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TMI Blog2019 (11) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... is recovered from their premises. Further, he stated that the statements dated 22.05.2013 and 21.11.2012 were not voluntary but forced to give statements - Further, Shri Sanjay Kumar Goel, during the course of adjudication was cross examined and has stated that all the statements were given under pressure and threat and also stated that no original documents were shown to me while recording my statement. As, Shri Avtar Singh in his cross examination has stated that he was working on his table at office at the time of visit and he alone was present and there was no other person present in the godown. The godown is in 8 bighas area, there are four rooms and rest of the area is open. No recovery of bag was made in his presence, the visiting staff informed him recovery of bag from the godown, the visiting staff also did not offer their personal search, therefore, the recovery of cloth bag containing documents pendrive is doubtful - the panchas to the panchnama dt. 27.11.2012 are not independent witnesses, but, they are under active influence in the Central Excise Department, as Shri Sachin Brar S/o Shri Dalip Brar R/o House No. 92, Sector 5, Block A, Prem Nagar, Mandi Gobindgarh w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed - decided in favor of appellant. - Appeal No. E/60532/2019, E/60535/2019, E/60537, 60539-60542, 60616, 60629-60631, 60642-60643, 60690-60703, 60705, 60708, 60710-60713, 60715-60735, 60737-60741, 60743, 60771, 60773, 60801-60802, 60878/2019 - A/60932-60996/2019 - Dated:- 13-11-2019 - HON BLE MR. ASHOK JINDAL, MEMBER (JUDICIAL) AND HON BLE MR. C L MAHAR, MEMBER (TECHNICAL) Shri Sudhir Malhotra, Sh. Poojan Malhotra, Sh. Sujeet Bhadu, Sh. Veer Singh, Sh. Naveen Bindal, Sh. Sudeep Bhangoo, Sh. Arun Kumar Mahajan Sh. Gaurav Aggarwal Advocates and Shri G. S. Dhillon, Consultant for the Appellant Shri Vijay Gupta, Authorised Representative for the Respondent M/s Sai Steel Traders, Sanjay Kumar Goyal, M/s Sai Multi Metals, Sh Rajkumar Kakaram Bansal, Sh Yogesh Mittal, Sh Parveen Mittal, Ms Yashodha Traders, Adarsh Garg Director, Jogindra Castings Pvt Ltd, Sanjay Gupta, Oasis Enterprises Pvt Ltd, Mathli Steels, Neelkanth Recycling Pvt Ltd, Ms Anj Metal Recycling Pvt Ltd, Samana Concast Mgg, Northern India Steel Rolling Mills Mgg, Dasmesh Alloys Mgg, Shiva Castings Pvt Ltd Mandi Gobindgarh, Ms Dasmesh Castings Pvt Ltd, Shri Gan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are mentioned at Sr. No. 26 and 27 of Annexure A of the Panchnama dated 27.11.2012. The said two bunch of papers have been marked as File No. 26 and File No. 27. During the course of search of residential godown and office of Shri Rajesh Kumar Proprietor of M/s SMM, some loose papers were allegedly recovered, but, the same has not been made RUDs in the show cause notice. Further, during the course of search of the premises of M/s YT and its partner, the incriminating documents were allegedly recovered from the residential premises of its partner of Shri Yogesh Mittal. Thereafter, various statements have been recorded during the course of investigation of dealers of scrap and manufacturer of iron steel ingots i.e. furnace units and re-rollable units (alleged that they have received goods without cover of invoices and various other people). On the basis of these statements, as well as, the documents recovered during the course of search, it has been alleged that the scrap dealers, namely, M/s SST, M/s SMM and M/s YT are clearing scrap to the re-rollable units in cash without cover of invoices and issuing invoices to the furnace units without supply of goods and the amount rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of office, godown of M/s SST; office, godown and residential premises of M/s SMM; office premises of M/s YT registered dealers; office premises of Sh. Pankaj Goyal, Sh. Parveen Mittal brokers and residential premises of Sh. Yogesh Mittal partner of M/s Yashoda Traders. (b) It has been alleged that during the course of search at godown of M/s SST, a cloth bag of black and blue colour hidden in the bushes was found which contained HP make pen drive and two bunch of papers are mentioned at SNo. 26 and 27 of Annexure A to Panchnama dt. 27.11.2012. The said two bunches of papers have been marked as File No.26 (RUD-13), File No. 27 (RUD-14) in the impugned order. (c) During the search of office and residential premises of M/s Sh. Rajesh Kumar prop. of M/s SMM, some loose papers allegedly recovered but same has not been made RUD s in the show cause notice. (d) During search of premises of M/s YT and its partner, the incriminating documents were allegedly recovered from the residential premises of its partner Sh. Yogesh Mittal. The file recovered