TMI Blog2016 (10) TMI 904X X X X Extracts X X X X X X X X Extracts X X X X ..... l the above stated appeals are dismissed. - Appeal No. E/55665, 55705, 55706, 55707, 55711 and 55712/2013-EX[DB] - ORDER NO.70721-70726/2016 - Dated:- 8-8-2016 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) AND MR. ANIL G. SHAKKARWAR MEMBER (TECHNICAL) Shri Rajiv Ranjan, Jt. Commissioner (AR) for the Revenue Shri Bipin Garg and Shri Amit Awasthi for the assessee ORDER Per Mr. Anil G. Shakkarwar: The S e five appeals, bearing Nos.E/55705/2013, E/55706/2013, E/55707/2013, E/55711/2013, E/55712/2013, have been filed by CC,E., Lucknow, against main noticee of the original show cause notice M/s Durga Trading Company and other co-noticee and Appeal No.E/55665/2013, has been filed by M/s Durga Trading Company. All above appeals are arising out of common Order-in-Original No. 16/COMMR./LKO/REMAND/CX/2012-13 dated 01.112012 passed by Commissioner of Central Excise S. Tax, Lucknow. They are taken together for disposal. 2. The brief facts of the case are that M/s Durga Trading Company (hereinafter referred to as DTC), 14, Datia Houser K, Colony, Khurshed Bagh, Lucknow was engaged in the manufacturing of Pan Masata Gutkha under the Brand name Pukar'. Most of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 250 Kgs. Of Katha was in excess over the corresponding recorded balancer 2.5 The above alleged anomalies in the physical stock of finished goods, packing material and raw material could not be properly explained by the authorized signatory on the spot to the officers conducting search. Shri Udai Chaurasia explained that 120 bags of Gutkha bearing Pukar brand was received by his firm UT on from DTC without accounting for the same in their proper books of accounts. The said 120 bags of Gutkha were detected by the officers at various other premises. Further, it also came to the notice of the officers that another consignment of 40 bags was removed from the factory of DTC without accountal in their books of accounts as said consignments were also traced by the officers at different premises. Cash amounting to (Rupees Thirteen lakhs eighteen thousand) was recovered from the ground floor of the premises by the officers conducting search. The officers seized the said cash for further investigation. DTC deposited ₹ 60 lakhs vide eight TR-6 Challans during the course of investigation. 2.6 The officers searched the premises of M/s Udai Traders and seized 21 bags of Pukar Gutkha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cies, Raebareli. Cash of ₹ 6,85,000/- 7. Shop of M/s Rastogi General Store, Allahbad. 13 bags of Pukar Gutkha. 3. On the basis of investigation, M/s Durga Trading Company and other co-noticee were issued with a show cause notice No.DZU/INV/31/2004/1728 dated 16.09.2004, directing M/s Durga Trading Company to show cause as to why Central Excise Duty amounting to ₹ 5,18,16,960/- should not be demanded for removing 17992 bags of Pukar Gutkha without accounting of the same and certain other proposals as far as:- 3.1 M/s Durga Trading Co. / Lucknow was required to show cause as to why:- (i) The Central Excise duty amounting to ₹ 5,18,16,960/- should not be demanded for removing 17992 bags of Pukar Gutkha (all manufactured by DTC) without accounting the same. (ii) All amount of ₹ 60 lakhs, deposited during the investigation, should not be appropriated against the aforesaid demand. (iii) The Central Excise duty of ₹ 4,60,800/- on goods seized in transit (i.e. 110 bags of Gutkah, 10 bags of Gutkha seized at the Godown of M/s Narayan Transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use as to why penalty should not be imposed on him. 4. The said show cause notice was adjudicated through Order-in-Original No.19/Commr/LKO/2005 dated 27.05.2005, wherein the Original Authority has held as follows:- (a) Confirmed duty of ₹ 5,18,16,960/- for removing 17992 bags of Pukar Gutkha without payment of Central Excuse duty against M/s Durga Trading Co., Lucknow. (b) Appropriated ₹ 60 lakhs paid during the investigation towards the above duty liability. (c) Confirmed duty of ₹ 4,60,800/- against M/s Durga Trading Co., Lucknow on goods seized in transit, namely 110 bags of Gutkha, 10 bags of gutkha seized at the Godown of M/s Narayan Transport Forwarding Agency, Lucknow and 40 bags of Gutkha seized at the premises of M/s New Malik Transport. This amount has already been deposited therefore he ordered to appropriate the same. (d) Confirmed