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2015 (9) TMI 206 - MADHYA PRADESH HIGH COURT

2015 (9) TMI 206 - MADHYA PRADESH HIGH COURT - 2017 (346) E.L.T. 382 (M. P.) - Duty demand - Shortage of goods - Seizure of goods - Fraudulent availment of MODVAT Credit - Non receipt of actual goods - Held that:- From the contents of paragraphs 24 to 29 of the order-in-original, the contention of the appellant regarding violation of principle of natural justice appears to be incorrect - In view of the concurrent finding of fact recorded by both the authorities, Court does not find any substance .....

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order. For the sake of convenience the facts are borrowed from C.E.A.No.36/2014. 3. This appeal has been filed by the appellant under Section 35-G of Central Excise Act, 1944 against the final order dated 9/5/2014, passed by the Customs Excise and Service Tax Appellate Tribunal New Delhi, in Appeal No.E/541-543, 971-974/2006. 4. M/s. Bhanu Iron & Steel Co. Ltd are manufacturers of M.S. Plates and M.S. Coils falling under Chapter 72 of the Central Excise Tariff. They were buying M.S. Slab fro .....

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/1995 to 29/8/1995, the Central Excise Authorities, searched the premises of the appellant and noticed a shortage of 2620.800 MT of slabs. On further verification, stock of 76.62 of M.S. Plates (final product) valued at ₹ 11,89,650/- was found to be in excess of the stock shown in the statutory record. The excess M.S. Plates were seized. 5. Shri Yashwant Singh Bisht, DGM and Shri B.R. Bishnoi, Excise Officers of the appellant - M/s. Bhanu & Steel Co. Ltd., in their respective statement .....

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d remanded the case to the Commissioner concerned, for passing an appropriate orders, in accordance with law, after giving the appellant required document and giving an opportunity of explaining their case in person or through their counsel. The Commissioner of Central Excise & Customs, considering the statements of various persons, which were reproduced in the impugned order and after granting fully opportunity to the petitioner and to the appellant passed the following order :- ORDER 69. I .....

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ion fine of ₹ 8,00,000/- (Rupees Eight Lacs Only), which shall be exercised within 30 days of the receipt of this order. (ii) A penalty of ₹ 5,00,000 (Rupees Five Lacs only) is imposed on the Noticee No.1-M/s. Bhanu Iron & Steel Co. Ltd., Plot No.801, Sector-III, Pithampur under Rule 173Q of erstwhile Central Excise Rules, 1944. (iii) The Central Excise duty at appropriate rate should also be paid at the time of clearance of impugned goods. (2) Show cause Notice No. V(72)15-14/97 .....

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wo Thousand Five Hundred Seven Only) under rule 571(4) and 57U(6) of the erstwhile Central Excise Rules, 1944 on the Noticee No.1-M/s. Bhanu Iron & Steel Co. Ltd Plot No.801, Sector-III, Pithampur. iii) They are also liable to pay interest at appropriate rate under rules 57I (5) and 57U (8) of the erstwhile Central Excise Rules, 1944 from the first day of the month succeeding to the month in which wrong credit was availed by noticee No.1 M/s- M/s Bhanu Iron & Steel Co. Ltd. Plot No.801, .....

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Steel Co. Ltd. Plot No.801, Sector-III, Pithampur, under Rule 209A of erstwhile Central Excise Rules, 1944. vi) A penalty of ₹ 1,00,000/- (Rupees One Lacs only) each is imposed on the Noticee No.3- Shri Y.R. Bisht, Dy. General Manager, of Noticee No.1- M/s. Bhanu Iron & Steel Co. Ltd., Plot No.801, Sector-III Pithampur, Noticee No.4-M/s Belveder Engineering Ltd., 9th K.M.Stone Behind Janak Steel Tubes Ltd., Delhi Road, Hissar, Noticee No.5- M/s Bharat Industrial Structural Constructio .....

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Thousand only) imposed on the Noticee No.10 - Shri Sanjay Gupta, Owner of M/s Sanjay Roadways, Belatola, Guwahati (Assam), Noticee No.11-M/s Laxmi Ispat Industries, 17-A, Industrial Area, Bhanpuri, Raipur (MP), Noticee No.12-M/s. Balajee Loha Pvt. Ltd., 206-208, Urai Industrial Complex, Raipur (MP), Noticee No.13-M/s Bansal Commercial Co., G.E.Road, Khursipar, Bhilai (MP), Noticee No.14-M/.s Dinesh Traders (Iron & Steel Dealer), Nandini Road, Chhawani Chowk, Bhilai., Noticee No.15-M/s Easter .....

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dustries, G.E. Road, Tatibandha, Raipur and Noticee No.21-M/s. Ramesh Rolling Mills Pvt Ltd., G.E. Road, Tatibandha, Raipur (MP), respectively. This order is being issued without prejudice to any other action that may be taken against the noticee under any other provision of law for the time being in force. 7. In an appeal, the learned tribunal by impugned order dated 9/5/2014 (Annexure A/1), dismissed the Excise appeals. Para 33 to 40 are relevant which reads as under :- 33. We have further exa .....

