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TMI Blog2015 (5) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... wer quantity of blooms, billets and ingots compared to higher quantity thereof manufactured. Entire plea of appellant as to sale of iron ore, arise of fines etc was proved to be false. The material fact, outcome of investigation, gravity of allegation and strength of evidence on record prima facie show that interest of revenue has been prejudiced by the appellant causing loss to it to the extent aforesaid. This calls for predeposit to work out an interim modality since balance of convenience tilts in favour of Revenue and without pre-deposit order; irreparable injury may be sustained by Revenue - keeping in view prejudice caused to Revenue, Appellant is directed to deposit ₹ 12 crores within four weeks of receipt of this order and make compliance - Partial stay granted. - Excise Stay Application No. E/Stay/59375/2013 in Excise Appeal No. E/58737/2013 -EX[DB] - Stay Order No. 51941 - Dated:- 3-6-2014 - Hon ble Mr. D. N.Panda, Judicial Member And Hon ble Mr. Manmohan Singh, Technical Member,JJ. For the Appellant : Shri G. L. Rawal, Advocate , Shri Rohit Chaudhary, Advocate For the Respondent : Shri S. K. Panda, JCDR, Ms. Sweta Bector, DR ORDER Per: D. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt in the Excise Division did not mention Camp No. and Camp day suppressing the actual production. But such details were available in the records recovered from the SID corroborated by statement of Shri M.S. Vas, Manager (SID process). These details exhibited the i.e. number of continuous run of the kilns. That showed unaccounted production of sponge iron. (b) Three different versions in daily operation report of 29.01.2005 of DR plant were recovered from the control room of sponge iron division (SID) during the search operation. Variation in two reports showing lower quantity of production in respect of both the kilns remained unexplained. (c) Details of raw material fed as well as camp number and camp day of both the kilns were available on the back side of the actual production report which remained absent in the fabricated reports proving that production figures were fabricated to suppress the same in Excise records. (d) Daily operation report of the direct reduced iron process plant recovered from the SID when compared with the records maintained in Excise division for the period 01.04.2002 to 30.01.2005, difference of 2,69,603 MT of sponge iron arose proving sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report of DR Plant was the actual production report. (j) Two computer generated sheet containing daily sponge iron production for the month of July, 2003 (up to 27.07.2003) in lumps, fines and lumps off grade did not find place in the statutory RG-1 record or Form-IV account. (k) A computer generated sheet recovered from Quality Assurance Department of SID showed that production and dispatch of sponge iron from 01.05.2004 to 21.05.2004 varied with the figures appearing in the statutory records. (l) Another computer generated sheet of Quality Assurance Department for 01.08.2004 exhibited day wise production of kiln 1 2 for the month of September, 2004. Similar such sheet of 04.11.2004 showed production summery of October, 2004. Computer generated report dated 02.12.2004 showed production summery of November, 2004. Similarly another computer sheet dated 01.01.2005 showed production summery of December, 2004. Figure in these documents differed with the figures reported in the statutory records for the relevant periods making clear that statutory records were not recording actual production. (m) The computer generated performance report dated 03.01.2005 containing produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... According to investigation, the iron ore fines to the tune of 1,21,144.730 MT said to have been used in Induction furnace Division, during 2002-2003 to 2004-2005 up to 30.01.2005 was a baseless plea to escape suppressed quantity of iron ore from scrutiny of Revenue. Such quantity tallied with the consumption figures of iron ore mentioned in DR plant daily operation report of SID not accounted for. The minor difference of 4753.950 MT found to be in excess was due to the non-availability of DR plant daily operation report of SID for the period 16-11-2002 to 30.01.2005. 7. Investigation had also gathered materials suggesting clandestine removal of bloom, billets and ingots manufactured. Such removal was corroborated from the entries found in the loose papers recovered from the weighbridge site of the appellant (manufacturer). Truck operation report, inter officer memo, vehicle movement register, driver bio-data log book recovered from the Transport Section of the factory as well as minutes of daily co-ordination meeting of the Commercial Department of the Noticee recovered from the Executive Director s Chamber demonstrated clandestine removal of above goods. Similarly incrim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even if entire electricity generated by the appellant in its captive power plant is considered as consumed for production thereof. Appellant says that additional quantity of power to the tune of 894 lacs units of electricity is required for the alleged production. Appellant also pleaded that allegations of no receipt of iron ore, production of lower quantity of sponge iron and production of huge quantity of blooms, billets and ingots are baseless. 12. Investigation alleged that the appellant deliberately manipulated statutory records to suppress production of sponge iron for ultimate clandestine removal of the bloom, billets and ingots produced out of such suppressed sponge iron. Based on the facts and figures discovered by investigation, clandestine production and removal of blooms, billets and ingots was worked out to be 81,121.870 MTs and duty evaded thereon was worked out as follows for the relevant period on the basis of suppression noticed during those periods and assessable value for the respective period were worked out basing on ER-1 returns: Period Suppression of captive consumption of sponge iron(MT) Suppression of production of bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant that iron ore comes from Odissa by rail to Bardwar. There after, that goes to the appellant s factory through Truck. Appellant sells part of the received iron ore at the railway sliding at Bardwar. Such sales are fully accounted for and unsold quantity of iron ore reaches the factory. Books of accounts are maintained to record entire receipt of the iron ore at the factory. Nothing has escaped at any time from accounting. 