed.
(Pronounced in open court on 15-9-2011) X X X X Extracts X X X X X X X X Extracts X X X X
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