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TMI Blog2015 (11) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly the payments received in the above-mentioned four bank accounts in respect of sales of aluminium cables cannot be treated as the payments received for sale of the cables manufactured and cleared by M/s Batra Henlay Cables. No enquiry has been conducted with the remaining customers - Without any enquiry with them, it cannot be presumed that the payments made by them were in respect of the goods manufactured and cleared by M/s Batra Henlay Cables which had been sold to them. In view of this, the payments received into the four bank accounts, mentioned above, from the parties with whom no enquiry had been conducted, cannot be treated as the payments for the goods manufactured and cleared by M/s Batra Henlay Cables and those amounts cannot be taken into account for calculation of the duty demandable from M/s Batra Henlay Cables. - Commissioner s order confirming duty demand of ₹ 66,04,307/- has to be set aside and the matter has to be remanded to the Commissioner for denovo adjudication - impugned order is set aside - Decided in favour of assessee. - Excise Appeal No. 628-630 of 2005 - Final Order No. 51200-51202/2015 - Dated:- 17-4-2015 - Shri Rakesh Kumar, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 473 to M/s Sterling and Wilson Electricals and No. 450, 482, 504 and 615 to M/s ETA but the goods sold under these invoices had not been accounted for in their books of accounts. It, therefore, appeared that M/s Batra Henlay Cables in order to remain within full duty exemption limit and thereby wrongly and fraudulently avail of the SSI exemption were grossly under reporting and suppressing their production and clearance. 1.2 In course of investigation, it was found that account No. 347 had been opened in Ashok Vihar Branch of Catholic Syrian Bank Limited in the name of Shri Vinod Kumar, an employee of Grandlay Cinema, by showing him as Proprietor of M/s Batra Henlay Cables and similarly another account No. 3159 had been opened in Shakur Basti, New Delhi Branch of Punjab National Bank in the name of the same Shri Vinod Kumar by showing him as proprietor of M/s Batra Henlay Cables. Similarly, it was found that an account No. 367 had been opened in Ashok Vihar Branch of Catholic Syrian Bank Limited in the name M/s Cosmoline Electricals through the same Shri Vinod Kumar and an account No. 4077 had been opened in Darya Ganj, Delhi, Branch of Indian Overseas Bank in the name of M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lic Syrian Bank Limited, that the cheques issued in the name of Devin Board were being deposited in its account and thereafter cash used to be withdrawn from that account and used to be handed over to Shri Brajesh Batra. Statement of Shri Rajesh Batra, Partner of M/s Batra Henlay Cables, was recorded wherein he stated that it is his brother Shri Brajesh Batra who is looking after the work of M/s Batra Henlay Cables. Enquiries were made with certain buyers of wires and cables who had made cheque payments in the name of M/s Batra Henlay Cables and M/s Cosmoline Electrical and they confirmed having purchased wires and cables from M/s Batra Henlay Cables. In view of this investigation, it appeared that the amounts deposited in the above-mentioned four bank accounts were for sale proceeds of the wires and cables manufactured by M/s Batra Henlay Cables which had not been accounted for in its books of accounts. The amounts deposited in these accounts during 1994-1995, 1995-1996, 1996-1997 and 1997-1998 were ₹ 43,67,280/-, ₹ 1,38,55,588/-, ₹ 99,14,298/- and ₹ 8,09,212/- respectively against which the value of clearances declared in the books of accounts during these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 11AC of Central Excise Act, 1944 readwith Rule 173Q of Central Excise Rules, 1944 and (c) imposition of penalty under Rule 209A of Central Excise Rules, 1944 on M/s Batra Enterprises, Shri Brajesh Batra and Shri Vivek Batra, partner and Shri Rajesh Batra, Partner of M/s Batra Henlay Cables. 1.4 The above two show cause notices were adjudicated by the Commissioner by a common order-in-original dated 29/10/04 by which the above two duty demands were confirmed against M/s Batra Henlay Cables alongwith interest thereon under Section 11AB and beside this, penalty of equal amount was imposed on them under Section 11AC of Central Excise Act, 1944 readwith Rule 173Q of Central Excise Rules, 1944, penalty of the ₹ 10 lakhs each was imposed on Shri Brajesh Batra partner of Shri Batra Enterprises and M/s Batra Enterprises under Rule 209A of the Central Excise Rules, 1944. No penalty was imposed on individual partners of M/s Batra Henlay Cables. The land, building, plant and machinery of M/s Batra Henlay Cables was ordered to be confiscated under Rule 173Q (2) of Central Excise Rules, 1944 with option to be redeemed on redemption fine of ₹ 10,00,000/-. 