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TMI Blog2018 (6) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... rdections. The penalty amount on the appellants company shall be worked out accordingly - the penalty imposed on the appellant-Director appears to be excessive and the same is reduced to 2 lakhs. Even by the rule of thumb, and the production reworked out on the basis of admitted average production, there exists element of clandestine production and removal. Appeal allowed in part. X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, as per the show cause notice dated 18/07/2011 are that the appellant during the period 2008-09 suppressed production and removed clandestinely 1443.588 MT of MS Rod which was calculated on the basis of Dispatch Register (Private record) and other records withdrawn from the appellant's factory premises by the preventive officers of the Department. This quantity was not accounted for in their specified records by the appellant, during the relevant period and further alleged that the said goods were removed clandestinely valued at ₹ 3,42,13,036/- without issuing Central Excise invoices and without payment of duty amounting to ₹ 35,23,943/- (including cess). It was also alleged that the appellants have contravened the rules by willful suppression of facts with ulterior motives and with intent to evade payment of duty. The SCN was adjudicated on contest and the proposed demands were confirmed, along with equal amount of penalty under Section 11 AC of the Act. Further, personal penalty of ₹ 5 lakhs was imposed on Shri Sumit Agarwal, Director of M/s B.P. Ispat Pvt. Ltd. Being aggrieved, the appellants preferred appeal before the learned Commissioner (Appeals) who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 009 matched with the entry on page no.31 of Dispatch Register in respect of Truck No.MP-20 G-2320 dated 06/02/2009 showing dispatch of 21.00 MT (Sr. no.71 of Annexure-B to the SCN). No other Central Excise invoice was found issued by the appellant company in respect of other dispatches recorded in the Dispatch Register. Thus, it appeared that the appellant company have dispatched or cleared 1443.588 MT (1464.588-21.0) of M.S. Rods clandestinely, during the period from 22/01/2009 to 20/02/2009 without issue of invoices and without paying duty. These clandestinely clearances appeared to be corroborated with account of suppression of production (private record). 10. Being aggrieved, the appellant preferred appeal before learned Commissioner (Appeals) who was pleased to dismiss the appeal, observing that, "the adjudicating authority have rightly observed that there are sufficient corroborative evidences on record to sustain the charge of suppression of production and its clandestine removal and his (Adjudicating authority) order confirming the demand of duty by invoking the extended period of recovery in terms of proviso to Section 11 A of the Act, is proper and correct. The impositio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to question no.85 admitted that entries were related to number of pieces of M.S. Ingots. The learned counsel states that from perusal of the statement dated 08/05/2009, it is evident that in reply to question no.85 it is revealed that the words in question "pieces" and "M.S. Ingots" were super scribed and moreover the entire statement being recorded subsequently, in the office by Preventive Staff, evidently was under duress and coercion. Further, in absence of any corroborative evidence, cannot be relied upon. Moreover, the Director, Sumit Agarwal was not making any entry in the said production register and Shri Raju Dewangan who had claimed to have maintained the register, clearly in reply to question no.2 stated that the said register contained the entry of daily production of Rods, kept on stand. Moreover, Shri Sumit Agarwal, Director in his reply stated that the weight of one piece of Ingots cannot be estimated, as because Ingots are placed in the stand after cutting. It was further stated that in the M.S. Ingots, piping, cut pieces or broken pieces requires cutting before keeping on stand and the cut pieces are placed with mis-roll. However, in the SCN, as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of dispatch register, clandestinely removed, tallied with unaccounted production of 1496.850 MT of M.S. Bars worked out from the number of pieces of Ingots, recorded and consumed during the period 22/01/2009 20/02/2009 in the production register. The learned counsel states that the said production register was for the period from 03rd January, 2009 to 20th February, 2009, did not correspond to the period in the dispatch register being 22/01/2009 to 20/02/2009. As per the statement of Raju Dewangan, the production register shows the production of 10 MM Bars only whereas the Dispatch Register as summarized (Annexure-B to SCN) shows the production of various sizes including 10 MM. So both the quantities did not tally, as alleged. Further, even considering the entry in alleged production register, as numbers of M.S. Ingots, the entire numbers of Ingots would never be converted into M.S. Rods instantly, as substantial stock of under process material obtained after rolling, but yet not attained the stage of final product for entry in RG-1 register. This was neither verified nor accounted for while arriving at the production of M.S. Rods. 15. As regards the finding that the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoices that too when not produced for cross examination. 2015 (325) ELT 130 (Tri.-Mumbai). 3. Cross examination is integral part of principles of natural justice-Manek Chemicals Pvt. Ltd. Vs UOI [2016 (334) ELT 302 (Guj)] 4. Statements recorded behind back of assessee cannot be relied upon in adjudication proceedings without allowing assessee an opportunity to test evidence by cross examining makers of said statements- Jindal Drugs Pvt. Ltd. Vs UOI [2016 (340) ELT 67 (P & H)] 5. For establishing the factum of clandestine manufacture, the revenue is required to establish the guilt beyond doubt. The entries in the note books recovered from Shri Singh who have been denied by the Appellant to be their employee, can at the most, create a doubt against the appellant, but cannot take the place of legal evidence so as to establish charge against them.- Sharma Chemical Vs CCE Calcutta [2001 (130) ELT 271 (Tri-Kolkata)]. 17. The learned A.R. for revenue relies on the impugned order. He further states that the dispatch register maintained and recovered during search/investigation contains the truck numbers. Further, some of the transporters in the follow-up investigation have admitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansporters is not an admissible evidence, being in violation of the provisions of Section 9D of the Act. I find that leading questions have been asked to the transporters like from one Shri Pappal Agarwal owner of Vehicle No.CG-13 D-1144, Question, please tell, by the said vehicle on 1st February, 2009 M.S. Rod loaded from M/s B.P. Ispat Ltd. where was it transported? Answer- on the said vehicle whether M.S. Rod was loaded on the said date from M/s B.P. Ispat, I cannot remember. I enquired from my driver who is also unable to recall. Further, one of the transporter namely Shri Pravesh Kumar Chaturvedi owner of Truck No.CG-11 AB 0361, in reply to query whether the said truck on the dates 04th, 08th and 20th February, 2009 as per record of the appellants, whether transported M.S. Rod from appellants premises to Baralar and also as regards the freight payment? In answer Mr. Chaturvedi replied that his truck only transport goods of M/s Prakash Industries. It appears that the Driver may have without his knowledge done some transporting, the freight of which have not been received by him. Further, he states that He will enquire regarding this matter from his driver. 19. Further, I find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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