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M/s Batra Henlay Cables, M/s Batra Enterprises, Shri Brajesh Batra Versus CCE, Delhi - II

2015 (11) TMI 1034 - CESTAT NEW DELHI

Clandestine clearance of goods - SSI Exemption - Clearances of goods without making declaration to Department - Non Inclusion of value of clearance - Held that:- On perusal of some of the invoices procured from the customers who had made cheque payments to M/s Batra Henlay Cables and M/s Cosmoline Electricals, it is seen that some of the invoices are in respect of supply of aluminium cables, while it is the stand of M/s Batra Henlay Cables that their unit was not capable of manufactured aluminiu .....

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them from other dealers and accordingly the payments received in the above-mentioned four bank accounts in respect of sales of aluminium cables cannot be treated as the payments received for sale of the cables manufactured and cleared by M/s Batra Henlay Cables.

No enquiry has been conducted with the remaining customers - Without any enquiry with them, it cannot be presumed that the payments made by them were in respect of the goods manufactured and cleared by M/s Batra Henlay Cables .....

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be remanded to the Commissioner for denovo adjudication - impugned order is set aside - Decided in favour of assessee. - Excise Appeal No. 628-630 of 2005 - Final Order No. 51200-51202/2015 - Dated:- 17-4-2015 - Shri Rakesh Kumar, Member (Technical) And Shri S.K. Mohanty, Member (Judicial) For the Petitioner : S/Shri Sudhir Malhotra and A.S. Hasija, Advocates For the Respondent : Shri M.S. Negi, Authorized Representative (DR) ORDER Per. Rakesh Kumar :- The facts leading to filing of these appeal .....

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Shri Brajesh Batra, Rakesh Batra and Shri Vivek Batra, brothers of Shri Rajesh Batra as its partners. Another partner of this firm is Mrs. Mala Batra wife of Shri Rajesh Batra. M/s Grandlay Cinema is a proprietary firm of Shri C.L. Batra Father of Shri Rakesh Batra, Shri Rajesh Batra, Shri Brajesh Batra and Shri Vivek Batra. M/s Batra Enterprises, M/s Batra Henlay Cables and M/s Grandlay Cinema have offices at the same place. The period of dispute in this case is from 1994-1995 to 1997-1998. Du .....

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d invoice No. 516 dated 28/12/96 and the invoices in between were missing. Certain other records which appeared to be relevant for investigation were taken over under Panchnama for further investigation. During investigation it was found that the invoice No. 183, 192, 205, 215, 250, 276, 280, 320, 323 etc. had been issued to two different sets of buyers and it appeared that under the same invoice numbers goods had been sold to two different sets of buyers, the other set of sale transactions bein .....

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their production and clearance. 1.2 In course of investigation, it was found that account No. 347 had been opened in Ashok Vihar Branch of Catholic Syrian Bank Limited in the name of Shri Vinod Kumar, an employee of Grandlay Cinema, by showing him as Proprietor of M/s Batra Henlay Cables and similarly another account No. 3159 had been opened in Shakur Basti, New Delhi Branch of Punjab National Bank in the name of the same Shri Vinod Kumar by showing him as proprietor of M/s Batra Henlay Cables. .....

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ables, M/s Cosmoline Electrical is a concern of Shri Brajesh Batra. Another account was found in the Ashok Vihar, New Delhi Branch of Catholic Syrian Bank Limited in the name of M/s Devin Board. From the bank statements of the accounts of Shri Vinod Kumar in Catholic Syrian Bank Limited and Punjab National Bank and from the bank statements in respect of accounts of M/s Cosmoline Electrical in the Catholic Syrian Bank Limited and Indian Overseas Bank, it was found that the cheques received from v .....

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Syrian Bank Limited, Ashok Vihar, New Delhi in November 1994 as Proprietor of M/s Batra Henlay Cables on the introduction of Shri Naveen Mehta, a person known to Shri Brajesh Batra and that similarly he had opened an account No. 3159 in Punjab National Bank in his name as Proprietor M/s Batra Henlay Cables and account No. 367 in Catholic Syrian Bank Limited in his name as Proprietor of M/s Cosmoline Electrical and another account No. 4077 in Indian Overseas Bank in his name as Proprietor of M/s .....

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to huge cash withdrawal, he, on the instructions of Shri Brajesh Batra, started issuing cheques in the name of M/s Devin Board, which was a firm of Shri Naveen Mehta which had a bank account in Catholic Syrian Bank Limited, that the cheques issued in the name of Devin Board were being deposited in its account and thereafter cash used to be withdrawn from that account and used to be handed over to Shri Brajesh Batra. Statement of Shri Rajesh Batra, Partner of M/s Batra Henlay Cables, was recorde .....