1.5 Against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht cross examination of the 17 customers of M/s Batra Enterprises, who have given statements to the effect that they had purchased Batra Henlay brand cables, but the same had not been allowed and that in view of this, the statements of the customers of M/s Batra Enterprises cannot be relied upon, that other than the statements of the customers, there is no evidence to prove that M/s Batra Enterprises purchased unaccounted cables of Batra Henlay brand manufactured by M/s Batra Henlay Cable and supplied the same to the 17 customers, that as regard the duty demand of ₹ 66,04,307/- raised vide show cause notice dated 27/9/99, this demand is based on the amount of ₹ 2,89,47,379/- deposited in the above-mentioned 4 accounts in the name of Shri Vinod Kumar, that the appellant were neither having plant and machinery nor infrastructure to manufacture the quantity of goods on which the duty has been demanded, that there is no evidence to show that the goods against which the cheque payments have been made in the name of M/s Batra Henlay Cables and M/s Cosmoline Electricals had been manufactured by M/s Batra Henlay Cables, that Shri Brajesh Batra in his statement dated 09/8/99 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s deposited by cheque in the four secret accounts two in the name of Shri Vinod Kumar by showing him as Proprietor of M/s Batra Henlay Cables and two in the name of Shri Vinod Kumar by showing him as Proprietor of M/s Cosmoline Electricals, he pleaded that Shri Vinod Kumar in his statement dated 03/3/98 while stating that he is an employee with M/s Grandlay Cinema, had admitted that these four accounts in Catholic Syrian Bank Limited, Indian Overseas Bank and Punjab National Bank had been opened on the instructions of Shri Brajesh Batra, that he has signed the blank cheque books in advance and handed over the same to Shri Brajesh Batra, that the payments made for the goods sold by M/s Batra Henlay Cables were received by cheques in the name of M/s Batra Henlay Cables or M/s Cosmoline Electricals and deposited in these accounts and thereafter the cash was withdrawn and given to Shri Brajesh Batra, that subsequently on the objection of branch Manager of Punjab National Bank to huge cash withdrawals, cheques were issued in the name of a firm called M/s Devin Board of Shri Naveen Mehta which also had account in Catholic Syrian Bank Limited and, thereafter the withdrawals were made fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les received by them were of Batra Henlay brand and during that period, there were no sale of any wires and cables by M/s Batra Henlay Cables to M/s Batra Enterprises, that on this basis it has been presumed that the goods worth ₹ 71,13,121/- supplied to 17 customers were of Batra Henlay brand which had been illicitly cleared by M/s Batra Henlay Cables to M/s Batra Enterprises without accountal and without issue of any invoices, that during the period of dispute, as per the records of M/s Batra Enterprises, they had purchased wires and cables from 12 suppliers and all of them in their statements have stated that they have never supplied Batra Henlay brand wires and cables to M/s Batra Enterprises, that in view of this, the only conclusion which can be drawn is that the Batra Henlay brand wires and cables supplied to 17 customers by M/s Batra Enterprises had come from M/s Batra Henlay Cables and the same had been cleared by M/s Batra Henlay Cables without issue of any invoice and without payment of duty and that in view of this, the duty of ₹ 23,20,278/- has also been correctly confirmed alongwith interest and penalty has been correctly imposed. He, therefore, pleaded th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of prosecution proceedings, a statement made and signed by a person before a Gazetted Central Excise Officer in course of enquiry proceeding shall be relevant for the purpose of proving in any prosecution proceeding, the truth of its content when the person who had made the statement is examined as a witness before the Court and the Court of the opinion that having regard to the circumstances of the