TMI Blog2012 (10) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... ENTED BY : S/Shri K.K. Anand and V.K. Gupta, Advocates, for the Appellant. Shri R.K. Verma, DR, for the Respondent. [Order per : Jyoti Balasundaram, Vice-President]. - For reasons recorded below, we waived pre-deposit of duty and penalties and, proceeded to decide the appeals themselves at this stage as the impugned order suffers from the vice of violation of the principles of natural justice. 2. The brief facts of the case are that M/s. Jindal Nickel Alloys Limited (M/s. Jindal) are engaged in the manufacture of Stainless Steel Ingots/Billets falling under Chapter 72 of the CETA, 1985. M/s. Jindal was also sending the ingots manufactured by them to the following four job workers for conversion into SS Flats under Notification No. 214/86-C.E., dated 1-3-1986 : (i) M/s. B.B. Steels Limited. (ii) 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 Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tters and transporter. Duty of Rs. 10,04,04,722/- (BED) and Rs. 27,94,724/- (Education Cess) was demanded from M/s. Jindal on SS Flats valued at Rs. 62,75,29,520/- removed clandestinely during the period 2006-07 and 2007-08 (upto 18-11-2007). Penal action was proposed against M/s. Jindal, its Directors, re-rollers, cutters and transporter. 5. All the noticees, co-noticees filed their respective replies to the SCN. The Commissioner after considering their, respective replies confirmed a duty demand of Rs. 7,48,66,917/- (BED) and Rs. 21,72,673/- (Education Cess) = Total Rs. 7,70,39,590/- on SS Flats against M/s. Jindal after arriving at its value at Rs. 46,79,18,229/-. He ordered confiscation of SS Flats valued at Rs. 2,40,381/- seized 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 impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In support of their claim of maximum capacity of manufacture, they had brought on record a Chartered Engineer s Certificate, dated 1-7-2008 in which the said Chartered Engineer Shri R.K. Aggarwal after visiting the factory and after examining the equipments installed in the factory, had certified that the annual production capacity of M/s. Jindal on single shift basis was 1963.200 MT per annum. M/s. Jindal during the course of adjudication proceedings had offered the said Chartered Engineer for examination by the Commissioner, but there is no finding by 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en they did not have requisite capacity to manufacture ingots to the extent alleged by the Department. (xv) The re-rollers or sellers of the scrap were never shown the incriminating documents. These statements are very vague and these could not be used against M/s. Jindal. None of the re-rollers has specified the quantities of ingots allegedly received by them without accountal. In other 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e granted as a matter of right. In support of his submissions, he placed reliance on the judgment of the Hon ble apex court in the case of Kanungo Co. v. Collector of Customs, Calcutta Ors. reported in 1983 (13) E.L.T. 1486 (S.C.). (vi) In this case, even otherwise, there was no need to allow 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 va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii) Aryan Abhushan Bhandar v. Union of India 2002 (143) E.L.T. 25 (S.C). (iv) Lakshman Exports Ltd. v. Collector of Central Excise - 2002 (143) E.L.T. 21 (S.C). (v) Swadeshi Polytex Ltd. v. Collector 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 ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side the evidentiary value of the Central Excise s Certificate. When the annual capacity production has been determined by the Central 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, r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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