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TMI Blog2019 (8) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... Mayank Metals, M/s Shivam Metals and M/s Vasudev Udyog and manufactured Copper Wires and Copper Strips and cleared the same without payment of duty. Since it is establish that M/s Mayank Metals, M/s Shivam Metals and M/s Vasudev Udyog did not clear Copper Ingots in clandestine manner to SMS, therefore, receipt of raw materials by SMS is not established. Further, revenue has not brought on record any other source of receipt of non duty paid raw material by SMS - Further, the only evidence against SMS was said 31 small spiral pads and 9 files containing loose papers recovered from the residential premises of Shri Subodh Gupta. Shri Subodh Gupta appeared before the Original Adjudicating Authority on 01.02.2018 and was not offered for cross examination. Appeal allowed - decided in favor of appellant. - SMT. ARCHANA WADHWA, MEMBER (JUDICIAL) And MR. ANIL G. SHAKKARWAR, MEMBER (TECHNICAL) Shri Rupesh Kumar, Advocate, Shri Jitin Singhal, Advocate And Shri Pravesh Gahuguna, Advocate, Shri Rajesh Chhibber, Advocate Shri Tarun Chawla, Advocate, Shri R.P. Singh, Advocate, Absent on call, for the Appellants Shri Rajeev Ranjan, Addition Commissioner, Shri Sandeep Kumar Singh, Deputy Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deep Metal Supply, Chawri Bazar. On the basis of said searches offices recorded various statements. During his statement Shri Shubodh Gupta employee of SMS stated that he used to look after production and dispatch on behalf of SMS. On behalf of M/s Mayank Metal their Proprietor Shri Pawan Kumar Agarwal stated that they supplied copper ingots on cash basis to SMS, without invoices. On behalf of M/s Shivam Metal, Proprietor Shri Sanjeev Agarwal stated that they had supplied Copper Ingots without invoices on cash basis to SMS. On behalf of M/s Vasudev Udyog Shri Jai Bhagwan Authorized Signatory stated that they supplied Copper Ingots without invoices on cash basis to SMS. Shri Anil Kumar, Driver stated that they used to transport Copper Ingots without bills and invoices from various manufacturers to SMS. Shri Muhammad Ishrar, employee of SMS stated that he used to pilot vehicles while carrying Copper Ingots from various manufacturers to SMS at the said premises of M/s Sandeep Metal Supply. Invoices issued by 12 traders were resumed. Some of the traders stated that they had issued invoices and the same were bogus whereas some other stated that they have opened the firm at the behest of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of various persons. The cross examination of representative of M/s Mayank Metals, M/s Shivam Metals and M/s Vasudev Udyog was permitted. During the cross examination all of them stated that they had never transacted with SMS and they did not know Shri Sandeep Gupta (accepted Shri Jai Bhagwan representative of M/s Vasudev Udyog) and that they were coerced to implicate Shri Sandeep Gupta with the threat of arrest. Without allowing any further cross examination, Order-in-Original dated 30.05.2014 was passed, confirming the demand and imposing penalties. The said order was challenged before this Tribunal and the said appeals were decided through Final Order Nos.70198-70204/2017 dated 30th January, 2017. In para no.6 of the said Final Order this Tribunal has made following observations and issued directions:- In this view of the matter, we are satisfied that there has been violation of the principles of Natural Justice and the provisions of Section 9D of Central Excise Act, 1944. Accordingly, we allow these appeals by way of remand and set aside the impugned order. We, further, direct the learned Commissioner to convey the reasons to the appellant for refusal of cross-examination of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation Central Excise duty demand was raised against M/s Mayank Metals, M/s Shivam Metal and M/s Vasudev Udyog. The said show cause notice was adjudicated through another Order-in-Original bearing No.03/Commissioner/GZB/2018-19 dated 25/05/2018 through which the demands raised were confirmed and penalties were imposed and a personal penalty was imposed on Shri Sandeep Gupta. The said Order-in-Original is also impugned in the present appeals. 6. Heard Shri Rupesh Kumar learned Advocate along with Shri Jatin Singhal and Shri Pravesh Bahuguna learned Advocates on behalf of M/s Sandeep Manufacturing Strips (SMS). They made following submissions:- i) The entire demand is based on 31 Small Spiral Pads recovered from the residential premises of Shri Subodh Gupta who was the employee of SMS. Further, in addition to the said 31 Small Spiral pads the allegations of revenue were also on the basis of statements of Shri Subodh Gupta recorded before the Central Excise Officers. The appellants requested for cross examination of Shri Subodh Gupta which was allowed initially. However, latter on, learned Original Authority denied the cross examination of Shri Subodh Gupta on the ground that despite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als and M/s Vasudev Udyog and/or the said three Ingots manufacturers received raw materials at all and how the goods got manufactured clandestinely and removed clandestinely. ix) In para no.45.4 of the impugned Order-in-Original No.02 learned Original Adjudicating Authority has given his finding that the charge of abatement in clandestine manufacture and removal by SMS in the present show cause notice does not substantiate with the offences specified under Rule 26 (1) of the Rules. x) Regarding excess quantity of raw material and finished goods allegedly found in the factory premises of the appellant, proceedings were initiated and finally this Tribunal has held in separate proceedings that the said goods were not liable for confiscation. The department had accepted that order and refunded the amount paid by the appellant in the said proceedings. xi) Allegations of clandestine removal cannot be decided merely on the basis of uncorroborated entries in the records of third party as held in the case of M/s Kashmir Vanaspati Pvt. Ltd. Vs Commissioner of Central Excise reported at 1989 (39) ELT 655 (Tri.) in the case of M/s Kuber Tobacco Products Ltd. Vs Commissioner of Central Excise, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Shri Jatin Singhal along with Shri Pravesh Bahuguna on behalf of Shri Sandeep Gupta have submitted that their submissions in respect of SMS will hold good against Shri Sandeep Gupta because Shri Sandeep Gupta is proprietor of SMS and that the proprietor and the business organization are not two separate persons. 