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TMI Blog2019 (10) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... o ordered for recovery of interest under the provisions of Section 11AB of the Act on the amount of duty demanded. Further, the adjudicating authority has imposed penalty of Rs. 10 lakhs on Shri Sanjay Kanoria MD/Vice Chairman of M/s A. Infrastrucutre Ltd., Hamirgarh (Appellant, for short) under the provisions of Rule 26 of the Rules. Similar amount of penalty has been imposed on Shri V.K. Gupta, Chief General Manager of the Appellant company under the provisions of Rule 26 of the Rule along with penalty of Rs. 5 lakhs on Shri Darpan Jain, Proprietor of M/s kaka Roadlines, Kota under Rule 26 of Rules. A penalty of Rs. 5 lakhs is also imposed on Shri Parasmal Mehta, Proprietor of M/s Robin Roadways, Bhilwara, Rajasthan under Rule 26 of the Rules. A penalty of Rs. 5 lakhs is also imposed under the provisions of Rule 26 of Rule on Shri Jai Kumar Singhvi, Proprietor of M/s Sanghvi Transport, Nimbahera, Rajasthan. 2. Being aggrieved by the impugned order, the Appellants have preferred these appeals which are being disposed of by this order as the same is arising out of a common investigation conducted by the Directorate General of Central Excise Intelligence (DGCEI, for short). 3. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The statement of 93 truck owners, whose trucks were being used by the transporters were also recorded wherein they have stated that no fly ash has been transported by them. It is on this basis, the Show Cause Notice dated 31/31.12.2008 was issued, which was adjudicated by the adjudicating authority. This order is impugned in the present appeal. 4. Learned Advocate on behalf of the Appellant submitted that no mala fides can be attributed to the Appellant on account of altercation at the time of visit of the DGCEI officer. In the impugned order it is held that mala fides of the Appellant are evident as they had snatched incriminating documents from the DGCEI officers. As per learned Advocate, the statement is factually incorrect as no incriminating documents were there in the factory. The adjudicating authority in the adjudication order, or the Department in the Show Cause Notice has not mentioned as to what were these incriminating documents. All the documents have been provided to the DGCEI which is evident from the relied upon documents. 4.1 Learned Advocate categorically denied that any documents were snatched from the officer by the Appellant for their employee. In fact due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s further stated that the record is maintained by labour contractor, on the basis of the diaries of truck agencies, involved in the lifting of the fly ash. Also no statements has been recorded from the contractor, who maintained such record. The Appellant also received a letter from KSTPS, stating that while the Appellant had been regularly lifting fly ash in substantial quantity, they had failed to provide details of their received quantity. Accordingly, the Appellants were called upon to provide the relevant information to KSTPS. As the Appellant did not provide any details to KSTPS, the quantity lifted by them not have got recorded in the record of labour contractor. Therefore, the reliability of the statement of the Assistant Engineer and record maintained, showed no lifting of fly ash by the Appellant, which is doubtful especially as no challans, gate register, invoices are issued by KSTPS. 4.6 Learned Advocate further submitted that the case of the Department is about use of cement in lieu of fly ash relying upon the balance sheet for the period 2005-06. It is the submission of learned Advocate that a new unit was set up by the Appellant in Ahmedabad for manufacture of Asbes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he earlier period. 4.9. Learned Advocate has also contested the reliability of weighment slips for which duplicate could not be located. From statement of one of the employees, it is apparent that in case of failure of computerised recording the manual weighment is also done and the record is not available on the system. In the statement of Dharamkanta workers, it is said that their signatures are similar but forged one. It is the contention of the learned Advocate that the Department has not conducted examination of disputed handwriting from the handwriting expert. Also no cross-examination of these persons were permitted, without which the relevance of the statement is not admissible in the adjudication proceedings before the adjudicating authority. 4.10 Learned Advocate further submitted that the Appellant has requested for the cross examination of all the persons, whose statements have been relied upon in the Show Cause Notice. However, Commissioner has denied the same on the ground no such requests have been made which is not correct. The denial of cross-examination is in violation of the principles of natural justice especially when the records maintained by the Appellant d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (P) Ltd. Vs. CCE, Noida - 2016 (336) ELT 529 (Tri.-All.). 4.12 It is also contended that no penalty is imposable under Section 11AC of the Act read with Rule 25 of the Rules as there is no evidence of any fraud, suppression, intent to evade payment of duty. In view of above, the impugned order is not sustainable and liable to be set aside. 