9911796707
TMI Blog2015 (1) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... l be relevant for the purpose of proving in any prosecution for an offence under this Act, the truth of the facts which it contains, when the person who made this statement is examined as a witness in the case before the court and the court is of the opinion that having regard to the circumstance of the case, the statement should be admitted in the interests of justice. The only situation in which the statement of the person can be accepted by the court without his examination is when the person, who made the statement is dead or cannot be found or incapable of giving evidence or is kept out of the way by the adverse party or whose presence cannot be obtained without an amount of delay or expense, which under the circumstances, the court considers unreasonable. - Since in this case, the cross-examination of Shri Kulbhushan Jain and Shri Subhash Agarwal and also of the proprietors of the transport companies, whose statement have been relied upon was not allowed, the impugned order confirming duty demand based on their statement would not be sustainable. Moreover, other than the statements of Shri Kulbhushan Jain and Shri Subhash Agarwal and the proprietors of the transport compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Fatehpur (U.P.), (b) office premises of PAL at Plot No. 17, Fazalganj, Kanpur, (c) residential premises of the Directors Shri Ajay Kumar Jain and Shri Naveen Jain, (d) residential premises of a confidential employee Shri Kulbhushan Jain, (e) the premises of certain dealers - M/s Subhash Agarwal, Shri Ram Bala Gupta, M/s B.D. Agnihotri Sons and (f) the premises of transporters namely M/s Bhartiya Forwarding Agency, M/s Thakur Transport Company, M/s Pehalwan Transport Co., M/s M.P. Roadlines and M/s New Pooja Road Corporation. 1.3 In course of search of the factory premises, the stock of finished goods - M.S. Bars and the raw material - M.S. Ingots was checked. There was shortage of 146.24 M.T. in the stock of M.S. Bars involving Central Excise duty of ₹ 3,09,535/- and there was shortage of 67 M.T. of M.S. Ingots involving Cenvat credit of ₹ 1,04,977/-. Apart from this, no other incriminating document was found from the factory premises of PAL or its office premises. 1.4 From the premises of the dealer Shri Subhash Agarwal F/o Shri Vimal Agarawl, Proprietor, M/s V.K. Steel Traders, Kanpur, a few sales invoices of PAL, trading bills of traders and also the blank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jay Kumar Jain, Director of PAL and PIL and the bill books had been given to him by Shri Ajay Kumar Jain for safe keeping, that the loose slips recovered from residential premises are the documents under which consignments of MS Ingots were cleared by M/s Sigma Casting, a premier group company to PAL without payment of duty. He also stated that a total of 54 blank books of various trading firms recovered from his residential premises were being used for clandestine clearances of MS Bars and MS Ingots under the cover of trader s invoices. Statement of Shri Ajay Kumar Jain was recorded again on 13/04/04 wherein he reiterated his statements dated 15/07/12 and 18/07/03. 1.6 From the documents recovered from the residential premises of Shri Subhash Agarwal and Shri Ajay Kumar Jain and their statements, it appeared that PAL as well as PIL and other Premier group companies were removing the finished goods manufactured by them under the cover of the invoices issued by the various traders and once the goods reached the consignees, these invoices were destroyed and in case any consignment was intercepted by the sales tax or central excise authorities, Shri Subhash Agarwal immediately info ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingh, Proprietor M/s Thakur Transport Company, Unnao, who stated that on instructions of consignors and consignees they were not mentioning the names of the consignors and consignee, but they could identify the GRs where the consignments had been loaded from the factory of PAL and accordingly they identified the GRs which were taken over by the Investigating Officers. 1.11 In view of the statements made by Shri Subhash Agarwal and Shri Kulbhushan Jain, inquiry was made in respect of M/s Manoj Kumar Manish Kumar, Kanpur, M/s Prabhujot Steel, Kanpur, M/s Expert Agriculture Udyog, Kanpur and M/s Sunder Iron Manufacturers, Kanpur, and each of them stated that though they were registered with Sales Tax authorities and were dealing in steel items, they had never dealt with MS Bars but were engaged only in sale and purchase of steel sheets and as such they did not know Shri Kulbhushan Jain or Shri Subhash Agarwal. 