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TMI Blog2018 (5) TMI 820X X X X Extracts X X X X X X X X Extracts X X X X ..... ere are further corroborations in the form of documentary evidences, which could be like despatch details for the production, receipt details of the said material, transactions of the sale money, transportation details of such goods, details of additional consumption of electricity for such suppressed production a prudent individual would not agree with the present conclusions of the Revenue. There is nothing on record from the Revenue side to come to a reasonable conclusion to say that there has been preponderance of probability of such suppressed production on the part of the appellant - The evidences in the form of approximation and averaging production as 77.6% and one statement of Shri Agarwal, Director of the appellant company cannot be called a prudent conclusion of the production estimate. Impugned order set aside - appeal dismissed - decided against Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of above-said investigation, a show cause notice was accordingly issued to the assessee respondent on 11.02.2008 demanding the duty evaded and interest thereon, proposing penalty and appropriation of the cenvat credit reversed by the assessee respondent on inputs found short. 3.5 Counsel for the appellant has taken us to the show cause notice wherein it has been stated as under: "4. That the assessee is manufacturing zinc content finished goods zinc oxide, zinc ingots, zinc alloys from raw materials-zinc dross, zinc scrap, zinc ingots etc. Raw material is being imported by the assessee and also purchased from local market. The imported raw material viz. zinc dross/zinc scrap used in the manufacture of zinc oxide etc. is being described in Bill of entry as zinc dross/scrap in various names as 'Seal' or 'Scribe' or Scrub'. These codes are also given along with zinc contents in description provided in ISRI (Institute of Scrap Recycling Industries) which are reproduced below: Code : ITEM Scribe: zinc scrap contain a maximum 5% unmeltables such as free iron, copper, aluminium and other metals. Scrub: Zinc dross in slab form with a minimum zinc content of 92%. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at for each different raw material issued for manufacture of zinc product, they are showing less production as detailed in Annexure "A" with compare to (percentage) yield 120.6% required as per zinc content in each type of Scrap. 6. That the value of clearance of suppressed production and clandestine removal of the zinc oxide has been calculated on average basis by calculating total value of clearances made by the assessee, divided by total clearance of zinc oxide in the particular year." 3.6 He has also taken us to the demand of total duty from the assessee through a chart which has been produced along with the show cause notice which reads as under: M/s Mittal Pigments Pvt. Ltd. Kota Quantity in quintal Year Raw material issued for production (Qntls.) Production to be as per % yield recovery 70%-84% (Qntls.) Production shown (Qntls.) Production suppressed (Qntls.) Average sale rate per quintal (Rs.) Value on which duty not paid (Rs.) Cenvat 16% (Rs.) Cess (Rs.) 2002-03 8360.53 7022.84 7893.50 - - - - - 2003-04 23486.98 19729.06 18799.25 929.81 5200 48,35,012 7,73,602 - 2004-05 41,171.65 34584.18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minum and other metals. Scrub: zinc dross in slab form with a minimum zinc content of 92%. Seal: Zinc top dross with a minimum zinc content of 90%. Shelf: zinc dross content minimum of 85%. From the above definitions, it is clear that zinc Scribe, Scrub. Seal and Shelf means that this material contains zinc contents between 95% to 85%. Further samples from zinc dross lying were drawn on 17.10.06 and sent to the CRCI, New Delhi for test. The test results confirmed zinc content 96.40% in scrap under memo no. 2 and zinc contents 81.51% under test memo No. 3 Further chemical Examiner also opined that the assessee was using zinc dross of higher purity. 21. I further observe that Shri Ramesh Kumar Agarwal. Director of assessee unit. In his statement dated 02.12.2006 tendered under section 14 of Central excise Act, 1944 confirmed 120.6% yield of zinc oxide if the zinc ingots of 99.95% purity are used for manufacture. He also confirmed that they used zinc dross. Zinc scrap scribe, zinc scrap score, seal, zinc dross scrub, and zinc remitted ingots, zinc dross ash, zinc ingots and zinc alloy for manufacture of zinc oxide which are mostly imported. He further confirmed that zinc co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of raw materials used in the production of zinc oxide, as such l do not find any substance in the contention of the assessee. 24. The assessee also relied upon the commissioner (Appeals) order on similar issue dated 24.09.2002 in the case Zinc-O-India, Alwar. I have gone through the above case and l observe that the commissioner (Appeals) had held in this case that during the period 10/95 to 6/96 a greater proportion of zinc Dross was used as input resulting in a lower yield than the period from 6/96 to 3/97 when a greater percentage of zinc Ingot were used as input. Therefore, Logically would in lower production of zinc oxide than what can be produced from zinc Ingot. The facts of the present case are altogether different as in the present case department had made out the case of suppression of production on the basis of minimum contents of zinc in the raw materials namely zinc Dross Scrap, zinc Scrap Scribe, Zinc Scrap score used normally in the manufacture zinc Oxide. As such the case law cited is of no help to the assessee. 