from residence of Sh. Yogesh Mittal vide panchnama dt. 27.11.2012, and a register was recov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The panch No. 1, Sh. Sachin Brar S/o Dalip Brar R/o House No. 92, Sector 5, Block A, Prem Nagar, Mandi Gobindgarh was working in Central Excise Department, Mandi Gobindgarh on 27.11.2012 as an recruit of Manpower Contractor even upto 01.07.2017 he was working in the same office. The appellants requested for cross examination of panchas who witnessed the proceedings dt. 27.11.2012 and same was not allowed. It is stated that on 27.11.2012, the visit of officers were surprise visit to M/s SST and as per proceedings drawn by DGCEI officers, there was only Sh. Avtar Singh present in the premises. It is beyond one s perception to perceive what could be motive to keep cloth bag containing purportedly incriminating documents and pen drives in the bushes, where the documents were prone to vagaries of weather. Further, if the purpose was to conceal the documents that too photocopies and pen drives, those could have been placed any other place more secure, safe rather than in the bushes. Further, more surprisingly the said cloth bag hidden in the bushes was found by the visiting staff without the assistance of any labour or without thorough scrutiny of area of 8 bighas premise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows receipt of payment mentioned on the kacha parchi (File No. 26) recovered from M/s SST. The perusal of said table reveals that there are neither any date nor invoice number date nor description of products sold. The impugned order purportedly shows that it is an ledger account maintained by M/s SST, wherein details of cheques of different furnace units mentioned. The perusal of said table reveals, it starts with date 18.04.2012 followed by date 17.04.2012, 16.04.2012, 18.04.2012, 17.04.2012, 09.04.2012. The debit sides of ledger reveals payment by cheques. There are no documentary evidence brought on records to substantiate cash given back to furnace units against cheques. Needless to emphasized , the ledger account are not in sequential dates. The impugned order purportedly shows sale of goods in cash to M/S Ashirwad Steel Rolling Mills and issued bills to M/s Kanha Rolling Steel Mills without goods. The perusal of the record reveals there are neither any date nor invoice number therein; the vehicle number has been mentioned on weighment slip issued by M/s Neelkanth Computer Kanda, Mandi Gobindgarh. There was neither any investigation caused fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be received in cash. There are neither any investigation caused from said M/s Shree Balaji nor made co-noticee in the instant case. The Table No. 15 of impugned order purportedly shows weighment slip of M/s Bhushan Computer Kanda, Khanna inter-alia possessing vehicle number. There are neither any investigation caused from said M/s Bhushan Computer Kanda nor from transporter in the instant case. The Table No. 16 to 19 of impugned order do not belong to appellants under reply. IV. There were no incriminating documents recovered on 27.11.2012 during search of office, godown and residential premises of M/s SMM. During course of search of residential premises of Sh. Rajesh Kumar Prop. M/s SMM some loose paper were recovered but same has not been made relied upon documents in the case. The said Sh. Rajesh Kumar Prop. in his statement dated 27.11.2012 stated that they are engaged in trading of ship breaking scrap of Bhavnagar in local market of Mandi Gobindgarh. He stated that loose paper recovered from his residence are mainly freight related slips of material received from various ship breaking company of Bhavnagar to M/s SST. The goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atched between RUD-46 RG23D register have been considered that goods were sent to parties mentioned in register (RUD-46) and bills were sent to parties mentioned in RG23-D register without goods. The bills issued during the period 01.10.2012 to 27.11.2012 as mentioned in RG23D register/sales register and found not matching with register (RUD-46) have been considered as sold to respective units without invoice. The Table No. 21 22 of impugned order purportedly shows the entries of pages, recovered from residential premises of Sh. Yogesh Mittal. There are neither invoice number and date nor description of products mentioned therein. There is nothing brought on records that amount mentioned therein was receipt from rolling mills or furnace units; and there is nothing to support to whom goods were supplied. The Table No. 23, of impugned order purportedly shows the entries in the register (RUD-46) recovered from office premises of M/s YT. The departments stand is that entries in register (RUD-46) do not tally with RG23D, the goods there were supplied without