9911796707
TMI Blog2019 (2) TMI 1550X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be said to be based on the available evidence for scrutiny. Also, Show cause notice is only narration of search operations and evidences recorded in form of statements of various person. Commissioner has in his order recorded that the persons making the statement have not testified their statements as correct and voluntary. Thus these statements in absence of other evidences cannot be called as reliable evidence in proceedings relating to evasion of duty. Further another fact that needs consideration is that the amount which have been said to be received clandestinely against the duty evaded by way of undervaluation of goods is determined by way of deposits made in the bank accounts of the managing Director. How a person receiving the money in cash against such undervalued goods leave a trail by depositing the said amounts in his accounts has not been considered and answered by the revenue in these proceedings. Appeal allowed. - APPEAL Nos. E/1596,1597/2006 - A/88310-88311/2018 - Dated:- 5-12-2018 - Mr. S.K. Mohanty, Member (Judicial) And Mr. Sanjiv Srivastava, Member (Technical) Shri Vipin Kumar Jain, Advocate, with Shri Roshil Nichani, Advocate, for appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain finished goods which were not found accounted for in the RG-1 Register were seized under panchanama dated 15.10.1996 and subsequently released provisionally against B-11 Bond of ₹ 5.40 Lakhs and Bank Guarantee of ₹ 3.50 Lakhs. 2.3 During certain pay in slips of the saving account no 167423 with Development Credit Bank of the Managing Director Shri Vali N Mithiborwalla (Appellant 2) were also recovered. These pay in slips mentioned the name of various customers of the Appellant. Thus branches of the Development Credit Bank, holding the said account were visited and the bank statement in respect of the saving accounts (A/c No 167423 and 1875) of Appellant 2 were taken. Scrutiny of the said saving accounts statement revealed that prima facie deposit of around ₹ 2 Crores during the period April 1994 to November 1996. 2.4 In his statement dated 15.10.1996, Managing Director of Appellant admitted that- though the actual price of the veneer ranges between ₹ 5 to ₹ 14 per sq mts, depending on the quality of log, the actual billing at time of clearance was done at ₹ 1 to ₹ 2.50 per sq mts, differential being collected in cash; d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (1) of Section 11A of the Central Excise Act, 1944; (iv) ₹ 30 lacs paid by the assessee vide T.R. 6 Challan No. dated 18.10.96 voluntarily towards their duty liability on account of misdeclaration, suppression of facts and under valuation of goods should not be appropriated towards the evaded duty amount; (v) Goods valued at ₹ 5.40 lakhs seized on 15.10.96 should not be confiscated as per the provisions of Rule 173Q and or Rule 209, and or Rule 226 of Central Excise Rules, 1944; (vi) Penalty should not be imposed on them for suppressing the actual assessable value of their final products by reason of fraud, collusion, willful misstatement or suppression of facts from the Central Excise authorities and thereby evading Central Excise duty by undervaluing the goods, as per the provisions of Section 11AC of Central Excise Act, 1944 and or Rule 173Q and or Rule 209 and or Rule 226 and or Rule 9(2) and/or Rule 52A; (vii) Interest should not be charged under Section 11AB of Central Excise Act, 1944 on the delayed payment of duty at the appropriate rate; (viii) The land, building, plant and machinery, material conveyance or things used in co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. We have heard both sides. The basic grievance of the assessee is that of violation of the principles of natural justice. The appellants have not been supplied with copies of some of the documents relied upon in the show cause notice in spite of repeated request for the same; the request for cross-examination of customers confirming receipt of goods without payment of duty has not been granted and no reasons for rejecting the request made has been recorded; no details are furnished as to who are the five customers who corroborated the payment to the Managing Director of the Company for receipt of veneers. 3. The Commissioner has also not given any detailed finding as to why he had held that only ₹ 24,42,919/- have been received by the company s Managing Director as payment for goods cleared clandestinely even though the deposits made by the Managing Director and supported by way of paying slips amounted to ₹ 1,98,52,332/-. The Commissioner s order rather cryptic. We therefore set aside the same for the above reasons and remand the case to the jurisdictional Commissioner for fresh decision in accordance with law after supply of relied upon documents requested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice is barred by limitation. viii. Since the goods which have been confiscated and allowed to be redeemed on payment of redemption fine of ₹ 1.25 lakhs, were at the time of search available in the factory premises and were not cleared without payment of duty order for confiscation is bad in law. 4.1 We have heard Shri Vipin Kumar Jain, Advocate along with Shri Roshil Nichaini, Advocate for the Appellants and Shri A B Kulgod, Assistant Commissioner (Authorized Representative) for the revenue. 