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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 ..... amely MS ingots, it was seen that though the accounts reflected the stock of 707.940 MTs of MS ingots, only 83.085 MTs of ingots were physically available. Thus, there was a shortage of inputs to the tune of 624.855 MTs. Search operations were conducted at M/s. New Hindustan Steels (NHS), M/s. Anand Steel Mart (Anand), M/s. Madurai 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 Rs. 56,34,585/- for the period 2001-02 to 2003-04 along with interest and imposed equal penalty. Besides this, personal penalty of Rs. 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 Rs. 2 lakhs on M/s. Anand. Aggrieved by such order, the appellant M/s. DSRM, M/s. NHS, M/s. MMS and Shri Ramasam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of the appellants. He submitted that while remanding the matter relating to the duty demand of Rs. 12,90,032/- in respect of 615.28 MTs of CTD bars, allegedly received by MMSD, the Tribunal had actually dealt with all the allegations and evidences on this 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 Rs. 31,96,509/-, Rs. 11,48,044/- and Rs. 12,09,032/-. Out of this only, the third issue was remanded. However, in the denovo proceedings against the duty demand of Rs. 12,90,032/- remanded by Tribunal, the adjudicating authority has confirmed duty of Rs. 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 inpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... para 8 of the Final Order had held that since the statement of Shri A. Jaimulabdeen and Shri M. Shajahan have been retracted, department has not been able to sufficiently establish the basis of duty demand. Further, the Tribunal had 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 clande ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 Rs. 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 this quantity from total shortage of 624.85 MTs (624.85 - 476.33) to arrive at the balance unaccounted raw material quantity as 148.525 MTs. In the Show Cause Notice, it was alleged that 345.135 MTs o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 21,15,379/-. There is no demand of Rs. 21,15,379/- at the time of adjudication. The demand adjudicated is only Rs. 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 learned counsel that they requested for cross-examination of mahazar witnesses and the adjudicating authority did not allow the same acquires relevance. 16. As already stated, though in the Show Cause Notice it is alleged that 615.28 MTs of CTD bars were clandestinely r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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