9911796707
TMI Blog2014 (9) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest has been confirmed and penalty equal to the duty demanded has been imposed on the first appellant under Section 11AC of Central Excise Act, 1944 and Rs. 25,00,000/- under Rule 25 of Central Excise Rules, 2002. A penalty of Rs. 5,00,000/- has also been imposed on the second appellant. The first appellant has deposited an amount of Rs. 10,00,000/- during the course of investigation. 3. The learned counsel submitted that the appellant could not defend their case properly because there were a number of CDs recovered and documents recovered from the appellant but despite their request the CDs were not returned and only print outs from some of the CDs were supplied. As a result, the reply could not be effectively submitted. The learned AR seriously contested this. After hearing both the sides, we have to state that even though appellant may be having a case on the ground that they did not receive the entire set of documents/records/CDs, the case was not effectively put forth by the appellants themselves before the learned Commissioner and they did not make a serious issue of the disadvantage that they were put in. This is emerging from the observations in the impugned order wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled before the Tribunal wherein they had mentioned that a copy of the e-mail message had not been given to them. In response the learned AR takes us through paragraph 127 of the impugned order wherein learned Commissioner had discussed the print out of mails which have been provided to them. From the observations of Commissioner we cannot make out as to what exactly appellants have claimed that they have not received and what the Commissioner had observed that they were given. Nevertheless we take note of the fact that this relates to an amount of only Rs. 7,27,149/- and having regard to the fact that the total demand is more than Rs. 7.4 crores, it would be appropriate for us to proceed to decide the matter rather than avoid coming to a proper conclusion on other issues. 6. The net result of the above observations is that it is not possible to remand the matter on the ground (which was the first request of the learned counsel) that principles of natural justice have not been observed. If the appellant was not satisfied with the documents or the time given for reply, they should have agitated the matter. Therefore at this stage we do not consider that appellant has made out a cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o returns were filed by the firm from 2007-08 onwards and dissolution of the firm was intimated to the Income Tax Department on 10.04.2007. Sri A.K. Agarwal, the MD himself had written a letter to the department on 13.09.2011 that the firm has discontinued its business from 2007-08 onwards which is corroborated by the investigation conducted by the Revenue. Further it was also submitted that appellant had registered with the VAT department. Further the learned counsel also drew our attention to a letter written by the MD to the Commercial Tax Officer wherein he had intimated the Commercial Tax officer that they had decided to restart the trading of various goods in their firm's name and requested for reissue of the registration number. However we find that there is no acknowledgment from the department and there is no other evidence forthcoming that appellant continued to do the business and further it is also noticed that there is just a mention on the paper 'drop box on 01.11.2007 at 1.30pm'. This means that this letter was dropped in the drop box. There is no indication who dropped in the drop box and also there is no indication whether the firm filed vat returns thereafter or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agarwal firm did not show any transaction of TMT bars. Only paper transactions or paper records have been created. This is the prima facie conclusion that can be drawn based on the records at this stage. Needless to say this is a very complicated case but fact remains that as regards TMT bars it was the claim of the appellant that this was a trading activity of the firm. But facts relating to the firm speak another thing, the invoices of the firm speak a different thing and the investigation conducted by the firm reveal another thing. The situation is nobody can understand what exactly happened. At this stage therefore the only option that would be available is to rely upon the paper records which are recovered which show that there was a trading of TMT bars which was kept in the administrative office and appellants themselves have claimed that it was a trading activity of the firm and that the firm was trading in TMT bars which has been found to be totally false. The appellant is engaged in the manufacture of TMT bars and therefore when they accepted it was a trading activity of the firm and the firm was owned by the M.D. and firm was not undertaking such activity, the obvious co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced from a specific quantity of iron ore. In the absence of any such evidence and in view of the fact that records were recovered from the computer and also in view of the fact that there is absolutely no rebuttal of the claim of the department that consumption figures of sponge iron shown for production of billet were not actual and in the absence of a comparison of RG1 figures and private record figures by the appellant with suitable explanation for the difference, we have to accept the claim of the Revenue that on a prima facie basis the demand for more than Rs. 1 crore on the ground that the appellant did not account for excess sponge iron produced in their premises and therefore same was cleared in a clandestine manner has to held as probable. Therefore we consider Revenue has made out a prima facie case on this issue. Non accountal of billets etc. from Sl. No. 1 to 3 once again would relate to the consumption of sponge iron to some extent. Therefore we would not like to go into great detail since demand for sponge iron has been in our opinion held to be prima facie sustainable. According to the Revenue sponge iron consumption was shown in excess and therefore obviously ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances. Moreover it can be said that when a company/person indulges in clandestine removal, such income cannot accounted for in the books of anyone and that will remain invisible. That being the position merely because the company has suffered loss, it cannot be said that there is no money available. These are details which are known only to the concerned persons who deal with such things. In such a situation it is difficult to accept the submission that requirement of pre-deposit should be waived on the ground of financial difficulty. Central excise duty is liable to be paid once in a month and receipt of consideration is irrelevant and duty is on the activity of manufacture. Therefore the tax is definitely a first claim over any asset which the assessee has. In this case period relates to 2007-09 and it is already 5 years since the events have taken place and Government is yet to get any money. 11. In view of the above discussion we consider that appellant should deposit an amount of Rs. 5 crores within 12 weeks and report compliance. The learned counsel submitted that since appellant could not defend their case properly and even though as observed by the Tribunal it was t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
