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TMI Blog2016 (4) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... Mathura Polymers) which is in appeal No. E/549/2005. That was a job worker of M/s. Vijay Aqua Pipes Pvt. Ltd., (hereinafter referred to as Vijya Aqua) which is in appeal No. E/614/2005. Central Excise Authorities made a search to the premises of M/s.Vijay Aqua on 24/02/99 and found a truck bearing No. TN 72 5238 in their premises with certain goods loaded therein. Search party found connection between M/s. Vijay Aqua and M/s. Mathura Polymers for which, they made a search to the premises of M/s. Mathura Polymer also on the same date. 1.3 During search into the premises of Mathura Polymer, search party found certain materials relating to M/s. Vijay Aqua. They drew a mahazar recording statement u/s 14 of Central Excise Act, 1994 form Shri Rama Rao, of M/s. Mathura Polymers who was authorized person of that concern looking after the day to day activities. In mahazar, Shri Rama Rao, categorically admitted that he was in-charge of receipt of raw materials from M/s Vijay Aqua for Job work to be done thereon as well as clear the job worked goods. He also brought out the modus operandi of M/s. Mathura Polymer and M/s. Vijay Aqua in page-3 of mahazar and his statement revealed that Shri N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods were cleared without any duty paying documents by M/s. Mathura Polymers and the contents of the statement of Shri Natarajan recorded on 22.02.99 was agreeable to him. When a specific query about challans and chits was made to Shri Nainar, he clarified that the PVC pipes as described and quantified in the chits bearing identification No. Sl.No. 1 to 10 and Sl. No. 1 to 18 were the goods manufactured by M/s. Mathura Polymers. Such goods were cleared through the vehicle of M/s. Vijay Aqua. The goods so manufactured were by M/s. Mathura Polymers out of the raw materials supplied by M/s. Vijay Aqua. He also categorically stated that the goods sent were not accounted for in the statutory record. They also availed modvat credit without following the central excise procedures and reversal thereof was not made in respect of the goods sent to M/s. Mathura Polymers through chits. When the authority worked loss of revenue of Rs. 5,16,161 in that regard Shri S.Nainar agreed to pay that. 2.3 On the aforesaid background, it was submission of the ld. Counsel that M/s. Mathura polymer is not liable to the duty liability of Rs. 5,95,721/- assessed by adjudicating authority. So also penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is concerned that relates to the claim of SSI exemption by the appellant. 3.1 Ld. AR on behalf of Revenue submits that there was specific intelligence with revenue that duty evasion has occurred due to no accounting of goods sent by M/s. Vijay Aqua to M/s. Mathura Polymers for Job working and Job worked goods sent by the later to the former without being accounted by both of them. Search was conducted to the premises of both on 24.2.99 to ascertain the quantum of revenue loss. Ld. adjudicating authority has recorded the history of the case in para-2 at page-2 of the adjudication order demonstrating questionable conduct of both Parties. Revenue found that raw materials were sent by M/s. M/s. Vijay Aqua to M/s. Mathura Polymers for Job working thereon. That was not accounted for by either parties in their statutory record for which there was loss of revenue which was worked out by the Revenue in very clear terms applying the law relating to Valuation and recording violation of procedures in para 59.4 of the adjudication order. 3.2 Revenue further submitted that the Adjudicating authority in para 59.1 at page 51 of Order-in-Original recorded the plea of M/s. Mathura Polymers as to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken on such plea and other pleas in the past in these cases and the appeals are made 10 years old. In the interest of justice, the appellants were given an opportunity to place their case on 20.01.2016 without default. They were further informed that if they fail on that date, appropriate order shall be passed on merit without issuing further notice. 5.1 On 20.01.2016, the appellants M/s. Vijay Aqua, Sri Nainar and Sri Thiyagarajan remained absent. Therefore they were granted last opportunity of hearing for 22.01.2016. Ld. Counsel Smt. Hema Muralikrishnan, along with Sri L. Muralikrishnan, Advocates, appearing on behalf of M/s. Vijay Aqua, in appeal No.E/614/2005, and Directors Shri S. Nainar in appeal No.E/613/2005 and Shri Thiyagarajan, in Appeal No.E/615/05 of the said company submitted that there is no dispute that the invoices appearing in annexure C1, C2, C3 of SCN were the bone of contention which were raised by appellant during the year 1998-99 as is apparent from para-18 of the OIO. Annexure C1 deals with the duty paid invoices. That had not given rise to any dispute in the adjudication. The invoices that appearing in annexure C2 gave rise duty demand of Rs. 67,03,159/- w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous places as per the worksheet prepared in annexure-B without payment of appropriate duty due on the said goods and without following any central excise procedures." 6.2 Revenue says that all the annexures C1, C2 and C3 were the outcome of investigation and that was examined independently without any set off of the claim of the appellant that duty paid under Annexure C3 be adjusted against liability arose under Annexure C2. Relying on para 47 of the adjudication order, submission of learned DR was that C3 not being correlated to the demand under C2 there is no question of set off. Relying on para -47 and 51.1, ld. DR says that the appellants having failed before the Settlement Commission were given appropriate hearing by the adjudicating authority. But they avoided appearance for which on the basis of the material on record, the adjudicating authority proceeded to complete adjudication. 