15. Revenue baselessly makes allegation that iron ore to the extent of 276896.820 M.T. were not accounted for. There was no evidence of pilferage of this quantity by the appellant nor consumption thereof in the factory for manufacture of sponge iron. Merely making allegation that this quantity of iron ore not being sold was not recorded in factory, Revenue arbitrarily and baselessly has worked out unaccounted manufacture of sponge iron alleging evasion of duty on 2,69,603 M.T. of sponge iron. There was no evasion of excise duty at all on sponge iron. There was also no unaccounted use thereof for ultimate manufacture of blooms, billets and ingots. 16. Revenue without proper examination of relevant facts and evidence, taking balance sheet figu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case to direct no pre-deposit by the appellant since the appellant has protected Revenue making deposit of ₹ 72,38,695/- towards duty and ₹ 1,44,776/- towards education cess respectively as against the arbitrary duty demand of ₹ 16,92,11,104/- alleged to have been evaded making clandestine manufacture and removal of blooms billets and ingots. Similarly, as against the unfound stock demand of ₹ 94,59,415/-, an amount of ₹ 73,90,760/- and ₹ 1,47,815/- having been deposited towards duty and education Cess respectively, appellant should be heard on merit without calling for pre-deposit. SUBMISSION OF REVENUE 22. On the other hand, Revenue submits that original adjudication was made by the Commission, Raipur on 21.08.2009 raising duty demand of ₹ 46.00 crore. That order was subject matter of appeal before Tribunal. Only on the ground of violation of natural justice, that adjudication was set aside and remand thereof made for re-adjudication. 23. While original adjudication resulted in duty demand of ₹ 46.00 Crores, in re-adjudication, learned authority dropped major demand; raising a meager amount of duty demand of ₹ 17.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Headquarters, Raipur remanded the matter with the consent of the parties, recording in Para 20 of the order that in view of the alleged bias against the adjudicating authority, re-adjudication is to be made by the Commissioner, Indore expeditiously before 31.03.2010. Appellant was also directed to file detailed reply to the Show Cause Notice on or before 28.10.2009. 28. In view of the above order of Tribunal changing jurisdiction, enquiry was made from the ld. JCDR as to whether Board had issued any notification or order appointing Commissioner, Indore to exercise his jurisdiction over the matter. But reply of Revenue was negative. Stay application was taken up accordingly for disposal following judicial discipline. 29. Although time frame was fixed by Tribunal as above for completion of re-adjudication, expressing difficulties, Revenue sought extension from time to time and ultimately completed re-adjudication by the present impugned order dated 29.03.2013. 30. Appellant filed reply to the Show Cause Notice on 26.10.2009 stating that the earlier reply filed may be read as part and parcel of the reply in response to the directions of the Tribunal as above. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved the way to scientifically fabricate all other records to show production of lower quantity of blooms, billets and ingots compared to higher quantity thereof manufactured. Entire plea of appellant as to sale of iron ore, arise of fines etc was proved to be false. 35. Iron ore is a major mineral. Movement thereof in the course of inter-state trade from one State to another occurs under Central Sales Tax Act, 1956 furnishing declaration by the consignee disclosing the purpose for which such goods moved. Revenue may do well to enquire actual quantity of iron ore moved from the State of Odissa to the State of Chhatisgarh and the purpose for which such goods moved. The object stated in the declarations furnished under Central Sales Tax Act, 1956 if enquired, that shall reveal truth. 36. Learned Adjudicating Authority was not satisfied as to the plea of sale of iron ore. According to him, to cover up the clandestinely removed quantity of blooms, billets and ingots, proportionate quantity of iron ore was pleaded to have been sold, which in turn was found to be false. 37. The plea of low yield of the sponge iron failed to be substantiated in absence of technical report. Ld. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich they would rather well leave alone in the public interest, because of the stays granted by Courts. We have come across cases where an entire Service is left in a stay of flutter and unrest because of interim orders passed by courts, leaving the work they are supposed to do in a state of suspended animation. We have come across cases where buses and lorries are being run under orders of Court though they were either denied permits or their permits had been cancelled or suspended by Transport Authorities. We have come across cases where liquor shops are being run under interim orders of court. We have come across cases where the collection of monthly rentals payable by Excise Contractors has been stayed with the result that at the end of the year the contractor has paid nothing but made his profits from the shop and walked out. We have come across cases where dealers in food grains and essential commodities have been allowed to take back the stocks seized from them as if to permit them to continue to indulge in the very practices which were to be prevented by the seizure. We have come across cases where land reform and important welfare legislations have been stayed by courts. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 16,92,11,104/-, towards allegation of clandestine removal of blooms, billets and ingots, appellant had deposited an amount of ₹ 72,83,471/- and that has been appropriated in the re-adjudication. Similarly against the duty demand of ₹ 94,59,415/- and education cess of ₹ 1,89,188/- aggregating ₹ 96,48,603/- against unfound stock during physical inventory, the appellant has deposited ₹ 73,90,760/- and ₹ 1,47,819/- towards duty and education cess respectively aggregating ₹ 75,38,575/-. That has also been appropriated. It is surprising that although the duty demand of ₹ 94,59,415/- was levied against unfound stock, there was no levy of penalty under Section 11AC by the Commissioner, which calls for enquiry. 42. In view of the aforesaid discussions and taking entire aspect of the matter into consideration as well as following the ratio laid down by Apex Court in the case of Benara Valve 2006 (204) ELT 513 (SC) we are of the opinion that order for pre-deposit shall not cause undue hardship to the appellant. Therefore keeping in view prejudice caused to Revenue, Appellant is directed to deposit ₹ 12 crores (Twelve Crore Only ..... X X X X Extracts X X X X X X X X Extracts X X X X
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