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TMI Blog2018 (1) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... 58,865/-), M/s Sri Navadurga Billets Pvt. Ltd., (Rs. 32,87,667/-), M/s Dilip Rerolling Pvt. Ltd., (Rs. 93,93,087/-), M/s Sundar Ispat Ltd., (Rs. 17,50,000), M/s Mha Shiva Shakti Steel Rolling Mills Pvt. Ltd., (Rs. 6,61,540/-), M/s Ramnath Omkarmal Steel Rolling Mill Pvt. Ltd., (Rs. 28,41,129/-). On recording of statements from the persons in charge of these units, the department took a view that the said amounts received and shown in the private records of the appellant was pertained to clandestine clearances of MS ingots by the appellants to the above units. Accordingly, a show cause notice in F. No. DGCEI/HYRU/12-02/2010 (SCN No. 18/2010) dated 10.05.2010 was issued to the appellants demanding Central Excise duty of Rs. 24,88,770/- beside seeking to impose penalty under Section 11AC of Central Excise Act, 1944 (CEA) on the appellant unit and also personal penalty under Rule 26 on Sri. Ramanuj Agarwal and Sri. Ambika Prasad. 4. After following the due process of law, the Adjudicating Authority confirmed the demands raised with interest and imposed equivalent amount of penalty on the partners. Aggrieved by such an order, an appeal was preferred before the First Appellate Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions only. * The approximate quantity [the SCN has not quantified the MS ingots cleared], in the above transaction would be 780 MTs. As per the appellant, this quantity is accounted for, since monthly ER 1 Return with these quanty, along with Excise Duty payments have already been shown. If the Dept.'s contention that the cash receipt of Rs. 1,99,58,861 from TU is purely on account of clandestine removal, they have to prove that the appellant had manufactured additional 780 MTs do so. * The allegation is that the appellant has cleared another Rs. 1,27,00,000 worth M S Ingots to others. Assuming, without admitting, that it pertains to clandestine manufacture and clearance of M S Ingots only, this would get quantified to 498 MTs of M S Ingots. * As per the Sales details, duty quantified in the Returns / Sales register, the appellant has cleared 3054.81 MTs [including 780 to TU] during the period under question [about 2 months]. * In other words, the Dept. has to prove that apart from 3054.81 manufactured and cleared by them on proper accountal, the appellant had manufactured further 780 MTs [for TU] + 498 MTs [for others], i.e they have clandestinely manufactured and clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Since Sunder Ispat wanted their payments to be made by way of cheque, they have given cash which has been recorded by Mr Ambika Prasad on 23.12.2009, 26.12.2009, 29.12.2009 and 2.1.2009. The cash received has been deposited in the Bank and this amount has been returned to Sunder Ispat by Karthik Steels by way of Cheque. Therefore, this cash receipt has nothing with any selling transactions by the appellant with Sunder Ispat. The Ledger account of Suder Ispat in the books maintained by Karthik Steels has been produced before the lower authorities [Page Nos.222 to 224]. Hence, demand of Rs.l,33,222 was required to be dropped. * Apart from the recovered mini note book (private record) and statements recorded from a few buyers, no other corroborative evidence like electricity consumption, production capacity in the factory premises, purchases clearance by vehicles, sales proceeds etc. has been brought in by the Dept to fasten the duty liability. * Thus, other than creating a doubt about the clandestine manufacture, the Dept. has not come out any concrete / corroborative evidence to fasten the duty liability. On the other hand, the appellant has produced all the evidence on hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the appellant in this regard were that they were under tension, hence failed to mention about their trading activity in scrap at the time of recording the said statements. I find these submissions of the appellants were not convincing, because the trading activity involving turnover of huge amounts and which was not an occasional business activity; hence cannot fail the memory/miss the attention of the appellants, whatever may be the circumstances they were under. Further, the appellants also failed to prove with documentary evidence that the subject cash entries pertains to their scrap sales. No doubt, the VAT returns/some scrap purchase documents submitted by the appellants may show that the appellants were into trading activity of scrap, but these alone would not establish that the subject cash entries were related to such scrap sales and to rebut the evidence collected, without any cogent and corroborative evidence on record. The appellant also failed to correlate any of the subject cash receipt entries with the scrap sales made to respective parties, with relevant ledger extracts maintained by them, even to consider their submissions. In view of this, I cannot agree with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment had adduced evidence in the form of scrap and sponge iron (raw materials for manufacture of ingots) purchased from M/s Archana Iron Trades and M/s Sheetal Shipping respectively, as discussed at para 5.3.2 and 5.3.3. of the notice. The appellant had also admitted in their statement that they use to purchase scrap/sponge iron without bills and made payments for such purchases. Moreover, manufacturers engaged in clandestine manufacture and clearance would not maintain any records and create evidence for such activity. The department cannot be expected to unearth every piece of evidence which is in the domain knowledge of the manufacturers engaged in such activity to prove the case with mathematical precision. Therefore, in cases of clandestine clearances, as the one before me, the preponderance of probabilities, in the face of evidence collected and statements recorded, the charge against the appellants held to be as proved. 9. I also notice that Shri Ramanuj Agarwal and Ambika Prasad who were the partners of the M/s Raghava Ispat had admitted the clandestine clearances and these statements were never retracted. The partners of the M/s Raghava Ispat, having admitted clandes ..... 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