TMI Blog2018 (6) TMI 1338X X X X Extracts X X X X X X X X Extracts X X X X ..... s were engaged in the manufacture of Shikhar brand of Gutkha, falling under Tariff Item 24039990 of the First Schedule to the Central Excise Act, 1985. Officers of DGCEI conducted investigations in the business premises of M/s Bihar Carrying Company, Kanpur on and after 09.05.2008 and resume some records from the said transporter and statement of Shri Uma Shanker Awasthi, Manager of M/s Bihar Carrying Company, Kanpur was recorded. Further statement of Shri Ram Prakash Singh, Booking Clerk of M/s Bihar Carrying Company, Kanpur, was recorded. During the course of investigation the officers also recorded statement of Shri Shailendra Mittal, Proprietor of the respondent company on 19.02.2010. Statement of Shri Abhishek Gupta, Authorised Signatory of M/s Acchyut Packaging Pvt. Ltd., Kanpur was recorded and also of Shri Sushil Mishra, Authorised Signatory of M/s Sarvesh Polychem Pvt. Ltd., Kanpur. Further statement of Shri Tarun Kumar Pnadey, Authorised Signatory of M/s Sparsh Laminators Pvt. Ltd. and that of Shri Prashant Agarwal, Manager of M/s Shiva Group of Agencies, Kanpur and that of Shri Rishi Kumar Gupta, Director of M/s Southern Arecanut Pvt. Ltd., Kanpur was recorded on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) that Shri Uma Shanker Awasthi, in his statement dated 14.08.2008 stated that he did not mention the name and brand of gutkha transported by him. He stated that no code was used for transportation of Shikhar brand gutkha and that code CP Goods‟ was used to denote transportation of Tiranga brand gutkha. Further, in his subsequent statement dated 28.01.2010, he clarified that Tiranga brand gutkha was transported to Tata Nagar, Bhagalupur and Ranchi destinations only and Shikhar brand gutkha was transported to various places of Bihar viz. Samastipur, Sitamarih, Darbhanga, Muzaffarpur, Patna, Betiah, Katihar. Accordingly, in view of joint decoding the codes of brands of gutkha as well as various destinations, Charts 2/G/J were prepared for quantification of transportation of unaccounted Shikhar brand of gutkha. The aforesaid chart has been prepared in accordance with decoding done by Shri Uma shanker Awasthi. Further, a regular transporter of gutkha, who is transporting unaccounted gutkha, is not supposed to writ the correct details of gutkha i.e. brand name, name of manufacturer and name of consignee etc., in the records of his transport company like loading registers e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epted the contents of aforesaid charts, as per his memory, is factually incorrect inasmuch as the contents of these charts have not been narrated by Shri Umas Shanker Awasthi as per his memory rather the same were recorded in black and white in records maintained by his transport company and he has submitted that the quantity shown in these charts were not accompanied by any bill of bilty and he did not maintain any other record for such kind of transportation. Thus, the Adjudicating Authority has failed to evaluate the statement of Shri Uma Shanker Awasthi in its true perspective. 2.1. The Adjudicating Authority has also not appreciated the fact that the statement of Shri Manoj Kumar Srivastava, Manager of M/s Bihar Carrying Co., Patna was recorded on 23.02.2010. During the statement Shri Manoj Kumar Srivastava accepted the contents of Chart-2, Chart-G and Chat-J showing transportation of unaccounted Shikhar brand of gutkha to various destinations. He also accepted the facts stated by Shri Uma Shanker Awasthi during his statements tendered on 10.05.2008, 14.08.2008 and 28.01.2010 and statement dated 20.11.2008 of Shri Ram Prakash Singh, Booking Clerk of M/s Bihar Carrying co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis of entries available in the private records maintained by M/s Bihar Carrying Co., Kanpur. 2.3. The Adjudicating Authority has failed to appreciate that the Chart-J contained the details of Shikhar brand of gutkha transported by transporter namely M/s Bihar Carrying Corporation, Knapur under the guise of kachri and papad shown in the goods manifests. Shri U.S. Awasthi, Manager of the transport company and Shri R.P. Singh clerk of the transport company in their statements have categorically accepted that 440 bags of Shikhar brand gutkha, were transported by them under the guise of kachri / papad . At no stage of time they have retracted from their statements. The demand cannot be set aside merely on the basis of non mentioning of goods manifests in the list of relied documents, which has been discussed in the body of the notice, as held in the case of Ashok R. Mistry vs. Commissioner of Customs (Acc Import), Mumbai reported in 2011 (266) ELT 58 (Tri.