25. This is a case of suppression of production and clandestine removal of goods without payment of duty. In the cases of clandestine removal all that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be incorrect to suggest that the conclusions of the Tribunal were based on a single factor namely unretracted statement of the proprietor. As noted, the Tribunal based its conclusion on several factors and evidences noted above. " (2) In Commissioner of Central Excise vs. Sarin and Sarin 2015 (316) E.L.T. 401 (Allahabad) wherein it has been held as under: 11. The Adjudicating Officer has considered the statement of the assessee and, in our view, the Adjudicating Officer has appreciated the material evidence correctly. The statements made by Sri Dipak Mehra and Sri Davi Sarin have a material bearing on the issue. For the sake of convenience, the relevant part of the statements is extracted herein below: "A. I have seen this raw material register & signed in the same on today date it is the same register which is resumed from my factory on 20- 1-03, yet there is a difference in Qty. of Sada Pan Masala & Gutkha actually mfd. in the factory & shown in our records but I cannot explain the difference & I have no reply for this shortage. Q.9. Are you excepting that you have suppressed the production of Pan Masala & Gutkha as described in Q. No. 8? A. Yes, there is a supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. He admitted that value of such goods would be approximately ₹ 91.92 lacs on which Excise Duty payable would be approximately ₹ 7.57 lacs. He admitted that no such Excise Duty was paid on the goods so dispatched. He also admitted that the goods were sold without bills or invoices or without making any entries in the records. Raw materials for such goods were purchased in cash without making any entries in the record. In his second statement dated 17-2-2011, in addition to admitting his previous statement, he further stated that the goods clandestinely removed as mentioned in the spiral diaries were sold to known people. He, however, could not produce the names and addresses of such purchasers since they were not mentioned in the register. 4. It can thus be seen that the Dispatch Supervisor as well as one of the Directors of the company who was responsible for the day-to-day functioning of the company had in unequivocal terms admitted the clandestine removal of the goods without payment of Excise Duty. Matching entries were found in their diaries which did not form part of the final records. Raw material was purchased in cash. Clearances were made without raising bil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considered. It appears that the Assessing Officer noticed the gold content in the final product as per the Books of Accounts and as per the appraisal of customs authority. Therefore, the Assessing Officer worked out the excess consumption of gold which according to him had been actually sold in the local market. The Assessing Officer also noticed that similar modus operandi was done in the year 1989-90 also and there was no change in the modus operandi in the subsequent years under consideration. At this stage it appears that the assessee produced some further evidence which we have perused from the paper book produced and according to the assessee by producing such new evidences the case differs from 1989-90, as according to the assessee by using new evidences which were not there in the year 1989-90, they have been able to produce the evidence with respect to the actual consumption of gold in final product of ornaments which were exported. However, considering the evidences from the paper book produced, which according to the assessee are new evidences, we are of the opinion that as rightly observed by the learned ITAT none of the evidences can be said to be contemporaneous a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties under the Gold Control Act. Raw gold supplied to the karigars for preparation of ornaments was recorded in the books of the assessee. To such gold, the karigars would add alloy @ 7.100 grams per 100 grams of gold to achieve desired purity of gold of 22 carat. Even when such ornaments were received back after preparation, they were tested, certified and recorded in the assessee's records. It was thereafter not possible for any mischief or modification, particularly looking to the certificate issued by the Gems & Jewellery Export Promotion Council. Counsel pointed out that 22 carat of gold or for that matter any other carats would not have precise purity and would have a range of fineness of gold. He drew our attention to the specifications laid down by the Bureau of Standards, which provides as under:" 1. 22.3 Carat gold: It shall be of fineness not less than 970. 2. 22 Carat gold: It shall be of fineness not less than 916.6. 3. 21 Carat gold: It shall be of fineness not less than 875. 4. 