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e wires and cables manufactured by M/s Batra Henlay Cables which had not been accounted for in its books of accounts. The amounts deposited in these accounts during 1994-1995, 1995-1996, 1996-1997 and 1997-1998 were ₹ 43,67,280/-, ₹ 1,38,55,588/-, ₹ 99,14,298/- and ₹ 8,09,212/- respectively against which the value of clearances declared in the books of accounts during these years were ₹ 29,72,193/-, ₹ 29,37,677/-, ₹ 50,00,713/- and ₹ 1,15,40,988/- .....

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o ₹ 66,04,307/- from them under proviso to Section 11A (1) of Central Excise Act, 1944 for the period from 1994-1995 to 1997-1998 alongwith interest thereon under Section 11AB, (b) imposition of penalty on M/s Batra Henlay Cables under Rule 173Q (1) (d) of Central Excise Rules, 1944 readwith Section 11AC of Central Excise Act, 1944 ; (c) confiscation of land, building, plant, machinery of M/s Batra Henlay Cables under Rule 173Q (2) of the Central Excise Rules, 1944 and (d) imposition of pe .....

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invoices of Batra Enterprises they had purchased Batra Henlay wires. However, it was found that during that period, there were no sales of any Batra Henlay wires/cables by M/s Batra Henlay Cables to M/s Batra Enterprises and, thus, it appeared that the Batra Henlay brand cables supplied by M/s Batra Enterprises to various customers were those which had been manufactured and clandestinely cleared by M/s Batra Henlay Cables. Duty demand of ₹ 23,20,278/- is on this basis. In this regard a sh .....

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h Batra and Shri Vivek Batra, partner and Shri Rajesh Batra, Partner of M/s Batra Henlay Cables. 1.4 The above two show cause notices were adjudicated by the Commissioner by a common order-in-original dated 29/10/04 by which the above two duty demands were confirmed against M/s Batra Henlay Cables alongwith interest thereon under Section 11AB and beside this, penalty of equal amount was imposed on them under Section 11AC of Central Excise Act, 1944 readwith Rule 173Q of Central Excise Rules, 194 .....

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der of the Commissioner, these appeals have been filed by M/s Batra Henlay Cables, Batra Enterprises and Shri Brajesh Batra. 2. Heard both the sides. 3. Shri Sudhir Malhotra, Advocate, and Shri A.S. Hasija, Advocate, the learned Counsels for the appellants, pleaded that the duty demand against M/s Batra Henlay Cables consists of two components duty demand of ₹ 66,04,307/- on the basis of deposits in four bank accounts No. 347 and No. 367 in Ashok Vihar, New Delhi Branch of Catholic Syrian .....

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377; 23,20,278/-, from perusal of para 46, 47, 48 of the impugned order dated 29/10/04 of the Commissioner, it will be seen that M/s Batra Enterprises had purchased wires and cables from 12 parties during 1994-1995 to 1996-1997 period, that from the scrutiny of the sales and purchase register for 1996-1997 (upto 17/1/97) maintained by M/s Batra Enterprises it will be seen that they had sold electricals goods worth ₹ 87,63,425/- whereas from purchases were worth ₹ 68,24,884/- and they .....

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the unaccounted goods received from M/s Batra Henlay Cables have been accommodated against the statutory invoices issued by M/s Batra Enterprises, that there is no dispute about the purchase of wires and cables by M/s Batra Enterprises from 12 parties, that the sale invoices issued by M/s Batra Enterprises do not mention the brand name Batra Henlay, that the appellant had sought cross examination of the 17 customers of M/s Batra Enterprises, who have given statements to the effect that they h .....

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ce dated 27/9/99, this demand is based on the amount of ₹ 2,89,47,379/- deposited in the above-mentioned 4 accounts in the name of Shri Vinod Kumar, that the appellant were neither having plant and machinery nor infrastructure to manufacture the quantity of goods on which the duty has been demanded, that there is no evidence to show that the goods against which the cheque payments have been made in the name of M/s Batra Henlay Cables and M/s Cosmoline Electricals had been manufactured by M .....

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ices against which the cheque payments had been made and which had been deposited in the four accounts pertain to supply of under ground power cables which cannot be manufactured by M/s Batra Henlay Cables, as the same have multi core of aluminium, that Shri Kishan Singh Rathore, who was working as Supervisor, in his statement has categorically stated that M/s Batra Henlay Cable have only three extruder machines out of which only one machine was working and that there was no manufacture of alumi .....

