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TMI Blog2020 (11) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... t the documents or clandestinely. It is also observed that although the third party records are good evidence of suspicion of clandestine activity, but the same cannot be adopted for concluding the charge of clandestine removal in the absence of corroborative evidence. Further, in spite of the names being found of the parties, to whom the alleged clandestine removal has been despatched, there is no further inquiry made from the alleged receivers of goods - the demand against the appellant is not sustainable, in absence of sufficient evidence of clandestine manufacture and removal of the goods. Appeal allowed - decided in favor of appellant. - Excise Appeal No.51623 of 2018 (SM) and Excise Appeal No.51705 of 2018 (SM) - FINAL ORDER NOS.51582-51583/2020 - Dated:- 5-11-2020 - HON BLE MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) Ms. Kaynat, Advocate for the appellant. Ms. Tamnna Alam, Authorised Representative for the respondent /Department. ORDER The appellant company and its Director, Shri Pankaj Tekriwal are in appeals against the impugned order-in-original, whereby excise duty has been demanded ₹ 41,76,213/- along with equal amount of penalty on the alle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise Act, 1944, wherein he inter alia stated as under:- i) That he is working as Commission Agent for the last 2-3 years for his firm - M/s. Monu Steels, Near Deshbandhu Complex, Raipur (C.G.). ii) That the buyers and sellers contact him over phone for the purchase or sale of iron and steel products. iii) That the rate of goods and his commission is finalized over phone iv) That on finalization of deal, the seller supplies goods to buyer and he takes the details of such supplies, and enters in his diary. v) That the buyers sometimes send the payment directly to the suppliers and sometimes the payments are sent to him for disbursement to the suppliers, and in such case, he contacts the seller and makes the payment. vi) That in case of ingots, he gets commission from both buyers and sellers as well. vii) That in case of sponge iron, he gets commission from seller only viii) That he receives the payment from the buyers either in cash or through cheque. ix) That he receives the dispatch details from sellers over phone and makes the entries thereof in his diaries, which includes the name of buyer, name of seller, date, bill no., quantity , bill amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven by Mr.S.K. Pansari, date of removal, quantity of goods removed , rate, date of receipt, amount received, date of payment, amount paid, etc. 7. In order to verify the genuineness of such transactions undertaken by appellant through Monu Steel and to verify as to whether proper cenral excise duty has been paid by them on such clearances of MS Ingots, summons were issued upon appellant, inter alia, asking them to furnish their sales details pertaining to the period 2006-2007. 8. In pursuance to the summons, Shri Manish Pandey, the Authorised signatory of appellant submitted the documents called, for on 15.06.2009 .Further, statement of Shri Manish Pandey, Authorised Signatory of appellant was also recorded under Section 14 of the Central Excise Act, 1944 on 15.06.2009 before the Superintendent (Prev.), Central Excise Hqrs., Raipur, wherein he deposed that the documents/records being submitted are in relation to production, storage and removal of goods by M/s.Hi Tech Abrasives Ltd., and expressed their willingness to cooperate with the investigation and also undertook to discharge any duty liability that may arise out of examination of the documents / records being submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reiterated that they had not cleared /removed MS Ingots through the said commission agent without issue of sales invoices or without payment of central excise duty. 12. On being specifically asked during the course of recording of statement dated 23.10.2009 and upon his denial, having only genuine transactions through M/s.Monu Steels, (Prop. Shri S.K. Pansari), Shri Pankaj Tekriwal was shown the copy of statement of Shri S.K. Pansari recorded under Section 14 of the Central Excise Act, 1944 on 15.01.2007, wherein Shri S.K. Pansari has Stated that he has correctly entered in his records all the transactions of sale of MS ingots undertaken through him by various manufacturers. He was asked to clarify entries as recorded in the registers/diaries recovered by the central excise officers. 