Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

M/s Salasar Ispat Pvt Ltd, Shri Pravesh Gautam, Shri Pravin Gautam Versus Commissioner of Central Excise & Customs, Nasik

Clandestine removal of goods - Penalty under Rule 26 - Evasion of duty - Insufficient evidences - Trading activity - Violation of principle of natural justice - Difference of opinion - Majority order - Held that:- no credence can be paid to the capacity determined in 1999 under the compounded levy scheme. Capacity was not determined during the period in question. Duty is to be demanded from the appellant for clandestine clearances based upon available evidences. - While it is true that the appel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f MS ingots was not from one source but from number of sources and at times through brokers. Suppliers of MS ingots as also brokers had confirmed the correctness of the information indicated in the diaries recovered from the appellant's office in Mumbai. It is also noted that majority of the supplier of MS ingots in turn have paid the duty for the clandestinely cleared MS ingots to the present appellant. In such a situation, in my considered view, as far as the purchase of clandestinely cleared .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e duty on the goods cleared without bill. In his statements during investigation, Shri Faruk Shaikh has admitted the details. It is also important to note that Shri Faruk Shaikh along with the diaries was apprehended during the search at the appellant's factory itself.

All the MS bars which are shown as cleared without bills from the appellant's unit, were in reality cleared from the appellant's unit without payment of duty and the duty on the same is required to be confirmed. The qu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ce has been recovered from the appellant's own office and the appellant has admitted the details in these records, the same are required to be confirmed and the appellant is liable to pay duty, interest and consequential penalty on the same. These will be required to be recomputed by original authority. Personal penalties will also be required to be proportionately redetermined including the clearance through Shri Farukh Shaikh. - evidences collected by the investigation team during the course o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

conclusion from the documents particularly regarding procurement of clandestinely cleared goods will be what has been proposed by the Revenue. Only in respect of some of the buyers of MS bars, though in the statements they have accepted purchase of clandestinely cleared MS bars, but Revenue has failed to point out the corresponding entries in record No. 23, 24 and 26 and as mentioned with reference to point No. 2 of the difference of opinion, the demand in respect of the same cannot be upheld. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

), P S Pruthi, Member (T) And P K Jain, Member (Technical) - Third Member on Reference For the Petitioner : Shri D B Shroff & Shri Ashok Kumar Singh, Advs For the Respondent : Shri S Dewalwar, Addl Commissioner (A.R.) ORDER Per Ashok Jindal The main appellant namely M/s Shri Salasar Ispat Pvt. Ltd. has filed appeal against the impugned order confirming the demand of duty along with interest and imposition of penalty on account of clandestine removal of TMT/CTD bars. The co-appellants namely .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aged in a large scale evasion of duty on clearance of their final product clandestinely. During the course of search, no incriminating documents were found. No unaccounted raw materials or finished goods were found in the premises. All entries in the statutory records tallied with the stocks of inputs and finished product found were as per the accounts books maintained by the appellant but the department recovered three documents namely Record Nos. 23, 24 and 26 from the office premises of Gauta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sh Gautam on 18.12.2006 and statement of broker Shri Faruk Sheikh on 19.12.2006 were recorded in which Shri Faruk Sheikh has stated that he has acted as a broker for various parties and he had brokered the purchase of 578.240 MT of TMT bars from the appellant during the impugned period. But during the course of cross-examination on 29.7.2009, Shri Faruk Sheikh retracted his statement saying that no goods were sold by the appellant to him without cover of excise invoices. He has also admitted tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

3, 24, and 26 are in the handwriting of Shri R.L. Gautam whose statement was never recorded and as observed by the revenue that nearly 75% of the entries mentioned in those records pertains to Gautam Enterprises and Shiv Ganesh Parvati. It is also contended that the Directors of the appellant company have retracted their statements recorded during the course of investigation stating that their statements were recorded under duress. It is further submitted that cross-examination of various person .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ce was produced that the appellant had purchased the above material in their factory. It was contended 7426.530 MT of ingots to manufacture 7426.530 metric tons of TMT/CTD bars is only on presumption basis. It was contended by the appellant before the adjudicating authority in reply to the show-cause notice that the installed capacity of the appellants factory is only 4441 MT per year and as per the records during the period of six months in dispute, the appellant has already cleared about 2600 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ing team regarding the use of furnace oil for the purpose of heating the furnace. For transporting the goods alleged to have been purchased and sold clandestinely, the appellants would have required over 1000 trucks during the impugned period. He further submits that during the course of search, no incriminating documents were found in the factory and office of the appellants. No excess raw material were found on verification of the stocks. It is prayed that as there was no corroborative evidenc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lants are before us. 3. Heard both sides. 4. In defence of their appeals, the learned Counsel for the appellants submits that the entire case is built up on the basis of information contained in the private note books /collection books / chits recovered from the premises of Gautam Enterprises at Mumbai. The said notebook is not written in the handwriting of any of the directors of the company. It is in the handwriting of Mr. R.L. Gautam whose statement was not recorded at all. Therefore, the sai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