invoices to furnace units. There is nothing corroborative brought on records to substantiate th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pressure in respect of M/s Jogindra Casting Pvt. Ltd. and M/s Oasis Enterprises Pvt. Ltd. resp. Initially duty of ₹ 40 lacs and ₹ 20 lacs were debited at about 4 AM on 12.02.2013 and on further pressure duty of ₹ 5 Lac and ₹ 10 lac got debited at about quarter to 5 AM on 12.02.2013 in respect of M/s Jogindra Casting Pvt. Ltd. and M/s Oasis Enterprises Pvt. Ltd. resp. The debit entries were mailed from mail id [email protected] to [email protected] on 12.02.2013 at 04.09.18 AM, 04.11.47 AM, 04.53.44 AM and 04.54.40 AM. Sh Sanjay Gupta of M/s Jogindra Casting Pvt. Ltd. and M/s Oasis Enterprises Pvt. Ltd. visited DGCEI, Hqrs. New Delhi in compliance to summons on 11.02.2013 and he was allowed to go back at 05.15 AM on 12.02.2013. The very time factor of debiting the amount and time of mail to DGCEI, prima-facie exhibit the level of pressure/coercion exerted on said Sh. Sanjay Gupta by the department. (b) Sh. Sanjay Gupta of M/s Jogindra Castings Pvt. Ltd. and M/s Oasis Enterprises Pvt. Ltd. during cross examination on 26.12.2018 before Ld. Adjudicating Authority deposed that shortage of 12 MT of finished goods on 31.01.2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s SST M/s SMM; Sh. Parveen Kumar Mittal - Broker deposed having sold goods alongwith invoices and their statements were recorded under threat and pressure. The ld. Adjudicating authority erred in not considering the depositions made before him during cross examination. (a) The Ld. Adjudicating authority had allowed cross examination only of Sh. Sanjay Gupta of M/s Jogindra Castings Pvt. Ltd., M/s Oasis Enterprises Pvt. Ltd.; Sh. Raj Kumar Kakaram Bansal, partner M/s SST; Sh. Sanjay Kumar Goel , Manager M/s SST; Sh. Avtar Singh , Accountant M/s SST; Sh. Ram Bector, Asstt. Manager M/s YT; Sh. Yogesh Mittal , Partner M/s YT; Sh. Parveen Kumar Broker ; Sh. Ravi Kumar Sharma , Accountant M/s Allied Recycling Ltd. The ld. Adjudicating Authority denied cross examination of other parties viz. Sh. Sachin Brar Sh. Rulda Singh - Panchas to panchnama dt. 27.11.2012 (RUD-2); Sh. Rajesh Kumar Prop. M/s SSM; Sh. Harsh Kumar Gupta Sh. Dhiraj Ram Pal partner M/s YT; Sh. Rajinder Garg owner of M/s Bhatinda Rampura Carrier; Sh. Sarwan Singh - Manager M/s Maharashtra Lorry Supplier; Sh. Rajesh Gupta Director M/s Durga Multimetals; Sh. Sanjeev Gupta Dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly dealt with the entire factual matrix presented before it. The Tribunal rightly concluded that in the case of clandestine removal of excisable goods, there needs to be positive evidences for establishing the evasion, though contended by the Revenue. In absence of any material reflecting the purchase of excessive raw material, shortage of finished goods, excess consumption of power like electricity, seizure of cash, etc., the Tribunal noted and held that there was nothing to bank upon except the bare confessional statements of the proprietor and of some of the persons connected with the manufacturing activities and such statements were retracted within no time of their recording. The Tribunal also noted the fact that the requisite opportunity of cross-examination was also not made available so as to bring to the fore the true picture and therefore, it concluded against the Revenue observing that not permitting the cross-examination of a person in-charge of records of M/s. Sunrise Enterprises and absence of other cogent and positive evidences, would not permit it to sustain the demand of ₹ 1.85 Crores raised in the Demand notice and confirmed by both the authorities below . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable in original, is not admissible evidence. XVII. The ld. Adjudicating authority erred in invoking extended period of limitation as there were neither willful suppression, mis-statement or concealment of facts with an intent to draw any unlawful benefit. The raw material received were used in the manufacture of final products and cleared on payment of higher duty. As to how goods manufactured and cleared on payment of duty, in absence of raw material under reference not substantiated. There is neither any allegation nor findings regarding procurement of raw material without payment of duty (for substitution against invoices of M/s SST, M/s SMM M/s YT). XVIII. The ld. Adjudicating authority erred in imposing penalty as there were neither any mensrea nor any malafide. The goods were purchased against lawful invoices and used in the manufacture of finished goods which were cleared on payment of duty. XIX. The penalty under Rule 26 of Central Excise Rules, 2002 has been incorrectly imposed on Directors /Partners as inputs received were utilized in manufacture of final