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2016 (9) TMI 1177 - CESTAT KOLKATA

2016 (9) TMI 1177 - CESTAT KOLKATA - TMI - Clandestine removal of goods - Whether appellant was manufacturing Zinc Ingots for the entire period from 1996-1997 to 2000-2001 or started such Zinc Ingot manufacturing few days before the search - Held that:- the case of the Revenue is that appellant was manufacturing Zinc Ingots right from 1996-1997 as appellant had the Zinc Ingot making Bhattis all through. Appellant has taken a plea that Zinc Ingots cannot be manufactured from Zinc Ash/Dross. Howev .....

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off. The statement of Shri Deb Nath Bhattacharya (Accountant) of the appellant confirmed the rate of processing to be ₹ 1.50 per Kg. of material received and that ingot manufacturing started in the last few days. - Shri Prabir Hazra, Proprietor of M/s. Super Galvanizing Works in his statement dt. 31.08.2000 stated that he is getting Zinc Ingots manufactured out of Zinc Dross supplied from M/s. Sylvan Chemicals and also produced two challans dt. 22.07.2000 and 05.08.2000. However it is .....

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hat appellant would not make further request to call the cross examinees. However, it is observed from the record of personal hearing in Revenue s paper book that there is no concessions to the effect that cross-examination of witnesses will not be insisted. Rather the plea of Shri Rohit Gupta was to call Shri Hazra and Shri Bansal again which was accordingly ordered by the Adjudicating Authority in the record of the personal hearing. In view of the above statements of Shri Prabir Hazra and Shri .....

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Documentary evidences gathered by the investigating agency do raise suspicion but a suspicion howsoever grave cannot take the place of proof. Accordingly department's argument that all processing done by the appellant, for the relevant period, was only manufacturing of ingots, is not acceptable and is rejected. Further a case of clandestine removal cannot be based only on statements unless corroborated by other positive evidences. - Further even if it is assumed that appellant was manufactur .....

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d adopted is not reliable and logical in view of the fluctuating nature of market forces. Accordingly duty calculated and demanded in the show cause notice is not correct and legally not sustainable. Therefore, clandestine removal is not proved against the appellant. - Confiscation in lieu of redemption fine - 20.44 M.Ts of Zinc Ingots - Demand alongwith interest and penalty - Held that:- it was argued by the appellant that this quantity seized/confiscated will be eligible to small scale exe .....

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d and partly remanded - Appeal No. E/268/2006 - Order No. FO/A/76091/2016 - Dated:- 28-9-2016 - Shri H.K.Thakur, Member (Technical) And Shri P.K.Choudhary, Member (Judicial) Shri B.N.Chattopadhyay, Consultant and Shri Arijit Chakraborty, Advocate for the Appellant Shri K.Choudhari, Suptd.(AR) for the Respondent ORDER Per Shri H. K. Thakur 1. This appeal has been filed by the appellant against Order-In-Original No. 72/Commissioner/CE/Kol-II/Adjn/2005-2006 dated 08.02.2006 passed by the Commission .....

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appeared on behalf of the appellant and made following submissions/arguments to defend their client:- (i) That appellant is a registered small scale unit and carries out activities of grinding/sieving of Zinc Ash so that it can be used for making Zinc Sulphate for the manufacture of fertilizers. That appellant has got two Bhattis run on coal and Zinc Ash after processing is given back to concerned person after charging a labour charge of ₹ 1.50 per kg. of Zinc Ash. That Zinc Ash from galva .....

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raw materials. That revenue has demanded duty on the clearances calculated by dividing the job charges shown in their balance sheets by processing charge of ₹ 1.50 per kg. (ii) That only in May, 2000 appellant purchased 40 second hand dyes to expand their business and on 27.07.2000 appellant got order for making Zinc Ingot case @Rs.2.50 per Kg. That Zinc waste and scrap was received under two challans were received and used in the manufacture of 20.440 MT of Zinc Ingots which were seized/c .....

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r Driving licenses or electric bills etc. of their clients. (iv) That department has relied upon the statement of one person Shri Prabir Hazra, who was not appellant s client but stated on the basis of two challans (Annexure 4(1) and 4(2) of the Show Cause Notice) to allege that Shri Prabir Hazra has sent Zinc Dross to the appellant for the purpose of making Zinc Ingots. That statement of Shri Prabir Hazra is ex-facie incorrect as from Zinc Dross directly Zinc Ingots can never be made. That cros .....

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(vi) That relied upon statement of Shri Ajoy Bansal is dictated as no processing charges were paid for the Ingots manufactured by the appellant for Shri Ajoy Bansal. That during cross examination the rate were stated by Shri Bansal to be in the range of ₹ 2.50 to ₹ 3.00 per Kg. (vii) That process of manufacturing Ingot started only with the receipt of scrap from M/s. Anjali Impex as per the statement dt. 10.08.2000 of Shri Deb Nath Bhattacharya, Accountant of M/s. Sylvan Chemicals wh .....

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e eligible to value based exemption for the seized/confiscated Ingots manufactured by Adjudicating Authority and also imposition of ₹ 2.00 lakh redemption fine was bad in law. 3. Shri K.Choudhari, Suptd.(AR) appearing on behalf of the Revenue made the following arguments:- (i) That appellant had two bhattis heated by coal which were capable of being making Zinc Ingots indicated by the seizure of 20.440 MT of Ingots from their factory. (ii) That none of the customers/vendors whom appellant .....

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nation but he did not turn up and that Shri Rohit Gupta for the appellant did not press for further cross examination of Shri Prabir Hazra. That rate of processing charges for making Zinc Ingots for M/s. Anjali Impex was also ₹ 1.50 per Kg. which indicates that all through appellants were making Zinc Ingots only. 4. Heard both sides and perused the case records. The issue involved in the present proceedings is whether appellant was manufacturing Zinc Ingots for the entire period from 1996- .....

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9.2000 of Shri Sunil Kumar Gupta partner of the appellant, while giving answer to Q.No.4 of his statement, clearly stated that he did not know the names and addresses of the persons who send them the material for processing. The challans under which materials are received indicate the processes of grinding and melting were required to be done and other processes of casting and sieving are scored off. The statement dt. 17.08.2000 of Shri Deb Nath Bhattacharya (Accountant ) of the appellant confir .....

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ut have been signed by one Shri P.Samanta. Cross-examination of Shri Prabir Hazra was asked by appellant and the same was allowed by the Adjudicating Authority. Efforts were made by the Adjudicating Authority to call Shri Prabir Hazra but he did not turn up. A finding is given by the Adjudicating Authority that Shri Rohit Gupta, on behalf of the appellant during personal hearing on 06.01.2006, submitted that appellant would not make further request to call the cross examinees. However, it is obs .....

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Revenue that processing rate of ₹ 1.50 per Kg. for processing of Zinc Ash is given by Shri Deb Nath Bhattacharya in his statement dt. 17.08.2000 which should be considered as true and has not be retracted. It is observed that answer to Q.No.2 of the same statement also convey the Zinc Ingot making were started by appellant only in the last few days. It is a well accepted legal proposition now that a statement has to be accepted as a whole and Revenue cannot pick and choose the portions of .....

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by the appellant, for the relevant period, was only manufacturing of ingots, is not acceptable and is rejected. Further a case of clandestine removal cannot be based only on statements unless corroborated by other positive evidences. 5. Further even if it is assumed that appellant was manufacturing Zinc Ingots all through the period from 1996-1997 to 2000-2001 then also 100% yield cannot be obtained from Zinc Ash/Dross received by the appellant. Yield of Zinc Ingots will depend upon the percent .....

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