13. In reply, Shri Pankaj Tekriwal deposed that whenever they had any transactions with or through the said M/s.Monu Steels (Prop. Shri S.K. Pansari), Raipur they have recorded the same on their books of accounts, issued sales invoices and paid central excise due on the same. Regarding other entries as detailed in the records, he showed his inability to offer comments as these entries have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en issued are duly informed to him. It might be that some removals were either made without payment of duty or were made under parallel invoices. (b) Whenever the seller does not intimate the invoice number in respect of the removals of sponge iron, the code mark R has been mentioned by him in his records/diaries against each of such transactions. (c) That whatever tax evasion is done by the manufacturers of sponge iron, is evident from his records, he stated that he has not been benefited out of such evasion of tax, but has only received his commissions for brokering of deals. 18. On comparison with the purchase details of sponge iron as per the recovered private records of Kailash Traders, it appeared that the appellants have made both accounted and unaccounted purchase of sponge iron. Such unaccounted purchase of sponge iron is 244.10 M.T. made on various dates during the period July to September, 2006, (as per Annexure F to show cause notice). However, this allegation was denied by the appellants and they categorically stated that they have made only accounted purchase of sponge iron. 19. In his statement, Mr. Pankaj Tekriwal, Director stated that the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. During the course of adjudication, Shri S.K. Pansari was crossed examined, wherein, he, inter alia, stated that diaries, etc. on the basis of which, clandestine clearance have been estimated by the Department was written by his nephew. Mr. Bal Mukund Pansari, who died sometime in 2008 -2009. Further, no statement of Mr. Bal Mukund Pansari was ever recorded. It is also stated that the recovered records of Monu Steels were maintained on the basis of the telephonic conversation communicated by Mr. S.K. Pansari to his nephew, late Bal Mukund Pansari, who used to write down the same in the records. He has never examined the correctness of such entries nor has got any documentary evidence in support of such entries. Further, there was possibility of mistakes in the records. It was further urged that the allegation of suppressed production and clearance is bad in law, with reference to the report of the Joint Parliamentary Committee, which has specified 1800 units PMT of ingots, whereas National School of Secondary Steel Technology have specified 1427 units PMT. Further, the allegation of suppression is bad as not a single truck carrying unaccounted finished goods were intercepted by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total Duty Quantification of demand in Annexure C to SCN 2047.599 36491442 5838631 116773 5955404 Less: invoices submitted by the noticee 587.245 10055520 1608883 32178 1641061 Less: Double entries in Annexure- C to the SCN. 44.440 846289 135421 2709 138130 Total MS Ingots 1415.914 25589633 4094327 81886 4176213 Accordingly, duty of ₹ 41,76,213/- including cess was confirmed on the alleged clandestine removal of 1415.914 MT of M.S. Ingots. Further, equal amount of penalty was imposed under Section 11 AC and the balance proposed demand was dropped. Further, penalty of ₹ 50,000/- was imposed on the appellant Director - Shri Pankaj Tekriwal under Rule 26 of the Central Excise Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I find that the demand has been confirmed only on the basis of the unsubstantiated evidence being the private records of the two brokers viz. M/s.Monu Steels and Kailash Traders and the statement of their proprietors. I further find that the author of private records of M/s. Monu Steels - Mr. Bal Mukund was never examined by the Revenue. Further, M/s. S.K. Pansari during his cross examination has admitted that the said records were maintained under his instructions by Shri Bal Mukund Pansari. Further, Revenue have failed to find out any inconsistency in the records of the appellant, nor there is any seizure of any consignment of goods being raw materials or finished goods, being transported without the documents or clandestinely. 32. I further observe that although the third party records are good evidence of suspicion of clandestine activity, but the same cannot be adopted for concluding the charge of clandestine removal in the absence of corroborative evidence. Further, in spite of the names being found of the parties, to whom the alleged clandestine removal has been despatched, there is no further inquiry made from the alleged receivers of goods. Accordingly, I hold that the ..... 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