TMI Blog2023 (7) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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. Penalty - Notice demanding duty for the period 2005 to 2009-10 was issued on 24.12.2010 - HELD THAT:- Since they have not suppressed any information from the department, Notice cannot be issued by invoking extended period - It is observed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty 4. E/78084/ 2018 01-02/Commr/CGST CE/HWH/Adjn/2018-19 dated 01.05.2018 December, 2015 to March, 2017 Central Excise duty of Rs. 3,93,25,766/- along with interest and equivalent penalty 2. In the individual appeals being Appeal Nos. E/410/2012, E/77128/2017 and E/78085/2018, the authorized representative 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovered in terms of various provisions of the Central Excise Act, 1944 (hereinafter Act ). It was also proposed in the show cause notice that the amount of Rs. 10.50 lacs already paid should be appropriated. Sri Dinesh Rungta, constituted attorney and authorized representative of M/s S. A. Enterprise, was also directed to show cause as to why personal penalty should not be imposed on him under Rule 26 of the Rules. iv. Subsequently, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory that all the aforesaid machines were old and covered with dust and filth, and the landis machine had not even been installed. The appellant firm s stand was further supported by the certificate of the Chartered Engineer (page nos. 2628-2629 in Part 6 of the combined Paper Book filed before this Hon ble Tribunal), wherein it had been certified that the goods dealt with by the appellant firm could not have been manufactured using the aforesaid machines 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, agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was incorrect. Page nos. 702-711 of Annexure A of the reply against show cause notice dated 21.02.2014 clearly showed that the goods had been transported from the premises of SubhLabh Enterprises to the premises of Viswanath Projects Ltd. by truck bearing no. AP-16TX/9879. The appellant had also submitted challans along with the invoices in all other cases to show the movement of goods, for instance, the documents at page nos. 528 and 530 in Part-3, Volume I of 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w cause notice dated 24.12.2010, which was the first show cause notice in the matter, had been issued by primarily relying on the representations to various power supply corporations by the appellant firm that she was the manufacturer of the goods supplied by her. After referring to the statements given during the course of investigations by the appellant firm s authorized representative, the said show cause notice had relied on the stipulations and conditions of the tender 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 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We observe that 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. We must bear in mind the fundamental principle of law that suspicion, howsoever grave, cannot take the place of proof. The appellant firm had consistently maintained its defence and, furthermore, no inconsistency could be 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 un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... workers over and above the declared quantities. In any event, we hold that the appellant firm should not have been held liable to duty in respect of job work activities by the job workers on a principal-to-principal basis. 13. As regards the Orders-in-Original dated 22.09.2017 and 01.05.2018, our conclusions and reasoning are stated in the following manner which would also summarize the crucial aspects of the matters: - A. Co-relatable purchase and sales : We 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 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... test, slip load test etc. had been conducted in outside laboratories. Such position is evident from the documents relied upon while issuing the show cause notice dated 21.02.2014 such as Annexures X and B1 as also the test reports filed by the appellant firm in their defense, such as the documents at page nos. 5149 to 5400 (Part 8), page nos. 7897 to 7944 (Part 14), page nos. 8761 to 8786 (Part 17) of the combined Paper Book filed before this Tribunal. E. 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 24.03.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods : We do not find proper justification to confirm the findings that the appellant firm had not adduced evidence of the physical movement of goods purchased by her or gotten manufactured on job work basis or that the bills referred to by the appellant firm as trading sales did not contain any sort of supporting documents to prove conclusively that the subject sales were trading sales or that the submitted documents did not bring forth evidence of the physical 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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