-Mumbai) wherein it was observed as under- The learned counsel has objected to placing reliance on this affidavit which is not one of the documents relied upon in the show-cause notice. It is true that this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shailendra Mittal (proprietor of M/s Trimurti Products, manufacturer of Shikhar‟ brand gutkha), he had sometimes supplied the packaging materials to them without cover of any invoice, due to some constraints of market. However, he can‟t furnish the details of such supplies as such types as records were not maintained/preserved. (ii) Shri Prashant Agarwal, Manager of M/s Shiva Group of Agencies, Kanpur ( supplier of Tobacco ) was recorded on 19.02.10. He stated that he has sold tobacco to the manufacturer of Shikhar brand of gutkha. He also sells tobacco to Gutkha manufacturers on cash payment basis. In such cases, name of customer is shown as CASH, in the cash memos, as per prevailing market practices. At present, he cannot segregate the cash memos which were pertained to sale of tobacco to M/s Trimurti Products, Kanpur since the cash memos does not bear the name of customer (Gutkha manufacturer). Further, he does not maintain any such record which can show the name of customer/Gutkha manufacturer, in cases of cash sale. (iii) The statement of Shri Rishi Kumar Gupta, Director of M/s Southern Arecanut Pvt. Ltd., Kanpur ( supplier of Supari ) was record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction capacity of the unit, the number of working hours have been taken to be 22 hrs. (against normal working hours of 8:00 am to 8:00 pm) and speed of pouch packing machine has been taken to be 238 pouches per minute (verified during panchnama proceedings dated 04.11.09) whereas during panchnama proceedings dated 22.09.07, the speed was found to be 120 to 140 pouches per minute. In this regard, it is important to note that even if the working hours are 12 hrs in a day and the speed of machine is taken to be 120 pouches per minute, the suppression of production comes to nearly 70% of the total production (estimated on the basis of capacity), as per chart given below:- S. No. Period Nos. of machines Production capacity (kg) Recorded production (kg) Percentage of unrecorded production 1. Apr 06 to Sept 06 71 1722539.52 354948 79% 2. Oct 06 to Apr 08 77 5915669.76 1927692 67% 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red on the basis of contents of Loading Registers . He also admitted that 6995 bags (as per Chart-2), 27,886 bags (as per Chart-G) and 440 bags (as per Chart-J) of Shikhar brand of Gutkha were transported through their transport company from Kanpur to other stations, during the period April 06 to April 08. He also accepted that the consignments shown in these Charts were transported through their transport company, without cover of any bill of manufacturer and without cover of any GR or builty. (iii) The statement of Manoj Kumar Srivastava, Manager M/s Bihar Carrying Co. Patna was recorded on 23.02.10, wherein he stated that he agrees with the contents of the statements of Shri Uma Shanker Awasthi, manager of M/s Bihar Carrying Co., Kanpur, tendered on 10.05.08, 14.08.08 and 28.01.10 and statement of Shri Ram Prakash Singh, clerk of M/s Bihar Carrying Co., Kanpur, tendered on 20.11.08. He also accepted the contents of Chart-2, Chart-G and Chart-J, prepared on the basis of Private Diary Pad and Loading Registers . He also stated that Shikhar Gutkha was transported from Kanpur to Darbhanga, Samastipur, Muzaffarpur, Betish and Sitamarih and were also routed through Patna. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usal of records of M/s Trimurti, it is found that they have not shown the purchase of tobacco on cash payment basis. Thus, M/s Trimurti have suppressed the purchase of tobacco, which have been used in the manufacture of unaccounted Gutkha, which was cleared without cover of any invoice and without payment of Central Excise duty. (vi) The statement of Shri Rishi Kumar Gupta, director of M/s Southern Arecanut Pvt. Ltd., 49/65, Nayaganj, Kanpur was recorded on 19.02.10, wherein he stated that he also sells supari to Gutkha manufacturers on cash payment basis. In such cases, name of customer is shown as CASH, in the cash memos, as per prevailing market practices. He further added that at present, he cannot segregate the cash memos, which were issued to M/s Trimurti Products, Kanpur, since the cash memos does not bear the name of customer (Gutkha manufacturer). Further, on perusal of records of M/s Trimurti Products, it is found that they have not shown the purchase of supari on cash payment basis. Thus, M/s Trimurti have suppressed the purchase of supari, which appear to have been used in the manufacture of unaccounted Gutkha, which was cleared without cover of any invoice and wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cond shift of 5 pm to 10 pm, as per demand of the product. He also stated that during the period April‟06 