duty of ₹ 1,05,030/- against M/s Durga Trading Co., Lucknow on the goods seized at the premises of M/s UT. (e) Imposed penalty of ₹ 5,23,82790/- against M/s Durga Trading Co., Lucknow. (f) Ordered for recovery of interest on the above duty. (g) dropped duty amounting to ₹ 44,865/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he party involved in conspiracy though SCN carries no such charge. (v). As regard the excess quantity of Supari and Kattha, the statutory requirement of recording such quantities was deleted from Form-IV register. A/A erred in holding that this defence was not given by the Party during search and it was given for the first time during reply of SCN only. (vi). The excess quantity of Supari and Kattha was not weighed at the time of raid and it was concluded on mere assumption. A/A is not proper in holding that such objection was not raised by the Party at the time of raid. It is necessary for A/A to ascertain from the analysis of all material on records whether the same establishes correctness of the weight as disclosed in the Panchnama. However, no such exercise was done by the A/A. (vii). Finding of A/A that the excess or shortage of tobacco/gutkha is to be presumed as the Party might have hidden the excess tobacco is not good as such conclusions cannot be drawn without analyzing the evidences in this regard more particularly in the cases where the Department has to discharge burden to establish the case of clandestine removal. (viii). The A/A has relied on arithmetical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stating that it is M/s DTC M/s Udai Traders who were arranging the transport to ascertain whether the words zarda gutkha in GRs/challans means Pukar brand gutkha of M/s DTC and whether the goods were being booked for transport on slips of M/s Udai Traders and for that purpose to permit cross-examination of deponents and thereafter to decide the matter. 6. In compliance to said order dated 12.08.2011, remanded proceedings were adjudicated vide impugned Order-in-Original No.16/Commr./LKO/REMAND/CX/2012-13 dated 01.11.2012/ wherein the Original Authority has ordered as follows:- (i). He confirmed Central Excise duty of ₹ 39,08,160.00 (Rupees Thirty nine lacs eight thousands one hundred sixty only) under sub Section (i) of Section 11A of the Central Excise Act/ 1944 for removing 1357 bags of excisable goods/ Pukar Gutkha' without payment of Central Excise Duty against M/s Durga Trading Co., Lucknow. (ii). The central excise duty of ₹ 39,08,160.00 (Rupees Thirty nine Iacs eight thousands one hundred sixty only) was ordered to be recovered under Section 11A(I) of the Central Excise Act, 1944 from M/s Durga Trading Co., Lucknow and the same was being appropri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of M/s R.P. Products, Lucknow under Section 121 of Customs Act as made applicable to Central Excise Act. (xii). He ordered release of cash amounting to ₹ 2,93,000/- (Rs. Two Lacs Ninety Three thousands only) seized from residence of Shri Pankaj Chaurasia, Lucknow under Section 121 of Customs Act as made applicable to Central Excise Act. (xiii). He ordered release of cash amounting to ₹ 10,03,000/- (Rs. Ten Lacs Three thousands only) and ₹ 3,70,000/- (Rs. Three Iacs Seventy Thousand only) seized from residence of Shri Raj Kumar Chaurasia and Shri Pushkar Chaurasia under Section 121 of Customs Act as made applicable to Central Excise Act. (xiv). He did not impose any penalty on M/s Udai Traders, Lucknow under Rule 26 of Central Excise Rules, 2002. (xv). He did not impose any penalty on M/s Repo Products, Lucknow under Rule 26 of Central Excise Rules, 2002. (xvi). He did not impose any penalty on Shri Ashish Srivastava under Rule 26 of Central Excise Rules, 2002. 7. Challenging the said impugned Order-in-Original dated In 1.11.2012, Commissioner of Central Excise, Lucknow, as filed above said appeals on the grounds as follows:- (a) While deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pure after-thought. Further, the adjudicating authority has himself stated that the transporters were the apparent co-accused in the case who acted in connivance with the Party and hence their earlier statements cannot be relied upon. In view of this finding of the adjudicating authority he ought not to have accepted the cross-examination by the Counsel of the Noticee who he has held to be co-accused. (b) Further, the cross-examination was not done in proper manner. In fact, the proper