9911796707
TMI Blog2015 (11) TMI 1476X X X X Extracts X X X X X X X X Extracts X X X X ..... empted from duty, if the same are manufactured by using fly ash not less than 25% by weight, subject to the condition of maintaining account of receipt and disposal of fly ash in a format prescribed by the Commissioner and furnishing a monthly return to Assistant Commissioner, in this regard in a prescribed format. According to the appellant company, during the period from December 2003 to March 2006 they were using fly ash more than 25% by weight in the manufacture of the said pipes and on this basis they were availing all the exemption, mentioned above and according to them during this period, they were procuring the fly ash from Kota Super Thermal Power Plant and Suratgarh Thermal Power Plant and were filing monthly returns with the Jurisdictional Central Excise authorities regarding receipt and use of the fly ash, and were also maintaining the prescribed records. In March 2006 the officers of Directorate General of Central Excise Intelligence (DGCEI) visited the appellants factory with a view to conduct verification with regard to use of the fly ash in the manufacture of AC Pressure Pipes. From the facts narrated in the show cause notice, it is seen that at the time of officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ajasthan was also imposed under Rule 26 of the Central Exicse Rules, 2002. 1.2 The appellant company, its Managing Director/Vice Chairman Shri Sanjay Kanoria, Shri V.K. Gupta, Chief General Manager of the appellant company, Shri Parasmal Mehta, Proprietor M/s Robin Roadways, Shri Jai Kumar Singhvi of M/s Singhvi Transport and Shri Darpan Jain, Proprietor M/s Kaka Roadlines filed appeals against the Commissioners order alongwith stay applications. The stay applications were heard by the Tribunal on 04/2/13 and were disposed of by a common stay order No. 56018-56023/2013 dated 04/02/13 by which the Tribunal directed the appellant company to pre-deposit an amount of 50% of the duty demand confirmed against them within a period of 12 weeks from the date of this order. Subject to the pre-deposit of the above amount by the appellant company, the requirement of pre-deposit of balance amount of duty demand, interest and penalty by the appellant company and the requirement of pre-deposit of penalty by other appellants would stand waived and its recovery stayed during the pendency of the appeals. The compliance was to be reported on 15th May, 2013. 1.3 The appellant company filed an appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2014. The matter was adjourned as parties to the proceedings made a prayer to have clarification from the High Court as an objection was raised by the departmental representative that the Tribunal was required to examine plea of financial hardship only while examining the application afresh. The appellant petitioner on the other hand emphasised that they are at liberty to refer merits of the case also. By instant application a clarification of the order dated 29/4/2013 is sought. It is submitted by learned Counsel for the applicant that the petitioner was permitted to withdraw the writ petition with liberty to file an application afresh and, therefore, entire application is required to be considered by the Tribunal as per provisions of Section 35-F of the Act of 1944. On the other hand as per the respondents the CESTAT is not supposed to examine merits but only the issue with regard to financial hardship existing to have waiver of the requirement of pre-deposit. From perusal of the order dated 29.4.2013 it is apparent that a permission was granted to the petitioner to withdraw the petition for writ preferred to challenge the order pertaining to waiver of condition of pre-dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment have stated that no fly ash had been transported in their trucks to the factory premises of appellants factory, that with regard to the inquiry at Kota Thermal Power Plant, the Investigating Officer conducted inquiry only with the persons Incharge of the Silos wherein the dry fly ash is stored while the appellant had lifted fly ash (slurry) from the fly ash pond, that while 90% of the fly ash generated in the power plants is stored at fly ash pond, where it is constantly sprinkled with water, only 10% fly ash is stored in silos in the dry form, that no inquiry had been made with the officials of the Kota Thermal Power Plant at the fly ash pond, that in response to the appellants application dated 09/4/14 to Superintendenting Engineer, Kota Super Thermal Power Station, under RTI Act, Kota Thermal Power Station vide letter dated 23/4/14 has informed that since during 2003 to 2006, there was no provision of sale of fly ash, and fly ash at ash pond was available to anybody free, no records were being maintained, that in view of this, the statements of Shri Mahmood Ahmed, Assistant Engineer (ash handling maintenance) and of Shri Vinod Kumar Agarwal, Assistant Engineer (CA-II) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the transporters and various truck owners and since their cross examination has not been allowed, no reliance can be placed on those statements, that as regards the discrepancy between the records of Dharamkanta and of the appellant, the appellant started getting the fly ash weighed at the Dharamkanta w.e.f. April 2005 and from April 2005 to October 2005, there is no discrepancy and the discrepancy is only in respect of 197 Dharamkanta slips of November 2005 to March 2006, the duty involved in relation to which is Rs. 1,95,62,727/-, that since there was no malafide intention, longer limitation period under proviso to Section 11A (1) was not invokable and for the same reason, no penalty was imposable on the appellant company under Section 11AC, that the appellant company is facing serious financial crises, that since the appellant have strong prima facie case in their favour and since the appellant are facing serious financial crises, the requirement of pre-deposit of the duty demand, interest and penalty by the appellant company may be waive for hearing of the appeals and recovery thereof may be stayed. 