MS Ingots has denied any clandestine removal. Moreover, the statements of 3 brokers relied by the revenue, recorded during the cross examination, have also stated that they have never purchased goods from the appellants without Central Excise invoices and their statements were recorded during investigation under duress. In these circumstances, the incriminating statement recorded during the course of investigation of these persons cannot be relied upon. Moreover, the appellants required for cros .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t. Ltd. v. CCE - 2010 (255) ELT 496 (All). 4.1 It is also submitted that unless the exceptions carved out in Section 9D of the Central Excise Act, 1944 are clearly made out, the statements cannot be regarded as being relevant and therefore cannot form the basis of proving the truth of the facts contained in the statements unless the deponents thereof are produced for cross-examination as held by the Hon'ble Delhi High Court in the case of Basudev Garg v. CC - 2013 (294) ELT 353 (Del). 4.2 Th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2221 MT whereas the appellant had manufactured/cleared 2600 MT on the strength of Central Excise invoices. If the quantity of clandestine removal is taken into account, the appellant should have manufactured atleast 10,000 MT TMT bars during the impugned period. This is impossible to produce such a huge quantity during that period in teh absence of excess machinery or production capacity in the factory of the appellant. To support this argument, the appellant also filed an affidavit dated 09.08 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

onsumed remains similar all the times. He further submits that the department has not verified the production capacity and the electricity consumed. Therefore, the claim of the department is on presumption basis that such a huge production and clearance have been done without payment of duty is not tenable as per the decision of Galaxy Indo Fab Ltd. v. CCE - 2010 (258) ELT 254 (T). He further submitted that no records pertaining to the alleged clandestine removal of the goods by the appellants w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of search in the factory, no incriminating documents were found and the stock of raw materials tallied with the Books of Accounts, therefore, the allegation cannot be made against the appellant for clandestine removal of the goods. He further submitted that the Balance Sheets of M/s Gautam Enterprises and M/s. Shiv Ganesh Parvati show that those firms were engaged in the activity of trading of ingots and sale of bars manufactured out of such ingots. To support this contention, the appellant has .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

for the Revenue has also submitted a written submission. On the basis of these submissions, it is argued that the ingots were recorded as per the entries found in the private record seized during the course of investigation and they have admitted the supply of M.S. Ingots to the appellants. As per the Hon'ble Supreme Court judgement in the case of CCE Madras v. Systems & Components Pvt. Ltd. 2004 (165) ELT 136 (SC), what is admitted, need not be proved. He further submitted that retract .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

per the decision in the case of Patel Products vs. CCE - 2003 (151) ELT 650 (Tri. - Del). 5.2 He further submits that clandestine activity at best can be established only by circumstantial evidence as held by the Tribunal in the case of Gulabchand Silk Mills v. CCE - 2005 (151) ELT 650 (Tri. Bang.). 5.3 He further relied on the judgement of the Hon'ble Supreme Court in the case of Collector of Customs, Madras and Others v. D. Bhoormull - 1983 (13) ELT 1546 (S.C.) wherein it was held that th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tion capacity depends on number of hours and raw material used during the course of manufacturing of the final product. He further submitted that details of the transporter, vehicle No. etc were not necessary to be ascertained as the evidence for establishing the charge and proving the facto of clandestine removal is available in the records. In these circumstances, he prayed that the impugned order is required to be upheld. 6. After hearing both the sides, we find that allegation of clandestine .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pellant is that the hand writing in some of the records was not of the appellants. The said fact was not examined during the course of adjudication by the adjudicating authority. It is also found that the records recovered from the office premises of M/s Gautam Enterprises as claimed by the appellants are not in the handwriting of the appellants but in the handwriting of Shri R.L. Gautam but unfortunately no statement of Shri R.L. Gautam was recorded during the course of investigation to prove c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