5. Shri V.B. Jain, learned Authorised Representative reiterated the findings of the Commissioner in the impugned order and pleaded that bulk of the fly ash is claimed to have been procured by the appellant company from Kota Thermal Power Plant, that since the officials of the appellant company did not cooperate with the Investigating Officers and there was even incident of violence at the time of search of the factory premises of the appellant company for which an FIR had been lodged by the Department, the Investigating Officers had conducted inquiries at the Kota Thermal Power Plant and Suratgarh Thermal Power Plant, that the statements of Shri Mahmood Ahmed, Assistant Engineer (ash handling and maintenance) and of Shri Vinod Kumar Agarwal, Assistant Engineer (CA-II) of the Kota Thermal Power Plant had been recorded, that it is clear from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8%, while the minimum fly ash use required is 25%, that when the concerned officials of the Thermal Power Plant deny having permitted the appellant company to lift any fly ash and when the transporters, who as per the records of the appellant company, were engaged by them for transportation of the fly ash, have also denied having transported that fly ash, it is absolutely clear that the appellant company has not used fly ash to the extent of 25% or more by weight of the AC Pressure Pipes manufactured by them and have fraudulently availed the benefit Notification No. 6/02-CE, that when the appellant have falsified their books of accounts, can be attached to them no creditability profit and loss account and, hence, the appellant's plea regarding severe financial problem is not acceptable and that in view of the above, this is not the case for waiver from the requirement of pre-deposit. 6. We have considered the submissions from both the sides and perused the case record. 7. The appellant are manufacturers of AC Pressure Pipes. The raw material for Asbestos Cement Pressure Pipes is Asbestos fibre and cement. However, as per ISI specification ISI 592-2003 for Asbestos Cement Pressure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kota Thermal Power Plant ; (2) Statement dated 08/2/08 of Shri Vinod Kumar Agarwal, Assistant Engineer, CA-II of Kota Thermal Power Plant, Kota recorded under Section 14 of Central Excise Act, 1944 wherein he stated that he looks after ash handling plant stage II, III and IV of Kota Thermal Power Plant, that he looks after the data of ash generated and collected in dry form inside the plant and also records the utilisation of dry fly ash and as per his statement on the appellant company has not lifted any fly ash from the fly ash plant of Kota Thermal Power Plant ; (3) According to the appellant, the trucks loaded with wet fly ash lifted from the fly ash plant of Kota Thermal Power Plant had been weighed at Shri Nath Computerised Dharamkanta and in this regard they had produced the Dharamkanta slips. However, on inquiry with Shri Nath Computerised Dharamkanta slips produced by the appellant company have been found to be fake and as per the records of Shri Nath Computerised Dharamkanta, the weighment slips of the same numbers had been issued in the name of totally different parties ; (4) Statement of Shri Lila Ram Sabnani, owner of M/s Shri Nath Computerised Dharamkanta wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orage of fly ash in silos while the appellant have lifted fly ash from the fly ash pond in wet form. It is also pleaded on the basis of information obtained from Kota Thermal Power Station under RTI Act during the period of dispute, since there is no provision of sale of fly ash and anybody could lift fly ash, no records in this regard and hence the statements of the Assistant engineers are without any basis. Accordingly, the contention of the appellant is that the statements of Shri Mehmood Ahmed and Shri Vinod Kumar Agarwal, Assistant Engineer of the appellant company have no evidentiary value. 9.1 Another plea of the appellant is that since the statement of Shri Darpan Jain of M/s Kaka Roadlines and of Shri Parasmal Mehta of M/s Robin Roadways have been retracted as a result of which their cross examination were absolutely necessary, but since their cross examination has been refused, no reliance can be placed on their statements. Other pleas of the appellants are that - (1) calculation of percentage of fly ash in AC Pressure Pipes during 2005-2006 is wrong as the cement used in Ahmedabad plant of the appellant company has also been treated as used in the Bhilwara plant; (2) di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and not containing fly ash, while 46553.754 M.T. of cement had been used for manufacture of 53995.600 M.T. of Asbestos Cement Pipes containing fly ash. The fly ash content on this basis would come to 13.8% which is much less than the required 25%. Though the appellant plead that out of total 55965.554 M.T. of cement received at Bhilwara Plant, the quantity of 19882.4 of the cement had been sent to manufacturing unit at Ahmedabad and as such 26671.35 M.T. of cement had been used during 2005-2006 for manufacture of 53995.6 M.T. of Asbestos Cement Pipes containing fly ash, no evidence in this regard has been produced which makes the assertion doubtful. 13. As it can been seen from the discussion above that the entire case of the Department is made on the basis of statements of the various persons, who have not been examined by the adjudicating authority while adjudicating the case and also the Appellants were not permitted to cross examined these witnesses and thus the impugned orders suffers from the inherent infirmity. In this regard we place reliance on the decision of G. Tech Industries (supra) and Swadeshi Polytex Ltd. (supra) wherein it is held that it is mandatory on the par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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