to April‟08, the number of labourers were 35 to 50, who were working on daily wages basis, in his factory. He also stated that during the period April 06 to April 08, there was one electricity connetion of 75 KVA and there was also one DG set of 160 KVA (as standby), which was used in his factory in the manufacturing activities. The enquiries conducted at the end of M/s Trimurti Products, also reveals that their unit was having a huge infrastructure for manufacturing activities and a large number of pouch packing machines viz. 71 to 77 were installed during the material period. Further, the capacity and speed of the pouch sealing machines, installed in the factory premises were many times more than the recorded production of Gutkha, which indicates that more than 90% of the production was suppressed and clandestinely removed without payment of duty. 8. While adjudicating a similar case against M/s Kaya Fragrances M/s H-Choice Collection Pvt. Ltd., Kanpur, which was based on the same private diary and loading registers and statements tendered by employees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence in the form of buyer s records or transporters examination or electricity records or record pertaining to excessive raw material need not be referred to. The appellate authority simply mentioned that reliance on the decision in Sai Chemicals Pvt. Ltd. is wrong. In fact the charges against the noticee are fully corroborated with independent evidences. (ii) Motorol Technologies Ltd. vs. Commissioner of C. Ex. Vadodara 2009(245) ELT 0278 (Tri.-Ahmd.) As such, the charges of clandestine removal further get corroborated from the labour contractor and the records maintained by him and the bills raised by him for the goods manufactured. Accordingly, we find that there is overwhelming evidence available in the present case establishing it beyond doubt that the appellant s use indulging in clandestine removals. All the statements recorded during investigation are corroborative of each other. Further, the records maintained by labour contractor fully tally with the pencil entries in private records, thus lending further corroboration to charges of clandestine removals. Shortages of raw material and final product detected at the time of visit of the officers furthers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ha is also corroborated with other evidences, discussed in foregoing paras. 10.1. The case laws relied upon by the Adjudicating Authority are distinguished. These case laws are related to cases based on private records which were not corroborated with other corroborative evidences. On the other hand, the instant case is based on strong documentary evidences duly corroborated with other corroborative evidence, hence the case laws cited by the Adjudicating Authority are not applicable to the instant case. 10.2. Thus, in view of the foregoing paras, it is found that the clandestine removal of Shikhar brand of gutkha is duly supported by strong documentary and tangible evidence duly corroborated by other evidences. Thus, the order passed by the Adjudicating Authority is liable to be set aside and demand of duty is liable to be confirmed. 11. In view of the foregoing submissions, it appears that the party was engaged in willful suppression of production of Shikhar brand of gutkha an clandestine removal thereof without cover of invoice and without its accountal in statutory records with intent to evade payment of duty. Accordingly, they appears to be liable for penal ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Shikhar Brand Gutkha , he replied that he himself used to dispatch Shikhar Brand Gutkha and further stated that they did not have any delivery van for transportation. He further stated that the goods manufactured by them were sold at factory gate and their customers made arrangements for transportation of the same. In respect of Charts marked as 2 G and J and statements of Shri Uma Shanker Awasthi, he replied that he was not able to offer commands on the quantity of Shikhar Gutkha shown in the said charts prepared on the basis of private records of transporter and also enable to explain about duty paid nature of such goods. Learned counsel for the respondent also has taken us through finding of Original Authority recorded on page 100 where the learned Original Authority has held that demands raised on the basis of Charts 2 G and J are not found to be sustainable on account of 13 reasons stated therein. The learned counsel for the respondent has submitted that the findings of Original Authority are detailed and reasoned and hence sustainable. The grounds of appeal raised by Revenue are more or less reproduction of show cause notice and there has been an allegation that the Origin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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