1.12 On scrutiny of balance sheet of PAL for period from 2001-2002 it was found that they have shown receipt of ₹ 1,66, 92,918/- as service charges/sale commission/supervision charges from a number of firms/companies. Perusal of the vouchers recovered from the office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was adjudicated by the Additional Commissioner vide order-in-original No. 10/ADC/SKP/ 07 dated 23/10/07 by which the duty/Cenvat credit demands, as mentioned above, were confirmed against PAL alongwith interest on it under Section 11AB and beside this, while penalty of ₹ 25,76,526/- was imposed on PAL under Section 11AC, penalty of ₹ 2,00,000/- was imposed on Shri Ajay Kumar Jain under Rule 26 of the Central Excise Rules, 2001/2002. 1.15 PAL and its Director Shri Anil Kumar Jain filed appeals against the above order of the Additional Commissioner to Commissioner (Appeals). The Commissioner (Appeals) vide order-in-appeal dated 30/05/08 confirmed the duty demand of (a) ₹ 3,09,535/- on shortage of 146.24 M.T. of MS Bars and Cenvat credit demand of ₹ 1,04,542/- on shortage of 67.36 M.T. of MS Ingots Cenvat credit availed MS Ingots and (b) duty demand of ₹ 8,35,865/- on 462.27 M.T. of MS Bars held to have been cleared clandestinely and transported under 39 GRs (38 GRs of M/s Pehalwan Transport Co. and one GR of M/s New Pooja Transport) alongwith interest thereon under Section 11AB ; but dropped the duty demand of ₹ 10,97,160/- based on the GRs o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itional Commissioner nor the Commissioner (Appeals) considered the said submission. In fact, the appellant company has nothing to do with Shri Kulbhushan Joshi. (3) The GRs issued by the transport companies which are being linked to the appellant company also mentioned the consignees, but no statement of any buyers/consignees shown in the GRs has been recorded. (4) When the entire case of the Department alleging duty evasion against the appellant company is based on certain private documents recovered from third party premises of Shri Kulbhushan Jain, Shri Subhash Agarwal, Shri B.D. Agnihotri, M/s Manoj Kumar Manish Kumar and the transport companies, the documents recovered from them could not be relied upon by the Department without permitting their cross examination. The cross examination these persons had been specifically requested but same was denied without any justification. Tribunal in the cases of Milton Polyplast vs. CCE, Thane - II reported in 2006 (201) E.L.T. 372 (Tri. - Mumbai), Saraswati Rubber Works (P) Ltd. vs. CCE, Gurgaon reported in 2006 (205) E.L.T. 993 (Tri. - Del.) and Chandan Tubes Metals Pvt. Ltd. vs. CC, Vapi reported in 2006 (193) E.L.T. 48 (Tri. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of the Commissioner (Appeals)s order by which he has dropped the part of the duty demand. 4. Shri Pramod Kumar, the learned Jt. CDR, defended the impugned order confirmed duty demand of ₹ 8,35,865/- by reiterating the findings of the Commissioner (Appeals) and also assailed the part of the Commissioner (Appeals)s order by which the duty demand of ₹ 10,97,160/- had been dropped alongwith penalty of equal amount by reiterating the grounds of appeal. With regard shortage of the finished goods and Cenvat credit availed MS Ingots, he pleaded that the stock taking had been conducted in presence of the appellant s employee who at that time had expressed full satisfaction with the method of weighment. He, therefore, pleaded that having accepted the method of weighment, the appellant at the stage of adjudication and appeal cannot question the method of stock taking and plead that the shortage are not the real shortages. He also pleaded that the average weight per ingots and average weight per bar had been determined by actual weighment and thereafter by multiplying the average weight per ingots/average weight per bar by the number of MS Ingots/MS Bars, the weight of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andestine manner without payment of duty and without of issuing of invoice and they were doing so by adopting a modus operandi under which with the assistance of a dealer and one of their employees, they were procuring the bills of some traders and were clearing the MS bars under the invoices of the traders and if any such consignment was intercepted by the Central Excise Department or Sales Tax Department, the appellant company used to be immediately informed by the persons who were arranging the unaccounted sale and transport and immediately the appellant company used to issue central excise invoice in the name of the dealer under whose trading invoice, the goods had been cleared. 