llant without any Central Excise documents. Revenue has not proved any contrary to these evidence with support of any documents on record. 6.2 Further, we observed that the department has alleged that the appellant has purchased 7474.305 MT of ingots and received in their factory. As the factory of the appellant is located in Dindori, Nasik and the ingots manufacturers situated at Sinnar, Nasik. Between the factory of the appellant and the supplier, there is an Octroi Naka but no efforts was mad .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d without cover of Central Excise invoices and cleared clandestinely and no effort was made to prove how the goods were transported from the factory of the appellant to the market and no effort was made to find out is there any change in the patter of production capacity or in the electricity consumption to manufacture these final product. No effort was made to find out is there any excess purchase of furnace oil for manufacturing of TMT bars as the same is used for heating the furnace. No effor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he case of clandestine removal which the revenue failed to do so. 6.4 We further find that during the course of adjudication, the appellant sought cross examination of about 31 persons whose statements were relied upon by the Revenue. Out of those persons, only 4 persons were allowed and all the 4 persons who appeared for cross-examination have stated that they have dealt with the appellants and all the dealings were done with the appellants under the cover of Central Excise invoices. No transac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oceeding is a valuable right given to the accused/Noticee, as these proceedings may have adverse consequences to the accused, at the same time, under certain circumstances, this right of cross-examination can be taken away. The court also observed that such circumstances have to be exceptional and that those circumstances have been stipulated in Section 9D of the Central Excise Act, 1944. The circumstances referred to in Section 9D, as also in Section 138B, included circumstances where the perso .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

observed as under:- "29. Thus, when we examine the provision as to whether the provision confers unguided powers or not, the conclusion is irresistible, namely, the provision is not uncanalised or uncontrolled and does not confer arbitrary powers upon the quasi judicial authority. The very fact that the statement of such a person can be treated as relevant only when the specified ground is established, it is obvious that there has to be objective formation of opinion based on sufficient ma .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

powers. The aggrieved party is not remediless. This order/opinion formed by the quasi judicial authority is subject to judicial review by the appellate authority. The aggrieved party can always challenge that in a particular case invocation of such a provision was not warranted." 6.6 Further in the case of J & K Cigarette Ltd. - 2009 (242) ELT 189 (Del.) the issue of constitutional validity of Section 9D of Central Excise Act, 1944 came up before the Hon'ble High Court wherein the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

v) before arriving at this opinion, the authority would give opportunity to the affected party to make submissions on the available material on the basis of which the authority intends to arrive at the said opinion; and (v) it is always open to the affected party to challenge the invocation of provisions of Section 9-D of the Act in a particular case by filing statutory appeal, which provides for judicial review." 6.7 Further we find that the principle laid down by the Hon'ble Delhi Hig .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ore the adjudicating authority that their production capacity was fixed in the year 1998 under the scheme of compounded levy and the production capacity was fixed @ 4441 MT per year and thereafter there is no change in pattern of production. The capacity was fixed for 24 hrs of working by the appellant in their factory. In these circumstances, when the production capacity has not been increased as claimed by the appellant and has not disproved by the adjudicating authority in the adjudication or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ossibility of production capacity from the appellants factory to the extent of demand made by the department and the adjudicating authority ignored the said ground taken as defence by the appellant that the installed capacity could not permit production of huge quantity of processed fabrics as has been calculated by the department. In those situation, this Tribunal came to the conclusion that the department has not verified during the course of investigation that the production capacity of the a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is no increased in production capacity fixed by the revenue and as this claim has not been examined during the course of investigation as well as in adjudication, we find it is a vital evidence for the fate of issue. Moreover, the electricity consumption was also not checked. Therefore, the ratio laid down by this Tribunal in the case of Galaxy Indo Fab Ltd. (supra) squarely applicable to the facts of this case and we hold that it will be absurd to believe the claim of the department about the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

factory of the appellant. We also find that the appellant, in alternate, has claimed that entries pertains in private records are of trading activities which has not been discarded by the revenue but the appellants have produced some evidence for these trading activities by way of IT Returns and Balance Sheets. We also note that the Central Excise duty payable on the manufacture of the goods, as the goods in question can't be produced by the appellant, the demand of excise duty is not susta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the appellant therefore Central Excise duty cannot be demanded. Moreover, when the claim of the appellant is that these activities pertain to trading activity. In these circumstances, we hold that the Revenue has failed to prove their case of manufacturing of excess quantity of goods and clandestine clearance thereof without payment of duty. In these circumstances, the charge of clandestine removal of the goods is set aside. Consequently, the impugned order is set aside and the appeals of the ap .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

