TMI Blog2007 (8) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... rom various persons during the course of investigation. 2. First category relates to demand of Rs. 55,80,483/-. This demand is based on the records of Mathadi and Un-protected labour Board (BMUL) who had provided labour to M/s. Ujwal Ispat Pvt. Ltd. and whose secretary, Shri Nilkanth Tarachand Uprade has provided the data regarding loading and unloading of finished goods and raw materials and in his statement dated 11-1-1996 confirmed that they were doing the work of loading and unloading of iron and steel products within the factory premises and as regards unloading and loading work of iron and steel products, he clarified that they were loading CTD bars manufactured in the factory premises of M/s. Ujwal Ispat Pvt Ltd. and were in loading billets only and apart from Mathadi Labour, no other labour was doing the work of loading and unloading in the factory premises the appellants. As per rates prescribed by the Mathadi Labour Board, it was revealed that the payments made to the Mathadi labours was in respect of only loading and unloading of raw materials and finished goods and not for removal of other raw materials arising during the course of manufacture within the factory. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing identical number were also issued in favour of some other buyers for same quantities of iron and steel. 3. Third demand amounting to Rs. 1,05,334/- is in respect of clandestine removal of excisable goods during January, 1996 to March, 1996 worked out on the basis of the seized records of M/s. Ujwal Ispat Pvt. Ltd and lorry receipts withdrawn from the transporters, namely, M/s. MuIti Transport, Nagpur, M/s. Amravati Golden Transport, Nagpur and M/s. Jayashree Goods Garage and submission of Shri Devidas Mangwani, Proprietor of M/s. R.K. Steels and other concerned transporters in which they have admitted the delivery of finished goods from M/s. Ujwal Ispat Pvt. Ltd for which no entry is found in the records of M/s. Ujwal Ispat Pvt. Ltd. 4. The Show cause notice was adjudicated by the Commissioner who confirmed the demand of duty amounting to Rs. 70,81,815/- in respect of three category. Besides this interest and penalty of equivalent amount was imposed under Sections 11AB, 11AC read with Rule 173Q. Penalties of Rs. 20 lakhs, Rs. 3 lakhs, Rs. 2 lakhs, Rs. 20 lakhs and Rs. 25,000/- have been imposed under Rule 209A on Shri Laxman Parchani, Director of M/s. Ujwal Ispat Pvt. Ltd, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been proved to be the actual meter readings for the said period. They have submitted detailed electricity consumption which clearly demonstrated that on an average the electricity consumption per meter tonne for the period for the periods 1993-1994 to 1998-1999 was between 232 units per tonne. They have also submitted a report of M/s. Printo Electric Co., Engineers and Contractors as also the report of the National Institute of Secondary Steel Technology regarding for production of the finished products and their production is in accordance with the said report. The demand in respect of clandestine removal has been made on the basis of assumption and presumption and the department does not have any tangible and positive evidence in the absence of which duty cannot be confirmed. The plant does not have capacity to produce the goods alleged to have been clandestinely removed and the production capacity fixed under the compounded levy scheme introduced subsequently is in accordance with the production reflected in their RG-1 register. 7. As regards demand of Rs. 13,95,998/-, it was submitted that in so far as the purchases from M/s. Shiva Steels are concerned, the department alleged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Secretary of BUML that for small and sundry works like cutting, chattel shifting, they have not hired any contract labour and this is being done by their own workers being an integral part of the factory work. In para 1 of the said letter, they had also said that the Mathadi Act was introduced in their establishment with effect from 25-2-1993 for the work of loading and unloading only. Further Shri Uprade, Mokadam of casual worker in his statement dated 11-1-1996 has clarified that they were doing the loading of CTD bars and unloading of billets only. This left no scope of further interpretation of words 'loading and unloading'. 12. Plea of the appellants that they were also doing various other works inside the factory, for example, shifting of the raw materials or finished goods from one place to another does not hold ground because Mathadi Board has various rates for such works but payment particulars show only two type of work undertaken. Thus, while the rate for loading was @ Rs. 10 and Rs. 18.50 per MT, as the case may be, during the relevant period and @ Rs. 8 and Rs. 14.80 per MT for unloading, the rates for shifting and stacking were @ Rs. 5.80 and Rs. 10.73 per MT and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erk. Shri Laxman Parchani in his statement dated 12-1-1996 has admitted that, "I have to state that the said file contains loose production report for the period 7-12-1995 to 9-1-1996 mostly maintained by our despatch clerk, Shri Shivshankar Singh". Shri Shivshankar Singh, despatch clerk in his statement dated 12-1-1996 has stated that he had recorded actual production of excisable goods on the papers placed in the said file and that he recorded the production shown in the said file on hourly basis and confirmed that the production available in the file was the actual production. Shri Parchani in his statement