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M/s. Patliputra Industries Ltd. Versus Commissioner of Central Excise, Patna

2016 (3) TMI 991 - CESTAT KOLKATA

Confirmation of demand and penalty on the quantity of goods shown in the respective small chits/papers - Held that:- Merely because the entries mentioned in the rough chits did not tally with the production/clearance register would not by itself lead to a conclusion that the quantity of goods mentioned in those private chits were clearance without payment of duty. On the other hand, on scrutiny of the reconciliation statement submitted by the appellant during the course of hearing, Revenue has f .....

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orative evidences showing production and removal of goods without payment of duty, entries reflected in private chits cannot itself be a ground for confirmation of demand. Therefore, the confirmation of demand on this count is liable to set aside.

Demand on cancelled invoices - Held that:- Find force in the contention of the ld.Advocate for the Appellant. In his statement dated 30.11.2004 Shri Ravinder Prasad, Director of the appellant in response to question No.13 has explained that .....

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clearance of goods without payment of duty against cancelled invoices. Therefore on this count also the confirmation of demand fails.

Demand on Oxygen gas cleared in the year 2002-03 - Held that:- the appellant themselves had admitted clearance of the Oxygen gases after March, 2003 against the agreement dated 15.03.2003 which has been confirmed by the purchaser Shri Deepak Kr.Agarwal in his statement dated 18.01.2005. In the said statement Shri Deepak Kr.Agarwal has categorically st .....

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.

Considering that the appellant has admitted certain liability and not pleaded about non-imposition of penalty against confirmed undisputed liability, therefore, penalty under section 11AC would remain against the confirmed undisputed liability. But the appellant would be entitled to discharge 25% of the penalty subject to fulfillment of the conditions laid down under section 11AC

Further, the redemption fine imposed by the adjudicating authority is too harsh. The redempti .....

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e case are that the appellant was issued with a show cause notice on 24.01.2001 pursuant to the visit of the factory premises of the appellant by the officers of Central Excise department on 28.07.2004 and on completion of necessary investigation conducted thereafter demanding duty of ₹ 2,65,596/- not paid on the goods manufactured and alleged to have beencleared without payment of duty and irregular availment of CENVAT Credit of ₹ 8,04,445/- besides proposal for confiscation of 3,77 .....

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e matter to the adjudicating authority for denovo adjudicaion after providing effective personal hearing to the appellant. Consequently, after hearing appellant on 12.12.2007 and considering their written submission, the de novo order was passed by the adjudicating authority confirming the demand and imposition of equivalent penalty besides directing confiscation of goods. Aggrieved by the said order the appellant preferred an appeal before the ld.Commissioner(Appeals). The ld.Commissioner(Appea .....

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irmed on the basis of kachha chits and hand-written papers recovered from their premises. Also, he has challenged the Central Excise duty of ₹ 32,367/- confirmed on cancelled invoices and duty of ₹ 38,400/- confirmed on Oxygen gases allegedly cleared for the period 2002-2003 without payment of duty. The ld.Advocate assailing the findings of the authorities below on the issue of confirmation of demand on private small rough chits retrieved from the premises of the appellant, submitted .....

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of evidence that the goods mentioned in these chits were cleared by them without payment of duty. Further, he has referred to the statement of two customers namely Shri Amar Kasera and Shri Sunil Kr.Agarwal dated 12.10.2004 recorded by the department under section 14 of the Central Excise Act, 1944, whereunder the said persons had categorically stated after seeing the private chits that they had not received the goods mentioned in those chits without payment of duty. It is his contention that th .....

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to air. He submits that after March, 2003 only they were required to pay duty; since the goods were sold by an agreement dated 15.03.2003 with M/s.Deepak Kr.Agarwal, whose statement was recorded by the department on 18.01.2005 and in the said statement Shri Agarwal has categorically submitted that they have entered into an agreement with the Appellant on 15th March, 2003 and thereafter they have started purchasing Oxygen gas from the Appellant. He submits that no other evidence has been produced .....

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opies of cancelled invoices submitted along with their paper book. It is his contention that since duty on Vanaspati has been levied for the first time in the year 2002-2003, the procedure for maintenance of the records was not in accordance with law inasmuch as the person who used to prepare the excise invoices did not know the implication of cancellation/correction of an invoice. He submits that the invoices were cancelled/corrected if any of the entries in the invoices was found to be wrong b .....

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new one, therefore the fine should be reduced to the minimum. Besides he submits that even though penalty under Section 11AC has been confirmed against them, but they were not given an opportunity to pay 25% of the penalty in the event they comply with the conditions laid down under section 11AC of the Central Excise Act, 1944. 6. The ld.AR for the Revenue on a direction from the Bench examined the re-conciliation statement of rough order slips along with relevant invoices as submitted by the ap .....

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evidences about clearance of goods mentioned in those cancelled invoices, therefore demand has been confirmed against them. It is his contention that the appellant could nor produce the first and second copy of the invoices even though the triplicate and qua-duplicate copy were available with the appellant. Similarly, on the issue of demand of duty on Oxygen gas the ld.AR for the Revenue has submitted that the appellant could not produce any evidence to establish the fact that prior to March, 20 .....

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Oxygen gas cleared in the year 2002-03. As against the demand on rough notes I find that neither authorities below had analyzed the evidences by which it could be inferred that whether the quantity mentioned in those rough chits had infact been cleared without payment of duty. Merely because the entries mentioned in the rough chits did not tally with the production/clearance register would not by itself lead to a conclusion that the quantity of goods mentioned in those private chits were clearan .....

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ed by the department that they have purchased the goods against excise invoices and the quantity mentioned in the chits were not received by them. In absence of cogent and corroborative evidences showing production and removal of goods without payment of duty, entries reflected in private chits cannot itself be a ground for confirmation of demand. Therefore, the confirmation of demand on this count is liable to set aside. Similarly, in relation to demand on cancelled invoices, I find force in th .....

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e respective cancelled excise invoices. In absence of substantial evidences of clearance of goods against cancelled invoices, it is difficult to accept that the appellant indulged in clearance of goods without payment of duty against cancelled invoices. Therefore on this count also the confirmation of demand fails. Also, in relation to demand of duty on clearance of Oxygen gases, the appellant themselves had admitted clearance of the Oxygen gases after March, 2003 against the agreement dated 15. .....

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