9911796707
TMI Blog2019 (4) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... records like Note Pads , Writing Pads and Register and the Computer print out with Appellant-Rishabh - HELD THAT- The observations of the Adjudicator are totally contrary to the admitted position in Para 6 and Para 18 respectively of the Show Cause Notice, which ruled out relevance of these documents with the Appellant-Rishabh. The fact of Smt Rashmi Jhawer s organizing and handling business activities from Calcutta is unambiguously clarified by Shri Sandeep Maheshwari in his statement recorded on the spot, on the day of search on 08.01.2016. While specifying his own responsibilities in the activities of maintenance of the records of the Appellant-Rishabh, at Hathras. We do not find any evidence on record to support the Revenue s claim of issue and /or service of any of the five summons to Smt. Rashmi Jhawar and thus her avoidance to tender evidence. Reliability on statements - HELD THAT:- The Adjudicator had denied cross examination of Shri Santosh Jhawer , on the grounds of being co-accused and also at the same time relied on his statement recorded behind the back of the Appellant-Rashmi Jhawer , implicating Smt. Rashmi Jhawar. As per settled law, the statement of co-accused is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sandhya Maheshwari and brought them to the premises of SKJ and included these in the panchnama of SKJ, as having been found and resumed from there. That physical stock of goods-scrap, ingots etc, was taken, and found as follows:- S.No Description of goods No. of pieces Weight in Kgs. Value in Rupees Remarks Finished goods (i) Zinc Ingot 4734 41798.400 5015808.00 (@ 120/- per kg.) (ii) Aluminium Ingots 672 2688.000 322560.00 (@ 120/- per kg.) Imported Goods (iii) Zinc Ingot 1160 23200.000 3480000.00 (@ 150/- per kg.) Raw Material (iv) Aluminium Wire 1500.00 225000.00 (@ 130/- per kg.) (v) Zinc Scrap 212100.000 23331000.00 (@ 110/- per kg.) (vi) Coal Stock (Approx) 3000.000 28500.00 (@ 9.5. /- per kg.) (vii) Wood Stock (Approx) 2000.000 8000.00 (@ 1/- per kg.) Other Material (viii) Moulds (Presently in use) 340 (ix) Moulds (Broken and not in use) 28 (x) Furnace (Working 7 (xi) Furnace (not in use) 1 (xii) No of fresh crucibles found in Godown 6 (xiii) No. of broken crucibles found in Godown 4 Statements of following persons were recorded- NAME Date of recording Mr. Ramesh Chandra Tiwari, Authorised signa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.36% 602784.00 2012-13 01.04.12 to 31.03.12 955033.50 96242224.00 126.30 120620731.00 12.36% 14908722.00 2013-14 01.04.13 to 31.03.14 1250466.55 124397833.00 139.31 174202495.00 12.36% 21531428.00 2014-15 01.04.14 to 28.02.15 1356877.91 161997870.83 166.80 226327235.00 12.36% 27974046.00 2014-15 01.03.15 to 31.12.15 123352.54 14727079.17 166.80 20575204.00 12.50% 2571900.00 2015-16 01.04.15 to 31.12.15 71709595.00 160.40 71709595.00 12.50% 8963699.00 Total 4608220.00 554100776.00 730480728.00 88105944.00 8. Thereafter common Show Cause Notice No. IV CE (9)CP/Agra/SKJ/03/2016/3091-96 dated 05.05.2016 was issued demanding duty & penalty for the period 01-4-2011 to 28-09-2015, with proposal for confiscation of goods of SKJ 44486.404 kg (zinc scrap). 9. The SCN was adjudicated on contest and the proposed demand confirmed with penalty and appropriation of ₹ 10 Lakhs towards duty, which was deposited during investigation. Being aggrieved, the appellants are in appeal. 10. Heard the parties. 11. (a). The ld Advocate took us through the impugned Order and various evidences relied by the Adjudicator to uphold the charges and cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellants in the alleged manufacturing activities since inception. He had put forth various reasons and argued that the credibility and admissibility of the relied upon documents and statements do not stand on the legal anvil. Ld DR Shri Rajeev Ranjan, Additional Commissioner submitted that the present demand has been confirmed by the Adjudicating Authority for valid reasons and cannot be faulted. 14 (a). On perusal of the documents, we find that the witnesses to the Panchanama and representatives of the Appellants were not associated in the search proceedings, is also evident from their absence in the relied upon Photographs and Video-CD of the search operation. Our findings are further supported from the fact as narrated in the affidavit of the panch witnesses, who were called by the officers and informed, that they had prepared some documents and requested them to sign the documents. Evidently the witnesses were called after preparation of the Panchanama and obviously after completion of search. The affidavit of the said persons denying their association in search is a valid piece of evidence and erroneouly brushed aside by the Adjudicator. (b). We further notice from the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relied upon documents do not bear the names of either of the Appellants and there is no other indication in these records to connect the documents to the Appellants . 16(b)(i). We notice that the Note Pads do not contain the details of receipt of Raw-materials , manufacturing of Zinc Ingots and clearance thereof ; that each page of these Note Pads indicate some names and dates with some figures scribbled thereon ; that there is no signature, name or designation of the scribe of the documents , that the Note pads used nomenclature namly Tanki, Barik, Gamti, Solder, Mota Tanki, Kali Peetal, Saff Peetal, Aluminium, and not Zinc Ingots . 16(b)(ii). The relied upon Writing pads are found to contain daily receipt and expenses and not the manufacture and sales of any item much less the Zinc Ingots as claimed by the Revenue. The Register only contained daily receipt and expenses and not the sales of Zinc Ingots as claimed by the department. We therefore hold that the details contained in the said private records do not pertain to the Zinc Ingots, as alleged. 