products and cleared on payment of duty. There are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties unless they are corroborated with the tangible evidence Hindustan Machines Vs. CCE 2013 (294) ELT 43 (Tri.). (iv) Shri Sanjay Kumar Goyal stated in his cross examination before Ld. Commissioner that since he was doing business of brokerage, trading and finance in personal capacity also he was keeping some records which had entries relating to M/s SST as well as activity he used to do in his personal capacity. (v) The record maintained by a third person containing details of various parties, cannot be connected to M/s SST. Hon ble Tribunal in the case of M/s Raizo Plasto Pvt. Ltd. Vs. CCE decided by Final Order No. A/60651-60652/2017-SM (BR) dated 24.04.2017 has held in Para 34 as under: - 34. I find that the ledger book has been recovered from the father of the Shri Surinder Raizada who stated that he was maintaining personal records and to the records the account of the firm of his wife Mrs. Sapna Raizada, proprietor of M/s Raizo Chemicals and also recoding the financial position of the appellant company. The records recovered does not pertain to M/s Raizo Plasto Pvt. Ltd. No description of the goods was found, there is only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STT that the said record RUD-13 and 14 referred in Show Cause Notice as file at S.No. 26 27, was not available at the godown of M/s SST from where it is shown to be resumed. (x) That the resumption is shown under panchnama dated 27.11.2012 RUD-2 (handwritten Page No. 516 convenience Compilation-II) which is shown to be drawn at the registered address of M/s SST which is Godwon-cum-Office at Sardar Nagar, G.T. Road, MandiGobindgarh. The said visit and proceeding of panchnama is highly suspicious and illegal. The revenue in the Show Cause Notice has shown recovery of a bag coloured blue and black which allegedly contained two bunch of papers alongwith one HP make pendrive. The said recovery was noted at S.No. 26, 27 and 29 respectively of resumption memo. In the said panchnama, it is stated that the visiting staff offered their personal search to Shri Avtar Singh who politely refused. Thereafter, it is stated that the said cloth bag was found hidden in the bushes near water tank in the premises and was recovered in presence of Shri Avtar Singh. This version of the panchnama is completely negated by Shri Avtar Singh in his cross examination, wherein he stated that no s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the case of M/s SST that the said bag was planted by the visiting team on its own accord or on instruction of a third party competitor. The truth would have come out in the detailed enquiry. (xiii) This is the reason that the visiting staff did not offer any personal search which is mandatory under the law so as to check planting of evidence. (xiv) Most important fact which shows the said panchnama proceeding as sham is that the panchas in the search were not independent rather were under active influence of Central Excise department. Pancha-1 ShriSachinBrar S/o of ShriDalipBrar, R/o House No. 92, Sector 5, Block-A, Prem Nagar MandiGobindgarh was working in Central Excise department MandiGobidngarh on 27.11.2012 as an recruit of manpower contractor. Even as on today, he is working in the same office (GST Office now). This fact was clearly stated in the reply to Show Cause Notice. However, the Adjudicating Authority denied the cross examination without any rhyme and reason. When the panchas to the panchnama are not independent, the entire proceeding under the said panchnama as well as recovery becomes illegal and cannot be read into evidence. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice 9. M/s Super Steel Traders No Show Cause Notice It can be seen that out of nine parties mentioned above, no Show Cause Notice has been issued to five parties. Therefore, there is no consistency and credibility of investigation where the Show Cause Notice has been issued on whims and fancies rather than tangible evidence. (xvii) In any case, no data of alleged pendrive can be relied upon in the present case because the provision of Section 36B of the Central Excise Act has not been complied with. Relying upon M/s Popular Paints and Chemicals Vs. CCE Final Order No. 52716-52718/2018 and M/s Magnum Steels Ltd. Vs. CCE 2017 (358) ELT 529 (Tri.). (xviii) That the false case made by the department at behest of one of competitor of M/s SST, on his false and misleading information is on weakest footing being not supported by any evidence. On the other hand, M/s SST has: (a) duly purchased goods from suppliers of Bhavnagar which is not disputed by department (b) goods were appropriately duty paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken a small sample to confirm the allegations on entire