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TMI Blog2017 (12) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... s recorded during search and investigation were under pressure, is not correct - Held that: - regarding Physical verification of stock we observe that such exercise was challenged by the appellant immediately after search, the Pancha witness Shri Daulat Ram during cross examination confirms not undertaking of stock taking exercise. During subsequent statements the Appellant or its directors were never again confronted on the aspect of retractions and from this we find force in the appellants arguments that no such stocktaking was actually done - Ld. Commissioner’s finding that each test recorded in the diary of chemist is one heat and calculating total production by an arithmetic calculation is not sustainable in view of the specific statement of the director during investigation and not recording of the any statement of the chemist who had made entries in the said diary. Further, it is a legally settled position that no demand for clandestine manufacture can be sustained based on theoretical and uncorroborated calculations. Clandestine removal based on register of vehicles booking maintained by New Vikas Transport Company - Held that: - we find force in the appellants arguments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E/56611/2013 Raghuveer Metal Industries Ltd. Duty ₹ 23,34,20,556/- Penalty Rs.23,34,20,556/- Charge of clandestine clearance. 2. E/56612/2013 Raghuveer Metal Industries Ltd. Redemption Fine ₹ 10,00,000/- Confiscation of goods worth ₹ 70,49,861/- Currency of ₹ 66,30,000/- Confiscation under Rule 25 of CER, 2002 [Panchnama dated 15.09.2010 (RUD-1] 3. E/56613/2013 Mr. Anil Pokharna Rs.1,00,00,000/- Rule 26 of CER, 2002. 4. E/56614/2013 Rajasthan Commercial House Redemption Fine ₹ 2,00,000/- Confiscation of goods worth ₹ 10,24,676/- Currency of ₹ 23,00,000/- Confiscation under Rule 25 of CER, 2002 [Panchnama dated 14.09.2010 (RUD-6)] 5. E/56615/2013 Mr. Raj Kumar Pokharna Rs.1,00,00,000/- Rule 26 of CER, 2002. 6. E/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 per metric ton of sales made by the appellant excluding service tax. 4. On the basis of information that RMIL appellant were indulging in evasion of duty by clandestinely manufacture and clearance of finished goods, a search operation was conducted on 14-15/09/2010 at the factory and related premises by the officers of DGCEI. During the course of search some discrepancies were noticed in stock of raw materials and finished goods. The details of the physical stock taking are as follows: S. No. Item Quantity as per Records (MT) Actual Quantity as per Panchnama (MT) Difference Value (Rs.) 1. Ingots 1452.242 1137.386 (-) 314.856 72,41,688/- 2. Miss Rolls 205.995 52.29 (-) 153.705 28,43,542/- 3. Billets 68.84 65.225 (-) 3.615 77,722/- 4. Furnace O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said transporters. Further, for some of the GR's, no corresponding invoice was found to be issued. In respect of information collected from the commercial tax Department revealed that entry in respect of 162 vehicles as per sale entries were not found recorded in appellant s records. Further appellant purchased material through three vehicles, which were not recorded in their records. 8. As per the agreement dated 01/07/2006 and 22/09/2009 between the appellant-RMIL and Kamdhenu Ispat Ltd. (M/s KIL), Bhiwadi, royalty was being paid at the rate of ₹ 150 per M.T. There appeared to be excess payment of ₹ 25,79,797/-, made during the period April 2008 to October 2008 as compared with the clearances effected in ER-1 returns. There also appeared to be some discrepancy in the electricity consumption pattern vis-a-vis product norms as per ER 5 returns. 9. Show cause notice dated 11/03/2011 was issued proposing confiscation of excess TMT Bar seized in the factory premises of RMIL and the premises of its dealer/distributor RC H and Rajasthan Steels. Further confiscation of Indian currency of ₹ 63,20,000/-, ₹ 60 lakhs and ₹ 23 lakhs, seized du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds/books of KIL. The learned counsel states that the appellant s account in the books of KIL seized by the Department RUD 88, reflects the entries for royalty due and paid. When the royalty amount is actually paid by the appellant during the month, it's account, in KIL books is credited and when the royalty income is recognised/due in the books of KIL, the appellant s account is debited. This is how the account of appellant is maintained by KIL in its books of account. However, the Department have wrongly interpreted it by treating both the royalty due as well as royalty paid amounts every month appearing in the Ledger account of the appellant in the books of the KIL, as separate payments of royalty by the appellant to KIL. The learned Commissioner lost sight of the fact that the account of the appellant was credited with the royalty payment entry dated 04/04/2008, for ₹ 4 lakhs, and debited with royalty due entry dated 30/04/2008, for ₹ 4,28,104/-. Thus, these two, amounts one being Debit amount other being credit amount cannot be added to get total royalty paid by the appellant. The learned counsel also demonstrated this in the course of hearing. Referring to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri. Del.) CCE, Meerut-I v. Silvertone Papers Ltd., 2013 (287) E.L.T. 478 (Tri. Del.) Hissar Pipes Pvt. Ltd. v. CCE, Rohtak, 2015 (317) E.L.T. 136 (Tri. Del.) 20. He also asserted that even the expertise of the employees could not have led to weighment of around 2200 MT of stock within the short span of 15 hours, taken in the Panchanama proceedings, since the time required to load, unload and weigh the vehicle could not be curtailed. Such stock taking required around 228 truck loads of 10 MT per truck. 