18 Carat gold: It shall be of fineness not less than 750. 5. 14 Carat gold: It shall be of fineness not less than 583.3. 6. 12 Carat gold: It shall be of fineness not less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. If we take as sample of such discrepancy that emerges in the category of 22 Carat gold ornaments, after supplying raw gold to the artisans and the artisans preparing gold ornaments after adding alloy in the specified quantity, the assessee received gold ornaments, according to the assessee's records having purity of 93.37%. The very same ornaments when were exported, the assessee recorded its purity as 91.66%. Some of these ornaments also were subject to actual test by the Customs authorities. The result also matches the assessee's claim of gold purity of 91.66%. Thus, in fact, there was considerable discrepancy between the two sets of documents pertaining to the same set of gold ornaments is undeniable. The assessee owed an explanation and had a duty to reconcile this discrepancy. The authorities found that the assessee failed in doing so. This was on the premise that the assessee's explanation was found unacceptable and inadequate. The assessee's only explanation was that the ornaments actually carried purity of 93.37% but were reflected in the export documents having purity of 91.66%. This according to the assessee was done because the importers had desired ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse. It is also not true that in coming to such conclusions, the Revenue authorities ignored the presence of the certificate of the Gems & Jewellery Export Promotion Council. The contention that in absence of proof of local sale, it must be presumed to have been exported, in our opinion, is fallacious. It is not even the case of the assessee, barring his explanation about the higher purity of gold being exported when lower purity gold is declared in the export documents, that such gold was in some form or the other, separately or independently exported. When the authorities did not accept the assessee's explanation, it comes to a situation where such differential quantity of gold did not form part of the assessee's exports. The only conclusion, therefore, available to the authorities and therefore rightly reached at was that the gold was subjected to local sale. All in all, the issues considered by the Revenue authorities at a greater length, referring to and analyzing the evidence on record and once which were confirmed by the Tribunal by giving cogent and detailed reasons, in our opinion, do not suffer from any perversity. In the result, the questions are decided in negat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to extract the statements which corroborated each other. Besides, the Managing Director of the Company on his own volition deposited the amount of ₹ 11 lakhs towards excise duty and therefore in the facts and circumstance of the present case, the aforesaid statement of the counsel for the Respondents cannot be accepted. This fact clearly proves the conclusion that the statements of the concerned persons were of their volition and not outcome of any duress. (6) In Commissioner of C. Ex., Madras vs. Systems and Components Pvt. Ltd. 2004 (165) E.L.T. 136 (S.C.) wherein it has been held as under: 5. The Appeal filed by the Department has been disposed of by the Tribunal by holding that the Department has not proved that these parts were specifically designed for manufacture of Water Chilling Plant in question. The Tribunal has noted the Technical details supplied by the Respondents and the letter of the Respondents dated 30th November, 1993 giving details of how these parts are used in the Chilling Plant. The Tribunal has still strangely held that this by itself is not sufficient to show that they are specifically designed for the purpose of assembling the Chilling Plant. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistrate has given various reasons for disbelieving the evidence of PW-3, the panch witness who had also, at one point of time, indulged in smuggling. It is unlikely that PW-3 would bring 200 gold biscuits of foreign marking and conceal them in the compound of the Appellant without Appellant's knowledge for safe custody. It is not his case that he had facilitated FW-3 in concealing them in his compound. The place of concealment of the contraband is also significant at this juncture. It is just near and visible from the window of his bed-room through which he or family members could always watch anyone frequenting the place where the contraband was concealed. This fact becomes more relevant when we consider that after concealment of the contraband in the compound one would ensure that others having access to the compound may not indulge in digging and carrying away the same. As soon as the Appellant and/or the members of his family had sight of such visitor or movement by others, they would immediately catch hold of such person or would charge them. Obviously, therefore, it would be the Appellant who had concealed 200 gold biscuits of foreign marking in his compound at a place a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfession was voluntary and believes it to be true, then there is no legal bar on the Court for ordering conviction. However, rule of prudence and practice