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TMI Blog2021 (11) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 21,15,379/-. This is because the Commissioner has added ₹ 11,48,044/- which has been already upheld by the Tribunal to the amount of ₹ 9,67,335/- arrived by him. I cannot understand the logic of the adjudicating authority in adding the amount that has already been upheld by the Tribunal. Though the Tribunal has remanded the matter to look into the penalty that has to be imposed after readjudication of the issue of ₹ 12,90,032/- that has been remanded, the issue of penalty in regard to ₹ 11,48,044/- has to be recorded separately. The duty demand that has been already upheld by the Tribunal cannot be added to the amount of adjudication in denovo adjudication. The adjudicating authority has confirmed the total demand of ₹ 21,15,379/-. There is no demand of ₹ 21,15,379/- at the time of adjudication. The demand adjudicated is only ₹ 12,90,032/-. There cannot be confirmation of a higher amount. The Commissioner having analysed merely the shortage of raw materials, the argument of the learned counsel that they requested for cross-examination of mahazar witnesses and the adjudicating authority did not allow the same acquires relevance - thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Steel Syndicate, Dindigul (MSSD), M/s. MMS Steels Dindigul (MMSD), Sri Sithi Vinayagar Steel Madurai (SSVS) etc., which revealed that M/s. DSRM had procured unaccounted raw materials and used such raw materials for unaccounted manufacture for CTD bars and clandestine clearances. Statements were also recorded. Based upon such evidences show-cause notice dated 20.4.2005 was issued to the appellant. After due process of law, the adjudicating authority confirmed duty demand of ₹ 56,34,585/- for the period 2001-02 to 2003-04 along with interest and imposed equal penalty. Besides this, personal penalty of ₹ 2 lakhs was imposed on the Managing Director of the appellant3 company Shri Ramasamy, penalty of Rs.one lakh each on M/s. NHS, M/s. MMSD and ₹ 2 lakhs on M/s. Anand. Aggrieved by such order, the appellant M/s. DSRM, M/s. NHS, M/s. MMS and Shri Ramasamy filed appeals before the Tribunal. The matter was heard by the Tribunal and vide Final Order No. 41903 to 41906/2017 dated 31.8.2017, the Tribunal set aside the demand of ₹ 31,96,509/- in respect of 129.89 MTs of CTD bars alleged to be received by M/s. NHS. The duty demand of ₹ 11,48,044/- in respect of 44 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his issue in para 8 of the final order and concluded that the department has not been able to sufficiently establish the basis of the duty demand. However, the Tribunal observed that since DSRM and MMSD are related units, it requires to further look into the matter and remanded the same. 5. As per the findings of the Commissioner in the earlier proceedings, the demand was upheld in three aspects as ₹ 31,96,509/-, ₹ 11,48,044/- and ₹ 12,09,032/-. Out of this only, the third issue was remanded. However, in the denovo proceedings against the duty demand of ₹ 12,90,032/- remanded by Tribunal, the adjudicating authority has confirmed duty of ₹ 9,67,335/-. The adjudicating authority has arrived at this amount after considering the shortage of inputs recorded at the time of search. He adverted to page 179 of the appeal paper book and submitted that after the search, the department had taken away as part of evidence the input register maintained by them. They were then asked to start a new input register from the date of the search (29.7.2003). At the time of search and seizure, stock of inputs as per the input register was 707.940 MTs. The quantity physica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon the decision of the Hon'ble High Court in the case of Jindal Drugs 2016 (340) ELT 67 (P H) to hold that the statement cannot be relied in evidence unless the witnesses have been examined as required under sec. 9D of Central Excise Act. 8. In para 25 of the impugned order, the Commissioner has applied the input-output ratio as per SION norms (C 513) contained in EXIM Policy to calculate the quantity of unaccounted raw material in respect of duty demand for which the matter was remanded. These calculations are without any basis and not in accordance with the remand directions. He submitted that the demand confirmed in the denovo adjudication is merely on the allegation of unaccounted raw materials and the department has not been able to establish any unaccounted production of CTD bars or clandestine removal of the same. Further third-party records cannot be accepted as evidence for arriving at the conclusion that goods have been clandestine removed. Any thirdparty document has to be corroborated by other reliable evidence. He referred to the judgment of the Hon'ble High Court of Allahabad in the case of Continental Cements Ltd. Vs. Union of India 2014 (309 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arumandapam, M/s. Ramya Steels, Trichy. It was stated in Show Cause Notice that certain documents were recovered with regard to the method of clandestine clearances adopted by the appellant using the entity M/s. MMSD. The Commissioner though merely reiterated some facts with regard to these traders in para 22, has not analysed the issue of cash flow from M/s. MMSD to these local traders. So also the evidence of transportation from these traders to M/s. MMSD has not been established properly. In the denovo, the Commissioner has approached the issue on a different angle. He has attempted to find out the balance shortage of MS ingots that would be available for manufacture of CTD bars relating to the duty demand of ₹ 12,90,032/-. The shortage of raw materials at the time of search and seizure was 624.855 MTs of MS ingots. The quantity of finished products material in regard to the duty demand upheld by the Tribunal in respect of M/s. Anand Steel Mart is 445.17 MTs. The adjudicating authority applied the input output ratio given in the EXIM Policy, and calculated that 476.37 MTs ingots is required for manufacture of 445.17 MTs of CTD bars. The adjudicating authority then deducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to ₹ 11,48,044/- has to be recorded separately. The duty demand that has been already upheld by the Tribunal cannot be added to the amount of adjudication in denovo adjudication. The adjudicating authority has confirmed the total demand of ₹ 21,15,379/-. There is no demand of ₹ 21,15,379/- at the time of adjudication. The demand adjudicated is only ₹ 12,90,032/-. There cannot be confirmation of a higher amount. 14. This apart, the main argument put forward by the learned counsel for the appellant is that the Commissioner has relied upon the statement of Shri R. Manoharan, who is the Director of M/s. MMS, Karaikal. The said person had retracted his statement within a week. He has not been put to examination as required under sec. 9D of the Central Excise Act, 1944. Therefore, the said statement cannot be relied at all. The evidence necessary to bring out the allegation that the appellant, M/s. DSRM, had clandestinely removed the finished products through M/s. MMSD has not been brought forth by any further evidence in the second round of adjudication. 15. The Commissioner having analysed merely the shortage of raw materials, the argument of the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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