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2016 (10) TMI 677 - CESTAT NEW DELHI

2016 (10) TMI 677 - CESTAT NEW DELHI - TMI - Suppression of facts - clandestine removal of finished products - demand of duty along with interest and penalty - documents seized on search of premises did not tally with facts supplied - Held that: - the Commissioner (Appeals) has erred in taking the view that there is not enough evidence of clandestine removal of goods. Even though the statement of Shri Sanjay Kejriwal, who is said to be the author of the private records recovered has not been rec .....

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the department and certainly the extended period of limitation is invocable in this case and hence the demand cannot be held to be time barred. - The Commissioner (Appeals) order setting aside the demand is not proper. The demand is based on evidence which stands admitted by Director on records recovered from the assesses factory. There is nothing on record to the effect that statements relied upon have been extracted under duress. The Director also has voluntarily stated that he is satisfi .....

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ber (Technical) Shri G.R. Singh, DR For the appellant Ms. Rinky Arora, Advocate For the respondent ORDER Per Mr. V. Padmanabhan The present appeal filed by Revenue is against the order dated 19.9.2008 passed by the Commissioner (Appeals), Raipur. The assessee is a manufacturer of iron and steel items such as steel shorts, CI shots and MS ingots etc. falling under Chapter 72 of the Central Excise Tariff Act. The departmental officers visited their factory on 6.6.2003 and carried out the verificat .....

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rtment undertook investigation and came to the conclusion that the assessee has cleared inputs on which Cenvat credit have been taken as well as some finished products clandestinely without payment of duty. On conclusion of investigation a Show Cause Notice dated 11.7.2007 was issued to the assessee which was adjudicated vide order dated 23.6.2008 in which Central Excise duty to the extent of ₹ 14,12,984/- was demanded from the assessee along with interest and imposition of penalty. Also a .....

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rs and other documents like notebooks were recovered by the officers, Shri S.N. Sharma, the authorised person, deposed in his statement dated 7.6.2003 that the resumed papers were related to date wise receipt of raw material as well as despatches. Thereafter, statement of Shri N.P. Tekriwal, Director of the unit, was recorded in which he admitted that some goods were despatched without payment of duty and without cover of invoices. He also showed his satisfaction with the method of verification .....

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te book No.1. When officers carried out cross verification of the entries found in notebooks 2 to 6 as well as invoices on record it was observed that some entries in notebooks matched with the particulars of sale invoices issued by the assessee. It was found that there were several entries in these notebooks which were not mentioned in the sale invoices. These entries pertained to clearances of finished products such as M.S. ingots, runners and risers and also scrap. Several entries pertained t .....

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een cleared but invoices have not been issued. Shri N.P. Tekriwal, Director was shown these charts and note books recovered. After interrogation his statement stands recorded on 7.6.2003 in which, he admitted that entries in the tabular chart were pertaining to the clearances made by the assessee without issuance of Central Excise invoice and without payment of Central Excise duty. He further admitted that they have moved raw materials without any documents between M/s Steel Abrasive Industries .....

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tock taking was conducted. 7. On the basis of the comparison chart prepared by the officers with the accounted clearances of the assessee, demand for duty was raised by Revenue vide Show Cause Notice dated 11.7.2007. An amount of ₹ 13,47,699/- was demanded on the alleged clearances of finished goods without payment of duty; ₹ 65,285/- was also demanded on the shortage of inputs as well as finished products noticed at the time of verification by the officers. Demands stand confirmed i .....

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statement of Shri N.P. Tekriwal, Director of the assessee. This statement is related to chart shown to him and not related to evidences i.e entries made in the note books recovered by the officers. (iv) There are errors in the chart prepared by the Revenue. These errors are highlighted by the assessee before Commissioner (Appeals). (v) The matter is time-barred. 9. The appeal filed by Revenue seeks to set aside the Order-in-Appeal and to reinstate the Order-in-Original of confirmation of duty. T .....

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. Tekriwal, Director has given confessional statement dated 7.6.2003 in which he has expressed his satisfaction with the procedure of stock taking and admitted the shortages noticed in respect of raw materials as well as finished products. He has further admitted that private records recovered contained details of receipt of raw materials and finished products cleared with and without payment of duty. He has admitted the details in the tabulation chart prepared by the Revenue on the basis of the .....

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suppression of facts wherein the extended period of limitation is invocable. 10. Heard Shri G.R. Singh ld. Advocate for the appellant and heard Ms. Rinky Arora, ld. Advocate for the assessee. 11. The ld. Advocate for the assessee sought to dismiss the appeal on the following grounds:- (i) From the records it may be seen that author of the private documents i.e. various note books recovered from the factory was Shri Sanjay Kejriwal, Supervisor. However, he has not been confronted and his stateme .....

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on the basis of such charts. (v) Duty paid on the goods have not been taken into consideration while arriving at the quantum of goods allegedly removed without payment of duty. They relied upon these following case laws:- (i) CCE, Bangalore Vs. Pragathi Concrete Products (P) Ltd. [2015 (322) ELR 819 (SC)] (ii) Blue Star Ltd. Vs. Union of India [2015 (322) ELT 820 (SC)] (iii) CCEST, Vs. Triveni Engineering & Industries Ltd. [2015 (317) ELT 408 (All.)] (iv) CCE, Nagpur Vs. Hyundai Unitech Ele .....

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s as well as finished products resulted in shortages detected in the stock of raw materials as well as finished products. The manner of stock taking was to the satisfaction of Shri N.P. Tekriwal, Director who was present throughout the proceedings. The shortages also stand admitted by Shri N.P. Tekriwal and the duty due on raw materials as well as the finished product found short stand already paid by them to the extent of ₹ 65,285/-. 13. Several loose sheets as well as six private note bo .....

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the note books No. 2 to 6 with the invoices on record for clearance of finished products. Charts have been prepared by listing all those clearances which have been made without issuing invoices; such charts have been show to the Director Shri Tekriwal. After considering the chart as well as private note books in his statement, the Director dated 7.6.20-03 has admitted that the notebooks contained details of clearances of raw material and finished products - both on payment of duty and otherwise .....

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he statement of Director is the basis for the demand. The statement is inculpatory and is specific. The Director clearly admitted that the documents/private records recovered by the officers contained details of procurement of raw materials as well as clearance of finished goods with and without payment of duty. This fact is further strengthened by the observation that many entries in the private documents are covered by the invoices issued by the assessee on which duty stands paid. The Director .....

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d independently. The department in this case has relied upon the confessional statement of the Director which is also supported by the mentioned entries in the private records. There is no averment that the statement has been taken under duress. The assessee also does not appear to have asked for cross-examination during the process of adjudication. 15. In view of the foregoing, I find that the Commissioner (Appeals) has erred in taking the view that there is not enough evidence of clandestine r .....

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