does require that the Court seeks corroboration of the retracted confession from other evidence. The confession must be one inculpating the accused in the crime. It is not necessary that each fact or circumstance contained in the confession is separately or independently corroborated. It is enough if it receives general corroboration. The burden is not as high as in the case of an approver or an accomplice in which case corroboration is required on material particulars of the prosecution case. Each case would, therefore, require to be examined in the light of the facts and circumstances in which the confession came to be made and whether or not it was voluntary and true. These require to be tested in the light of given set of facts. The high degree of proof and probative value is insisted in capital offences. 21. In Kashmira Singh's case the co-accused, Gurcharan Singh made a confession. The question arose whether the confession could be relied upon to prove the prosecution case against the Appellant Kashmira Singh. In that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find out whether there are any other facts and circumstances to corroborate the retracted confession. It is not necessary that there should be corroboration from independent evidence adduced by the prosecution to corroborate each detail contained in the confessional statement. The Court is required to examine whether the confessional statement is voluntary; in other words, whether it was not obtained by threat, duress or promise if the Court is satisfied from the evidence that it was voluntary, then it is required to examine whether the statement is true. If the Court on examination of the evidence finds that the retracted confession is true, that part of the inculpatory portion could be relied upon to base conviction. However, the prudence and practice require that Court would seek assurance getting corroboration from other evidence adduced by the prosecution. 32. It is true that in criminal law, as also in civil suits, the trial Court and the appellate Court should marshal the facts and reach conclusion, on facts. In a criminal case, the prosecution has to prove the guilt beyond doubt. The concept of benefit of doubt is not a charter for acquittal. Doubt of a doubting Thomas or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we think that instead of being committed to jail, the Appellant should be sentenced to pay fine of ₹ 10,000/- and ₹ 5,000/- respectively for the two aforementioned offences, within 4 months from today. In default, he shall undergo imprisonment for a period of 2 months and 1 months respectively which are directed to run consecutively. (8) In Collector of Customs, Madras and Ors. vs. D. Bhoormall 1983 (13) E.L.T. 1546 (S.C.) wherein it has been held as under: 40. In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector. There was no violation of the rules of natural justice. The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoomiull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell tale circumstances in which the goods were found, regarding their being smuggle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase of raw material out side the books have been proved. 16. In the light of the above discussions and considering the totality of the case, we are satisfied that no case is made out for extra so called clandestine sale of the Portland Cement to the said parties. We are satisfied that the first appellate authority has rightly deleted the addition and cancel the penalties. Hence we hereby set aside the impugned order passed by the Tribunal and restore the order passed by the first appellate authority, alongwith the reasons mentioned herein. (2) Commissioner of C. Ex., Meerut-I vs. R.A. Castings Pvt. Ltd. 2011 (269) ELT 337 wherein it has been held as under: 3. Being aggrieved by the impugned orders, the respondents filed appeals before the Customs, Excise & Service Tax Appellate Tribunal, New Delhi. The Tribunal observed that it is settled principle of law that the electricity consumption can not be the only factor or basis for determining the duty liability, that too on imaginary basis, especially when Rules 173E mandatorily requires the Commissioner to prescribe/fix norm for electricity consumption first and notify the same to the manufacturers and thereafter ascertain t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of fact or fraud on the part of the respondents. No substantial question of law arises from the order of the Tribunal. (3) Paras Ship Breakers Ltd. vs. Commissioner of Central Excise 2007 (217) ELT 321 wherein it has been held as under: 18. In terms of Section 35G of the Central Excise Act, the High Court, thus, could entertain an appeal only if a question of law arose. No question of law having, thus, arisen for consideration before the High Court, we are of the opinion that the impugned judgment does not suffer from any legal infirmity. (4) Collector of Customs, Bombay vs. Swastic Woollens (P) Ltd. and Ors. 1988 (37) ELT 474 wherein it has been held as under: 9. The expression "wool wastes" is not defined in the relevant Act or in the notification. This expression is not an expression of art It may be understood as in most of financial measures where the expression are not defined not in a technical