enters around the various evidences which were produced through investigations and relied upon by the department. On the other hand, my learned Brother has found lack of evidences in establishing the evasion of duty. Therefore, I think it would be appropriate to analyse the matter evidence-wise. 12. Various evidences brought out in the investigations need to be considered. First, they are in the form of confessional statements of the Directors of the appellant Company, brokers, manufacturers of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Directors Shri Parvesh Gautam and Shri Pravin Gautam have in their statements dated 18.12.2006, 02.01.07, 05.01.07, 06.01.07 and 20.12.06 accepted the correctness of the transactions reflected in their private records. The brokers through whom the M.S. Ingots were procured viz. Shri Kamal Singh Dassani vide his statement recorded on 09.01.2007, Shri Vijay Kumar Jindal on 09.01.07, 15.01.07 and 17.01.07 admitted the clandestine deals. Shri Jindal identified the entries in Record Nos. 23 and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ati Steel Cast Ltd.) vide his statement on 22.01.07, Shri Suresh Mittal (M/s. Ishu Super Steel Pvt. Ltd.) on 23.01.07, Shri Mohit Satbir Sarlia (M/s. Silver Ispat Pvt. Ltd.) on 23.01.07, Shri Jayprakash Mittal (M/s. Silver Ispat Pvt. Ltd.) on 16.01.07 and Shri Stbir Sarlia (M/s Sarlia Steel Pvt. Ltd.) on 23.01.07 also corroborated the transactions of clandestine sale. Mr. Manek Shah of MITC Rolling Mills in his statement dated 23.07.2007 identified the entries in Record No. 23 regarding sale of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in H. Modi on 18.01.07, Shri Ketan H. Shah, Patner of M/s. D. Ketan & Co. on 22.01.07 also confirmed the clandestine transactions. In fact, Shri Arvind Shah, Shri Chirag Busa in his statement dated 23.5.2008, Shri Bhupendra Amarchand Shah in his statement dated 16.5.2008, Shri Kunal Kishore Gandhi, Shri Lalit Jain in his statement dt. 19.01.2007 all confirmed entries in Record No. 23 which reflect clandestine transactions in cash between them and SSIPL without any bills. 12.2 It is contended .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

such documents and conduct enquiries in relation to the transport. It is true that in cases of clandestine production and removal, assessees will try not to leave any evidence which can trap them. On the other hand, paras 2.1 and 2.1.1 of Annexure I to the show-cause notice show how methodically the Revenue has been able to decipher the records. The sample pages of Note Books seized from Shri Umesh Modi which figure at Sl.No. 1,2,3,4,5,6 of the annexure to Panchanama dated 18.12.06 indicate how .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n Book for 2006-07 recovered from the possession of Shri Faruk Shaikh where entries have been deciphered to indicate the name of supplier (wherein the words Salasar has been scored out and Praveen has been written) quantity of goods, rate per Kg. of goods, value of goods and payment details. With reference to this records Shri Faruk Shaikh confessed that the clearances effected by the manufacturers of TMT bars as recorded in the two collection books covering the period 2005-06 and 2006-07 were c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o be true. The acts of SSIPL have been corroborated by documents resumed from other persons who were connected with the transactions such as the supplier of raw material or the purchaser of the finished goods. Simply because some of the persons retracted their submissions will not nullify and abrogate the submissions with reference to the records seized. The private records seized and deciphered cannot be brushed away as evidence without substance. The records speak of definite entries which are .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lthough retracting them later. 13. The next piece of evidence relates to the production reflected in the records, vis-a-vis Annual Production Capacity determined in the year 1999 under Compounded Levy Scheme. The contention of the learned Counsel is that the Annual Production Capacity determined in June 1999 by the Range was 4444 M.T only whereas the clandestine clearance alleged by the department comes to 7697 M.T. for the six months period from July 2006 to December 2006, which far exceeds the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ly because the actual capacity could be tweaked by changing the above parameters but the duty payable would remain the same. In other words, the capacity practically could be much more than declared and verified capacity. In any case, the plea of the Counsel that the capacity was not changed after 1999 cannot be accepted because it was never verified subsequently. Capacity determined in 1999 has no relevance in 2006. The change in number of utilized hours itself could have increased the capacity .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

clared in ER-1 Returns as production 1 July, 2005 173.120 31.110 204.23 2 Sept.2005 245.360 39.485 284.845 3 Oct.2005 223.160 18.925 242.085 4 Nov.2005 195.250 16.935 212.185 5 Jan.2006 Not available 61.240 6 Feb.2006 Not available 21.085 7 April, 2006 219.580 21.940 241.520 8 May, 2006 366.410 40.785 407.195 9 June, 2006 273.120 18.975 292.095 10 July, 2006 364.020 895.865 1259.885 11 Aug, 2006 372.850 1074.425 1447.275 12 Sept, 2006 349.495 1580.750 1930.245 13 Oct, 2006 401.050 1751.555 2152. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ext piece of evidence which has been discussed in the cross examination. The contention of the appellant is that out of 31 persons, cross-examination was conducted in only 5 cases. It is seen that Shri Ashok Kumar Singh at the time of personal hearing held on 01.07.2009 before the Commissioner, C.Ex, & Cus., Nashik, showed his willingness to cross-examine 5 persons, namely (i) Shri Pradip Sargoi (ii) Vijaykumar Mittal (iii) M/s Bhavshakti Steel Mines Pvt. Ltd. (iv) Shri Farukh Shaikh and (v) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