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and cleared by M/s Batra Henlay Cables, that in any case, Shri Brajesh Batra was an active partner of M/s Batra Enterprises and he was not a partner of M/s Batra Henlay Cables and if Shri Brajesh Batra opened the four accounts in- connivance with Shri Vinod Kumar, an employee of M/s Grandlay Cinema, the deposits made in the four accounts cannot be linked to M/s Batra Henlay Cables and cannot be treated as payments for the goods manufactured and cleared by M/s Batra Henlay Cables and on this bas .....

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in the four secret accounts two in the name of Shri Vinod Kumar by showing him as Proprietor of M/s Batra Henlay Cables and two in the name of Shri Vinod Kumar by showing him as Proprietor of M/s Cosmoline Electricals, he pleaded that Shri Vinod Kumar in his statement dated 03/3/98 while stating that he is an employee with M/s Grandlay Cinema, had admitted that these four accounts in Catholic Syrian Bank Limited, Indian Overseas Bank and Punjab National Bank had been opened on the instructions .....

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were issued in the name of a firm called M/s Devin Board of Shri Naveen Mehta which also had account in Catholic Syrian Bank Limited and, thereafter the withdrawals were made from the account of Shri Naveen Mehta and the cash was handed over to Shri Brajesh Batra, that though Shri Brajesh Batra is not a partner of M/s Batra Henlay Cables, but it is Shri Rajesh Batra who is the partner in this firm, Shri Rajesh Batra in his statement dated 11/6/97 has stated that the entire work relating to sale .....

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ourbo Ltd., M/s Sterling & Wilson Electricals Pvt. Ltd., M/s Unitech Ltd., M/s Switchgear & Control and M/s Gwalec Electricals (P) Ltd., that all of them have admitted to have purchased wires and cables from M/s Batra Henlay Cables and made payments by cheque, that from this it is clear that all the cheque payments made into the above-mentioned four accounts opened in the name of Shri Vinod Kumar by showing him as Proprietor of M/s Batra Henlay Cables and M/s Cosmoline Electricals have b .....

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ay Cables, that in view of this, the duty demand of ₹ 66,04,307/- has been correctly confirmed by the Commissioner alongwith interest and penalty of equal amount has been correctly imposed, that as regards the duty demand of ₹ 23,20,278/- against M/s Batra Henlay Cables, this demand is based on the fact that during period from 1994-1995, to 1996-1997 M/s Batra Enterprises, a firm in which Shri Brajesh Batra is the main partner, had sold wires and cables worth ₹ 71,13,121/- to 1 .....

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thout issue of any invoices, that during the period of dispute, as per the records of M/s Batra Enterprises, they had purchased wires and cables from 12 suppliers and all of them in their statements have stated that they have never supplied Batra Henlay brand wires and cables to M/s Batra Enterprises, that in view of this, the only conclusion which can be drawn is that the Batra Henlay brand wires and cables supplied to 17 customers by M/s Batra Enterprises had come from M/s Batra Henlay Cables .....

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d 27/9/99 for demand of duty of ₹ 66,04,307/- and the show cause notice dated 04/4/01 for demand of duty of ₹ 23,20,278/-. 7. Coming first to the duty demand of ₹ 23,20,278/- this demand for the period from 1994-1995 to 1996-1997 is based on the sales of wires and cables made by the trading firm with Shri Brajesh Batra as its main partner to 17 buyers and the statements of those buyers stating that they had received Batra Henlay brand wires and cables. Since, during that period .....

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ables supplied to the 17 buyers had been procured from M/s Batra Henlay Cables who had cleared the same clandestinely, without issue of invoices. The value of these sales is ₹ 71,13,121/- on which the duty of ₹ 23,20,278/- has been demanded. The defence of the appellant is that merely on the basis of the statements of the 17 buyers, it cannot be inferred that the wires and cables supplied by M/s Batra Enterprises were of Batra Henlay brand manufactured by M/s Batra Henlay Cables. Sin .....

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y proceeding under this Act, other than the proceeding before the Court, as they apply in the proceeding before a Court. In terms of sub-Section (1) of Section 9D, which is in respect of prosecution proceedings, a statement made and signed by a person before a Gazetted Central Excise Officer in course of enquiry proceeding shall be relevant for the purpose of proving in any prosecution proceeding, the truth of its content when the person who had made the statement is examined as a witness before .....