7. Nobody appeared on behalf of Shri Subodh Gupta. In the grounds of appeal filed by Shri Subodh Gupta, it is interalia stated as follows:- The statements recorded by the Department are all recorded under pressure and were all dictated by the Department. Noticee (Shri Subodh Gupta) denies all the submissions so recorded by the Department. The statements recorded by the Department are not at all voluntary statements and were recorded under threat. Under these facts and circumstances the said statement cannot be relied upon. The noticee (Shri Subodh Gupta) was not at all knowing any of the code language used as stated in the statement. The Department forcefully made the noticee (Shri Subodh Gupta) to write such statement giving code language so used in the statement. Further, it is prayed that Shri Subodh Gupta was only the employee of SMS, therefore, he cannot be imposed w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am Shrivastava. Therefore, relying on the decision of this Tribunal in the case of M/s Kuber Tobacco Works Vs Commissioner of Central Excise, Delhi reported as 2013 (290) ELT 545 (Tribunal-Del.) the said confirmation of demand is not sustainable. He has further submitted that the statement of proprietor of the appellant was taken under duress and the same was retracted on the very next day. During the cross examination on 23.04.2014 the proprietor of the appellant stated that he does not know Shri Sandeep Gupta and SMS. He has further submitted that he has made transaction through cheques only and Department has recorded statement under threat and coersion. He further submitted that on the basis of said submissions the demand is liable to be set aside including all penalties against the appellant and its proprietor. 8. Heard Shri Rajesh Chhibber learned Advocate on behalf of M/s Shivam Metal. He has submitted that the demand of Central Excise duty of around ₹ 2.9 crores along with interest and penalty was confirmed against the appellant on the basis of third party document received from the residence of Shri Subodh Gupta. The matter was remanded by this Tribunal through afore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated above. Therefore, they were not eligible to imposition of penalty. 10. Heard Shri Tarun Chawla learned Advocate on behalf of Shri Mukesh Chauhan. He has submitted that the appellant was working as employee of SMS and he was maintaining Central Excise records. Appellant was categorically doing account related works and has no role in the clearance of the goods much less clandestine clearance of goods. He has further submitted that in the absence of any specific allegations with corroborative evidence about appellant knowing any clandestine activity or involving himself in any clandestine activity penalty cannot be imposed on him. Further, since there was no clandestine activity going on, the question of imposition of penalty on the appellant does not arise. 11. Heard Shri Rajeev Ranjan learned Addition Commissioner, Shri Sandeep Kumar Singh, Learned Deputy Commissioner Shri Shiv Pratap Singh, learned Deputy Commissioner on behalf of revenue. They have reiterated the findings of Original Adjudicating Authority in both the impugned Orders-in-Original. 12. Having considered the submissions from both the sides and on perusal of records, we note that the case of revenue is that Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Authority did not give opportunity of cross examining Shri Subodh Gupta by the other appellants and accordingly, the directions of this Tribunal for allowing cross examination was violated and that all the evidence that were collected by revenue through Shri Subodh Gupta has become inadmissible in view of the ruling by Hon ble Allahabad High Court in the case of Commissioner of Central Excise, Meerut-I Vs M/s Parmarth Iron Pvt. Ltd. (supra). Further, revenue does not have any information required to establish clandestine manufacture and removal as required as per the ruling by Hon ble Allahabad High Court in the case of M/s Continental Cement Vs Union of India (supra). In his grounds of appeal before this Tribunal Shri Subodh Guptra has denied all the submissions recorded by the Department and submitted that submissions in the said statements were not voluntary and he did not know any code language and he was forcefully made by the Department to write such statement giving code language so used in the statement. The case of M/s Mayank Metals, M/s Shivam Metals and M/s Vasudev Udyog is that they never received any raw material for manufacture of such huge quantity of Copper Ingots ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corded wherein the noticee stated that he was not concerned with the preparation of sale invoices, purchase invoices, accounts and excise related records. The notice denied any involvement in excise duty evasion activity of SMS. Further he also stated that he had no knowledge of illegalities going on at the end of M/s SMS. The notice was issued SCN proposing penalty under rule 26(1) of the Central Excise Rules 2002. (i) The notice denies all the above allegations made in the present show cause notice. (ii) It is submitted that even otherwise also the noticee has very good and strong case on merits. The noticee would like to make following submissions on merits of the case. (iii) It is submitted that the notice was not at all involved in the evasion if at all done by M/s SMS and he was not having any knowledge about the same. Therefore the allegations in the SCN is not at all sustainable and it needs to be dropped. (iv) It is submitted that the statement so recorded by the department are all recorded under pressure and were all dictated by the department. It is submitted that the noticee deny from all the submissions made in the statements so recorded by the department. It is submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther, unless there is clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. On careful examination, it is found that with regard to alleged removals, the department has not investigated the following aspects : (i) To find out the excess production details. (ii) To find out whether the excess raw materials have been purchased. (iii) To find out the dispatch particulars from the regular transporters. (iv) To find out the realization of sale proceeds. (v) To find out finished product receipt details from regular dealers/buyers. (vi) To find out the excess power consumptions. 13. Thus, to prove the allegation of clandestine sale, further corroborative evidence is also required. For this purpose no investigation was conducted by the Department. 15. We note that the representatives of M/s Mayank Metals, M/s Shivam Metals and M/s Vasudev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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