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2014 (6) TMI 268 - AT - Central ExciseEvasion of duty - Clandestine clearance of goods in the name of closed unit - manufacture of printing and writing paper as well as news print - Exemption Notification No. 6/2001-C.E., dated 1-3-2001 - Held that:- Both the units are situated in adjoining plots. It is also not in dispute that at the time of visit to the factory of M/s. Sikka and M/s. Shamli on 24-4-2003, it is only the M/s. Sikka which was found to be functioning and the unit of M/s. Shamli was found to be totally closed and from its appearance, it appeared that it was not functioning since long. There is no dispute about the fact that M/s. Shamli did not have electricity connection since 3-7-1998. Though M/s. Shamli claim to be manufacturing paper by using the power using diesel generating sets, out of two DG sets each of 380 KVA, only one DG set was found to be functioned, in respect of this also no evidence of purchase of diesel by M/s. Shamli for running of the DG set. The communication dated 18-9-2001 of M/s. Shamli to Assistant Labour Commissioner shows that they had intimated the Assistant Labour Commissioner regarding closure of their unit in September, 2001. After this communication of September, 2001 there is no further communication, which shows that the unit remained closed since September, 2001. It is also seen that M/s. Shamli had deposited their contributions towards employees provident fund in the office of Provident Fund Commissioner only upto February, 2001. It is difficult to believe their claim that their factory was still functioning by hiring contract labour. When no evidence of contract labour having been engaged by them have been produced. Even if the claim regarding supply of waste paper from M/s. Raghav Enterprises is accepted, it cannot be concluded that this waste paper was used by M/s. Shamli, when all other evidence indicate that the same was closed - obviously the waste paper, if any, supplied by M/s. Raghav Enterprises must have been used in the factory of M/s. Sikka. Taking into account the totality of the evidence against M/s. Shamli, we are of the view that the claim that M/s. Shamli was functioning during the period of dispute is difficult to believe, more so, in view of the fact that at the time of officer’s visit to the factory on 24-4-2003 from the condition of the plant it appeared that the factory is closed since long and also there was neither any power connection since July, 1998 no any evidence of purchase of diesel for running DG set or engaging contract labour. Goods which are shown to have been cleared under the invoices of M/s. Shamli, had actually been manufactured by M/s. Sikka and this has been done by M/s. Sikka to wrongly avail of the exemption under Notification No. 6/2001-C.E. Since from the records it is seen that it is Shri Vinay Bansal who was running both the units and it is he who is the brain behind this duty evasion, the penalty has been rightly imposed on him - Decided against assessee.
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