4. Shri Pramod Kumar, the learned Jt. CDR, opposed the stay application by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a slips but inquiry with this Dharamkanta revealed that the Dharamkanta slips of the same numbers as those produced by the appellant company had been issued to totally different parties and even the truck numbers and consignors were different, that during 2005-2006, as per the balance sheet of the appellant company, total pipes manufactured without using fly ash were 9411.8 M.T. in which the cement of the same quantity was used and total cement used during 2005-2006 was 55,965 M.T. which implies that 46,554 M.T. of cement was used in the manufacture of the AC Pressure Pipes which are supposed to be containing 25% or more of fly ash by weight, that the AC Pressure Pipes manufactured during 2005-2006 by using fly ash are 53,995 M.T. and on this basis the percentage of fly ash would come to 13.78%, while the minimum fly ash use required is 25%, that when the concerned officials of the Thermal Power Plant deny having permitted the appellant company to lift any fly ash and when the transporters, who as per the records of the appellant company, were engaged by them for transportation of the fly ash, have also denied having transported that fly ash, it is absolutely clear that the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tments contention is that these records are false. 7. The evidence relied upon by the Department in support of its allegation of duty evasion by wrongly and fraudulently claiming the exemption under Notification No. 6/02-CE dated 01/3/02 is, in brief, as under :- (1) The statement of Shri Mahmood Ahmed, Assistant Engineer (Ash Handling Maintenance) of Kota Thermal Power Plant, Kota recorded on 08/2/08 under Section 14 of Central Excise Act, wherein he stated that he looks after the ash handling plant and equipment of unit-5 and unit-6 and ash disposal lines of ash dyke which contain ash slurry which is pumped in ash dyke (also known as ash pond) which contain ash slurry and that during 2003-2004 to 2005-2006 the appellant company has not lifted any fly ash from fly ash plant to Kota Thermal Power Plant ; (2) Statement dated 08/2/08 of Shri Vinod Kumar Agarwal, Assistant Engineer, CA-II of Kota Thermal Power Plant, Kota recorded under Section 14 of Central Excise Act, 1944 wherein he stated that he looks after ash handling plant stage II, III and IV of Kota Thermal Power Plant, that he looks after the data of ash generated and collected in dry form inside the plant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the quantity of cement used in manufacture of pipes with the use of fly ash would be 46553.754 (55965.554 9411.08). As per the data provided by Shri V.K. Gupta of the appellant company, the AC Pressure Pipes manufactured by using fly ash during 2005-2006 was 53995 M.T. Thus, it appeared that during 2005-2006 46553.754 M.T. of cement had been used for manufacture of 53995.6 M.T. of Asbestos Cement Pipes with fly ash and accordingly the percentage of fly ash in such pipes would be 13.78% ; (8) Shri Sanjay Kumar Kanoria, Managing Director of the appellant company on being asked to explain the above discrepancy could not give any satisfactory reply. 8. The contention of the appellant on the other hand is that the Department has not conducted inquiry at fly ash pond but has conducted inquiry with the persons managing the storage of fly ash in silos while the appellant have lifted fly ash from the fly ash pond in wet form. It is also pleaded on the basis of information obtained from Kota Thermal Power Station under RTI Act during the period of dispute, since there is no provision of sale of fly ash and anybody could lift fly ash, no records in this regard and hence the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power plant, the statement of the two Assistant Engineers are of doubtful evidentiary value, when their cross examination has not been allowed. 10. The appellant company have also claimed that the trucks loaded with the wet fly ash lifted from the Kota Thermal Power Plant were weighed at Dharamkanta of M/s Shri Nath Computerised Dharamkanta, Khamirgarh and in this regard they had produced computerised weighment slips. However, even according to appellant, there is discrepancy in relation to 197 weighment lips for the period from November 2005 to March 2006 and the total duty involved in respect of the same is Rs. 1,95,62,727/-. 11. From the findings of the Commissioner in para 27 of the impugned order it appears that during 2005-2006, the appellant used 9411.8 M.T. of cement for manufacture of AC Pressure Pipes containing only cement and not containing fly ash, while 46553.754 M.T. of cement had been used for manufacture of 53995.600 M.T. of Asbestos Cement Pipes containing fly ash. The fly ash content on this basis would come to 13.8% which is much less than the required 25%. Though the appellant plead that out of total 55965.554 M.T. of cement received at Bhilwara Plant, the q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d merit total waiver from compliance with the provision of Section 35F. 14. The appellant, however, have pleaded financial hardship and in this regard they had enclosed the balance sheet for 2013-2014. According to the appellant there was decline in net profit of the appellant company during the half year ended 30th September 2014 and that as on 30th September 2014 the appellant company has a total loan liability of 58.02 crores with re-payment of Rs. 4.4043 crores being due during financial year 2014-2015 and financial year 2015-2016. It has also been pleaded that the appellants company employees 546 staff and 450 casual workers through contractors and if the factory of the appellant company closes down the same would directly affect about 1,000 families. 15. Taking into consideration the factor of financial hardship being faced by the appellant company and also nature of evidence against them in support of allegation of duty evasion and which in our prima facie view would justify putting some conditions for safeguarding the interests of the Revenue, we direct the appellant company to deposit an amount of Rs. 1,65,00,000/- (Rupees One Crore Sixty Five Lakhs) within a period of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
