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TMI Blog2012 (10) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Super Metal Re-Rollers P. Ltd. (iii) M/s. D.P. Industries. (iv) M/s. Goyal Steel Corporation. The SS Flats were thereafter sent to the following cutters : (i) M/s. Raj Steel Cutters. (ii) M/s. J.S. Cutter. (iii) M/s. Singla Steel Cutters. and despatched to customers directly by the cutters and M/s. Jindal used to discharge the Central Excise Duty on the SS Flats. 3. On the basis of intelligence that M/s. Jindal were indulging in clandestine production and removal, various premises were searched by the Anti-Evasion branch of Delhi-I Commissionerate on 22-11-2007. The factory premises of M/s. Jindal were also searched wherein it was found that they had installed two number of crucible furnaces with one panel. Five diaries were also seized from Shri Rajesh Kumar Mittal, Supervisor of M/s. Jindal, which showed the details of sale of ingots. The residential premises of one Shri S.K. Sahu situated at F-1/71-72, Second Floor, Sector 11, Rohini, Delhi was also searched and number of incriminating documents in the form of loose/kachha slips and CPU's were found which were seize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the premises of M/s. Singla Steel Cutters but allowed the same to be redeemed on a fine of Rs. 50,000/-. He ordered confiscation of SS ingots valued at Rs. 22,32,960/- seized at M/s. Jindal but allowed the same to be redeemed on payment of a fine of Rs. 5,00,000/-. He ordered confiscation of SS ingots valued at Rs. 14,00,000/- seized at M/s. Super Metal Re-Rollers but allowed the same to be redeemed on payment of a fine of Rs. 3,00,000/-. He imposed equal amount of penalty on M/s. Jindal. Different amounts of penalties were imposed on the co-noticees under Rule 26 of Central Excise Rules, 2002. 6. We have heard the learned counsel for M/s. Jindal and its Directors, Shri Ajay Gupta, owner of vehicles, Shri Raj Kumar Nauhria, Proprietor of M/s. Raj Steel Cutters, as well as, the learned Authorized Representative. 7. The learned counsel Shri K.K. Anand for M/s. Jindal and its two Directors made the following submissions :- (i) The duty demand has been erroneously confirmed against them on SS Flats, which were manufactured by four re-rollers supra as independent manufacturers. They are the manufacturers of SS Ingots only a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner on this offer. (vii) The Commissioner has distorted the various facts on the issue of actual capacity for production. Firstly, he wrongly assumed that M/s. Jindal had installed Dual Trak Induction Furnace, whereas actually they had installed VIP Power Trak Induction Furnace. Secondly, the Commissioner has wrongly taken the number of transformers installed in the factory to be five whereas Panchnama drawn in the factory on 22-11-2007 at page no. 196 (Vol. I of paper book) shows that they had installed only one transformer. Thirdly, Commissioner has wrongly held that with one control panel, both the furnaces can function simultaneously. This finding of the Commissioner is not based on any technical opinion, or acceptable evidence. (viii) The officers at no stage tried to examine the actual production capacity of M/s. Jindal. They neither recorded a statement from any person related to the production, nor obtained any expert opinion. (ix) M/s. Jindal was producing around 170 MTs of SS Ingots per month, which was close to their maximum production capacity on single shift basis. No evidence has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er words, none of the re-rollers were confronted with quantities of ingots attributed to them at running page no. 119 of the appeal filed by M/s. Jindal. (xvi) The alleged buyers of the flats were not shown the seized documents. In other words, no corroboration was obtained from them for the quantities of SS Flats allegedly purchased by them. (xvii) The alleged buyers of the SS Flats, who allegedly purchased non-duty paid SS Flats have not been made co-noticees, which is fatal to the case of the Department. (xviii) No incriminating documents were seized from the premises of M/s. Jindal or its Directors or employees. There was no seizure of any unaccounted cash or seizure of unaccounted goods-in-transit. (xix) Penal action against Shri S.K. Sahu has been dropped by the Commissioner on the ground that he was in no way concerned in physically dealing with excisable goods alleged to have been removed clandestinely. However, Shri S.K. Sahu in his reply to the show-cause notice (para 98 of Order-in- Original) had submitted that he worked as a professional Accountant, undertaking on job basis, the work of maintaining the computerised records. He had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w cross-examination of various persons as two Directors of M/s. Jindal had clearly admitted the fact of clearance of SS Ingots and flats clandestinely. (vii) The various documents/loose slips seized from the residence of Shri S.K. Sahu clearly pertained to M/s. Jindal as admitted by him in his various statements. The various factual admissions by Shri S.K. Sahu were shown to both the Directors of M/s. Jindal and they clearly admitted its contents and also admitted the seized documents belonged to M/s. Jindal. (viii) M/s. Jindal had sufficient capacity to manufacture SS Ingots as held by the Commissioner. The certificate of the Chartered Engineer is of a later date and hence the Commissioner has rightly rejected it. (ix) The duty demand is based not only upon the computer printouts but also upon other documents such as, cutter/parchies/slips as would be evident by perusing the various Annexures such as, Annexures 'P', 'Q', 'R' and 'S' - demand in Annexure 'P' is based upon File No. 9, demand in Annexure 'Q' is based on the data retrieved from computer printouts, Annexure 'R' is based on parchies recovered from Shri S. K. Sahu and Annexure 'S' is based on closing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector of Central Excise, Meerut - 2000 (122) E.LT. 641 (S.C). We, therefore, are of the view that cross-examination of the following whose statements have been relied upon in the order is necessary in this case : (i) Shri S.K. Sahu, (ii) Four Re-rollers, (iii) Cutters of the SS Flats, (iv) Various scrap dealers, who stated that they were supplying scrap to M/s. Jindal, at the request of its (v) Director, Shri Ajay Gupta. The Commissioner is, therefore, directed to produce the aforestated witnesses during the remand proceedings and thereafter proceed to adjudicate the matter afresh. The learned counsel for M/s. Jindal had submitted that they had offered to the Commissioner to produce the Chartered Engineer Shri R.K. Aggarwal for his examination. But the Commissioner has given no finding on this offer of M/s. Jindal. We give liberty to the Commissioner to examine the said Chartered Engineer during the remand proceedings, to confirm the production capacity of M/s. Jindal. 9.1 With regard to production capacity of M/s. Jindal, we agree with the learned counsel's submissions that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise on the basis of the same plant and machinery found installed on 22-11-2007, the mere fact that the plant was visited by the Central Excise about seven months subsequent to the above date cannot be sufficient ground to reject the said certificate, especially when the Revenue did not take any steps to obtain any expert opinion on the annual capacity production of M/s. Jindal. We are, therefore, of the view that documents seized from a third party could advance the case of the department only if it is conclusively proved by the department that M/s. Jindal had capacity to manufacture six times more than its installed capacity. We, therefore, direct the Commissioner to take a holistic view on the capacity of manufacture of M/s. Jindal also considering the technical literature of the type of furnace installed in the factory before arriving at any definite conclusion. 9.2 The learned DR has strenuously argued that there are incriminating documents as well as statements of Shri S.K. Sahu, two Directors of M/s. Jindal, scrap dealers, transporters, re-rollers, cutters and buyers of SS Flats. In the first place, except scrap dealers and buyers of SS Flats, all others have been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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