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TMI Blog2004 (12) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... se Record maintained by RP-M. They made inquiries, searches of RP-M, RP-P, Raj Lubricants (Madras), Raj Petroleum Agency Hyderabad premises were conducted, further inquires made and show cause notice dated 24-5-1999 was issued to Nature of contravention Section/Rule contravened (i) Removal of excisable goods without valid invoice Rule 52A/173G(2) (ii) Non-accounting of manufacture & clearance of excisable Goods in RG 1 register. Rule 53/173G(4) (iii) Non accounting of manufacture & clearance of Excisable goods in the RT 12 returns. Rule 54/173G(3) (iv) Clearance of excisable goods without determining & discharging Central Excise duty. Rule 173F/173G(1) (v) Modvat Credit without physical receipt of inputs. Rule 57A (vi) Availment of qty. credit & duty credit, incorrectly. Rule 57G(7) & (8) In statutory records RG23 Pt. I & II. & demanded duty of Rs. 97,21,742/- on Clandestine Removal or excisable goods the period 1994-95, 1995-96, 1996-97, 1997-98 & 1998-99 as detailed in Annexure A-7 to the notice & demand & recovery of Modvat Credit of Rs. 39,59,631.90/- availed at RPM, which was not eligible & consequent penalties & interest liabilities. 1.4 These appeals a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich lead to unearth clandestine removal, are also required to be relied upon documents. The concerned persons of the Transport companies/agencies in their statements recorded under Section 14 of the Act, have confirmed the facts of transporting goods without valid cover of duty payments or without bills/challans and for which bills were not raised but only entries were made in their private records. For such activities Transporters were paid in cash. Hence these documents such as Gate Register, Lab Register and the records of the Transporters are taken as relied upon documents as these records are contemporary. And therefore, the contention of RP-M that these documents cannot be relied upon is non-sustainable (i) RP-M has submitted that JIT is an independent partnership firm and have submitted various copies Registrations issued by Government Authorities, Municipal Corporation etc. It is also submitted that RP-M has no way concerned with clearances of JIT whether clandestine or otherwise. Further they were not able to correlate entries of Lab Register as alleged. They have stated that JIT had cleared some goods from their Mumbai-9 godown and these would not appear in the Gate Regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and have not at all produced any supporting evidence for such denials. Further JIT had purchased 40 Tankers of Spray oil from one Sagar Industries amounting to Rs. 72 lakhs (apprx). These purchases were not accounted with RP-M or JIT, but Gate Register showed the receipts of the materials and the Lab Register showed testing and using in the process of manufacture. RP-M has produced just one or two bills issued by Sagar Industries for entire 40 tankers purchase, and for remaining quantities they have preferred to maintain silence. Such receipts of raw materials in unaccounted way has been confirmed by the employees of RP-M; viz. S/Shri Anil Lad, Production Supervisor and Kakubhai in their statements. Even the Directors of RP-M who are also Partners in JIT failed to explain such transactions in their statements as well as in reply to the questionnaire given to them. (d) From above paragraphs it is clear that RP-M has clandestine removed the finished goods in guise of clearances by JIT. RP-M also received the raw materials in the name of JIT and also in the name of fictitious firm i.e. Jalaram Trading Company. It is proved that RP-M had used the money received from various recipient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted the receipts on invoices of panama though the goods in actual were never received in the premises of RP-M. Similarly, the consignments from IPCL were actually received at RP-P, Gujarat, but billing was made to RP-M and the staff of RP-M has acknowledged the challans. The staff of RP-P Shri Chintan Sonara has confirmed these facts in his statement. The documents seized at HRL, also indicates this transactions. During the period of 3-8-96 to 19-11-1998, RP-M had availed credit of 133 tankers of materials of IPCL, but as per the records of HRL, only 13 tankers were delivered to RP-M and even these were not entered in the Gate Registers. In reply to this allegations RP-M has only submitted the statement showing the Credit of duty availed RP-M & RP-P and no other submissions, which appears that they have nothing to say against the allegation. Hence, the Modvat credit of Rs. 39,59,631/- wrongly availed by RP-M is required to be recovered under Rule 57-I(1) of the Central Excise Rules, 1944. The details of Modvat misuse are shown in Annexure A-7 to the notice. Annexure A-5 shows the details of wrong availment of Modvat Credit on the goods of Panama and Annexure A-6 of IPCL