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TMI Blog2016 (7) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... is answerable to law for the evasion of duty it has caused. Beginning from the show cause notice all the authorities have erroneously held that the appellant is entitled to cum-duty benefit. It is shocking to know that how such a concession can be given to an evader who did not maintain authentic record recognized by law to demonstrate cum duty clearness. Appellant resorted to clandestine removal and no records were maintained in respect of such clearance. Therefore the duty evaded transactions which have never seen the light of the day deserve no concession of cum duty benefit at all. The tainted deals should be banned by coercive measures of law to prevent recurrence thereof as were as to discourage evasion. - If such benefit is granted, that shall legalise illegalities. Demand of duty confirmed with penalty - Decided against the assessee - E/1074 & 1075/2005 - Final Order Nos. 41065-41066 / 2016 - Dated:- 5-7-2016 - SHRI D.N. PANDA, JUDICIAL MEMBER AND SHRI B. RAVICHANDRAN, TECHNICAL MEMBER Shri M. Karthikeyan, Advocate for the Appellant Shri K. Veerabhadra Reddy, JC (AR) for the Respondent ORDER PER D.N. PANDA The appellants being aggrieved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CTD bars manufactured by various manufacturers including the appellant. The material recovered and evidence gathered form bill traders and brokers revealed that the brokers were securing orders from different buyers for supply of CTD bars to them. Such orders were passed on to the manufacturers including the appellant, who cleared their un-accounted manufactured goods clandestinely. Sri G. Sampath Raj, director of the appellant Company in his statement admitted that there was receipt of 200 MTS of unaccounted raw material i.e. M.S. ingots from its sister concern TAL and nearly 180 MTs of CTD bars were manufactured out of that which were cleared without payment of excise duty. 3.2 Investigation discovered one writing pad (marked for identification as No. 8 to Annexure - A of mahazar and a folder marked as No. II (2)) from the premises of one Pankaj Saha who was a buyer of the CTD bars from the appellant company. Also writing pad (marked for identification as No. o4 to Annexure - A of Mahazar was recovered) from the residence of Chandar Sharma who had issued false invoices (second sales invoice) in connivance with R. Murali, a broker. The quantity and value of offending goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ojha and Babulal. Account was also opened in Tamilnadu Mercantile Bank (TMB) vide No.323633 and at Lord Krishna Bank, Teynampet. 3.6 All such accounts were maintained to route black mony colouring that to be sale proceeds of false transactions backed by false invoices. Shri Chander Sharma admitted that he had issued false invoices called second sales bill as if he had purchased the CTD bars and traded with the same. This modus operandi followed was to give shelter to the goods clandestinely cleared by the appellant company and sold to the buyers in Tamilnadu and Kerala. The proceeds thereof were routed through these accounts. 4.1 The brokers who secured orders were R. Murali, Rajasekar, Nachiappan and Bros, as well as Pankaj Saha. Chander Sharma explained his modus operandi as depicted by investigation in para 7 of the show cause notice. He admitted destruction of evidence which was done after completion of delivery of the goods. He categorically stated that the non-existing firms S.S. Enterprises, RVS Traders etc. were instrumentalities to give shelter to clandestinely cleared goods of the appellant. 4.2 The writing pad discovered from Chander Sharma in the course of inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the name of M/s. Priyank International. The materials seized from Pankaj Saha were not disowned by him. He explained the details contained therein which related to clandestinely removed goods of various mills including the appellant s re-rolling mill. 5.2 One Shri Sanjay Kumar Ojha who was looking after the accounts of the non-existing firm M/s. Priyank International, in his statement dated 7.8.1996 admitted that the transactions were made through false invoices issued by Priyank International. Ojha had also issued false invoices in the name of M/s. Hira Traders. 