TMI Blog2014 (9) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... rading activity of the firm. The situation is nobody can understand what exactly happened. At this stage therefore the only option that would be available is to rely upon the paper records which are recovered which show that there was a trading of TMT bars which was kept in the administrative office and appellants themselves have claimed that it was a trading activity of the firm and that the firm was trading in TMT bars which has been found to be totally false. The appellant is engaged in the manufacture of TMT bars and therefore when they accepted it was a trading activity of the firm and the firm was owned by the M.D. and firm was not undertaking such activity, the obvious conclusion that would emerge is that the first appellant has manufactured TMT bars and has to account for the same. Therefore we find that appellant has not been able to make out a prima facie case in respect of 3.21 crores. Even if the appeal has to be remanded it cannot be remanded without considering the balance of convenience and justice to the public at large and the Government. In our opinion, having retained the money for more than 5 years, the appellant should deposit at least amount which we ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceive the entire set of documents/records/CDs, the case was not effectively put forth by the appellants themselves before the learned Commissioner and they did not make a serious issue of the disadvantage that they were put in. This is emerging from the observations in the impugned order wherein the proceedings of personal hearing and other related issues have been discussed by the learned Commissioner which are not disputed and have been found to be factual. The appellant had submitted reply on 16.01.2013 to the show-cause notice which was issued on 20.01.2012 and the personal hearing was fixed on 24.01.2013. In the reply to the show-cause notice, the appellant had stated that they had not received all the relevant papers, print outs etc. However at the time of personal hearing, the Commissioner has recorded the following findings: 3.1. As seen from the record of personal hearing on 24.01.2013, the appellant had requested that cross-examination of Sri. A.K. Agarwal which was allowed and after the cross-examination, the appellants had argued their case. It has been recorded that the learned advocate undertakes to submit his arguments in the form of additional written submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd (which was the first request of the learned counsel) that principles of natural justice have not been observed. If the appellant was not satisfied with the documents or the time given for reply, they should have agitated the matter. Therefore at this stage we do not consider that appellant has made out a case for remand on the ground of non-observance of principles of natural justice. 7. Thereafter we requested the learned counsel to argue the matter on merits. There are several issues listed but since this is a case of clandestine removal and the detailed consideration would require scrutiny of voluminous documents, papers, submissions, records etc. we decided to consider certain important aspects wherein substantial amounts are involved. The total amount involved and various issues are available in the show-cause notice itself in paragraph 102 and the brief summary is as under: Sl. No. Details Total Central Excise Duty payable 1 Short accountal of Billets Production ₹ 35,69,969/- 2 Short accountal of Billets clearan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irm has discontinued its business from 2007-08 onwards which is corroborated by the investigation conducted by the Revenue. Further it was also submitted that appellant had registered with the VAT department. Further the learned counsel also drew our attention to a letter written by the MD to the Commercial Tax Officer wherein he had intimated the Commercial Tax officer that they had decided to restart the trading of various goods in their firm s name and requested for reissue of the registration number. However we find that there is no acknowledgment from the department and there is no other evidence forthcoming that appellant continued to do the business and further it is also noticed that there is just a mention on the paper drop box on 01.11.2007 at 1.30pm . This means that this letter was dropped in the drop box. There is no indication who dropped in the drop box and also there is no indication whether the firm filed vat returns thereafter or not. However it is also noticed that Commercial Tax Department at Andhra Pradesh had issued a registration certificate in the name of the firm Ashok Kumar Agarwal and the date of registration is 02.06.2014. At this stage the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y complicated case but fact remains that as regards TMT bars it was the claim of the appellant that this was a trading activity of the firm. But facts relating to the firm speak another thing, the invoices of the firm speak a different thing and the investigation conducted by the firm reveal another thing. The situation is nobody can understand what exactly happened. At this stage therefore the only option that would be available is to rely upon the paper records which are recovered which show that there was a trading of TMT bars which was kept in the administrative office and appellants themselves have claimed that it was a trading activity of the firm and that the firm was trading in TMT bars which has been found to be totally false. The appellant is engaged in the manufacture of TMT bars and therefore when they accepted it was a trading activity of the firm and the firm was owned by the M.D. and firm was not undertaking such activity, the obvious conclusion that would emerge is that the first appellant has manufactured TMT bars and has to account for the same. Therefore we find that appellant has not been able to make out a prima facie case in respect of 3.21 crores. 7.4. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im of the department that consumption figures of sponge iron shown for production of billet were not actual and in the absence of a comparison of RG1 figures and private record figures by the appellant with suitable explanation for the difference, we have to accept the claim of the Revenue that on a prima facie basis the demand for more than ₹ 1 crore on the ground that the appellant did not account for excess sponge iron produced in their premises and therefore same was cleared in a clandestine manner has to held as probable. Therefore we consider Revenue has made out a prima facie case on this issue. Non accountal of billets etc. from Sl. No. 1 to 3 once again would relate to the consumption of sponge iron to some extent. Therefore we would not like to go into great detail since demand for sponge iron has been in our opinion held to be prima facie sustainable. According to the Revenue sponge iron consumption was shown in excess and therefore obviously there is some relationship between the production of billets and the consumption of sponge iron. Therefore at this stage we consider that we need not go into details as to the sustainability of the demand under the heads 1 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That being the position merely because the company has suffered loss, it cannot be said that there is no money available. These are details which are known only to the concerned persons who deal with such things. In such a situation it is difficult to accept the submission that requirement of pre-deposit should be waived on the ground of financial difficulty. Central excise duty is liable to be paid once in a month and receipt of consideration is irrelevant and duty is on the activity of manufacture. Therefore the tax is definitely a first claim over any asset which the assessee has. In this case period relates to 2007-09 and it is already 5 years since the events have taken place and Government is yet to get any money. 11. In view of the above discussion we consider that appellant should deposit an amount of ₹ 5 crores within 12 weeks and report compliance. The learned counsel submitted that since appellant could not defend their case properly and even though as observed by the Tribunal it was their fault, yet the fact remains that they did not get enough time to submit the reply and it would have been better if the department were to make copies of all CDS and give it to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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