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TMI Blog2017 (6) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... ndings of the courts below are based on facts which was relatable with the documents and records as well as capacity of production - appeal dismissed - decided against Revenue. - E/966 & 967/2010-EX[SM] - Final Order No. 70362-70363/2017 - Dated:- 13-4-2017 - Mr. Anil Choudhary, Member (Judicial) Shri Ashok B Kulgod (Asstt. Commr.) A.R. for the Department K.K. Anand Advocate of assessee-respondents ORDER Revenue is in appeal against common OIA No. 29-30/CE/APPL/KNP/2010 dated 12.01.2010. 2. The brief facts are that Rimjhim Ispaat Ltd. (RJIL for short) having their factory located at Village Bharwa, District Hamirpur, U.P. are engaged in manufacturing of SS Steel Ingots/Billets/SS Flats and other products of iron steel falling under Chapter 72 of Central Excise Tariff Act, 1985 and are registered with the Department. On the basis of intelligence that RJIL were indulging in large scale evasion of duty by way of clandestine production and removal of the same, searches were conducted at the factory premises of RJIL, residence of Directors, premises of their agents at Delhi and Jodhpur, Cutters, registered offices at Delhi and Kanpur and also residences of som ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S Flats, the same used to be sent to different customers in the Wazirpur Industrial Area as per the direction of Shri Anil Goel. On further query about the duty paying documents of the SS Flats, received by him from RJIL, he stated that the same were being maintained by Shri Anil Goel and Shri Mukul Agarwal. Further, on being specifically asked about the duty paying documents of the SS Flats and end cuttings found in his factory on 22.11.2007, Shri Kapil Garg stated that he was not having any documents. 4. Statement of Shri Anil Goyal, Director of RJIL was recorded on 22.11.2007. In his statement Shri Anil Goyal stated that his firm M/s. Agarwal Steels was engaged in the trading of Stainless Steel as a commission agent, for the last one year he was the sole consignment agent of RJIL for the goods supplied at Delhi. That the cutting of SS Flats, received by him from RJIL, was being undertaken at business premises of Shri Laxmi Kant Goyal and Shri Kapil Garg. On being confronted with the statements tendered by Shri Laxmi Kant Goyal and Shri Kapil Garg on 22.11.2007, Shri Anil Goyal stated that he was in total agreement with the statements tendered by them. On being further con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded balances and he could not explain the seized 298.806 MT of SS Billets through any of their legitimate records. On further scrutiny it appeared that so far the stock detained from the premises of two cutters is concerned, respondent RJIL had not issued any invoice in favour of these parties. The records of M/s. Agarwal Steels also indicates that they had not received any invoice in respect of the above stated consignments. Furthermore, the fact of seizure of 298.806 MT of SS Billets and shortage of 154.864 MT of rods at the time of visit of DGCEI officers on 22.11.2007, also seem to establish the fact that RJIL had been indulging in unaccounted manufacture and clearances of SS Flats. The abovementioned quantities of detained goods were converted to seizure vide letters of even numbers dated 13.05.2008. 5. From the facts stated herein above, it appeared to Revenue that RJIL had manufactured and cleared 114.145 MTs of SS Flats (including Flats Cuttings) valued at ₹ 51.37 lakhs, involving duty of ₹ 8,46,498/- seized at the premises of Shri Laxmi Kant Goyal and 161.500 MT of SS Flats (including Flats Cuttings) valued at ₹ 72,67,500/- involving duty of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue preferred appeals before learned Commissioner (Appeals) who vide his impugned Order held that there is no merit in the Revenue appeals and hence rejected the same upholding the Order-in-Original, observing that the grounds of appeal taken in both the appeals are not substantiated. Further observed that Order-in-Original is a speaking order based upon and after considering duty paying documents, production capacity of respondent RJIL and electricity consumption, and appears to be legal and proper. 7. Being aggrieved, Revenue has filed these appeals and the assessees are in cross objection. 