6. Investigation noticed that in the name of Hira Traders false invoices were issued to one PMA Steels of Chennai. This was stated by A. Md. Saleem, Managing Director of that firm. He revealed that false invoices were issued in respect of certain quantities of the goods clandestinely cleared by the appellant. This comes out from para 7 of the show cause notice. Similarly para 18 of the show cause notice deals with other buyers namely Gold Star and Shams Steel Traders. They also stated that unaccounted goods were received by them from complex iron and steel company, Santhosh Metal, Priyank International, Shri Muru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6th October 2000 considering no evidence against the appellants. But learned Commissioner (Appeals) superficially determined the liability and demanded duty to the extent of ₹ 5,13,351/- followed by interest and penalty baselessly; there was no evidence available to show alleged clandestine removal of goods made by appellant company as well as its Director, Sri Sampath Raj Jain. The Director was not involved in the alleged act. Where the goods have gone was not evidenced. So also who were the buyers of the alleged goods did not come to record. In absence of any positive evidence of clandestine removal, the charges against the appellant failed to sustain. Accordingly order of learned Commissioner (Appeals) is liable to be set aside. 11. Revenue on the other hand says that when the adjudicating authority failed to take cognizance of the cogent and credible evidence recovered in the course of investigation demonstrating the questionable modus operandi of the racket and loss of public Revenue, as well as failed to appreciate value of the statements recorded from different persons who were actively and consciously involved in the evasion, Revenue went in appeal before learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. Investigation brought out its story of clandestine removal of goods made by appellant in clear terms recording evidence from bill trades and purchasers of such goods as well as recovering certain incriminating materials from them during search. Their oral evidence remained intact without being assailed by appellant. The documentary evidence discovered from the custody of such witness also remained unchallenged by the appellant. Their involvement in the bill trading racket causing evasion could not be ruled out. The appellant-company admitted that the unaccounted raw materials came from its sister concern M/s. TAL were used by the former to manufacture 180 MTs of finished goods and such goods were cleared clandestinely evading excise duty. Modus operandi of the racket established the premeditated design of all of them bringing out their nexus, collusion and abetment as well as malafide intent of the appellant to cause evasion by an organized bid. Collusion with brokers and bill traders could not be ruled out by both appellants leading any cogent and credible evidence. 15. Bill traders engineered false invoices and document holding out that they were buyers of duty paid goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offence against the other permitted under law since each offence is cognizable independently for its trial and sentence awarded except the sentence awarded against different offences concurrently undergone. Therefore on the facts and circumstances of the case, confining evasion made the appellant company to 269.712 MTS, shall be a bonus to appellants for the deliberate breach of law when they clandestinely removed 449.712 MTs (180 MTs + 269.712 MTs) of finished goods evading duty. 18. The appellant when failed to maintain proper accounts it is not entitled to plea of set off of 180MTs clandestinely removed against unaccounted clearance of 269.712 MTs found by investigation in para 28 of the show cause notice. It is therefore required that without any hesitation the adjudicating authority has to re-compute the duty liability of the appellant in respect of 449.712 MTs which is aggregate of 180MTs of goods as well as 269.712 MTS of goods clandestinely removed as established from evidence gathered and recovered in the course of search and show cause notice provided basis. There was misplaced sympathy on the evaders. This can be said following the principle laid down by Hon ble High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be pleaded as a defence to any action which is not in accord with law and justified - Rajiv Kumar Sharma Vs. Commissioner of Central Excise (Del.) - 2012 (276) ELT 321 (Del.). When investigation has discovered the truth and the bill traders as well as the purchasers of clandestinely removed goods demonstrated the questionable modus operandi of the appellant proving that goods of the appellant were dealt by them resulting in evasion of duty and their evidence remained uncontroverted, the appellant is answerable to law for the evasion of duty it has caused. 20. Beginning from the show cause notice all the authorities have erroneously held that the appellant is entitled to cum-duty benefit. It is shocking to know that how such a concession can be given to an evader who did not maintain authentic record recognized by law to demonstrate cum duty clearness. Appellant resorted to clandestine removal and no records were maintained in respect of such clearance. Therefore the duty evaded transactions which have never seen the light of the day deserve no concession of cum duty benefit at all. The tainted deals should be banned by coercive measures of law to prevent recurrence thereof as w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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