amely, Shri Pradip Sargoi and Shri Vijaykumar Mittal as they did not appear for cross-examination and the next date was fixed on 08.9.2009. Accordingly, letter dtd 04.8.2009 was issued to Shri Pradip Sargoi and Shri Vijaykumar Mittal to appear on 08.09.2009. However, the appellant vide their letter dtd. 5.8.2009 requested for postponement of hearing fixed on 08.9.2009 to 09.9.2009 as their counsel representing the case was not available on the said date due to hearing in the High Court, Mumbai i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

i Madhu Singh Parmar and Shri Harshad Modi to appeared on 06.10.2009 for cross-examination. After the cross-examination held on 06.10.2009, the appellant vide their letter dtd. 30.10.2009 informed that they would file reply within 10 days. Shri Singh filed reply in the matter vide his letter dtd. 30.10.2009. Shri Singh filed another reply vide his letter dtd. 18.11.2009. The case was finally heard on 18.11.2009. Shri Singh appeared on the said date. Thus no fresh cross-examination was requested .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t is in the hand writing of Shri R.L Gautam, their father. Further he contended that a number of entries had not been taken into consideration as they were not applicable to the appellants. The plea is that the entire quantity of 7447 M.T. is purchased as a part of the trading activity of that firm. The fact that only entries pertaining to appellant which were suspect and in respect of which corroborative confessions were made by persons involved in the transactions needed to be considered. This .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hich was engaged in the trading of Iron and Steel products; that he admitted that M/s. SSIPL used to purchase the M.s Ingots either through brokers or directly from various manufacturers without cover of Central Excise invoice and without payment of Central Excise duty, that the record no. 23 & 24 seized from his office premises at Mumbai contained the information relating to transactions of M.S. Ingots/TMT Bars and the record No. 26 contained the information relating to receipts and payment .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he admitted that the seized record no. 23 and 24 contained transactions pertaining to the sale of TMT Bars manufactured by M/s SSIPL and the purchase of raw materials viz. M.S. Ingots along with certain other trading transactions and the seized record no. 26 was the cash book maintained by his brother Shri Pravesh Gautam. On being shown page nos. 17 and 18 of record no. 30, seized from the Nashik office premises of M/s SSIPL on 18.12.2006 under Panchanama he stated that the said pages contained .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

bills and receipts of payments) reflected the clandestine transactions done by Shri Pravesh Gautam and Shri Pravin Gautam. Shri Pravesh Gautam had confessed to the Panchas that the said premises was used as office premises for SSIPL and M/s. Gautam Enterprises (his father R.L. Gautam being Proprietor). In the face of all the private records seized, the appellants have not succeeded in their belated pleas as they have not explained the various entires which indicate clandestine production and rem .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

all the evidence in cases of clandestine activity which can, at best, be established only by circumstantial evidence as held by the Tribunal in the case of Gulabchand Silk Mills Pvt. Ltd. vs. CCE Hyderabad II - 2005 (184) ELT 263 (Tri-Bang). It was held by the Tribunal that "in any type of clandestine activity, the persons try their best not to leave any evidence. We cannot expect persons indulging in clandestine clearance to faithfully put the details of all such clearances in some registe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y without any break. In this case, the statements or the admissions are supported by the recovery of non-duty paid goods as well as incriminating documents. In the present case I find that the statements and admissions are indeed supportive of the incriminating documents. 16. Learned Counsel's contention that the statements have been retracted is of no help in the face of the Hon'ble Supreme Court judgement in the case of Surjit Singh Chhabra vs. Union of India - 1997 (889) ELT 646 (SC) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

case the point to be noted is that the Directors verified the entries in the seized records to be true. In case they wanted to say that these entries were not true, they could have come up with documentary evidence such as purchase bill, sale bill, payment details, accounts of purchase of purchasers and sellers etc. which they failed to do satisfactorily. 16.2 It was held by the Hon'ble Supreme Court in the case of CCE Madras vs. System Components P. Ltd. - 2004 (165) ELT 136 (SC) that what .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods, by disclosing facts within his special knowledge". In the present case, evidences in the form of diaries recovered are corroborated by the confessional statements of various persons. Therefore, the department has discharge .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

7. As the activities of clandestine procurement of inputs, clandestine product and clearance of finished goods stand established, interest under Section 11AB and penalties under Section 11AC on M/s. Salasar Ispat Pvt. Ltd. and the penalties under Rule 26 of the Central Excise Rules, 2002 on Shri Pravesh Gautam and Shri Pravin Gautam are upheld. 18. In the above terms, the impugned order is upheld and appeals are dismissed. Difference of Opinion In view of the difference of opinion between Member .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the appellant and no duty is payable on the trading activity Or Member (Technical) is correct in holding that the capacity was never determined during the period in question and duty is to be demanded from the appellant for clandestine clearances. 2. Whether Member (Judicial) is correct in holding that the evidence on the basis of which the demand has been confirmed against the appellant are not sufficient to hold that the appellant has removed that goods clandestinely. Or The evidence collected .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