4.2 Arguing for the appellant learned counsel submitted that the case of revenue in the present case is based on certain documents which have never been supplied to them. He emphasized that even after the remand by the tribunal specifically for providing the said documents and thereafter adjudicating the matter Commissioner has not provided the said documents. He showed various correspondences undertaken by them with the Commissioner for supply of the said documents. Learned counsel submitted even after the matter being remanded by the tribunal specifically on this ground failure of Commissioner to provide the said relied upon documents is fatal to the case. He also sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure C . In receipt dt. 12.4.97, Shri Vali M. Mithiborwala has acknowledged receipt of show cause notice along with legible copies of all the enclosures and on 29.4.97, he has acknowledged receipt back of all the documents recovered under panchnamas from office, factory and residential premises except for the documents listed out in Annexure C of the show cause notice. It is beyond comprehension as to how a person of the level of Managing Director of OVPL cold take back after 17 days documents not relied upon and mentioned in Annexure C to the show cause notice without being aware of the contents of Annexure C . It is totally unacceptable when viewed it the context of the fact that much before on 4.11.96 he had submitted affidavits retracting his statement recorded on 15.10.96 and had alleged coercion, threat and harassment in its recording and consequently there was every reason to expect him to properly verify and confirm the documents being returned to him before acknowledging its receipt on 12.4.97 and 29.4.97. Subsequently letter dt 9.5.1997 received from OVPL stating that we are going through the documents received from you, may we request you Sir, kindly grant us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned to the notices on 29.4.97. I also observe that in response to A.C. (Adjn.) s letter dated 4.7.97, Shri Vipin Kumar Jain on behalf of notices while reiterating the non supply of documents at sr. Nos. 4,5,6 and 7, stated that he himself had gone through the bunch of documents and had noticed that the documents requested was not included therein. In a subsequent letter dt. 4th Nov., 97 addressed to CCE, Shri Vipin Kumar Jain while reiterating the non supply of documents at Sr.No.4,5,6 and 7 of Annexure C in his request to CCE for instructions to be given to the investigating officers slyly widens the scope of the request for supply of documents to furnish copies of Annex C to the notice and all the copies of the relied upon documents in addition copies of documents mentioned in B,C D in para 2 above may also be furnished . He has also indicated a willingness of go ahead with a personal hearing on 7th November, 97. He submitted a written reply dt. 24.11.97 and attended the hearing on 28.11.97 without reiterating his demand for supply of the documents. However, in final para of reply, it has been mentioned that it is an interim reply to the Notice since the required document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Wood and Paper Industries etc. Use of the expression all other statements recorded . clearly implies that some (i.e. relied upon statements as per Annexure C) have been received. Further statements of parties in sub para (d) of the request of the Noticees are not on record or relied upon. Copies of statements relied upon had been furnished along with the copy of the SCN as evidenced by the Noticees receipt dt. 12.4.97, fact that no request for any copy of statements relied upon was asked for at any stage and that none has been supplied during initial adjudication or on remand thereafter, expose the hollowness of the claim made by the Noticee. iv) Copies of the statement of accounts from the Bank. It is significant that the Noticee s letter dated 26th June, 1997, signed by Director, it is stated following documents have not been supplied along with SCN a) .. b) .. c) true and complete copy of Bank statement and pay-in-slips of relied upon documents on the notice. They are required as several entries in abridged Bank statements furnished along with the notice are on the face of it erroneous. Since Annexure B is the list/statement of details of pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r pressure, coercion and harassment. Jayaprakash Chandak proprietor Biz International, in his cross examination has stated that the statement was recorded under duress. Haresh Patel in his cross examination stated that he signed the statement without knowing what was stated therein as the officers threatened him with arrest. Shri Nitin Bagul, partner AN Industries in his cross examination has stated that he has paid only as per bill and the officers had brought the format of the statement. Shri Kankaria proprietor of Arihant Plywood in his cross examination stated that he had signed the statement under threat of otherwise being required to go to Bombay on summons. Shri Ashok Gwalani, Director of Mahalaxmi Plywood P. Ltd. in his cross examination stated that he did not remember how he identified the representative of Oriental Veneer and the extent of cash paid or the price of their competitors. (ii) that as the pay-in-slips, loose chits and bank statements of the accounts were not furnished and were not available no adverse inference can be drawn by the department. (iii) that the deposits received in the personal savings account of Shri Vali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may lead to further repercussion against him. It is also observed that in as much as the deponents have not been identified with an endorsement of identification by the Advocate on the N J Stamp paper, the affidavits are rendered defective. First on 17/19.10.96 to swear an affidavit to place correct facts on record and fear of repercussions from Excise officers but not file it before any authority or CCE, then on 4.11.96 to file a complaint letter enclosing the affidavits to the CCE and then not to pursue the complaint and join the adjudication proceedings is totally incomprehensible action except on the premise that it was a part of defence strategy. On the other hand, both the statements had been recorded by the Gazetted officer under Section 14 of the Central Excise Act, 1944 and are in the handwriting of the deponents and explicitly state that the statement had been tendered voluntarily, no threat or pressure applied or any promise has been made. Significantly, Shri Mithiborwala, backed up his admission by submitting a cheque and TR6 challan for ₹ 30 lakhs towards differential duty. As regards the statements recorded under Section 14 ibid, from the