transaction for the relevant period. (h) Annexure B to the Show Cause Notice in which the revenue has presumed the connection of entries made in RUD-13 with that of invoices issued by M/s SST, contains entries which totals to cenvat credit of ₹ 5,36,28,668/-. However, the demand in the present Show Cause Notice has been raised for more than ₹ 20.34 cr. against various parties. Therefore, without prejudice to other things, with regard to demand of ₹ 15 crore there is nothing in the Show Cause Notice or the Order in Original and the same is merely a result of assumptions and presumptions. (i) The statements relied upon in the Show Cause Notice are either retracted on the very next day or have been broken in cross examination. (j) The alleged records are resumed from third party who maintained the same for his personal use and contained entries relating to his own business also. (k) The recovery made under RUD-2 is highly suspicious and made in doubtful circumstances. (l) The record RUD-13 which is sole basis of present case, is an unau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yal and was made to sign it. On specific questioned about whether he signed the statement dated 05.11.2012 of Sanjay Kumar Bansal after reading it, Sh. Raj kumar bansal stated that he was not allowed to read the statement and he was not even provided the copy of his statement. (vi) During cross examination Sh. Raj Kumar kakaram Bansal he discredited his statement relied in Show Cause Notice that goods were delivered to the rolling mills of Mandi Gobindgarh without bills and the payments for the same were received in cash. (vii) The revenue authority in the impugned order has failed to bring on record any evidence from where it can be established beyond doubt that Sh. Raj Kumar Kakaram was involved in issuing of impugned cenvat invoices,then the imposition of penalty under Rule 26 of the Central Excise Rules, 2002 is unwarranted. Submissions on behalf of Shri Sanjay Kumar Goyal:- (i) The Adjudicating Authority confirmed the penalty against Sh. Sanjay Kumar Goyal amounting to ₹ 10,00,000/- under Rule 26(2) of Central Excise Rules, 2002 read section 11AC of the Central Excise Act, 1944 and Section 174(2) of the CGST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tructions of some person over phone. (vi) That the Sanjay Kumar Goyal after receipt of Show Cause Notice issued by DGCEI alongwith RUD came to know about the alleged explanation of certain entries relating to RUD-11/13/14 in the said statements which are extensively used in the Show Cause Notice issued by DGCEI. It is submitted that the Sanjay Kumar Goyal never gave any such explanation to the DGCEI. After thorough verification of the said alleged explanation, the Sanjay Kumar Goyal confirmed that the said explanation (by whosoever it is made) is incorrect and does not show the correct position of fact. (vii) The Sanjay Kumar Goyal states that he never executed any transaction of M/s Sai Steel Traders, wherein the goods were diverted to one party and only bills are supplied to another. During the relevant period and the total sales including Annexure E, the goods always accompanied the invoices. The case of revenue is false and incorrect. (viii) With regard to the records resumed at Sanjay Kumar Goyal s office in Motia Khan, Sai Market, Mandi Gobindgarh including RUD-11, it is submitted that the said record is Sanjay Kumar Goyal s pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue is incorrect which can be seen from their own document Annexure B. The thorough enquiry and analysis of the documents would show as under:- (a) In no transaction, the weight of goods is same (b) In no transaction, the value of goods is same (c) There are time differences in alleged supply of goods and alleged issue of invoice. (xii) Infact, the two types of transactions are independent and not relatable to each other. The transactions in which sales bills were issued by M/s SST, the goods were duly supplied to the buyers alongwith invoice by M/s SST. The other transactions in nearest time were the dealings done by the Sanjay Kumar Goyal in his personal capacity for his meager brokerage / arranging of finance. The Sanjay Kumar Goyal was in knowledge of the trucks coming from Bhavnagar to supply goods in MandiGobindgarh and payment of freight to the truck drivers was also being handled by him for transactions of M/s SST. The truck drivers since were coming from Bhavnagar were not under constant control and vigil of their truck owners and had an opportunity to make one or two local rounds in MandiGobindgarh to earn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Anand Anand Steel - Anand Steel Rolling Mills - Anand Steel - Anand Plate Yard Shiv Shakti Shiv Shakti Steel - Shiv Shakti Rolling Mills - Shiv Shakti Steel Industries - Shiv Shakti Products