adequate opportunity was given and further cross-examination was not requested especially on last date of hearing by the advocate and relying on case of Surjit Singh Chhabra (supra). (Prononuced in Court in 28.01.2015) ORDER NO.M/4569/15/EB Appeal Nos.E/483 to 485/10-Mum Date of Hearing: 15.6.2015. 6.7.2015 & 10.7.2015 For the Appellants : Shri D B Shroff, Senior Adv., Shri Ashok Kumar Singh & Ms Mahi Lalka, Advs. For the Respondent : Shri V K Agrawal, Additional Commissioner (AR) Per P .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er (Technical). 20. The first point referred to me is as under:- 1. In the facts and circumstances of the case whether Member (Judicial) is correct in holding that the appellant is not having the production capacity to manufacture 10,000 tons of TMT/CTD bars during the impugned period. Therefore, on the basis of records seized during the course of investigation are for the trading activity of the appellant and no duty is payable on the trading activity Or Member (Technical) is correct in holding .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

apacity, they could not have produced the assumed production as per the demand notice. On the other hand, learned AR's contention is that production capacity determined in 1999 was for purpose of charging the excise duty under compounded levy scheme and has nothing to do with actual production or the real production capacity. The learned AR's contention was also that in case of rolling mill by slight change in the parameters, the production capacity changes. For example, if the bars to b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s given up after some time as it was found the scheme itself is unworkable. It was also submitted that in such a situation, no importance can be given to the annual production capacity determined in 1999 for production of goods in 2006. Learned AR also submitted that purported production capacity is not based upon specification of manufacturer of plant or any authoritative literature. 20.2 I have given considerable thought to the issue. There are many plants and machines where the capacity is de .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ity of the plant. Similarly, no authentic literature on subject is produced to support the production capacity. As far as the determination of annual production capacity as per the compounded levy scheme which was introduced in 1998 and abandoned after 2-3 years, not much credence can be given. First of all, compounded levy scheme is introduced generally for evasion prone commodities. Further, rules for determining the annual production capacity are framed in such a way that the trade/manufactur .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

urnace, time for one round can be area of subjectivity. In case of rolling mill, there is no such standardization or parameter. It is for this reason that the appellant has not produced any catalogue etc. of the original rolling mill manufacturer so as to support their contention. It is also true that the rules framed in 1998 was based upon certain parameters as elaborated by Member (Technical) in his order. The criteria was also amended as it was found that the original criteria adopted was lea .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al) that the capacity was not determined during the period in question. I also agree with Member (Technical) that duty is to be demanded from the appellant for clandestine clearances based upon available evidences. Thus I agree with Member (Technical) on this point. 20.3 Learned Member (Judicial) has also mentioned that therefore on the basis of records seized during the course of investigation are for trading activity of the appellant and no duty is payable on the trading activity. While it is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

point referred to me is as under:- "2. Whether Member (Judicial) is correct in holding that the evidence on the basis of which the demand has been confirmed against the appellant are not sufficient to hold that the appellant has removed that goods clandestinely. Or The evidence collected by the Investigating team during the course of investigation are sufficient to prove the charge of clandestine removal as held by Member (technical)." 21.1 Details of various evidences which are avail .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is based upon the record Nos. 23, 24 and 26 recovered from office of the appellant in Mumbai. This office was a combined office of the appellant and two other firms controlled by the same family. One of these was Gautam Enterprises whose proprietor is Shri R. L. Gautam, father of the directors of the appellant company. The other firm is Shiv Parvati Enterprises which is again a partnership company and is looked after by Shri Parvesh Gautam who is director in the main appellant company. A lot is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t has explained the contents of the diary and how it was being maintained. It is not as if that the entries which are being claimed for Shri Salasar Ispat i.e. the present appellant, were any time being claimed by Shri Pravesh Gautam or any one else as that belonged to Gautam Enterprises or Shiv Parvati Enterprises. Even before investigating officer or adjudicating authority or before this Tribunal the appellants have never indicated any of the entries that Revenue is claiming pertains to M/s. S .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Revenue as pertaining to M/s. Shri Salasar Ispat Ltd. Thus, in effect, whatever has been done by the Revenue, if at all there is anything incorrect or inaccurate, it is in favour of the appellant and the appellant cannot have any grievance in such a situation. A lot is being said about retraction of the statements made by Shri Pravesh Gautam and Shri Pravin Gautam. I have seen these retractions. These retractions, to my mind, are of no consequence and are required to be totally dismissed for the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s based upon documents. If there is any incorrectness in these, the same could have been pointed out either during investigation or at the time of original adjudication. No such thing was done even before this Tribunal. No such infirmity has been pointed out. In view of this position, retractions of statement of Shri Pravesh Gautam and Shri Pravin Gautam are required to be totally ignored. 21.2 I also note that clandestine purchase of MS ingots was not from one source but from number of sources .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. 21.3 As far as the second aspect i.e. the sale of bars is concerned, I observe that the demands have been made based upon the assumed production from MS ingots clandestinely cleared by original manufacturer and received by the appellant. Demand is not entirely based upon the clandestinely cleared MS bars as found in the Record Nos. 23, 24 & 26 or the records recovered from Shri Faruk Shaikh, one of the brokers based in Nashik. It is also noted though Shri Pravesh Gautam in his statement ha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

