9911796707
TMI Blog2018 (11) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... . PRATEEK JALAN JJ. Mr. Rupesh Kumar, Advocate for the petitioner. Mr. Harpreet Singh, Senior Standing Counsel with Ms. Suhani Mathur, Adv. for respondent. S. RAVINDRA BHAT, J. (ORAL) 1. The question of law sought to be urged by the appellant in these two appeals is whether in regard to the total circumstances of the case, the Customs Excise and Service Tax Appellate Tribunal (CESTAT) was justified in rejecting the appeal without appreciating the facts and evidence before it. 2. The brief facts of the case are that on 08.08.2011, search and seizure proceedings were carried out in the appellant s premises. There is no dispute that it manufactures electricity wires and cables. Based upon the materials on record and the statements of various individuals including that of Sh. Lalit Jain- proprietor as well as his brother, a show cause notice was issued by the Revenue on 08.07.2013. The allegations in the show cause notice were briefly that the material included certain loose sheets and diaries, all of which tied up by the statements recorded in the course of the investigation from suppliers of raw materials. The Revenue also relied in the show cause notice, upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e factory at the time of search indicated clearances of finished products by using invoices in the name of M/s Universal Enterprises, Shahdara to various customers. The firm in the above name was found to be not in existence at the address cited in the invoices. This firm was admitted to be a fake firm as confirmed by Sh. Chittaranjan Pradhan, Supervisor cum Operator of the appellant. Invoices of such fake firm was made use of by the appellant as cover for clandestine clearances made without payment of duty. (iii) Certain loose papers were recovered at the time of search at the residence of Shri Lalit Jain, Prop. These loose sheets contained the details of various raw material suppliers and the quantum of such raw materials procured by the appellant. The main supplier of copper wire was M/s Balaji Metal, Shahdara, Delhi. Sh. Naresh Gupta, Prop. M/s Balaji Metal confirmed in his statement dated 08.08.2011 that raw materials have been supplied to the appellant by his firm. He also confirmed the total quantity of such raw material supplied to the appellant during the years 2007-10,2010-2011 and 2011-12. (iv) The other major raw material i.e. PVC compound was supplied by M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders and winding machine the quantum of production alleged would not have been achieved. (iii) It has also been argued that the documents recovered from residence of Sh. Lalit Jain do not pertain to the appellant, but pertains to the business of his brother Sh. Prithaviraj Jain who is said to have been working as commission agent. (iv) The adjudicating authority, in the impugned order, has given detailed findings on all the above grounds. The documents recovered from house of Sh. Lalit Jain clearly indicate the names of various raw material suppliers, quantity of raw materials procured and the period during which the same has been procured. The documents also indicate in detailed the various customers with the details of goods cleared as well as the payments received and pending. Many of the entries found are corroborated by payments made/ received in the bank account of the appellant. Obviously, such transactions are accounted. This leads us to the reasonable conclusion that the documents found are a truthful account of the actual transactions made by the appellant in terms of procurement of raw material as well as manufacture and clearance of the finished products. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of bias. It was urged that on a totality of evidence and if one looked into the analysis carried out by the Commissioner - in the orderin-original, it was evident that the Revenue fell prey to glaring discrepancies. In this regard, it was highlighted that as against the total sum of over ₹ 6.1 crores, allegedly paid, the appellants allegedly had a turnover of ₹ 5.21 crores. Learned counsel submitted that this was an inherent improbability, which exposes the findings of the Revenue. He submitted that, since the CESTAT did not apply its mind, its findings are perverse. 6. The Commissioner in the order-in-original took note of the fact that the seizures of the documents and other materials (including loose sheets, invoices, diaries etc.) were tied up by the statements of the raw material suppliers. At one stage, the appellant had urged that the material belongs to one Prithvi Raj Jain, his brother. However, the statement of Prithvi Raj Jain did not fully corroborate the version given by Lalit Jain, the proprietor of the appellant. The order-in-original noted importantly as follows: 14. It is submitted by RCI in defense that the documents on the basis of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 'A' of Panchnama drawn at the residence in the name of 'Nareshje' pertained to his firm M/s Balaji Metals and he had received the amount mentioned from Shri Lalit Jain for supply of bare copper wire to RCI during in 2009-10 in cash and cheque. Further, the parties mentioned in these documents were also admitted by Shri Lalit Jain to be its buyers and supplier of raw material. He admitted that the resumed three Scholar Fancy Memo Book contained details relating to sale value of wire and cable made by them to various buyers and details of payment received in return. In fact the documents i.e., three Scholar Fancy Memo Book (diaries) contain party-wise and date wise running account which is clearly sale value, receipt of sale proceeds and outstanding balance. Shri Lalit Jain explained that the entry occurring like 364=25, 482=22, 52771=5S on page22, 16 and 27 of diary (Scholar Fancy Memo Book) No.1, 2 and 3 were to be read as ₹ 36,425/-, ₹ 48,222 and ₹ 52,77,158/- respectively; that due to stiff market competition they used to purchase unaccounted raw material from the suppliers in cash and accordingly sale of finished goods i.e. PVC wire and cable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 4.1.12 cannot be treated as truthful as he was assisting his brother Sh. Lalit Jain in his business operations of M/s Reliance as admitted by Sh. Lalit Jain in his statement dated 17.05.13. 