Neelkanth Neelkanth Steel - Neelkanth Recycling - Neelkanth Mahadev Steel - NeelkanthConcast Pvt. Ltd. Shri Ganesh Shri Ganesh Steel - Shri Ganesh Steel Rolling Mills - Shri Ganesh Alloys - Ganesh Steel Industries Ganpati Ganpati Steel - Ganpati Trader - Ganpati Steel Rolling Mills - Shri Ganpati Steels ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No Show Cause Notice issued 4. Balaji Table 13 to 16 at Page 22 to 25 No Show Cause Notice issued (xvii) Thus the so called buyers of goods without invoices were not even issued even Show Cause Notice nor were subjected to the penalty. (xviii) No case has been made out for imposition of penalty against M/s SST under Rule 25 Submissions on behalf of M/s Yashoda Traders:- (i) A penalty of ₹ 23,91,084/- has been imposed upon M/s YT under Rule 25(1)(d) of Central Excise Rules, 2002 on the allegation that they have adopted same modus operandi as of M/s SST (Para 4.6.1, Internal Page 166 of Order in Original). (ii) The allegation of the department is that the entries in RUD 46 which matches with RG23D register s entries are genuine transactions and the remaining entries are mere supply of invoices without supply of goods. The said rest of the entries of the RG-23D for the period 01.10.2012 to 27.11.2012 has been impugned by the depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t shows that some statement was recorded of M/s Durga Multi Metals and Sri Vishnu Steels, however, as per para 1.35.1, they were shown File no. 26 (RUD 13 relating to M/s SST) was only shown and questions regarding same were put to him. No specific questions were put to them in relation to the M/s YT. In any case, it is admitted case of revenue that the said parties did not give any inculpatory statements. (ix) Even for recording statement misrepresentations were made in front of Sh. Jagdish Chander Bansal of M/s A.R. Castings and he was forced to reverse the credit under mis-representation of facts. His cross examination was allowed, however, he failed to come on first opportunity and no further opportunity was granted. Section 9D was not complied with regard to his statement. (x) The cash resumed was well accounted in the books of Yashoda Traders and no opportunity to explain the source of same was given to the noticee. The balance sheet was submitted before the Adjudicating Authority. (xi) That the penalty is not imposable on M/s YT as there is no evidence at all to implicate them for diversion of goods. Submissions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. Even in that slip there is nothing to show whether goods were supplied with bill or without bill. Further, the said entry on face of it looks like sale from S.M. Steel to Saggar Steels and not purchase by M/s S.M. Steels. Still further, the statement dated 17.07.2013 of ShriManoj Marta (RUD-13) nowhere admits any illegal purchase in respect of the entries mentioned in Table 33. Therefore, this extraction is completely false and in order to mislead the Hon'ble Adjudicating Authority. In any case, there is no connection of M/s SST with the said entry, therefore, the said entry or table 33 is of no consequence to the present case. (iv) Other than above, there is no specific allegation in the Show Cause Notice against Sh. Parveen Mittal and the adjudicating authority failed to bring on record any evidence against Sh. Parveen Mittal there is no discussion of the role of Sh. Parveen Mittal in the impugned order that how he was involved and why the penalty is imposed on him. Submissions on behalf of M/s Sai Multi Metals:- (i) A penalty of ₹ 70,76,919/- has been imposed upon M/s SMM under Rule 25(1)(d) of Central Excise Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of goods or unloading of goods at a different location than destination mentioned in the invoice. Or any question was put to them whether they transported goods without cover of invoices. There is no denial of actual transport of goods to the furnace units to whom invoices were issued. The transporter on the other hand confirmed payment of freight although in cash and also confirmed transport of goods .Therefore practically there is no evidence with the revenue for non-transport of goods. It is settled law that in order to allege paper transaction, the revenue must bring on record evidence from side of transporter that the goods were not actually transported. The revenue has grossly failed to adduce the said evidence in present case. Section 9D not complied with (ix) It is a settled law that the statement recorded by investigating agency shall pass through the test of Section 9D of the Central Excise Act 1944, before the same is regarded as admissible in evidence. The Adjudicating Authority shall specifically record the finding regarding compliance of Section 9D by examining the witness before him and to record his satisfaction