dated 12-1-1996 has stated that the production reports were maintained by the despatch clerk, Shri Shivshankar and that as the Managing Director of the unit he decided the production planning of the unit and some times he mentioned the items to be produced and the dates on those production reports. Shri Avinash Bokare in his statement dated 11-1-1996 inter alia has sated that he was writing daily stock account and in his absence Shri Parchani, Managing Director of the unit was looking after the said work and that he was maintaining RG-1 register as per the production figures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants have been able to show as to whom the payments were ultimately made. When firms were totally fictitious, so goods could have been transported accordingly appellants could not have purchased the same. They also did not have any permission from department to undertake trading activities from their premises and to bring duty paid goods in the factory. Reliance was placed on the decision of the Tribunal in the case of Saraf Silicates v. CCE, Bolpur - 1999 (112) E.L.T. 674 wherein it has been held that "clandestine removal - goods sold to fictitious firm without accountal - statements of various persons admitting clandestine removal - statements not recorded - charge of clandestine removal upheld." As regards the purchases made from M/s. Shiva Steels, it was submitted that M/s. Shiva Steels has close relationship with M/s. Ujwal Ispat Pvt. Ltd., that Shri S.P. Chandani one of the partner of M/s. Shiva Steels was also one of the director of M/s. Ujwal Ispat Pvt. Ltd., and that during the raid on M/s. Ujwal Ispat, blank book of invoices and delivery challan of M/s. Shiva Steel was seized under panchanama. Further the quantity of CTD bars and rods said to be supplied under six bil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ighly doubtful as it was produced after four years when not a word was mentioned earlier), does not come to the rescue of the appellants as even if admitted shifting, staking etc. was within the scope of work, it was never undertaken in view of the rate at which the payments have been made. We further note that for a period of month, there is clinching evidence of suppression of production in the form of a file containing a hand written chart of production of CTD bars for the period 1-12-1995 to 9-1-1996. The manner in which the production has been recorded can be done by a person of level of despatch clerk and recording is very systematic as for every single CTD bars produced a stroke is made on the paper sheet and accordingly if in one hour 75 bars have been produced 75 strokes have been drawn on that paper sheet. This record of hourly production reflects the production of particular hour and also progressive total of production up to that hour. At the end of the sheet, sum of total number of rods is reflected and it is multiplied by weight of each bar to determine the total production of that day. It also records the electricity meter readings of the two meters in running sequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... category of demand of Rs. 13,95,998/- This demand pertains to clearance effected by M/s. Ujwal Ispat Pvt. Ltd. in the guise of trading activity. We find that the appellants are said to have purchased 702.065 MT of CTD bars in the year 1996-97 and sold 873.925 MT of CTD bars and rods of various dimensions. Out of 702.065 MT of CTD bars purchased, 167.175 MT of CTD bars were purchased from M/s. Shiva Steel, 98.600 MT of CTD bars from M/s. Shree Vinayak Steels, 219.175 MT of CTD bars from M/s. Anju Steel and 317.115 MT of CTD bars from M/s. Steel Syndicate. In respect of last three firms, the same were found to be bogus and non existent at the address shown in the invoices and sale tax registration number were found to be belonging to other persons who in their statements have stated that they have never dealt with such products. Besides the transporters shown in the invoices have admitted as having not transported the goods. In such a situation an inference can be drawn that such purchases were fictitious and accordingly are to be treated as manufacture of M/s. Ujwal Ispat Pvt. Ltd only. Though M/s. Ujwal Ispat Pvt. Ltd. have stated that they have made the payments by cheques, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rments on that account have been made by the appellants in the written submission submitted by them consequent to the hearing. In the appeal memorandum, however, a plea has been taken, that interest has been demanded under Section 11AB and penalty imposed under Section 11AC for the period when these provisions were not in force and since these provisions do not have retrospective effect in view of the judgment of the Supreme Court in the case of Elgi Equipments Limited - 2001 (128) E.L.T. 52 (S.C.) and therefore they need to be set aside. Another plea taken is that a joint penalty has been imposed under Section 11AC and Rule 173Q which must be held to be imposed under Section 11AC and hence liable to be set aside in view of the decisions of the Tribunal in the case of Lauls v. CCE - 2000 (126) E.L.T. 623 and Amritsar Crown Caps Pvt. Ltd. v. CCE - 2002 (140) E.L.T. 437 (Tribunal) = 2001 (46) RLT 169. We find that the provisions of Sections 11AB and 11AC were introduced from 20-9-1996 and the same cannot be applied retrospectively. Therefore, demand of interest in respect of first category of demand of Rs. 55,80,483/- pertaining to June, 1994 to March, 1997 and the third category of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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