9911796707
TMI Blog2007 (5) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... g was initiated by the DGCEI, Kolkata against the appellant on the allegation that excisable goods i.e. spring leaves of different size and varities were clandestinely manufactured and removed without payment of duty. Adjudication was made by order in original CCE/BBSR-II/03/2003 on 26.2.2003 and that was upheld by Tribunal in Appeal Case No.EDM-251-253/03 on 31.5.2005. 1.3 In the course of Audit conducted for the period from October 1996 to September, 1997, copies of Balance Sheet of the Appellant was called for and on failure of the appellant to provide the same, those were obtained from Andhra Bank for the period from 1995-96 to 1997-1998 and sales figures obtained from Income Tax Authority. Sales Tax officer, Bargarh also made the sales figure of the Appellant documents it was noticed that sale figures of springs leaves furnished by the Appellant to Excise authority was lower than the sales figures submitted to the above Authorities/concerns and reasons of discrepancy explained was unsatisfactory. 1.4 . It was also noticed from Past records of the appellant that in last five years, they had not paid duty out of PL Account but sizeable amount of duty was discharged out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng loss etc. are baseless and untenable contention. Thus the assessee has totally failed to disprove the charges of suppression of production and surreptitious removal of excisable goods without payment of duty. The assessee being an unit operating under Self Removal Procedure since long, should be aware of various provisions of Central Excise Laws and is expected to maintain the prescribed Central Excise documents in a correct manner. Instead of assisting the Central Government in collection of its legitimate dues, the assessee has tried their level best to defraud the Government exchequer by surreptitiously removing the finished excisable goods without payment of Central Excise duty. Hence, the allegation of evasion of Central Excise Duty by suppressing the facts stands fully established against the assessee and they are liable to pay the Central Excise Duty as demanded in the instant Show Cause Notice. The details of the said duty demanded is calculated in the Annexure-C to the Show Cause Notice. However, in a similar issue i.e. for clandestine manufacture and removal of excisable goods i.e. M.S. Spring Leaves of different size and varieties without payment of duty during the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant while manufacturing spring leaves, uses flats of different sizes. Activity of manufacture undergoes series of process and operations. At every stage of processing, normal loss occurs to the raw material depending on the quality of input. Series of activities involved give rise to huge invisible loss. Entire finished goods manufactured were accounted for and there was neither clandestine manufacture nor such removal. 2.2 He further submitted that there was no intention at all to evade duty for which the proceeding was time barred and penalty was also not leviable. But merely on surmise and suspicion, exercise was done to impute the appellant to charges through time barred proceeding when entire fact and figure were all along available year after year in record. Further, the sales figure obtained from Income Tax and Sales Tax Authority were not at all examined yearwise to ask for reason why there was difference. But a superfluous view taken. Therefore, the calculation made in Annexure D to Show Cause Notice was baseless and unreasonable. Consequently, the order of Adjudication is unsustainable. 2.3 The Ld. Counsel in support of his arguments relied the following judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss loss year after year, the appellant has made the Department to believe that its sale was very low whereas higher sales figures were shown in returns to both sales tax as well as income tax authorities. 3.2 Learned JDR further submitted that the process loss that was claimed by the appellant was unfair, exorbitant, excessive and unreasonable which resulted in pilferage of Revenue. The appellant was not fair to make payment of duty from PLA account but all along it was taking advantage of Modvat credit. They had also not filed declaration as required by rule 173B disclosing generation of scrap and marketability thereof. This was another mischief for suppression of production as well as clearance. There was also no basis to show the generation of unsaleable scrap and scaling loss. The percentage of loss shown to the Excise Authorities was 10% whereas the unsaleable scrap and scaling loss was not proved by evidence and thus claim of the Appellant was baseless. There was no record to show stages of manufacture of finished goods and the place of existence/storage thereof for the purpose of identification and inventory . The appellant has also failed to establish a standard relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 Total of goods cleared + balance in hand (4+5+6) 7,287.187 807.259 8 Goods removed clandestinely (3-7) 706.951 100.313 9 A. Value (Rs.) 14,845.974 10 Total value (Rs.) 15,358.676 11 Duty payable @ 16% adv (Rs.) 2457.388 NB:- Out of total cut flats (semifinished goods) of 499 092 MTs found in the finishing room the quantity of s leaves and scrap has been cancelled @ 89.70% and 10.30% of flats ( i.e. 499.092 MTs) used in the same ratio as is being maintained by the party as per their statutory records during the period under reference. 4.3 In addition to the discrepency found as above, quantity of generation of finished goods was found to be disproportionate by Annexure 'C' to SCN . This was not disputed by Appellant. Further, the sales figures given to the Sales Tax Department and Income tax Department as well as Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The reason why different sales figures were submitted to sales tax authority, income tax authority remained unexplained and no evidence even led at this stage. Therefore, it was quite probable for the Department to discard claims of the appellant on filmy grounds stated by the appellant and also without any reconciliation on record. Suppression of sales figure, suppressing actual manufactured goods was quite probable to hold by Revenue against the appellant. Appellant's contention that the accounts were not reliable was evidenced from variation of sales figures submitted to different taxing Authorities with no good reason. 4.6 The Department also found that inflated figures were submitted to banks, as an act of mischief. Considering various aspects of the matter, the Learned Adjudicating Authority in para 17 of the order of adjudication held that the allegations in SCN was not controverted by Appellant leading cogent, credible and convincing evidence. Two successive investigations stated earlier have also resulted with levy of demand on the appellant proving clandestine removal as well as manufacture of such kind. The appellant failed to submit any reply against the allegat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad no basis since there was no method of accounting followed to demonstrate the stages of loss identifying quantum of output generated at each stage of processing nor the appellant ever prayed the Department for witnessing a trial run of manufacture to prove its bonafide when it had faced charges twice earlier as aforesaid. Following the judgement of Hon'ble High Court of Madras in the case of Madura Coats Limited vs. CCE-1995 (79) ELT 567 (Mad) holding that Adjudicating Authorities are concerned only with preponderance of probability indicating the truth and are not lied down to strict rule of evidence, the appellant should have brought all evidence to come out of clutches of preponderance of probability. The Authorities below have not merely acted on mathematical perceision by Annexure-D to SCN to work out loss of Revenue. But taking totality of facts and circumstances as well as circumstantial evidence , order of adjudication was passed which does not call for to hold otherwise. The Adjudicating Authority finding two sequential activity of evasion of Revenue in the past as stated earlier was right to decide the matter in the impugned order on the basis of the probabilities o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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