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2016 (11) TMI 1172 - CESTAT ALLAHABAD

2016 (11) TMI 1172 - CESTAT ALLAHABAD - TMI - Clandestine removal of goods - Held that: - billty books and challans resumed from transporter M/s BFC are not relied for issue of show cause notice and it is claimed by Revenue that Annexure-A to the show cause notice was prepared on the basis of billty books and challans resumed from transporter. Annexure-A indicates that 9403 number of bags of Gutkha were cleared through M/s BFC in the guise of Pashu Ahaar. The statements as stated above of the wi .....

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nd that Raw materials cannot be confiscated under Rule 25 of Central Excise Rules, 2002. We therefore, modify the impugned Order-in-Original by setting aside the confirmation of demand of ₹ 13,06,19,045/- and setting aside the penalty of ₹ 13,06,19,045/- and setting aside the order for recovery of interest on ₹ 13,06,19,045/- and setting aside the penalty of ₹ 50 lakh on Shri Praveen Kumar Singhal and setting aside penalty of ₹ 20 lakh on Shri Yogendra Kumar Singhal .....

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kkarwar, Member (Technical) Shri K. K. Anand, Advocate for the Appellant Shri Rajeev Ranjan, Joint Commr. (A.R.) for the Department ORDER Per Mr. Anil G. Shakkarwar The present three appeals are taken up together for decision because they were issued with a common show-cause-notice dated 09.06.2006. 2. The brief facts of the case are that M/s P & J Aromatics were engaged in the manufacture of Pan Masala and Gutkha under the brand name Jeet & Andaaz . The Officers of DGCEI conducted simul .....

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ties of raw materials were seized. Statements of various persons associated with above stated premises were recorded. On the basis of investigations carried out at the end of transporter, namely M/s Bharat Freight Carrier (referred as M/s BFC) and on the basis of information obtained from Railway Authorities in respect of goods booked for transportation by Railway obtained, it appeared to Revenue that M/s P & J Aromatics evaded Central Excise duty on Jeet & Andaaz brand Gutkha by removin .....

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6. Statement of Shri Birdi Chand Jain, proprietor of M/s Jain Transport Company which was engaged as delivery agent of M/s BFC at Karoli was recorded on 24.03.2006. On the basis of said statements, it appeared to Revenue that the appellant M/s P & J Aromatics used to transport Jeet & Andaaz brand Gutkha to various destination through M/s BFC and whenever the consignment was cleared on payment of duty, a regular transport document was prepared and whenever the excisable goods were clandes .....

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ed that M/s P & J Aromatics cleared 9403 number of bags containing Gutkha cleared clandestinely without payment of duty in the guise of Pashu Ahaar transported by road transport. On the basis of documents seized during the said searches, they approached the Railway Authorities and requested Chief Divisonal Commercial Manager of Agra of Indian Railways to provide copies of 7 GRs and forwarding notes dated 12.12.2005. The Chief Parcel Supervisor of Agra Fort Railway Station provided copy of 7 .....

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M/s P & J Aromatics, and made allegations that M/s P & J Aromatics has totally cleared 52447 bags of Gutkha through Railway. They further alleged that out of 52447 bags Gutkha booked through Railway, 40553 number of bags of Gutkha was cleared by M/s P & J Aromatics without payment of duty. So, on the basis of such presumptions, M/s P & J Aromatics, Agra was issued with a show-cause-notice dated 09.06.2006 calling upon M/s P & J Aromatics to show cause as to why following good .....

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nd Gutkha valued at ₹ 443352/- cleared clandestinely and stored at godown premises of Noticeee No.1 at 34/54/4A, Near Sitaram Colony, Agra, seized by the officers on 14.12.2005. (iv) 8 bags of Andaaz Brand Gutkha valued at ₹ 37,584/-, seized at godown premises of Noticee No.1 at OA/02-07, Sita Ram Colony, Balkeshwar, Agra on 14.12.2005. (v) 2 bags of Jeet Brand Gutkha valued at ₹ 8,262/-, seized at M/s Akhil Sales Agency, Jaipur on 02.05.2006. (vi) 18 bags of Jeet Brand Gutkha .....