16(b)(iii). We find that the resumed Consignment Challans Books for sale of Zinc Scrap, bear the names of the Appellants. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind that the Revenue itself had serious doubts about the veracity of contents of the Note / Writing Pads and Register as expressed in note appended to the said Table-2. 16 (f). We also observe that the result of the cross-examination of alleged buyers and also their written communications duly supported by the entries in their books of accounts do not corroborate transactions found recorded in the incriminating note/writing pad. Therefore the said revelation also discredits the authenticity of these note/writing pads etc. 16(g). We are also unable to reconcile as to how Shri Santosh Jhawer , who is stationed at Calcutta could , in his statement, decipher the contents of Note Pads and Writing Pads allegedly maintained at Hathras . We therefore agree with the ld Advocate that the deciphering of records as shown in the statement was made as per the dictates and under pressure of the officers. This had led to his instantaneous retraction of the statement, alleging the same to be non-voluntary and not based on the true facts, intimating that he was forced to admit that all the resumed incriminating records belonged to either of the Appellants and that in all the resumed documents whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Shri Anil Malik on the details recorded therein. We on hearing both sides and perusal of document, hold that the print out is devoid of even rudimentary details to connect it to the Appellant. The Print out lacked specific description of goods , name and identity of the supplier of the goods , nature of transactions i.e. whether pertaining to receipt of sums, trading, clearance, sales and the description of goods transacted, mode of transportation of goods, payment details of sale proceed .There is no identification of the author of the document and source documents which had gone into assimilation and generating of the print out data . The purpose of acquiring the goods and the mode of subsequent disposal , the names and addresses of the subsequent buyers, mode of transportation to their destination with bilty nos, mode and receipt of sale proceeds from them and most importantly the reasons of non reflections of the said transactions in books of accounts of M/s Cartoon Sanitation, Mathura. 17(b). We further notice that Shri Anil Malik was pulled out of cross-examination , after examination in chief. However at the same time his confirmation to earlier deposition was obtaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re were other corroborations to substantiate authenticity of the print out. We however observe that there is total lack of corroboration and even the Books of accounts do not support the print out leave aside their linkage with the Appellants . 18(a). Coming to evidentiary value and reliance on the retracted statements of S/Shri Santosh Jhawer dated 15.01.2016 (Proprietor of SKJ), Ramesh Chandra Tiwari and Sandeep Maheshwari representatives of the Appellant-SKJ and Appellant-Rishabh, both dated 08.01.2016, in the context of sustaining the charge of manufacture. It is observed that Shri Santosh Jhawer in his statement was interalia asked to "Mention the names of the brands of Zinc Ingots which were being manufactured in factory" Shri Santosh Jhawer, deposed that "RJ,PJ,LM brands of Zinc Ingots are being manufactured in his factory". Regarding commencement of production it was stated that Appellant-SKJ commenced production of Zinc Ingots w.e.f 02.01.2016 . However contrary to the said facts, the Adjudicator had made astute inference from his deposition, to project and hold that Zinc Ingots were being manufactured since inception. We find that the statement of Shri Santosh Jhawer sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o examine whether it was obtained by threat, duress or promise and whether the confession is truthful, as held in decision of Hon'ble Delhi High Court Delhi in the case of S.N. Ojha Vs. Commissioner of Customs 2016 (331) E.L.T. 33 (Del.) "21.----------- the broad principle that statements made have to be voluntary and not under threat, coercion, would nevertheless apply------------- 18(d). We find that the observations of the Adjudicator are inconsistent with the retraction letters and respective retraction Affidavits of Shri Ramesh Tiwari and Shri Sandeep Maheshwari in as much as that these persons had brought on records, as to how they were subjected to application of pressure, to extract their statement by the officers .We further rely on the affidavits that the Appellants also made specific request for recording of statement before some independent officer . However we do not find any evidence of issuance of Summons to the said representatives of the Appellants except a Summons dated 12.01.2016, that too for their appearance on the same date at Agra, which belies the findings of the Adjudicator that S/Shri Ramesh Chandra Tiwari and Sandeep Maheshwari representatives of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we notice that the Adjudicator had himself in para-53.8 of the impugned Order observed that "Out of these, 10 persons responded and 8 persons appeared for cross-examination. One person, on behalf of his two firms, submitted written submissions and expressed his inability to attend cross-examination due to his old age and illness. All these persons, except Shri Anil Malik, Director of M/s Cartoon Sanitation Pvt. Ltd., stated during cross-examination/ written submissions that they have purchased only Zinc Scrap from Appellants. 