regarding releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter deducting their commission @1%. He also provided the names of Furnaces and the Rolling Mills involved therein. (vi) Sh Sanjay Kumar Goel also explained the entries made in the documents recovered during search. He also explained various abbreviations used in the documents. One such explanation has been tabulated at page 5 to 9 of the impugned order. These entries clearly establishes that cheque was received from furnace unit and cash was paid after deducting their commission @ 1%. The entries in File No 27 resumed during search were with respect to cash received from Rolling Mills against the goods supplied without invoice. (vii) Sh Sanjay Kumar Goel sent a retraction affidavit dated 16.01.2013 against his statement dated 15.01.2013. He was given an opportunity for tendering the evidence and statement on 18.03.2013 and on this date he, after seeing his earlier statement dated 15.01.2013, agreed with its contents. He again sent his retraction letter dated 19.03.2013, which was rebutted being not based on facts. (viii) Summons dated 28.04.2013 and 22.05.2013 were issued to Sh Raj Kumar Bansal, partner in SST. However, he vide his lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed Cenvat credit on the basis of invoices issued by the dealers SST, SMM and YT against which no goods were received by them. (xvi) M/s Jogindra Castings Pvt Ltd and M/s Oasis Enterprises Private Ltd, both having common directors, were the major beneficiaries of the wrong availment of Cenvat credit. During the stock verification at M/s Jogindra Castings, shortage of 12.440 MT of finished goods was found. Sh Sanjay Gupta, director of said M/s Jogindra Castings admitted that the shortage is due to removal of goods without payment of duty and debited the duty involved. Sh Sanjay Gupta director in both the companies refused to offer any comments on the documents resumed at SST, SMM and YT but debited ₹ 45 Lacs in account of Jogindra Castings and ₹ 30 Lacs in the account of Oasis Enterprises. (xvii) Sh Jaswinder Singh Matharoo, Director in M/s C S Casting Pvt Ltd (another beneficiary) admitted that the entries of cheque and cash returned as mentioned the File No 26 resumed at SST against code CS are related to M/s CS Castings. He also admitted that the amount of cheques shown given to SST was reflected in their ledger at a few days later da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and documents were reflecting the cash returned. Various furnace units admitted of having received only invoices without goods and various rolling mills admitted of having received only goods without invoice, establishes the modus operandi adopted by the appellants. (xxv) Further, the counsels on behalf of the Noticees in their defence submissions to the SCN have themselves admitted that only two or three rolling units/ dealers have admitted to have purchased goods in cash , therefore the veracity of facts about other Noticees cannot be doubted. Thus in view of the above stated facts, no credence can be given to the belated retractions at the time of cross examination, which were bald retractions and have been made after so many years. (xxvi) It has further been contended by the counsels on behalf of the appellants that the documents shown to the appellants were only the photocopies and not in original and no reliance can be placed on the same as photocopies cannot be considered as credible evidence to prove the case against them. (xxvii) In this regard, submitted that Sh Sanjay Kumar Goyal, authorised signatory of STT, in his statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has stated that no bag was recovered in his presence, but, the visiting team has informed him that one bag is recovered from their premises. Further, he stated that the statements dated 22.05.2013 and 21.11.2012 were not voluntary but forced to give statements. We have also gone through the panchnama dated 27.11.2012 which records as under:- Thereafter, the officers took consisting of three rooms at ground floor and first floor wherein the records of the said company was installed in Almirahs. A search of abovementioned premises was also carried out by the visiting officers in our presence and in the presence of Shri Avtar Singh in ordinary manner. The officer while carrying out through checking of the premises found a cloth bag of blue and black colour hidden in the bushes near green coloured water tank. 10. Further, Shri Sanjay Kumar Goel, during the course of adjudication was cross examined and has stated that all the statements were given under pressure and threat and also stated that no original documents were shown to me while recording my statement. 