9911796707
TMI Blog2023 (7) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and conditions of the tender documents/ contracts - The appellant firm had also clarified that the factory at the Belilious Road premises lacked the infrastructure to manufacture any transmission line accessory or hardware equipment and that there was no testing facility inside the said premises. Surprisingly, in the adjudication order dated 29.02.2012, it had been held that upon investigation by the revenue authorities, manufacturing facility had been found at the Belilious Road premises, which had also been admitted by the noticee no. 2 in his statement dated 21.05.2010 and that no contrary evidence could be adduced by the noticees. Such findings had clearly been rendered in disregard of the inventory dated 08.02.2010 drawn up by the Central Excise officers, which established the point of lack of manufacturing facilities. The appellant firm s defence was further supported by the Chartered Engineer s Certificate filed in the subsequent stages. The enquiry and investigations leading up to issuance of the show cause notices dated 24.12.2010 and 24.03.2011, though giving rise to suspicion against the appellant firm, were insufficient to justify the confirmation of demands. Penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant firm, Sri Aayush Rungta has challenged the confirmation of personal penalties by the respective Orders-in-Original dated 21.03.2012, 22.09.2017 and 01.05.2018. 3. The facts of the case, briefly stated, are as follows: i. The appellant firm, a supplier of transmission line accessories and hardware fittings, used to submit bids when tenders were floated by different power supply corporations across India. The appellant firm also used to deal with various private parties. If the rates quoted by the appellant firm were accepted by a power supply corporation, the appellant firm received the order. It was stipulated in the tenders/contracts of the power supply corporations that orders will be placed on the manufacturers. The appellant used to represent and declare to the power supply corporations that it was a manufacturer and that its premises at 207/7, Belilious Road, Howrah-1 was its factory/place of manufacture. However, the appellant firm had not been registered with the Central Excise authorities. ii. Between March, 2007 and December, 2010 officers of the Directorate General of Central Excise Intelligence and Headquarter, Anti-Evasion Unit conducted investig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , periodic show cause notices were issued raising demands of Central Excise duty together with interest and penalty against the appellant firm on similar grounds. It was also proposed in the said show cause notices that personal penalty should be imposed on the appellant firm's authorized representative, Sri Aayush Rungta for his alleged acts/omissions. v. On confirmation of demands vide two Orders-in-Original dated 29.02.2012 and 21.03.2012, appeals were preferred before this Tribunal by the aggrieved parties, namely, M/s. S. A. Enterprises and Shri Aayush Rungta, which were registered as Appeal Nos. E/392/2012, E/409/2012 and E/410/2012. The connected stay petitions filed by the appellants-applicants were disposed of vide an order dated 20.07.2015 passed by this Tribunal by directing deposit of Rs. 20 Lakhs. The said directions were duly complied with. vi. In the meanwhile, further investigations were carried out. By an Order-in-Original dated 22.12.2015 passed by the Commissioner of Central Excise, Kolkata-II Commissionerate, adjudication proceedings in respect of show cause notices dated 21.02.2014, 28.03.2014, 16.10.2014 and 20.08.2015 were concluded and the all the propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s at the Belilious Road premises. The adjudicating authority had gravely erred in holding that there was no evidence in support of the claim that the aforesaid machinery had been lying unused for a long period of time or had not been used for manufacturing the goods in question. B. That the appellant firm could not have been treated as a manufacturer for central excise purposes simply on the basis of declarations or representations made to certain purchasers, namely, different power supply corporations and/or on the basis of warranty provided in respect of the goods in question. In this regard, reliance was placed on the decision of Aska Equipment Pvt. Ltd. v. Commissioner of Central Excise, reported in 2006 (202) ELT 795, against which Departmental appeal had been dismissed by the Hon'ble Supreme Court on the ground of delay as well as on merit, as reported in Commissioner v. Aska Equipment, 2010 (254) ELT A37. C. That, even otherwise, the appellant firm had not made any representation of being a manufacturer of the goods sold by her to any private party. In the initial show cause notices, sales of wire as also sales of hardware to private parties had not been included for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the combined Paper Book filed before this Hon'ble Tribunal showed the movement of goods purchased by the appellant firm from Deepak Industries to M. P. Poorv Kshetra Vidyut Vitaran Co. Ltd., Chhatarpur in truck no. MP-15-HA-0282. G. That the Commissioner's findings in relation to the appellant firm's failure to produce evidence proving the existence of her suppliers were perverse. None of the show cause notices except the one dated 21.02.2014 had remotely suggested that the appellant firm's suppliers had not actually existed. In fact, the appellant firm's purchases had been investigated and no adverse evidence could be found qua most purchases. Even as regards the said show cause notice dated 21.02.2014, the purported allegations regarding the four suppliers namely, M/s. B. K. Enterprises, M/s. Shiv Shakti Trade Center, M/s. Hari Om Enterprises and M/s. Evergreen Enterprises, had been fully met by the appellant firm in her defense, however, the supporting documents and explanations had not been looked into. H. That, there was no concrete evidence on record establishing clandestine manufacture or clearance or surreptitious sales or surreptitious purchases at any point of