6. The total duty demand confirmed against the appellant company by Order-in-Original passed by the Addl. Commissioner is ₹ 25,76,526/-. Out of this demand, demand of ₹ 1,04,542/- is CENVAT credit demand in respect of shortage of 67 MT of CENVAT credit availed on MS ingots detected by the officers in the course of stock taking at the time of visit of appellant company factory on 15/07/2002. The other duty demand of ₹ 3,09,535/- is in respect of shortage of 146.240 MT of MS bars dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) Upheld the CENVAT credit demand of ₹ 1,04,542/- in respect of alleged shortage of 67 MT of MS ingots and duty demand of ₹ 3,09,535/- in respect of shortage of MS bar of 146.240 MT ; (b) Has remanded the duty demand of ₹ 2,31,424/- based on the GRs issued by M/s. MP Bihar Road Lines and M/s. New Bhartiya Forwarding Agency to the original adjudicating authority as this demand was adjudicated without giving opportunity to them to submit their defence reply; (c) Has confirmed the duty demand of ₹ 23,540/- based on one GR M/s. New Pooja Transport and duty demand of ₹ 8,12,325/- based on 38 GRs of M/s. Pehalwan Transport, Fatehpur for 449.295 MT of MS bars and thus has confirmed the total duty demand of ₹ 8,35,865/- in respect of 38 GRs of M/s. Pehalwan Transport and one GR of M/s. New Pooja Transport Co; (d) Has set aside the duty demand of ₹ 10,97,160/- in respect of four GRs of M/s. New Pooja Transport, Kanpur, 27 GRs of M/s. Pehalwan Transport, Fatehpur and all the GRs issued by M/s.Thakur Transport Co. and (e) Has remanded the duty demand of ₹ 2,31,424/- based on the GRs of M/s M.P. Bihar Road Lines, Kanpur and M/s N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age of 67.360 MS ingot and duty demand of ₹ 3,09,535/- in respect of 146.240 MT. of MS bars is upheld. 8. Coming to the confirmation of duty demand of ₹ 8,35,865/- based on 38 GRs of Pehalwan Transport and one GR of New Pooja Transport, the basis of confirmation of this demand is that the goods covered under these GRs had been loaded from the factory of the appellant company and this is based on the statements of the transporters as well as the statements of Shri. Kulbhushan Jain, a person who is alleged to have been a confidential employee of the appellant company and Shri Subhash Agarwal of M/s. VK Steels, a dealer. The appellant had sought cross-examination of the transporters as well as of Shri Subhash Aggarwal and Shri Kulbhushan Jain, but the same was not allowed, even though Shri Kulbhushan Jain had retracted his statement. In terms of Section 9D (1) of Central Excise Act, 1994, a statement made and signed by a person before a central excise officer of a gazetted rank during the course of any enquiry or proceedings under this Act, shall be relevant for the purpose of proving in any prosecution for an offence under this Act, the truth of the facts which it cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cross-examination of Shri Kulbhushan Jain and Shri Subhash Agarwal and also of the proprietors of the transport companies, whose statement have been relied upon was not allowed, the impugned order confirming duty demand based on their statement would not be sustainable. Moreover, other than the statements of Shri Kulbhushan Jain and Shri Subhash Agarwal and the proprietors of the transport companies, there is no other evidence linking the GRs issued by M/s. Pehalwan Transport and M/s. New Pooja Transport with the appellant company. Therefore, I hold that the impugned order upholding the confirmation of duty demand of ₹ 8,35,865/- based on 38 GRs issued by transport companies and one GR issued by New Pooja Transport is not sustainable and has to be set aside. 9. As regards the Revenue s appeal against setting aside of the duty demand by Commissioner (Appeals), which is based on the GRs of M/s. Thakur Transport, M/s. New Pooja Transport Co. (4 GRs) and M/s. Pehalwan Transport Co. (27 GRs), it is seen that so far as the demand of ₹ 3,68,832/- based on the GRs issued by M/s. Thakur Transport is concerned, it has rightly been observed by Commissioner (Appeals) that neithe ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