6.3. Relying on para 53 of the adjudication order, Ld. DR says that the issue before the adjudicating authority was as follows:- "The issue involved is that:- A) VAP have availed modvat credit on all the inputs/raw materials purchased by them and have cleared certain inputs to job workers und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r proviso to sub-section (1) of Section 11 A of the Central Excise Act, 1944 read with Rule 9 (2) of the Central Excise Rules 1944. Thereby rendering themselves liable for a penalty equal to the duty amount so not paid under Section 11 AC of the Central Excise Act, 1944, and liable to pay interest under Section 11 AB of the Central Excise Act, 1944, and liable for a penalty under Rule 173 Q of CER 1944; that MPPL are also liable to pay Rs. 26,520/- being the duty involved in the seized goods under Section 11 A (1) of the Central Excise Act, 1944 read with Rule 9 (2) of the Central Excise Rules, 1944. And penalty under Section 11 AC of the Central Excise Act 1944 on the seized goods. C) The show cause notice also proposed confiscation of the vehicle, plant and machinery at VAP and MPPL and to impose penalty on Shri R. Thiagarajan, Managing Director of VAP and on Shri S. Nainar, Director of VAP, Shri V. Natarajan, MD of MPPL, Shri H. D. Pandey owner of the vehicle bearing registration No. TN 72 5238." 6.4 Relying on paras 54, 54.5 and 61 of OIO, ld. AR says that what was the assessee s case before the settlement Commission is depicted by learned adjudicating authority in his order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hortage of 2000 PVC pipes thereat. Shri Ramarao revealed that the shortage was due to dispatch thereof to M/s. Vijay Aqua by the said truck on the same day which was intercepted by investigation on 24.2.1999. 9.3 When Shri V. Natarajan, Managing Director of M/s. Mathura Polymers Pvt. Ltd. was examined on 25.02.1999. He revealed that what that was the statement given by Shri Ramarao was proper. However nothing came out from his statement to impute him to charge although he corroborated that the goods were cleared by M/s. Mathura polymers without payment of duty. 9.4 When aforesaid facts Came to the knowledge of investigation Shri Nainar, Director of M/s. Vijay Aqua was examined to discover truth. He fully agreed with the outcome of the investigation as recorded from the driver Shri K. Govindarajan, Shri Natarajan as well as Shri Ramarao. He also agreed that they will deposit the duty evaded amount of Rs. 5,16,161/-. 10.1 The outcome of investigation above, paved the way for further enquiry into the affairs of M/s. Vijay Aqua Pipes. Inventory of the said concern was taken on 4.3.1999. The goods found from the intercepted truck was seized noticing that to be unaccounted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udication order. 12.2 Although there were several opportunities granted, by Tribunal, M/s. Vijay Aqua did not lay any cogent and credible evidence to prove that the materials contained in File A (which were according to the appellant the Annexure C2 documents) giving rise to the demand of Rs. 67,03,159/- is unsustainable. That became admitted fact without controverting. The allegations of investigation and adjudication findings could not be defended. Therefore the demand on that count is to be sustained. It is ordered accordingly. 13.1 It was the prayer of the appellant M/s. Vijay Aqua Pvt. Ltd that the spurious invoices found from the file marked as file B showing duty deposit of Rs. 30,61,782/- having been deposited to regularize the duty evasion of Rs. 67,03,159/-, arose under the file marked as A , that may be adjusted. It may be stated that when duty evasion has occurred, the evader has no right to claim any relief of adjustment of duty paid preparing any fabricated/spurious document showing false clearances and law is well settled that one cannot take advantage of his own wrong. Therefore, appellant does not get any relief of adjustment of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n established fact from the evidence on record that this concern was involved in removal of unaccounted job worked goods to Vijay Aqua and was an abettor to commit fraud against Revenue. Accordingly entire demand of duty of Rs. 5,95,721/- levied on this concern is confirmed having been engaged in manufacture of duty evaded goods. So also the other consequences of law as adjudicated by the adjudication order remain untouched by this order except to the extent hereinafter dealt separately. Interest if any, payable, shall be recovered. 17. So far as imposition of penalty of Rs. 50,000/- (Rupees fifty thousand only) on M/s. Mathura Polymers, under Rule 173Q of Central Excise Rules, 1944 is concerned, that is not desirable to be levied in view of penalty of Rs. 5,95,721/- confirmed against that appellant imposed under section 11AC of Central Excise Act, 1944. 18. The penalty of Rs. 50,000/- (Rupees fifty thousand only) levied on Shri V. Natarajan does not appear to be reasonable for no incriminating evidence recovered in the course of search against him. He rather brought out the fraud committed against Revenue brining out involvement of Shri Rama Rao who was in-charge of manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X
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