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TMI Blog2018 (4) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... d - it cannot be agreed that the statement need no further corroborated evidence especially when it was retracted. The Department has not collected the sufficient/corroborative evidence. Hence, there is no justification to raise the demand in the hands of SKPL. In view of the majority order, the impugned order, confirming the demand of duty against M/S. Stovekraft Pvt. Ltd. and imposing penalty upon them as also on Shri Rajendra J. Gandhi, Managing Director, is set aside. Appeal allowed. - E/1419/2010, E/1420/2010 - 20186-20187 - Dated:- 14-2-2018 - Per: JUSTICE (DR.) SATISH CHANDRA 69. Both the appeals have emerged from the difference of opinion between the Member(Judicial) and Member(Technical). The Difference of Opinion between the Members has been referred as under: - 1. Whether the findings that there are not sufficient evidences available to establish unaccounted manufacture and clandestine removal of the goods; and the demand of duty along with interest and imposition of equivalent penalty on the appellant, M/S. Stovekraft Pvt. Ltd., therefore, are required to be set aside as held by Member(Judicial)? OR Whether the findings that there are sufficien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s conducted in the administrative once or L which IS located in the premises of M/S. Vardhaman Enterprises. During the course of search, pen drives were recovered and hard disk was also seized. Finally, the matter reached, pertaining to the import of stainless steel sheets, to the Settlement Commission. As per the Final order dt- 10/02/2009, the matter attained finality pertaining to the DRI case. However, in the pen drives, there were some references and information pertaining to the Excise duty evasion, so the same were passed on to DGCEI who started the Excise investigations on 18/01/2008. The Department has recorded the statement of Mr. S.N. Lokesh who is Accountant in-charge, earlier with SKPL and later, with M/S. Vardhaman Enterprises. The statements were recorded on various dates from 23/05/2006 to 18/08/2006. The statements of Shri Rajendra J Gandhi were also recorded. On the basis of these statements and information in pen drives, the DGCEI has made out a case of the clandestine removal and demanded the excise duty along with penalty. Being aggrieved, the appellants have filed the present appeals. 73. With this background, Shri Jaikumar, the learned representative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the source i.e. where the goods were manufactured and supplied. He also submits that the requirement of Section 36B of the Central Excise Act, 1944 is applicable to the pen drive and the same is not admissible evidence. He submits that the Judicial Member in its order has considered the same as irrelevant and Technical Member has said it was complied with but in fact it was not complied with. 74.4. Before concluding his arguments, he also argued on CENVAT credit of ₹ 85,22,040/-. Accordingly, the learned counsel submits that the allegation of the Department is that the appellant has received only bills but no raw material was received. However, the fact is that final goods were cleared after making the payment of duty. Lastly, he made a request to drop the demand by setting aside the impugned order. 75.1. On the other hand, the learned special counsel Shri PRV Ramanan, appearing for the Department, has justified the impugned order. He submits that administrative office of the appellant SKPL is located in the Premises of M/s. Vardhaman Enterprises. Both the business entities nave merged in April, 2007 i.e. after the search. pen drives which were recovered, confirms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations simultaneously as the incriminatory evidences recovered i.e. two pen drives as common. Be as it may. 78. The independent proceedings on the basis of the said pen drives were investigated by the DGCEI who recorded the statement of Shri S. N. Lokesh and Shri Rajendra J. Gandhi who is the key person in both the business entities. It makes no difference that the office of SKPL is located in the premises of M/S. Vardhaman Enterprises. In the eye of law, at the relevant time, both the entities are different as they have a different registration under the central Excise Act, assessments are different, one is private limited company and the other is proprietory concern, 79. In the instant case, it appears that the working of both the business entities was not in a proper manner. There was interchangeable in the brand names, and sometimes, the goods including the raw material too. As per the statement of Shri S.N. Lokesh, the goods are inter changeable at every stage. But at the cost of the repetition, both were separate legal entities during the period under consideration. 80. In the case of M/S. Vardhaman Enterprises, the appellant has accepted their fault, clandestine rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chand D. Jennoni, partner of M s. Maya Udyog has filed an affidavit, where it was stated that whatever raw materials supplied were supplied on purchase orders and payments were received by cheques. He categorically stated that they never made any transaction in cash with M/S. SKPL and raw materials were supplied against proper bills during the period of last 5 years. 82. Regarding the CENVAT credit, it appears that if the duty is paid on the finished goods, then CENVAT credit is allowable on the raw material. Here, appellant has paid the duty and claimed the CENVAT credit on the raw material. The plea that only bills were raised and raw materials were never supplied is sustainable for the reason that the Department has accepted the duty payment without any objection. When the duty has been paid, then appellant is entitled for the CENVAT credit. 83. It may be pointed out that the data recovered from the pen drives is the common data pertaining to SKPL and M/S. Vardhaman Enterprises and the demand of the duty in the show-cause notice is on the assumption that M/s.SKPL and M/S. Vardhaman Enterprises were responsible for clandestine removal. In fact, Shri S.N. Lokesh from whom th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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