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TMI Blog2015 (11) TMI 1473X X X X Extracts X X X X X X X X Extracts X X X X ..... Mandoli Industrial Area, Sewa Dham, Shahdara. All these evidences indicate that SBU was firm floated by Shri Sandeep Gupta in the name of his employee Shri Subodh Gupta. It is also seen that while goods manufactured by SMS-Ghaziabad were being cleared under parallel invoices without payment of duty to M/s. Sandeep Metal Supply, Chawari Bazar, M/s. Sandeep Metal Supply were showing purchase of the same goods from a number of suppliers namely, M/s. Sai Enterprises, JMD Trading, M/s. Mahalaxmi Agency, M/s. M.K. Traders, M/s. First International Business Limited, Tirupati Marketing Sales India, Delhi, M/s. Shivam Traders-Delhi, M/s. Pacific Sales (India), Delhi, M/s. Aadhar Technology Private Limited-Dariyaganj, New Delhi and M/s. Apurva Enterprises-Ajmeri Gate, Delhi and on enquiry either these firms were found to be closed since long or were not existing or they denied having supplied copper strips or copper wires to M/s. Sandeep Metal Supply, Chawri Bazar. There is a lot of evidence on record against SMS-Ghaziabad and the copper ingots suppliers Shivam, Mayank and Vasudev and as such it cannot be said that entire case of the department against SMS-Ghaziabad, Shivam, Mayank an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copper wires being manufactured by them, the premises of-(a) factory of SMS (b) residential premises of Shri Sandeep Gupta at C-21, Geetanjali Enclave, Delhi, (c) residential premises of Shri Subodh Gupta, Inderpuri Extension, alleged to be production Manager of SMS, (d) shop premises of M/s. Sandeep Metal supply, Chawri Bazar, Delhi-110006, the trading premises of Sh. Sandeep Gupta and (f) factory premises of Mayank, Shivam and Vasudev were searched. In the factory of SMS, certain unaccounted stock of finished goods as well as raw material was found and similarly, in the factory premises of Shivam, Mayank, Vasudev also unaccounted stock of finished goods was found which was placed under seizure. From the residential premises of Shri Subodh Gupta, certain accounts regarding receipts of raw material and dispatch of finished goods, kacha slips and parallel invoices were found which were taken over by the officers. In the course of the search of factory premises of SMS also, in addition to excess stock of raw material (copper ingots) and finished products (copper strips), certain incriminating documents in the form of kacha slips showing production on various dates which were not ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Delhi, M/s. Mahalaxmi Agency, Delhi, M/s. M.K. Traders, Delhi, M/s. First International Business Limited, Bhiwari, M/s. Tirupati Marketing Sales India, Delhi, M/s. Shivam Traders-Delhi, M/s. Pacific Sales (India), Delhi, M/s. Aadhar Technology Private Limited-Dariyaganj, New Delhi and M/s. Apurva Enterprises-Ajmeri Gate, Delhi. On enquiry in respect of the above suppliers, it was found that either the same were closed for the long time or the same did not exist or they had issued only bogus invoices to M/s. Sandeep Metals Supply on the request of Shri Sandeep Gupta. Enquiry at the end of Mayank, Shivam and Vasudev Udyog revealed that they had cleared huge quantity of copper ingots to SMS without payment of duty. 1.5 Based on the above investigation, following two show cause notices were issued: (1) SCN No. DZU/INV/C/CE/175/2010/PART1/1990 DATED 18/4/2012 issued by Additional Director General, Directorate General of Central Excise Intelligence answerable, Commissioner Central Commissionerate for demand of duty of ₹ 2,32,94,419/-, ₹ 2,90,57,862/- and ₹ 41,64,554/- from Mayank, Shivam and Vasudev respectively under proviso to section 11A(1) of Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was imposed on the following persons as under: (i) Shri Pawan Kumar Aggarwal, Proprietor of M/s. Mayank-Rs. 2 crores. (ii). Shri Sanjeev Gupta proprietor of Shivam - ₹ 2.5 crores. (iii). Jai Bhagwan authorized person of Vasudev -Rs. 30 lakhs. (iv). Shri Subodh Gupta, Ex-Manager, M/s. SMS-Ghaziabad - ₹ 20 lakhs, (v). Shri Mukesh Chauhan, Ex-Accountant, M/s. SMSGhaziabad- ₹ 10 lakh. 1.8 Against the above order of the Commissioner, these appeals have been filed by M/s. SMS-Ghaziabad, Shri Sandeep Gupta, Shivam, Mayank and Vasudev along with stay applications. 2. Heard both the sides in respect of the stay applications. 