buyers/customer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d he had made payments from his saving bank account no. 14369. He also could not explain how officers obtained detail about his transaction with Oriental Veneer, payment particulars, bank account no and personal details without putting any questions to him. Clearly, the statement has been recorded after his interrogation and Shri Kankaria, appeared to have been influenced and was not stating the whole truth in his cross examination. Next, Shri Jayprakash Chandak, of Biz International identified his signature but stated that was not in his handwriting and the statement contains some portion which he has disclosed and some which he has not. On the cross examination of Advocate he owned the answer to question nos. 1,2,6,8 and 9 but in response to further questions by the Commissioner drawing to the questions no.3 and 4 of the statement, he accepted that the answer at sr.no.4 intimating that the bill was raised for ₹ 2.50 or ₹ 10/- per sq. mtr. With latest consignment of A grade in November being ₹ 4.50 per sq. mtr. As also given by him and is correct. Further answer to question no.7, he admitted that the indication of total quantity purchased and the rates but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 14 of the Central Excise Act, 1944. Thus, I hold that there is nothing in the cross examination of these persons, which could cast any reflection on the statement recorded by Supdt. C. Ex. under Section 14 ibid and these statements are relevant pieces of evidence which can be relied upon. 26. It is observed that M/s. OVPL have not questioned the authenticity of the document viz. fax dated 14.5.96 sent by them (Oriental Veneer Products Ltd.) to M/s. Hans Enterprises. The Fax gives particulars about the invoice number and the amount billed for the supplies made along with the grade of material supplied, the rates thereof, the total sale price. It also indicate the amount due, the amount received and the balance. This has also been confirmed by Haresh Patel of M/s. Hans Enterprises. This clearly shows underbilling and recovery of additional amount over and above the bill by M/s. OVPL. The three chits recovered also indicated the underbilling, in supplies made but while copies thereof were furnished along with SCN, they are not presently available. But, Department s case of evasion of duty is not affected by the absence of these chit since, the fact of over billing is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in adjudication order. 3. In so far as bank account is concerned, the evidence of the Bank extracted from its books of account and statement thereof issued is the appropriate evidence, which cannot be disputed in law and such statements should also be examined with reference to cash book, journal and ledger of the appellant that shall be produced before ld. Adjudicating authority. 4. Appellant says that there were certain statements recorded from Mr Shrinivas Acharya, Konark Plywood Pvt. Ltd., Reliable Plywood Pvt. Ltd., Welcome Plywood Industries Pvt. Ltd., Shree Laxmi Saw Mills and Wood and Paper Industries. Revenue is required to produce copy of those statements before the Tribunal on the next date fixed for examination. 5. In order to facilitate the examination of the cash-book entries on cash deposit and bank deposit, the appellant shall make an application as expeditiously as possible before the Adjudicating Commissioner to fix the date and on that date appellant shall produce those records for aforesaid years for his examination. On production of such records and examination thereof, ld. Commissioner shall send his report to Tribunal along with his adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent manner, and it delays the final hearing of the appeal and thereafter the passing of the orders. The available material should have been taken into account to dispose of the appeal. 6. We, therefore, direct the Tribunal to pass final order in the appeal by reserving the right of both sides to raise appropriate contentions with regard to the interim directions and in the event they are aggrieved and dissatisfied with the final orders in the appeal. All contentions of both the sides in relation to interim directions are kept open along with that of merits. 5.7 In response to the order of the tribunal seeking the documents learned Commissioner has vide his letter dated 28.07.2017 informed as follows: 5.9 From the facts as available it is quite evident that certain relied upon documents which formed the basis of the show cause notice, have not been served upon the appellants and are also not available with the revenue now. Even at the time of adjudication in the remand proceedings these documents were not made available to the appellants. Since the starting point of investigation is the pay-in slips recovered from the premises of appellant during search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of ₹ 35,068.50 to evade central excise duty. c) Chit given at Sr.No.99 to document No.17 shows that the said assessee had supplied 19,670 sqr.mtr. of face veneers @ ₹ 17/- per sqr.mtr. and 9887.50 sqr.mtr. of face veneers @ ₹ 13.50 per sqr.mtr. to M/s. Star Plywoods Pvt. Ltd. but had billed the same for Re.1/- and thereby suppressed the value of face veneer to the extent of ₹ 4,38,313.50 to evade central excise duty. d) From the fax message sent by the said assessee from phone number 3851245 installed in the office of the said assessee to M/s. Hans Enterprises, it is seen that 673.72 sqr.mtr. of face veneers was cleared @ ₹ 19.50 per sq.mtr. and 2266.97 sqr.mtr. was cleared @ 14.75 per sqr.mtr. vide invoice number 486 dtd 2.1.96, available in document No.06, but the billing was done @ ₹ 2.50 per sqr.mtr. In invoice No.524 dated 19.1.96 of document No.07, 1312.50 sqr.mtr. of face veneer was cleared @ ₹ 19.50 per sqr. Mtr. but billing was done for ₹ 2.50 per sqr.mtr. In invoice No.589 dtd 9.2.96 of document No.08, 2319.91 sqr.mtr. was cleared @ ₹ 19.50 p.s.m. and 407.50 sqr.mtr. was cleared @ ₹ 16.00 p.s.m. h ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