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tigation relating to M/s UAL, M/s Belveder Engg. Ltd., that these unit did not have any infrastructure to produce the goods thus indicating only paper transactions with the sole motive to pass on illegal cenvat credit. (d) Statement of Shri P.S. Bedi director of M/s. UAL that UAL was working on the directions of Shri Bishnoi even Shri Bishnoi was not officially on Board of the Company. He has no knowledge of sale of M.S. Slabs by M/s UAL to M/s BISCO, Pithampur and invoices issued about sale wer .....

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ods purported to have been sent from M/s Belveder Engineering Ltd, Hissar on invoices, were found not issued or found take. (h) Detailed investigations conducted in respect of transportation of goods/materials have clearly indicated that such transportation were fake. All truck owners denied having undertaken any transportation. (i) Further investigations relating to transportation revealed a intriguing result as indicated in para 53 of the adjudication order that so called vehicles were LUNA, T .....

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oods and subsequently credit is availed. 35. It is also observed that confessional statements by not one but by almost everyone including M.D., Directors, DGM clearly, proved non-production, issue of fake invoices and subsequent non-transportation confirming scam of paper transactions. This proves clear intent to defraud revenue. 36. Learned counsel's pleas are not based on any principles which can come to the rescue as clear fraud is committed. Appellant have acted with malafide and attempt .....

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in 2004 (177) ELT 892 (Tri. - Mumbai) in para 11 and Divisional Bench of Hon'ble Tribunal in the case of Ranjeev Alloys Limited vs. CCE Chandigarh 2009 (236) ELT 124 (Tri.- Delhi) at para 9 to para 26 as extracted in previous paragraphs it has ome out that entire transactions get vitiated by fraud coupled with confessional statements, mis-statements, fabrication or records, paper transactions with intent to pass on illegal cenvat credit. 38. It is observed that Hon'ble High Court of Mad .....

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investigations by the revenue. 40. In view of above we find no infirmity in the findings recorded by adjudicating authority. Accordingly we uphold the findings in respect of appellants. Appeals are dismissed." 8. Learned counsel for the appellant has drawn our attention to order dated 29/3/2000 (Annexure A/4), letters Annexure A/5 to A/13 and Annexure A/14 dated 13/10/2005 and submits that the representation of the appellant visited the Superintendent (Preventive) on 14/10/2005, for collect .....

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d over to the appellant and therefore, he could not make out his case before the appellate authority as well as before the CESTAT. He submits that non-supply of documents by the department is a violation of principle of natural justice. In-spite of specific direction by the learned tribunal on 29/3/2000, the adjudicating authority failed to supply the aforesaid floppies and, therefore, he submits that impugned orders be set aside and matter be remitted to the adjudicating authority with a direct .....

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e demand of the Noticee No.1 for the supply of certain documents it is necessary to pin point the history of the proceedings in the case which dates back to correspondence dated 30.9.1997, wherein the Noticee was requested to file reply to the Notice. The Noticee, vide their letters dated 19.9.97, requested for supply of relied upon documents. 25. All the Noticees were requested to inspect/take photocopies of documents again vide letter 25.12.97, and they were requested to file reply vide letter .....

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more time for filing reply. Personal Hearing has again been fixed for 7.4.99, but nobody appeared on that date on behalf of Noticees. 27. The Noticee No.1 vide their letter dated 18.3.99 requested for release of nonrelied upon documents. However, based on an acknowledgment by Shri B. K. Joshi, Authorized signatory, way back on 24.9.98 my predecessor took the stand that the Noticee is unnecessarily trying to prolong the case without sufficient reasons and, therefore, proceeded and adjudicated the .....

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t received (I) computer, (ii) Computer floppies-64 (iii) files at Nos. 28, 29, 31, 32, 33, 36, 37 & 58 of Annexure-B of panchnama dated 26.08.1995 withdrawn from their premises. 28. The natural inference that can be drawn from the above is that all other documents whether relied upon/non relied upon have been released to the party. These documents were all along been demanded by them and they have put a condition in all their correspondence that unless these are provided to them, no defence .....

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pting the computer denied accepting the floppies taking a plea that the concerned floppies are of Unix system which they did not use at the relevant point of time. Curiously enough, they have also came with an objection that the returned files are not containing documents as mentioned in panchnama though the file cover is tallying with the same. In view of this resistance to take back the floppies, the officers had to draw a panchnama evidencing the efforts of the Department to supply the requir .....

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upon documents and the show cause notice is not at all relied upon them. All the relied upon documents on the basis of which the case was built upon, were provided to them way back in 1997. At that time, the Noticee was only asking for the relied upon documents and on receipt of the same, they wanted to adjourn the case proceedings on the pretext of non-receipt of non relied upon documents. After much efforts, these nonrelied upon documents though not much relevant to the case were located from .....

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