TMI Blog2017 (3) TMI 1350X X X X Extracts X X X X X X X X Extracts X X X X ..... record of cash receipts indicates that the sale proceeds of unaccounted goods are received in cash. The allegation of clandestine removal has been established by the Revenue against the appellant. While the onus is on the Revenue to establish clandestine removal, they are not required to prove the case with mathematical precision as such a case involves deliberate and well thought out modus-operandi to evade duty. Appeal dismissed - decided against appellant. - E/1677/2009 [DB] - FINAL ORDER NO. 50850/2017-DB - Dated:- 14-2-2017 - Mr. (Dr.) Satish Chandra, President and Mr. V. Padmanabhan, Member (Technical) Rep by. Hri A.K. Prasad, Advocate for the Appellant. Rep by. Shri R.K. Manjhi, DR for the Respondent ORDER The present appeal is directed against Order-in-Original dated 17.03.2009 passed by Commissioner of Central Excise S.T., New Delhi. 2. The appellant-assessee M/s. Haryana Steel Alloys Limited (hereinafter referred to as M/s. HSAL for short) is engaged in the manufacture of SS Ingots and SS Flats falling under Chapter heading 72 of Central Excise Tariff Act, 1985. The SS ingots are entirely consumed captively in the manufacture of SS Flat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the appellants both on questions of fact, evidence and case law. The Original Authority again repeated the demand. Being aggrieved, the present appeal. Thus, it is second round of litigation before tribunal. 3. The brief facts of the case are that the officers of DGAE along with Central Excise officers searched simultaneously appellant s factory at Muruthal, Sonepat, their Depot at A-32, Wazirpur Industrial Area, New Delhi and their head office at 3/5 Asif Ali Road, New Delhi on 06.10.1994 and seized documents and records. The scrutiny of recovered documents revealed that appellant was engaged in the manufacture of SS Ingots and SS Flats. The appellants owned eight trucks and were transporting their final product SS Flats through these trucks up to their Depot at Wazirpur. It was revealed that these goods were further dispatched to their consignment agents situated at Shahpur, Jodhpur and Ahmedabad through other transporters. It was also revealed that the appellant was also selling SS flats to their customers at Jagadhari directly from their factory. The goods were also found supplied by their own trucks and also by trucks hired through truck operators union, Sonepa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards goods dispatched. These note books (diaries) also contained the details of cash received by Shri Bijendra Kumar Arya during the corresponding period. 4.1 During the course of scrutiny, it was noticed that the details of trucks of SS Flats which were received from the factory of M/S. HSAL cleared on payment of Central Excise duty under GP.1, prior to April 94 and Gate-pass cum invoice after April 1994 were entered on the front pages of these note-books(diaries). The scrutiny further revealed that there were no details of GP-1, GP-1-cum-invoice corresponding to SS flats transported by the trucks for which details of receipt of SS Flats were written in the later pages of these note books(diaries). These note books(diaries) contain date-wise details regarding receipt of SS flats, weight, grade etc. and the truck numbers on which the SS Flats were received from the factory of M/S. HSAL. In these note books (diaries), it is also mentioned that the goods received without GP.1/ Gate pass/ Invoice were unloaded/ delivered at A-32, A-45, B-72/3 etc. In addition, details of certain cheques/ drafts and cash amounts were also found written in these note books. On comparison of these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he buyers of Jagadhari in the aforesaid Receive weight and Sale statements tally with the quantities for which GP-1s have been issued. However, there is no GP-1s for the quantities mentioned against the columns Extra Delhi, Extra out . It was noted that total quantity of SS Flats shown in columns Extra Delhi , Extra Out of these statements as per details were almost the same as given in the later pages of note books(diaries) showing details of SS Flats, recovered from the Delhi Depot of M/s. HSAL. It thus appeared that the quantities mentioned in the columns Extra Delhi, Extra Out of these monthly statements were cleared by M/s. HSAL clandestinely without payment of Central Excise duty. Statement of Shri Bijendra Kumar Arya, Receipt Dispatch Clerk of M/s. HSAL was recorded on 28.11.1994. He, inter-alia, stated that he was working with M/s. HSAL for the last 2 -3 years; that he used to sit in the office of the transporters who transported their goods from Delhi to their consignment agents at Bombay, Jodhpur and Ahmedabad and their office is situated at A-32, Wazirpur Industrial Area, New Delhi; that his work was to receive SS Flats which came from their factory in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dhpur; that their clerk Shri Bijendra Kumar Arya used to sit at A-32, Wazirpur Industrial Area, New Delhi along with the transporter s men at the same office; he confirmed that the arrangement to send the finished goods were through the trucks owned by M/s. HSAL to Wazirpur Industrial Area, New Delhi from where Shri Bijendra Kumar Arya used to arrange transshipment to various transporter s truck. Further, he was shown various Neelgagan note books (diaries) recovered from Shri Bijendra Kumar Arya, he stated that he has no knowledge about the main contents of the said documents. 5. On conclusion of the investigations, Revenue observed that M/s. HSAL were clandestinely dispatching the goods without payment of Central Excise duty in their trucks up to Wazirpur Industrial Area, New Delhi from where these goods were transshipped to various other consignment agents at different places. It was also observed that the non-duty paid goods were sent through same means as the goods for which the duty was paid. Further, it was observed that in respect of duty paid consignments, the same matched with the entries in the earlier part of the notebooks (diaries) and the entries at later part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consistent with industry norms. (f) Documentary evidence was also produced to show that, during the relevant period, the jurisdictional central excise officers were doing their normal PBC (Production Based Control) checks and the unit had also been audited during the impugned period without noticing any discrepancy. (g) Request was also made for cross-examination of Shri Bijendra Kumar Arya, Shri Jagdish Chander and others, but was denied. 