time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents/ contracts, as would appear from a reading of page nos. 55 to 75 of the Paper Book filed in relation to Ex. Appeal No. 392 of 2012. We note that the appellant firm had taken the factual stand that the declarations/ representations to the power supply corporations had been made only for the purpose of procuring business and that they had always engaged in trading and supply of the goods in question. The appellant firm had also clarified that the factory at the Belilious Road premises lacked the infrastructure to manufacture any transmission line accessory or hardware equipment and that there was no testing facility inside the said premises. Surprisingly, in the adjudication order dated 29.02.2012, it had been held that upon investigation by the revenue authorities, manufacturing facility had been found at the Belilious Road premises, which had also been admitted by the noticee no. 2 in his statement dated 21.05.2010 and that no contrary evidence could be adduced by the noticees. Such findings had clearly been rendered in disregard of the inventory dated 08.02.2010 drawn up by the Central Excise officers, which established the point of lack of manufacturing facilities. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed out to us between the statement dated 15.03.2011 of Appellant No.2/Shri Aayush Rungta and the statements given earlier by Shri Dinesh Rungta. In our opinion, the Department has not been able to prove its case with the help of concrete evidences. 12. We are also constrained to hold that the observations in the Order-in-Original dated 29.02.2012 as well as the observations in the Order-in-Original dated 21.03.2012 in relation to alleged inspection and testing at the factory premises, embossing of trademark on the materials supplied, voluntary payment of Rs. 10.50 Lakhs in admission of liability by the appellant firm and job work gotten done by the appellant firm in contravention of the Central Excise law are unsustainable due to the following reasons - I. Only physical verification of the items used to be carried out at the Belilious Road premises/ godown premises and other tests were conducted in the approved laboratories of third parties like M/s. Analyst, Benaras Road, Howrah, M/s. S. B. Steels, Liluah, Howrah. The said positions had been clarified in answer to question no. 13 of statement dated 25.01.2010 given by Shri Dinesh Rungta, as appears at page no. 63-64 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that the appellant firm's claim of trading is borne out from records such as purchase invoices and corresponding sale invoices. We find that the appellant firm has submitted voluminous documents in this regard, however, the same had not been properly appreciated while passing the impugned Orders-in -Original. On specimen basis, we have examined the documents at page nos. 2632 to 5148 in Part 7 of the combined Paper Book, covering the period from February, 2011 to March, 2013 and are satisfied about the appellant firm's explanations. The said documents being purchase and sale invoices contain all relevant information such as supplier's details, description of goods, payment of central sales tax, vehicle number for transportation of goods etc., which the adjudicating authorities neglected to examine. Thus, we cannot uphold the finding at page no. 21 of the impugned Order-in-Original dated 22.09.2017 to the effect that the appellant firm "…could not produce any document which settles the fact they have trading sales…". Similarly, the finding in the impugned Order-in-Original dated 01.05.2018 that transmission line hardwares were manufactured after the appellant fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Demand on sale of materials to private parties and sale of wires, channels, angles etc. : We find that the Department has raised demands on the sale of materials to private parties and sale of wires, channels, angles etc. for the period on and from February, 2011, although, the appellant firm had never held itself out as a manufacturer in respect of such supplies. It must be noted here that, in the earlier two show cause notices dated 24.12.2010 and 24.03.2011 no such demand had been raised. In this regard, we agree with the appellant firm's contentions that the basis and computation of demand in the subsequent show cause notices were contrary to those of the earlier two show cause notices dated 24.12.2010 and 24.03.2011. While passing the Order-in-Original dated 01.05.2018 the Commissioner ought to have appreciated that, whether the private parties to whom the appellant firm had supplied the goods in question further supplied the goods to electricity distribution companies was of no consequence for determining the appellant firm's liability. We also find that, qua such supplies of wires, channels, angles etc. as well as supplies to private parties, there is no evidence at all that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al movement of goods. The Commissioner failed to hold that the appellant firm had submitted not only invoices but also challans covering movement of the goods in question and the challan mentioned the mode of transport as also the registration number of the motor vehicles. Job work challans and documents showing movement of goods to and fro from the job worker's premises had been duly submitted by the appellant firm. In such circumstances, the adjudicating authority should not have faulted the appellant firm for failing to produce documents like agreement with suppliers, consignment notes, transporters' bill and their payment details, loading/unloading slips, weighment slips etc. To take an example, the Commissioner had held that the appellant firm could not establish physical movement of the goods purchased from SubhLabh Enterprises to Vishwanath Projects Ltd. which was incorrect. During the course of hearing before us, it was demonstrated as to how the said purchased goods had been transported to the premises of Vishwanath Project Ltd. by truck bearing no. AP-16TX/9879. Further and in any event, such issues were alien to the show cause notices and had been raised for the first ti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