for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s shown therein are of goods of proprietary interest of RPM. Reliance in this connection, placed on the statutory registrations of JIT with different authorities in respect of Compound at 124, G.D. Ambedkar Marg, rent receipts. Bank record and insurance company policy to show that JIT was actually conducting business and/or operating out of 124, G.D. Ambedkar Marg (were extensively relied upon in reply to show cause notice. Nothing is on record, why the said clearances as taken from Gate Register could not be of JIT & are necessarily of RPM, would be a presumption & assumption. Submission that all goods received at or discharged from common Gate of Compound at 124, G.D. Ambedkar Marg, cannot be attributed to RPM. Therefore demand as made cannot be upheld. Transaction of genuine trading transactions therefore relating to JIT and removed would shield RP-M from payment of excise duty. It is surprising why JIT were not given a notice and examined by the department. Further the said Gate register, is available only for period January 1998 to November 1998. The same cannot be made the basis for allegation for entire period of demand in the Show Cause Notice. (vi) As regards the lab regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a conflict, the documentary evidence should prevail; thereby when documentary evidence does not establish clandestine removal, the statements based thereon cannot prove [see R.P. Industries v. Collector, 1996 (82) E.L.T. 129]. Besides, these statements are qualified and conditional. The statements have to be read together and as a whole are not in part and pieces, when so read, the statements do not establish clandestine removal. (x) The second part of the demand related to and on the documents seized from the premises of transporters as at Annexure - A2 to A4 of the notices. This Tribunal in the following cases held that transporters records are not relevant to prove clandestine removal. (A) Durga Trading Co. v. Commissioner [2002 (148) E.L.T. 967] (B) Brims Products v. Commissioner of Central Excise [2001 (130) E.L.T. 719] (C) Raj Sundeep Co. Gian Singh v. Collector of Central Excise & Customs [2003 (162) E.L.T. 1028 (Tribunal) = 1999 (31) RLT 324] Is the submission made before us in absence of any material to the contrary, the same view has to upheld. In CCE v. Dashmesh [2001 (130) E.L.T. 658] this Tribunal has held that octroi receipt cannot the basis for alleging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ..." No further explanations are, on record, indicating any clarification to have been sought; from this willing witness, as to why he made cash payments in name of Raj Petroleum for Cash Bill supply by & on Bills of J.I.T.? How he placed the orders on J.I. Traders ab initio? and why he destroyed the bills when liabilities and LR receipt did exist? Similarly no corroboration of the dispatches, invoices and receipt of cash in the accounts of JIT Traders not to be existing or existing is on record. The above and the tone and the tenor of the statements, as recorded, indicates its unreliable nature. The same does not enthuse confidence to indicate that goods manufactured at RP-M premises travelled, as and in guise that of JIT or that they were non duty paid and were based on the lorry receipts/other documents or as deposed in the relied. (B) Denial of credit by the adjudicator has been arrived on the grounds - (a) (I) Documents are billed in the name of RP-M and received at Mumbai. (i) Challans acknowledge by RP-M — for suppliers of IPCL. (ii) Out of 133 tankers of IPCL products for which credit was availed by RPM only 13 tankers were delivered to RP-M but not entered in Gate Reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at under the impugned order, if on the date of passing of the Order, that Rule did not exist as it was also not saved by the provisions of Section 38A of the Act. Similarly Penal Provision under Rules 57-I(4) cannot be upheld. (C) The penalties imposed under Section 11AC are liable to be set aside, as no demands for duty and disallowance of the Modvat credit is sustainable. Consequently, interest under Section 11AB Rule 57-I(5) is also not payable. (D) Penalty under Rule 173Q (i) in the impugned order is arrived at on the following grounds - "26………..However looking into the version contraventions of the Rules with an interest to evade Central Excise Duties, which is proved in the matter, the penalty under Rule 173Q would be more appropriate, though this penal clause has not been invoked in the notice. To impose penalty under the Rule which is not invoked, but required to be imposed looking into the gravity of the contraventions, such likewise is taken by the Hon'ble Tribunal in the case of Silkon Silk Mills v. Commissioner of Customs - 1997 (89) E.L.T. 151 (T) and in the case of Borivli Horiery Mills v. CCE - 1991 (56) E.L.T. 76 (T). Hence RP-M is liable for penalty under Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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