te for the total quantity of MS bars with MS ingots and they adopted the assumed production method. It is seen from the impugned order that there are two types of evidences for the clandestine clearance of MS bars. The first evidence is from the diaries of Shri Faruk Shaikh. The diaries recovered from him indicated the purchase of clandestinely cleared MS bars during the period 2005-06 and 2006-07 (upto December 2006 i.e. the time of search). It was found that the diary contained precise informa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s-examination, Shri Faruk Shaikh has tried to backtrack and stated that he has not purchased any MS bars without bills. However, the said cross-examination has to be ignored for the simple reason that the diaries indicated clearances of both types vis. With bill and without bill and Shri Faruk Shaikh at no point of time has produced the bills corresponding to the clearances which were shown as without bills in the diary. Similarly, even the appellant has not shown invoices corresponding to the e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e, the same is 81.700 MT and from July to December 2006, the quantity is 352.770 MT. Duty, interest and penalties for clandestine clearance for these clearances is required to be computed. The second part of the demand is based upon the statement of various buyers of the appellant company as detailed in para 5.5 of the impugned order. I find that the statements of about 20 buyers were recorded, out of which the last six buyers are in reality, the buyers of Shri Faruk Shaikh which I have already .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

about 400 MT of MS bars but the same was also supported by various entries in record No. 23 at page 11, 24, 43, 46, 66, 75, 83, 94, 99, 143 and 162. Similarly, there were entries in record No. 24 at page 12 and 34. In my considered view, demand corresponding to 400 MT of MS bars need to be upheld/confirmed. Similarly, in respect of Mangal Steels, Mumbai, the admission is for a very specific quantity of 21 MT, which again appears in record No. 23 at page 6. Demand for this quantity is also requi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tails in record No. 23. Demand for the said 400 MT will also be required to be confirmed. In case of R.J. Steel Traders, Shri Mukesh J. Gupta has not specified the quantity though in record No. 23 there are entries at various pages. However, since no estimate of quantity or value is indicated, demand cannot be confirmed. Even the Revenue on the basis of entries has not estimated quantity or value. Similar is the position in respect of M/s. Airoli Iron & Steel Traders; Shri Chirag Himmatbhai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ale of MS bars. However, the Revenue has failed to precisely correlate or arrive at the quantity so cleared. As mentioned earlier, there are correlations in respect of few of the buyers and in my considered view, as far as these clearances are concerned, since these are based upon documentary evidence along with the statements and the documentary evidence has been recovered from the appellant's own office and the appellant has admitted the details in these records, the same are required to b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or 26 or estimate value or quantity from such entries, the same are not sustainable. In view of the above analysis, in my considered view, the evidences collected by the investigating team during the course of investigation are sufficient to the extent described above to prove the charge of clandestine removal. However, demand for the remaining quantity is not sustainable for want of sufficient evidence. I agree with Member (Technical) that the evidences collected by the investigation team durin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s under:- "3. Whether the Member (Judicial) is correct after relying on the case law in the case of Basudev Garg( supra) that the cross-examination was not granted to the persons whose statements have been relied on to hold that the charge of clandestine removal is in violation of principle of natural justice. Or Member (Technical) is correct in holding that adequate opportunity was given and further cross-examination was not requested especially on last date of hearing by the advocate and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

re taken in writing are not pressed during the arguments and only some of these are pressed. From the sequence of various letters as also the records of personal hearing, it appears that though the advocate for the appellant initially asked for cross-examination of 31 persons but later on, was satisfied with the cross-examination of 5 persons which were agreed by the adjudicating authority. I have also seen that after everything was over, in the final written submissions again the advocate for t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the documents were very precise which includes dates, supplier's name, broker's name, exact quantity, rate etc. In most of the statements, all that was done was to explain or confirm the details already indicated in the document and the case of the Revenue is based upon such document. Even if we ignore the statements, the only conclusion from the documents particularly regarding procurement of clandestinely cleared goods will be what has been proposed by the Revenue. Only in respect of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ecially on the last date of hearing by the advocate and also relying his decision on the case of Surjit Singh Chhabra (supra). I do not think that there has been any violation of the principles of natural justice in the present facts and circumstances of the case. I, therefore, agree with Member (Technical) on point No. 3. 23. (1) In view of the preceding discussion, as far as the first point referred to me is concerned, I agree with Member (Technical) that the capacity was never determined duri .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Highlight: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017 - Notification