manner of cross-examination was to make the transporters etc. to simultaneously face the Party's counsel on the one side and the Departmental Counsel/ Investigating Officers on the other side. However, in the instant case no such opportunity was given to Department/Investigating Officers to Cross-examine the transporters. It is observed that there is overwhelming categorical evidence where the facts have been admitted and the retractions are belated and baseless after-thought made after more than eight years. The adjudicating authority has without any basis ignored the categorical statements. The retractions should not have been admitted being belated and without any opportunity of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rroborated by enquiries at the end of dealers and other persons mentioned in the Show cause notice. (c) Further, the adjudicating authority has wrongly relied upon the statement of Shri Udal Chaurasia (which was also an afterthought), that he used to put his Brand Name on all the goods supplied. When Shri Chaurasia himself was an accused in the case who acted clandestinely in non-accountal and clandestine clearance and transportation of goods, then his statement could not be relied upon as it was an afterthought without any basis and was contrary to the overwhelming evidence mentioned above and detailed in the SCN. In fact/ the adjudication authority has himself observed that the statement of co-accused cannot be relied upon in absence of any corroborative evidence. In such case, the reliance placed by the adjudicating authority upon the statement of Shri Chaurasia is contrary to his own observation. The seizure of 10.61 lakh cash was not explained on the spot and remained unexplained even after 4 months of seizure. Regarding cash amounting to ₹ 10.03 lakhs seized from the residence of Shri Raj Kumar Chaurasia. He in his statement dated 11.08.2004 admitted that an am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmation and entire seized goods were liable for confiscation. In fact, Pan Masala/Gutkha industry is a known evasion prone industry and usually all transacations are made in cash and everything deals in chits and papers and nothing is recorded. Clandestine removal is an activity resulting in avoidance of legal duties to the State. Secrecy and stealth being its covering guards, it is impossible for investigation to un-reveal every link of the process. As held by Hon'ble Supreme Court in case of Collector of Customs, Madras others Vs. D. Bhoormull [1983(13)ELT 1546 (SC)] the Department is not required to prove its case with mathematical precision, but what is required is the establishment of such degree of probability that a prudent man may on its basis believe in the existence of the facts in issue. However, in this case the investigation has sufficiently established the charges. (f) Out of the demand of ₹ 5,18,16,960/- the Adjudicating Authority has confirmed the demand of ₹ 39,08,160/- and dropped the rest, However, the operating portion of O-I-O has no mention of such dropping. (g) O-I-O under scrutiny is passed in respect of eight parties, how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rove that the findings of the Original Authority so far as dropping of demand is concerned in any way deviated from the said directions of this Tribunal. He has requested to set aside the impugned order to the extent the same is against the interest of M/s Durga Trading Company and other co-noticee. 10. We have carefully taken into consideration the rival contentions. We find that the contentions of Revenue in the grounds of appeal are more or less repetition of show cause notice. We find that the show cause notice and earlier Order-in-Original dated 27.05.2005, have merged into the final order dated 12.08.2011 passed by this Tribunal, as per the doctrine of merger. The issue for our consideration is present appeals before us is whether the impugned order in original is sustainable with reference to the directions that were given by this Tribunal in its said final order dated 12.08.2011. The grounds of appeal by Revenue M/s Durga Trading Company are stated is foregoing paras. In none of the grounds, either Revenue or M/s Durga Trading Company would establish that any of the direction given by this Tribunal while remanding the matter to Original Authority have been violated whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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