TMI Blog2014 (11) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... on his instructions entire activity was conducted, he needs to be visited with penalty and the adjudicating authority has rightly done so. At the same time, we find that since the main appellant M/s Colius is a proprietary concern and has already been visited with penalty, taking a lenient view, we reduce the penalty imposed on Shri Somesh R. Mehra - As regards the penalty imposed on M/s Maple is justified and does not require any interference. - Appeal No.E/618-621/2012-DB - Order No.A/11836-11839/2014 - Dated:- 27-10-2014 - MR.M.V. RAVINDRAN AND MR. H.K. THAKUR, JJ. For the Appellant : Shri J.C. Patel, Adv. For the Respondent : Shri K. Sivakumar, Addl.Commissioner (AR) JUDGEMENT Per: M.V. Ravindran; 1. All these four appeals are being disposed of by a common order as these are arising out of the same impugned order-in-original and are inter-connected. 2. The main appellant herein M/s Colius Paper Converters (hereinafter referred to as M/s Colius) were visited by the officers of Department and detailed investigation was carried out. Various statements were recorded and on scrutiny of the records, Revenue authorities found that the M/s Colius had is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emovals were made without payment of duty. He stated that there were no clearances made of the goods shown in the Parallel RG-1 Register and that the parallel register and fake invoices were made only for showing to the Bank. Thus, the statement of Shri Somesh Mehra (Power of Attorney Holder of Colius) is non-confessional and exculpatory and does not admit any clandestine clearance of goods mentioned in the parallel RG-1 and the parallel invoices. The Department also carried out investigation in respect of the parallel invoices and caused verification to be done with the consignees mentioned in the parallel invoices to ascertain whether the consignees had received the goods mentioned in the parallel invoices. On such investigation and verification it was found that goods shown in the parallel invoices had not been received by the consignees and they had not taken CENVAT Credit on such invoices. On the other hand, it was ascertained on investigation and verification that RG-1 Register at Sr.No.12 and the invoices corresponding to the same were genuine and pertained to duty paid clearances. These facts are accepted in show cause notice in Paras 12 13 at Pages 92 93 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince Colius no longer undertook manufacture, it filed NIL ER-1 returns. Colius could not surrender the Excise registration on account of certain past outstanding dues of Central Excise duty which it could clear only by May 2008 and since Colius was not undertaking manufacture it filed Nil ER-1 returns. It is submitted that the taxing/charging event is manufacture which was undertaken by M/s Maple and hence M/s Maple rightly paid the duty and filed ER-1 returns in respect thereof. As per Section 2(f) of the Central Excise Act 1944, the manufacturer is the one who employs hired labour and who engages in the production on his own account. The evidence clearly shows that after December 2006, it was M/s Maple which employed the labour and used the machinery to produce the goods on their own account and Colius having sold of the business with the premises, machinery and labour, ceased to be the manufacturer. Thus, rightly M/s Maple paid the duty and filed returns in respect of such manufacture, clearance and duty payment and Colius having ceased to manufacture the goods rightly filed Nil returns. The mere fact that Colius could not surrender its Excise registration on account of pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout payment of Central Excise duty as is evident from the four parallel invoices which have been admitted to have been issued for clandestine clearance of goods. The said parallel register was maintained by M/s Colius upto 12.12.2006. Shri Mehra had not produced any evidence for clearance by M/s Maple of the goods manufactured by M/s Colius and they had filed their ER-1 returns showing production and clearance as NIL but it was found that they were working after 12.12.2006 also. It is admitted by M/s Colius and M/s Maple that the goods were being manufactured by M/s Colius but they were not being recorded in the records of M/s Colius and the goods were transferred to M/s Maple. M/s Colius though stated to have been sold to M/s Maple vide Memorandum of Understanding on 22.04.2006, the circumstances of this case are different than that discussed in the cases referred. There the appellants have maintained/issued fictitious commercial invoices, delivery challans etc i.e. private records solely for the purpose of taking enhanced bank loans. The Hon ble authorities have held that the entries made in the private records cannot be considered as a conclusive evidences for confirming th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that there was no electricity supplies to M/s Maple and electricity was supplied by M/s Colius. We find that the statement of Shri Somesh R. Mehra, Power of Attorney Holder though indicate that parallel RG-1 register and invoices were maintained for bank purpose to show higher sale target; it is noted that there no evidence has been marshaled by the appellant to controvert the findings of the adjudicating authority before us. It is also to be noted that the statement of Shri Rakesh Patel and Shri Somesh R. Mehra have not been retracted at any given point of time. In addition to the above said inculpatory statements, it is found that 4 parallel invoices were raised on which clearances were effected but Central Excise duty was not paid. The submissions of the ld.Counsel that this was an unintentional error, may not carry the case any further as the entire exercise as explained by the authorized signatory and power of attorney holder indicate that there was something hanky-panky in the functioning of M/s Colius and M/s Maple. We also find that Shri Patel in his statement categorically stated that through the parallel invoices, the appellant M/s Colius had cleared illicitly manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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