16.2 I further find that explaining pages 1 to 7 of S. No.6 of Annexure 'A' to panchnarna drawn at the residence of Shri Lalit Jain, Shri Prithviraj stated that these details were related to commission received against sale of goods by him, cash transactions and details of money financed by him to different parties. He stressed upon that these transactions had no relation with the business of MIs Reliance. I find that untruthfulness of statement of Shri Prithviraj is evident from the fact, that various entries in these documents showing payment/receipt through cheque/DO to raw material suppliers/ buyers of RCI were on verification by Department found to be debited/credited in RCI bank account. Further, these very documents contained details of bare copper wire received from Shri Naresh Gupta of M/s Balaji Metals, who admitted having received the amounts mentioned on page 6 (of loose page 1 to 7) in cash and cheque for supply of bare copper wire was seized both from the factory p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold PVC to RCI on kachi parchi. These statements are corroborated by the fact of seizure of unaccounted PVC made from factory premises of RCI on 8.8.2011 weighing 2920 kg. valued at ₹ 1,31,400/- and are admissible as evidence. Regarding statement of Shri Naresh Gupta proprietor of M/s Balaji Metals, who admitted having supplied bare copper wire to RCI and also accepted the entries made at page No.6 and 7 of S.No. 6 of Annexure 'A' to Panchnama dated 8.S.2011 drawn at the residence of Shri Lalit Jain, it is submitted that as stated by Shri Prithviraj these entries pertained to trading done by him (Prithviraj). I have already discussed this point in paragraph 16, 16.1 and 16.2 above and come to the conclusion that statement of Shri Prithviraj does not state true facts and these entries are in fact related to unaccounted receipt of bare copper wire from M/s Balaji Metals. Thus, it is apparent that the resumed documentary evidence regarding receipt of excess and unaccounted raw material i.e. bare copper wire, PVC, etc. as reflected in the resumed documents stand corroborated by the statement of the raw material supplier, Shri Lalit Jain of RCI, and seizure of PVC, bare c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical, Erode account and 152 bundles were cleared on 1.7.2011 and 207 bundles on 11.7.2011. Further, needless to say that this is clearance made to one party only. Unaccounted raw material collectively valued at ₹ 3,27,960/- was also seized on 8.8.2011. I further observe that though stated to be working for 8 hours only, nothing prevented RCI from working round the clock. In the light of above discussion I find that RCI had the capacity to produce wire and cables of the value alleged in the SCN. It is further contended that their electricity expenses were in the range of ₹ 10,000/- to ₹ 20,000/- per month as per the sub-meter installed in the factory. I find the ledger account of Power Electricity for the year 2006-07 to 2011-12 submitted along with reply to the SCN to be unauthenticated. In the circumstances, no notice can be taken of it. Moreover, no evidence of use of electricity out of the main connection by others with use of sub-meter arid the quantity of goods manufactured by them has been brought on record. Further, for establishing charge of clandestine removal the Department is not bound to prove excess electricity consumption. 21. RCI has further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stics clearly admitted that he had made sales of PVC Compounds to the appellant without issuing invoices and without proper accounting. The Commissioner also compiled the facts gathered on analysis of the loose sheets and the documents. He further noted that certain payments against raw material suppliers namely Naresh, Taparia, Omex and buyers namely Classic, Sasi Elec.Vinayalca, Paras Elec., Vikram Elec., Deepak Elec. were made by cheques/DDs. These were found to have been credited/debited in the bank accounts of the appellants. This according to the Commissioner constituted evidence to establish that purchase of raw material to produce the machinery have been corroborated. Furthermore, the three diaries i.e. the Scholar fancy memo book clearly mention the names of the buyers. The names of these parties were reflected in the sale invoices. 8. Initially, the proprietor Sh. Lalit Jain stated that his brother Prithvi Raj Jain was unemployed and dependent on him. Sh. Prithvi Raj Jain, on the other hand, stated that he was a commission agent and the documents pertain to purchase and sale of the household goods of different persons. The Commissioner deduced that Sh. Prithvi Raj Jain ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