21. The second Pancha, Shri Praveen Kumar could not be produced by Revenue for cross-examination, even though the appellant had requested for the same. Had he been produced, he would also have given similar statements as made by Shri Daulat Ram, during the cross-examination 22. That further As regards, the assumption of the department that each test noted in the notebook of chemist was one heat, and multiplying the number of heats with the capacity of furnace, and accordingly drawing of conclusion that 2409 MT of production took place during the period of dispute, as against recorded quantity of 1229 MT, he submitted that there is no basis whatsoe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsported to the Appellant. 26. He also pointed out that for the alleged clandestine production and clearance of 42,800 MT of finished products, the Appellant would have required around 47,000 MT of scrap. The impugned order vaguely and without evidence merely could uphold only 2230 MT, as unaccounted procurement of scrap. There is no evidence led by the department to prove such huge quantity of unaccounted scrap procurement by the Appellant and the other relevant necessary overheads/factors of production required for their conversion like labour costs, electricity, fuel, consumables, etc. 27. As regards, the demand of ₹ 7,33,57,221/- based on six booking registers and loose GRs of the transporter(s) is concerned, Ld. Counsel submitted that Shri Moin Khan (Transporter) himself stated during cross-examination in response to Question 11 12, that the booking register reflects only the approximate requirement whereas the actual weight in Kg is known after the actual loading of goods only. Further, in response to Questions 8 9, he had already stated that all the entries mentioned in the booking register may not have been actually transported. Thus, on a conjoint reading o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... henu shows that the total royalty payment for the month of April 2008 was ₹ 8,29,441/-, as against royalty payment of ₹ 4,00,000/- only recorded in the Appellant s account. There is no substance in the submission that payment of ₹ 4,00,000/- on 04.04.2008 was advance against the actual royalty due entry of ₹ 4,28,104/- made on 30.04.2008. 31. It is highly unlikely that the Appellant would show any royalty payment on paper with respect to clandestinely removed Kamdhenu brand TMT bars since it would enhance their chances of being caught during scrutiny. Such excess payment of royalty could only have been available in the records of M/s Kamdhenu Ispat Ltd. Therefore, the Ld. Commissioner has correctly confirmed the demand of clandestine clearance in this regard. 32. Further, in the matter of demand based on six booking register and loose GR of the transporter, Ld. AR submitted that on the basis of cross examination of Mr. Moin Khan, Proprietor of the transport entities, the Appellant argued that all the bookings made in the morning by the Appellant which were reflected in the booking register may not be finally transported. 33. He submitted that the ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant was procuring Cenvatable scrap by showing higher quantity of scrap than what was actually supplied by raw material suppliers and non cenvatable scarp from market without bills by making cash payments and without recording the scrap so obtained in their statutory records. 39. We have heard both the sides and have perused the appeal records and written submission given by both the sides. 40. On the first issue, regarding Physical verification of stock we observe that such exercise was challenged by the appellant immediately after search, the Pancha witness Shri Daulat Ram during cross examination confirms not undertaking of stock taking exercise. During subsequent statements the Appellant or its directors were never again confronted on the aspect of retractions and from this we find force in the appellants arguments that no such stocktaking was actually done. Further, it can also be understood that stock of approximately 2200 tons of steel (approximately 228 trucks load) cannot be undertaken in the total duration of 15 hours. Therefore, this finding of the Commissioner is not sustainable. 41. We also observe that Ld. Commissioner s finding that each test recorded i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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