Highlight: Companies (Acceptance of Deposits) Second Amendment Rules, 2017 - Notification

Highlight: Implementing Electronic Sealing for containers by exporters under self-sealing procedure prescribed by Circular 26/2017-Cus dated 1st July, 2017 and Circular 36/2017 dated 28 th August, 2017. — reg. - Circular

Highlight: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20 - Public Notice

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Circular: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20

Notification: Companies (Acceptance of Deposits) Second Amendment Rules, 2017

Notification: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017

Forum: Trans1 return

News: Exchange Rate of Foreign Currency Relating To Imported and Export Goods Notified

Forum: Credit on Repair of Company Car & Its Insurance

Circular: Promote the officers of the Indian Revenue Service (Customs and Central Excise) to the grade of Principal commissioner of customs, GST & CX

Circular: Allocate the charges amongst the Members of the Central Board of Excise and Customs

Circular: Strategy for audits in 2017-18 consequent to GST - Audit by Central Excise and service Department to continue for the accounting year 2016-17 and for the past period

Circular: Appoint the IRS (C&CE) officers as Principal Commissioner (Revision Application) and ex-officio Additional Secretary

Circular: Time limit for filing intimation for composition levy under Rule 3(1) of the CGST Rules, 2017 extended to 16-8-2017

Circular: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017

Circular: C.B.E. & C. Advisory on Customs related matters on introduction of Goods and Services Tax regime

Circular: List of Reduced Tax Liabilities under GST regime in comparison to present combined Indirect Tax rates

Circular: Works Contract for construction of Flats, Complex — Builders to pass on GST benefit to buyer otherwise anti-profiteering provisions of Section 171 of GST Act to apply

Circular: Clarification regarding applicability of section 16 of the IGST Act, 2017, relating to zero rated supply for the purpose of Compensation Cess on exports – Regarding.

Circular: Clarification on Inter-state movement of various modes of conveyance, carrying goods or passengers or for repairs and maintenance- regarding

Forum: Duty Drawback & Input Credit - under GST

News: RBI Reference Rate for US $

Highlight: Addition u/s 23(1)(a) - deemed rent - once the property is let out and at any point of time this remained vacant during the same cannot be brought to tax under the head House properties income.

News: Haryana constitutes screening committee on anti-profiteering

Highlight: Valuation of imported goods - it is necessary to re-examine the matter of both license agreement as well as supply contract simultaneously, to see if the enhanced royalty was in the guise of adjustment of the price of components.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

Highlight: Cenvat credit availed on Club Membership for the Director is not admissible as it cannot be said to be remotely connected with the activity of manufacture

Circular: Amendments in Hand Book of Procedures 2015-20 –reg.

News: Jaitley asks biz not to wait till last day to file GST returns

Circular: Implementing Electronic Sealing for containers by exporters under self-sealing procedure prescribed by Circular 26/2017-Cus dated 1st July, 2017 and Circular 36/2017 dated 28 th August, 2017. — reg.

Article: 20 Things You must know about E Way Bills in GST Law

Article: ‘DUTY DRAWBACK’ CANNOT BE EQUATED WITH ‘REBATE OF DUTY’

Highlight: Notification regarding GST rate for branded cereal, pulses and flour

News: Notification regarding GST rate for branded cereal, pulses and flour

Highlight: Anti-dumping duty on import of bus/truck tyres from China

Highlight: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Non-payment of service tax - maintenance and repair charges - appellants had knowingly and deliberately shown the repair charges as job work charges to mislead about their taxability - demand confirmed.

Highlight: BAS - execution of the project of smart card for vehicle registration – implementing the SOC-VRC project - The fact that the Government has outsourced some part of the work and paid certain consideration for such outsourced work, does not make the activity subject to service tax.

News: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Constitution of National Anti-profiteering Authority (NAA) under GST-reg. - Trade Notice

Highlight: Amendments in Hand Book of Procedures 2015-20 –reg. - Various amendments are made in Chapter-4 of Hand Book of Procedures 2015-2020.

Circular: Constitution of National Anti-profiteering Authority (NAA) under GST-reg.

Highlight: Sharing of expenses - BAS - promotion of business of group companies - sharing of expenditure for common facilities cannot be treated as service by one to another in such arrangement.

News: RBI Reference Rate for US $

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

Circular: Certain Clarifications sought on Construction Services provided in the Real Estate Sector – reg.

News: Anti-dumping duty on import of bus/truck tyres from China

News: Fast-track GST refund, else ₹ 65K cr may be stuck: Exporters



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version