11. As, Shri Avtar Singh in his cross examination has stated that he was w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irahs for the rooms in their office, therefore, the recovery of the documents from the premises of M/s SST is in doubt. 15. We also take a note of the fact that it has also alleged that during search, the officials were talking someone on phone and telephone calls record was not called for, which creates doubt that the cloth bag containing documents recovered during search is planted are only. 16. Further, as per the statement of Shri Sanjay Kumar Goel who stated that the office at Motia Khan, Sai Market, Mandi Gobindgarh was not the office of M/s SST, but was in personal office of Shri Sanjay Kumar Goel who not only owns the said place and also physically occupied the same for his own use from where he did his own brokerage for sale of material and trading on personal account, apart from working as part time Manager for M/s SST. A copy of sale deed dated 22.07.2010 was also produced. In these circumstances, the documents recovered from the premises of third party cannot be relied upon to confirm the demand against the manufactures (furnace units) in the absence of any corroborative or tangible evidence as held by this Tribunal in the case of M/s Hind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we take a note of the fact that there is no co-relation between invoice number, date, payments and details and detail of goods. Therefore, the whole effort made by the Ld. Commissioner in the impugned order to corroborate the photocopies of documents (of whom originals are not available is in vain). 19. We create doubts on the recovery of cloth bag hidden in bushes on the following grounds:- (i) At the time of visit Shri Avtar Singh, was sitting on his desk and there was no other person present in the premises. Obviously, the visit was spontaneous without any prior intimation, therefore, Avtar Singh being alone in godown could not have thrown the said bag in bushes which were at the end of the 8 bigha premises. (ii) As per the panchnama itself the records of M/s SST was stored in Steel Almirah in the office premises. In any case, no businessman will make photocopies of records and keep it in bushes outside office area in the godown especially when there was no pre-information of visit of officers. (iii) Avtar Singh was in his office itself when the recovery was shown and he specifically denied any recovery of bag in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivered the goods which shows that the investigation is incomplete. 23. As we claimer of the invoice issued to various furnace units has been mentioned by scrap dealers, but, no investigation was conducted from the transporter from where they have delivered the goods. This non-action by the department also shows that the investigation is not conclusive. 24. On the basis of above discussion, we find that there are following flaws in the investigation are as under:- (i) Huge quantity of records were resumed by the department from the premises of M/s SST and other parties, but only two bunch of papers (which are highly suspicious) are only relied upon by the department. Statutory records have been ignored. (ii) Although, there is allegation of diverting goods to one person and invoice to other, the DGCEI could not find any excess or shortage of stock of inputs at the premises of M/s SST or of the alleged buyers of goods / invoices. (iii) The enquiries from the transporters did not yield any result rather they confirmed payment of freight. They did not confirm any diversion of goods and invoices which was alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the impugned order, the appellant M/s Joginder Castings Pvt. Ltd. the main manufacturer has purchase the total raw-material to the tune of 34224.540 MT whereas the total production is recorded as 32775.875 MT which shows that the appellant had cleared 32775.875 MT of finished goods on payment of duty if the appellant has not received the goods from the M/s SST, M/s SMM and M/s YT, then, the question arises from where the appellant has procured the raw-material to manufacture such a huge quantity of finished goods which has been cleared on payment of duty. 26. We further take a note of the fact that in the case of M/s Oasis Enterprises Pvt. Ltd., again, the total scrap purchased is 36014.362 MT whereas the total production as 33182.075 and it has been alleged that from M/s SST the appellant has obtained only invoices for 4880.120 MT if the appellant has not purchased the raw material from M/s SST, the question arises from where he has purchased the remaining scrap. 27. On these issues, the Ld. Commissioner has not given any findings in the impugned order. Further, there is no allegation of procurements of raw-material received from the markets wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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