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ty or whose presence cannot be obtained without an account of delay or expenses, which under the circumstances of the case, the Court considers unreasonable. In accordance with the judgment of Honble Delhi High Court in the case of J&K Cigarette reported in 2009 (242) E.L.T. 189 (Del.) before invoking sub-Section (1) (a) of Section 9D, a specific finding has to be given by the Adjudicating Authority after hearing the assessee against whom such statement is to be applied without examination .....

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e where the case against the assessee is based mainly on the oral evidence in form of statements of certain witnesses and those statements are not corroborated by any other independent evidence. In such circumstances, in order to ascertain as to whether the statement given by the deponents are true, their cross examination would be mandatory. Since, in this case, the cross examination of the 17 buyers whose statements are being relied upon in support of the allegation of duty evasion of the appe .....

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lying upon those statements i.e. specific finding would have to be given after hearing the assessee as to whether the person whose statement is to be relied upon is dead or cannot be found or is incapable of giving evidence or is being kept out of the way by the adverse party or whose presence cannot be obtained without an amount of delay or expenses, which under the circumstances of the case, the Court considers unreasonable. 8. As regards the duty demand of ₹ 66,04,307/-, the evidence on .....

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Batra Henlay Cables and M/s Cosmoline Electricals ; (2) Statement dated 03/3/98 of Shri Vinod Kumar an employee of M/s Grandlay Cinema wherein he stated that while he is an employee of M/s Grandlay Cinema owned by Shri C.L. Batra F/o Shri Brajesh Batra and Shri Rajesh Batra, that he also worked for sometimes for Batra Henlay Cables and that he had opened the accounts mentioned above in his name on the instructions of Shri Brajesh Batra, that the cheques issued by various customers in the name o .....

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n cash and handed over to Shri Brajesh Batra ; (3) statement dated 04/3/98 of Shri Shrinath an employee of Batra Enterprises, who also corroborated the statement of Shri Vinod Kumar ; (4) statement dated 11/6/97 of Shri Rajesh Batra, partner M/s Batra Henlay Cables wherein he stated that though he is the main partner of M/s Batra Henlay Cables and Shri Brajesh Batra is the main partner of M/s Batra Enterprises and the works related to sales of M/s Batra Henlay Cables was being looked after by Sh .....

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uctions, stated that he had got the cables manufactured from job workers and the payments received into these accounts were of the sale proceeds of the cables got manufactured on job work basis ; (6) statements from certain customers of Batra Henlay Cables namely M/s Khandelwal Laminated Ltd., M/s Electrical Associates, M/s ETA, M/s MEC Electric Contracts Pvt. Ltd., M/s Bharat Construction Corporation, M/s Larson & Tourbo Ltd., M/s Sterling & Wilson Electricals Pvt. Ltd., M/s Unitech Ltd .....

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accounts during the period from 1994-1995 to 1997-1998 pertain to the clearances of wires and cables manufactured by M/s Batra Henlay Cables which have not been declared by them to the Department and have not been included in the value of their clearances and if value of these clearances in included they would not be eligible for full duty exemption during the period from 1995-1995 to 1997-1998 and the total differential duty payable would be ₹ 66,04,307/-. 8.2 The contention of the appel .....

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ed and cleared by Batra Henlay Cables and no duty can be demanded in respect of the amounts deposited in the above-mentioned four accounts which represent the payments for the goods which had not been manufactured and cleared by M/s Batra Henlay Cables. 8.3 The amounts totalling ₹ 2,89,47,379/- deposited during the period from 1994-1995 to 1997-1998 have been deposited in the accounts of M/s Batra Henlay Cables as well as M/s Cosmoline Electricals. M/s Cosmoline Electricals is a trading fi .....

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e Electricals is a fictitious entity floated by Shri Brajesh Batra or whether it is a real firm of Shri Brajesh Batra, the amounts deposited in the name of M/s Cosmoline Electricals cannot be presumed to be the payments for the goods manufactured and cleared by M/s Batra Henlay Cables. 8.4 On perusal of some of the invoices procured from the customers who had made cheque payments to M/s Batra Henlay Cables and M/s Cosmoline Electricals, it is seen that some of the invoices are in respect of supp .....

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having any machinery for manufacture of aluminium cables, the aluminium cables sold by them must obviously have been procured by them from other dealers and accordingly the payments received in the above-mentioned four bank accounts in respect of sales of aluminium cables cannot be treated as the payments received for sale of the cables manufactured and cleared by M/s Batra Henlay Cables. 8.5 It is also seen that while the payments in the four accounts mentioned above have been received from a .....

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