case, the statement should be admitted as evidence in the interest of justice. The only situation in which the statement given by a person can be admitted as evidence without his cross examination are enumerated in clause (a) of sub-Section (1) and those situations are when the person who made the statement is dead or cannot be found or is capable of giving evidence or is kept out of the way by the adverse party or whose presence cannot be obtained without an account of delay or expenses, which under the circumstances of the case, the Court considers unreasonable. In accordance with the judgment of Honble Delhi High Court in the case of J K Cigarette reported in 2009 (242) E.L.T. 189 (Del.) before invoking sub-Section (1) (a) of Section 9D, a specific finding has to be given by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Basti Branch of Punjab National Bank and account No. 4077 in Darya Ganj Delhi Branch of Indian Overseas Bank all accounts in the name of Shri Vinod Kumar, an employee of Grandlay Cinema by showing him as Proprietor of M/s Batra Henlay Cables and M/s Cosmoline Electricals ; (2) Statement dated 03/3/98 of Shri Vinod Kumar an employee of M/s Grandlay Cinema wherein he stated that while he is an employee of M/s Grandlay Cinema owned by Shri C.L. Batra F/o Shri Brajesh Batra and Shri Rajesh Batra, that he also worked for sometimes for Batra Henlay Cables and that he had opened the accounts mentioned above in his name on the instructions of Shri Brajesh Batra, that the cheques issued by various customers in the name of M/s Batra Henlay Cables and M/s Cosmoline Electricals were being deposited in these accounts and the cash was being withdrawn and handed over to Shri Brajesh Batra, that when the Branch Manager of Punjab National Bank objected to the huge cash withdrawals, the cheque were issued by him in the name of M/s Devine Board, a firm of Shri Naveen Mehta, a friend of Shri Brajesh Batra and those cheques were deposited in the account of M/s Devine Board and from the account, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the period from 1995-1995 to 1997-1998 and the total differential duty payable would be ₹ 66,04,307/-. 8.2 The contention of the appellant on the other hand is that all these payments deposited in the above-mentioned four accounts do not pertain to the goods manufactured and cleared by M/s Batra Henlay Cables, that during this period M/s Batra Henlay Cables were also getting certain goods manufactured on job work basis which were being manufactured by the appellant and that the duty can be demanded only in respect of those amounts deposited into the four accounts mentioned above, which are the payments for the goods manufactured and cleared by Batra Henlay Cables and no duty can be demanded in respect of the amounts deposited in the above-mentioned four accounts which represent the payments for the goods which had not been manufactured and cleared by M/s Batra Henlay Cables. 8.3 The amounts totalling ₹ 2,89,47,379/- deposited during the period from 1994-1995 to 1997-1998 have been deposited in the accounts of M/s Batra Henlay Cables as well as M/s Cosmoline Electricals. M/s Cosmoline Electricals is a trading firm and there is no finding of the Commissioner tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by M/s Batra Henley Cables and M/s Cosmoline Electricals. No enquiry has been conducted with the remaining customers. Without any enquiry with them, it cannot be presumed that the payments made by them were in respect of the goods manufactured and cleared by M/s Batra Henlay Cables which had been sold to them. In view of this, the payments received into the four bank accounts, mentioned above, from the parties with whom no enquiry had been conducted, cannot be treated as the payments for the goods manufactured and cleared by M/s Batra Henlay Cables and those amounts cannot be taken into account for calculation of the duty demandable from M/s Batra Henlay Cables. 8.5 In view of the above discussion, the Commissioners order confirming duty demand of ₹ 66,04,307/- has to be set aside and the matter has to be remanded to the Commissioner for denovo adjudication keeping in view our above observations. 9. In view of the above discussion, the impugned order is set aside and the matter is remanded to the Commissioner for denovo adjudication, strictly according to our observations and directions in this order. (Pronounced in open court on 17/04/2015.) - - TaxTMI - TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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