8. In addition to reiterating the above arguments, the appellant has further argued in the present appeal that; (i) In de-novo proceedings, the adjudicating authority has confirmed the demands and other penal proceedings without strictly complying with the remand directions of the CESTAT. The CESTAT directed the Commissioner to examine especially, the consumption of electricity and raw materials as to whether the actual consumption of electricity and raw material was in line with production as alleged. The Commissioner has failed to comply with this very direction of CESTAT. (ii) CESTAT had also directed theo adjudicating authority to consider the expert opinion submitted by the appellant. The opinion of hand-writing expert was th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovered from these premises can be attributed to Shri Bijendra Kumar Arya. (ii) Whether the statement of Shri Bijendra Kumar Arya could be relied upon as it was retracted and not produced for cross-examination. (iii) Whether the charge of clandestine removal could be upheld in the face of the expert opinions filed by M/s. HSAL and whether they are liable for contravention of the Central Excise Rules with an intent to evade payment of duty and liable for penalty. 12. Heard both the sides and perused of the records. We find that during the course of search on 06.10.1994, at the premises at A-31, Wazirpur Industrial Area, New Delhi, the officers recovered five Neelgagan note-books (diaries). A detailed statement of Shri Bijendra Kumar Arya, present in the said premises was also recorded during the course of search. Shri Bijendra Kumar Arya in his detailed statement explained the entries found in the seized Neelgagan note-books (diaries). He stated that these note-books (diaries) are maintained by him. He identified various entries in the note-books (diaries) covered by invoices/ gate-passes issued by M/s. HSAL and evasion of payment of Central Excise duty. Further, he el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-books (diaries) which were pertaining to the duty paid clearances, have been corroborated by invoices/ gate-passes found issued by the factory. This lends credence to the fact that the contents of the note-books (diaries) are trust-worthy. Likewise in respect of the other entries found in the same note-books (diaries) and explained by Shri Bijendra Kumar Arya as pertaining to the goods, received from the factory without the cover of invoices, there can be no reason to doubt and are also considered as trust worthy. The opinion of hand writing expert cannot be given too much credit in the light of the fact that Shri Bijendra Kumar Arya has explained and accepted that these records have been maintained by him. 14. The appellant has made a strong plea for ignoring the statement of Shri Bijendra Kumar Arya on the ground that it has been retracted and also on the ground that the witness was not produced for cross-examination. 14.1 We are of the view that though the statement of Shri Bijendra Kumar Arya stands retracted, its reliability should be evaluated on the basis of corroborating evidences and the conduct of the party. The statement given by him cannot be brushed aside simpl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SS flats during the disputed period covered in the show cause notice. 15.1 The expert opinion submitted only indicate an average yield as well as average consumption which cannot be considered as conclusive report that the appellant could not have produced the goods as alleged to have been cleared clandestinely without payment of duty. It is also on record that appellant were having two DG Sets of 2675KVA each and 1 DG Set of 1250 KVA and 250 KVA installed in the factory premises. The expert reports have not taken into account the electricity generated and used from the SG Sets and hence merits to be ignored. In any case, It is a settled law that average consumption of electricity cannot be used to arrive at the quantum of production. In this connection, reference is made to the decision wherein the Tribunal has held that demand of excise duty on production projected on the basis of electricity consumption cannot be upheld. The said decision was approved by the Hon'ble Supreme Court. In this background, we are of the opinion that the demand cannot be set-aside on the basis of expert opinion given by the appellant regarding the electricity consumption. 16. The appellant h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allegation of clandestine removal has been established by the Revenue against the appellant. While the onus is on the Revenue to establish clandestine removal, they are not required to prove the case with mathematical precision as such a case involves deliberate and well thought out modus-operandi to evade duty. The Tribunal in the case of Ramachandra Rexins Pvt. Limited vs. CCE, Bangalore 2013 (295) ELT 116 (Tri. Bang.), considered the issue in detail. The Hon'ble Supreme Court as reported in 2014 (302) ELT A-61 (SC), while upholding the decision of the Tribunal held as under:- Tribunal further held that in a case of clandestine activity involving suppression of production and clandestine removal, it is not expected that such evasion has to be established by Department with mathematical precision. A person indulging in clandestine activity takes sufficient precaution to hide/destroy the evidence. The evidence available shall be those left in spite of the best care taken by the persons involved in such clandestine activity. In quasi-judicial proceedings, in such a situation, the entire facts and circumstances of the case have to be looked into and a decision has to be ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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