19(b). We also observe that the written confirmation of the interrogated buyers followed by the outcome of their Cross-examination, corroborates that they transacted with the Appellants in Zinc Scrap only and also reaffirming their earlier communication, clearly stand by the contention of the Appellants. We further notice that the sale invoices and corresponding transport documents, ledger accounts received from a large number of other buyers in connection with annual reconciliation of accounts showing that the goods sold prior to 2.01.2016 by the Appellant were always Zinc Scrap, had not been challenged by the Revenue, nor found untrue. In our opinion the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03.2003 and the seizure of own manufactured goods based on their liability and confiscation on the grounds that the said quantity attracted Central Excise duty was also not called for . The Adjudicator had also arbitrarily and unlawfully ordered appropriating the involuntary deposit of ₹ 10 lakhs towards duty, without assigning any reason . We find from the decision of this Tribunal in the case of Gujarat Agrochem Ltd. v/s C.C.E., Surat [2012(280)ELT 435(Tri. Ahmd)] and Dodsal Pvt. Ltd. v/s CCE - 2006(193) ELT 518 , that debit of duty and statements at time of visit of Revenue officers is not sufficient for holding against the party. We , in light of the aforesaid findings set aside the confiscation of all the finished goods and appropriation of deposit of ₹ 10 lakhs towards duty, and order for refund. 21(a). Based on the findings on the relied evidence by the Revenue we find that the impugned order had failed to bring out any concrete, corroborative , reliable and independent evidence even distantly establishing production of finished goods (ingots), which is required to establish clandestine removal . Evidences of clandestine removal like transportation of goods ,tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our organizer for segregation / sorting of Scrap and later for production of Zinc Ingots were also submitted by the Appellant-SKJ in support of commencement of the production activities from 02.01.2016. In light of these evidences we do not subscribe to the Adjudicator's action to arbitrarily declare these documents as fabricated, without making any enquiry to verify the authenticity of documentary evidences and passing a reasoned order. 22(c). We are of the considered view that it is beyond human credence to judge the age of the machines from their still photographs and CDs, particularly the age of the furnaces which are installed under ground with only mouth exposed for charging and discharging . We therefore disagree with the findings in the impugned order that Furnaces were appearing old from still photographs and CDs (video), particularly when the Panchanama do not subscribe these facts . 22(d). We have no reservations in holding that without establishing availability of manufacturing machinery, the charge of production of Ingots does not survive. The Revenue had failed to disprove the claim of acquiring the manufacturing for machinery by the Appellant-SKJ at the end of Dec. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Appellant-Rishabh from their office located near Canara Bank, Circular Road, Hathras, and shown as resumed from Appellant-SKJ's premises. 23(c). Further in so for as the linkage of the private records like Note Pads , Writing Pads and Register and the Computer print out with Appellant-Rishabh is concerned , we find the observations of the Adjudicator are totally contrary to the admitted position in Para 6 and Para 18 respectively of the Show Cause Notice, which ruled out relevance of these documents with the Appellant-Rishabh . 23(d). It is evident from caption of Table A to the panchanama that the Revenue had exclusively connected the stocks of finished goods to the Appellant-SKJ, which is further borne out from the facts of giving provisional release of seized finished goods to the Appellant-SKJ. We further discover that only the Appellant -SKJ are asked to show cause against the proposed confiscation of the seized stocks. We therefore observe that the Revenue in that sense did not claim use of premises and manufacture of Ingots by Appellant- Rishabh also. 23(e). We observe that the fact of Smt Rashmi Jhawer's organizing and handling business activities from Calcutta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c Scrap, from the Circular Road Godown of the Appellant-Rishabh to various buyers. 23(g). We further observe that the Adjudicator had denied cross-examination of Shri Santosh Jhawer , on the grounds of being co-accused and also at the same time relied on his statement recorded behind the back of the Appellant-Rashmi Jhawer , implicating Smt. Rashmi Jhawar. We also realize that as per the settled law by the Apex Court, the statement of co-accused is a evidence but the statement of so claimed co-accused Shri Santosh Jhawer have been heavily relied against the Appellant-Rishabh, disregarding and by passing other direct evidences, is contrary to the settled law. 23(h). We also observe that the settled law on corroboration, that only those evidences which are completely credible can alone be used as corroborative evidence and used to give validity or credence to evidence, which is deficient or suspect or incredible, had not been followed. The Panchanama having legal backing normally holds the field to lawfully establish the credibility of other deficient / suspect evidence, but in the impugned order the credibility of Panchanama itself is legally untenable and factually misleading, dr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