3. Shri Pradeep Jain, Advocate, ld. Counsel representing all the appellants, pleaded that the departments case against M/s. SMS-Ghaziabad is based purely on the documents recovered from the premises of one Shri Subodh Gupta; that Shri Subodh Gupta was never an employee of M/s. SMS-Ghaziabad; that M/s. Shivam, Mayank and Vasudev and their proprietors had no dealings with M/s. SMS-Ghaziabad; that Shri Subodh Gupta in his statement has falsely implicated Shri Sandeep Gupta and other appellants; that in this reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remises on 27/7/2010 under the directions of the officers of DGCEI on 4522 kg. copper ingots seized from TATA 407 vehicle on 27/7/2010 which did not pertain to him. Shri Pradeep Jain, pleaded that the departments case against SMS, Vasudev, Mayank and Shivam is not sustainable; that the appellants have strong prima facie case in their favour and hence, the requirement of pre-deposit of the duty demand, interest and penalty by SMS-Ghaziabad, Shivam, Mayank and Vasudev and the requirement of pre-deposit of penalty by the other appellants may be waived for the hearing of their appeal and recovery thereof may be stayed. He also pleaded that the matter may be remanded to the Commissioner for de-novo adjudication after permitting the cross-examination of the various persons as requested by the appellants including Shri Subodh Gupta. 4. Shri Ranjan Khanna, ld. DR, opposed the stay applications by reiterating the findings of the Commissioner in the impugned order and pleaded that the departments case against SMS-Ghaziabad, Mayank, Vasudev and Shivam is not based only on the documents recovered from the premises of Shri Subodh Gupta. He pleaded that Shri Subodh Gupta is an employee-Prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvolved in day to day functioning of the factory of the SMS-Ghaziabad. Shri Khanna also pointed out to findings of the Commissioner in para 1.2 of the impugned order from which it is seen that at the time of search of the factory premises of SMS-Ghaziabad, in addition to excess stock of 4522 kg copper ingots and excess unaccounted stock of 4413 kg copper strips, certain hand written kacha slips were also found which showed the quantity of production on various dates which were not found entered in the daily stock account and several parallel invoices had been recovered. He pointed out to invoice no. 001 dated 3/4/2010 showing clearance to M/s. Asian Switchgears, Kanpur and invoice no. 004 dated 27/4/2010 showing clearance to M/s. Modern Hi-tech, Gurgaon were accounted for the RG1 Register. However, the invoice of same number but bearing different dates, i.e., 001 dated 2/4/2010 and 004 dated 12/4/2012 were showing the clearance to different parties which were not accounted for. He pleaded that this shows that the unaccounted copper strips and wires manufactured by SMS-Ghaziabad were being clandestinely cleared without payment of duty to M/s. Sandeep Metal Supply, Chawri Bazar under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as driven by one Shri Anil Kumar and another person named Shri Arvind Kumar, labourer of SMS-Ghaziabad was also sitting in the vehicle. It was loaded with copper ingots which according to the driver and Shri Arvind Kumar had been loaded from the premises of Maynak Metals, Binni Ki Bhatti, Mandoli Industrial Area, Sewa Dham, Shahdara. Subsequently, on enquiry, Shri Mohd. Ishraf also admitted that he was piloting the Tata 407 vehicle loaded with the clandestinely cleared consignment of copper ingots from the factory of Mayank. Subsequently, Mohd. Ishraf was also found to be an employee of M/s. SMS-Ghaziabad. Subsequently, statement of Shri Pawan Kumar Aggarwal, proprietor of Mayank was recorded wherein he stated that he was clearing the consignments of copper ingots without any bills and without any payment of duty of SMS-Ghaziabd. Similar statements have been given by Shri Sanjeev Gupta proprietor of Shivam and also by Shri Jai Bhagwan authorized signatory of Vasudev. 7. Though Shri Sandeep Gupta of SMS-Ghaziabad has totally dissociated himself from SBU and its proprietor Shri Subodh Gupta saying that he had no dealings with him, this stand of Shri Sandeep Gupta is not compatible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said that entire case of the department against SMS-Ghaziabad, Shivam, Mayank and Vasudev is based only on the statement of Shri Subodh Gupta and on the basis of the documents recovered from his premises. 9. In these circumstances, we are of the prima facie view that criminal complaint filed by Shri Sandeep Gupta against Shri Subodh Gupta before ACJM, Ghaziabad is only a strategy to dissociate himself from the documents recovered from the premises of Shri Subodh Gupta. 10. In view of the above discussion, this is not the case for total waiver from the requirement of pre-deposit and while granting dispensation from the provisions of section 35F of the Central Excise Act, 1944, the appellants, namely, SMS-Ghaziabad, Mayank, Shivam and Vasudev must be put to some conditions of pre-deposit to safeguard the interests of the Revenue. 11. In view of the above discussion, M/s. SMS-Ghaziabad, Mayank, Shivam and Vasudev are directed to deposit an amount of 50% of the duty demand confirmed against each of them within a period of 8 weeks from the date of this order. On deposit of this amount within the stipulated time, the requirement of pre-deposit of balance amount of duty deman ..... 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