8. Learned A.R. for Revenue have argued that (i) Regarding 298.806 MT SS Billets seized at the factory premises of RJIL. The goods were seized at the time of inspection on 22.11.2007. The assessee claimed that these goods are defective and are not marketable, appears to be after thought. When goods were seized on 22.11.2007, no such averment was made by Shri Durga Shankar Mishra, Authorized signatory in his statement under Section 14, who could not explain the seized goods with any office records. This view is clear as even after more than five months the respondent coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and various other buyers. This fact of manufacturing of SS Flats on job work basis, by respondent RJIL has been accepted in Para-2 of the show cause notice. The Revenue failed to take notice that JAL on its own, was also manufacturing and supplying SS Flats to the said Agarwal Steels under the cover of duty paying documents. If the quantity of SS Flats supplied by JAL directly to Agarwal Steels is also taken into consideration, no case of any clandestine removal, as alleged, is made out against the respondent RJIL. These submissions of RJIL have remained uncontroverted. Further, it is an admitted position that SS Flats on which duty was proposed to be demanded from respondent RJIL were seized from the premises of the two cutters of Agarwal Steels, namely Kapil Garg and Laxmi Kant Goel. It is further submitted that respondent RJIL never sold any goods to these cutters. The respondent RJIL and their sister concern JAL sold SS Flats on payment of duty to M/S. Agarwal Steels. Thus, no duty is demandable from the respondent RJIL. The learned counsel further relies on the ruling of the Hon'ble Apex Court in the case of Collector of Central Excise vs. Decent Dying Company (1990) 45 E. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es requirement for a particular size Shri Anil Goel, directs the Cutters to cut the flats as per requirement of the buyers and hand over the cut material to the buyers. The buyers pay the cost of the material to the commission agent Shri Anil Goel and the cutting charges are paid by the buyer to the Cutters. Shri Anil Goel, Proprietor of M/s. Agarwal Steels, Wazirpur Industrial Area, New Delhi the Commission Agent after seizure of the goods had made a request for provisional release of the goods detained at the premises of M/s. Laxmi Kant Goyal and Kapil Garg, the two cutters. A copy of the request for provisional release made by Shri Anil Goel was submitted alongwith defence. Shri Anil Goel had submitted statement of accounts of the consignment of M/s. Juhi Alloys Ltd. for the period 01.04.2007 to 22.11.2007 i.e. the date of seizure. Shri Anil Goel had also submitted the statement of accounts of M/s. Rimjhim Ispal Ltd. for the period 18.04.2007 to 13.11.2007. The details of purchase and sales as per statement of accounts stated above reported as under :- Purchase Sales Balance M/s. Juhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pur according to which for manufacturing 1 MT of Ingots in a induction furnace 1100 units of electricity are consumed. In the facts of the respondent RJIL they have consumed 617 units of electricity per M. T. which is much less than the average 1100 units, as arrived by study group of IIT. Further, it is urged that the Assistant Commissioner of Jhansi conducted heat cycle study in the month of November, 2008 and the average consumption of electricity was arrived at 703 units per MT of SS Billets which is more than the actual annual average consumption. In view of the facts and circumstances the Adjudicating Authority was satisfied that there is no clandestine manufacture or removal and was accordingly pleased to drop the proposed demand. 11. Having considered the rival contentions and on perusal of records I find that Revenue could not discredited the evidence which was produced before the courts below to the effect that SS Flats seized from the premises of two cutters were duty paid. It is not the case of Revenue contrary to the submission of the respondent that majority of SS Flats found in the premises of the two cutters were purchased by M/s. Agarwal Steels from RJIL and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per month was 4800 MT, have not been agitated by the Revenue. It is a fact on record that respondent RJIL have disclosed more production than the installed capacity. I further find that the court below have in the case of alleged clandestine manufacture and removal, rightly gone through the issue of installed capacity of furnace and possible manufacturing capacity and for this purpose have also taken into account the electricity consumption which does not lead to any adverse inference. I further find that the grounds taken by the Revenue that the respondent RJIL have not given any evidence in the past five years, there are only two panels, is uncalled for and it is does not arise from the orders of the courts below. Further, Revenue has also not got led evidence that the respondent RJIL have two panels in their factory. I have further find that the doubt expressed by the Revenue that the weight slips on the basis of which the goods were received by the two cutters of M/s. Agarwal Steels, as stated by them, ground of the Revenue that the invoices issued by respondent RJIL and JAL are not co-relatable with the weight slips, I find that this ground is also not tenable as no case of r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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