or any preconceived basis but on the basis of trade understanding of those who deal with these goods as mentioned hereinbefore. The Tribunal proceeded on that basis. The Tribunal has not ignored the Technical Committee's observations. We have noted in brief the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the Appellate Authorities as well as the Tribunal, and find that the Tribunal has recorded a finding of fact in paragraph 8 of the order as follows:- "8. It is seen from the above that the Revenue's only reliance is on the order forms recovered from the residential premises. All the respondents have clarified in their statement that such order are only for Booking of the goods and do not relate to clearance of the goods mentioned therein. The clearance of the final product is only about percentage of such quantities shown in order Booking Forms which is dependent upon various factors. In the absence of any evidence to support Revenue allegation, I am of the view that the appellant authority has correctly set aside the demand. Accordingly, Revenue appeal is rejected on the above ground also." (6) Hindustan Processors Ltd. vs. Union of India 2014 (300) ELT 23 wherein it has been held as under: 9. In the first place, what is involved in the case is a pure question of fact and not any question of law much less substantial question of law. Secondly, this Court cannot again in this appeal undertake the examination of factual issues nor can draw factual inferen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner Excise. In that view of matter, no substantial question of law arises. However, we make it clear that since no other material was available as per judgment of Allahabad High Court, therefore, we are not interfering. (8) Oudh Sugar Mills Ltd. Versus Union of India 1978 (2) E.L.T. (J 172) (S.C.) wherein it has been held as under: 7. Now, these calculations certainly involve some assumptions. The first is that the difference of 56 maunds noticed by the Assistant Chemical Examiner during the two and quarter hours test conducted by him on May 7, 1957 was uniform for every 2-1/4 hours working throughout the working hours of the crushing season which began on November 4, 1956 upto May 7, 1957 when the test was conducted. 11. If any one of these assumptions breaks down, then the ultimate conclusion will have to be rejected as incorrect. It has to be borne in mind that human element is involved at certain stages of the operation such as time of commencement of the day's working, the rapidity or slowness in feeding cut sugarcane into the crusher and mills, accurately adding the same quantity of water in the crusher and mills, stopping the inflow of mixed juice into the tan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons. The finding is thus vitiated by an error law. 14. The other finding that the registers were not properly maintained as required by Rule 83 is also an inferential finding based upon the calculations made by the Assistant Chemical Examiner. As we have already held those calculations being based upon unwarranted assumptions cannot form legal basis for a finding that more juice than what was recorded in the register has gone into the production of sugar. 15. It was, however, contended on behalf of the respondent that at the personal hearing given by the Central Board of Revenue, Shri C.M. Dalmia, Assistant Secretary of the Appellant and Shri, J.M. Shah, Superintendent Technologist employed by the Appellant had conceded that there had been "some erroneous accounting" on their part in showing the weight of mixed juice on an average of 7.5 tons and that their only plea was that this was not intentional or deliberate nor did it signify any mala fides on their part. No reliance has, however, been placed upon this confession in the Respondent's statement of the case. We may however point out that the gross annual turnover of sugar manufactured in the factory is in the neighbourhood ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent confirmed the duty demand along with interest for the period of five years alleging suppression of clandestine removal of the final product and also imposed penalty mainly based on the production approximation and on the statement of Director of the unit, Shri Agarwal, who is one of the appellants in this case. 6.2 The department has not gone beyond the approximation and the statement of Shri Agarwal. Any prudent person would not so conclude on extra production by approximation and by a mere statement of the Director of the company. Unless there are further corroborations in the form of documentary evidences, which could be like despatch details for the production, receipt details of the said material, transactions of the sale money, transportation details of such goods, details of additional consumption of electricity for such suppressed production a prudent individual would not agree with the present conclusions of the Revenue. There is nothing on record from the Revenue side to come to a reasonable conclusion to say that there has been preponderance of probability of such suppressed production on the part of the appellant. The evidences in the form of approximation and ave ..... X X X X Extracts X X X X X X X X Extracts X X X X
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