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4,650/-, 18 Kgs of outer packets valued at ₹ 3,240/- and 18 kgs f loose Pan Masala valued at ₹ 3,240/- seized at the premises of Unit No.1 of Noticee No.1 on 14.12.2005. (2) 1282.840 Kgs of Laminate pouches seized at Unit No.II of Noticee No.I. (3) 57 rolls of Lamination and 129 rolls of laminations and 13 bags of outer, totally valued at ₹ 8,39,500/-, seized at the godown of Noticee No.I at Mahajan Market, Balaji Nagar, Agra on 14.12.2005. (4) Jeet Brand Lamination & Oute .....

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; J Aromatics which was transported through Railway. Further, there were proposal for appropriation of ₹ 1.25 crore paid by M/s P & J Aromatics. There were proposals for imposition of penalty and recovery of interest from M/s P & J Aromatics. Further, there was proposal to impose personal penalty under Rule 26 of Central Excise Rules, 2002 on Shri Praveen Kumar Singhal and Shri Yogendra Singhal respectively Proprietor and Authorized signatory. 5. The appellants made submissions bef .....

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shu Ahaar had any mention of either their name or their Brand on the same. Therefore, all entries of Pashu Ahaar to be treated as clearance of Gutkha without payment of duty is mere presumption. They further contended that all the dispatches of Zarda Gutkha/Zarda Pouch from Agra Fort Railway Station was presumed to be the goods manufactured by appellant, whereas no such document is relied upon to establish any connection of appellant with the transportation of Gutkha transported through Railway .....

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ed before the Original Authority. 1. Shri Burhanuddin Assistant Commercial Tax Officer, Ailabad, division, Govt. of Andhra Pradesh, Commercial Tax Department on 12.11.2007. 2. Shri Vijay Singh, employee of M/s Bharat Freight Carrier, Agra on 16.10.2007. 3. Shri Rakes Goel, Director, M/s Sandeep Laminator Pvt. Ltd., Udyog Vihar, Gurgaon on 16.10.2007. 4. Shri Sayyed Tajjanul Islam, Partner, M/s. BFC, Hindon, Rajasthan on 04.10.2007. 5. Shri Vikram Kumar Goel S/o Shri Ram Bharose Lal Goel, 11 Vire .....

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11. Shri S.S. Agarwal S/o late Shri D.D. Agarwal, 345/3, Balkeshwar Colony, Agra on 20.08.2007. 12. Shri Shekhar Gupta S/o Shri Gopal Lal Gupta, Katia Bazar, Hindon City, Karuli, Rajasthan on 29.06.2007. 13. Shri Vishnu Kant S/o Shri Mahes Chand, Geeta Nagar, Agra on 29.06.2007. 14. Shri Gopal Lal Gupta, Katla Bazar, Hindon City, Karuli, Rajasthan on 29.06.2007. 15. Shri Jawahar Aggarwal of M/s Laxmin Narain Jawahar Lal Agency, Hindon on 27.06.2007. 16. Shri Girdhari Lal Danwani of Akhil Sales .....

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M/s P & J Aromatics (Unit-II), Agra on 26.06.2007. 23. Shri Abhishek Parihar S/o Shri R.K.S. Parihar, B-563, Kamla Nagar, Agra on 26.06.2007. 6. On the basis of deposition of above stated witnesses, they submitted before the Original Authority that the witnesses have stated before the Original Authority that the statements were taken by Investigating Officers under threat and all of them have retracted their statement during cross-examination. They further submitted that the persons associat .....

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further submitted that department has not brought any independent or corroborative evidence to show that all the Railway receipts which were issued by Railway pertaining to booking of Gutkha had any mention of the Brand manufactured by them, name of the manufacturer and that there was no evidence to establish that goods booked as Gutkha through Railway were manufactured by them. 7. Further, in respect of cross-examination of raw materials supplier, they submitted that whenever raw material was .....

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books of account. The Original Authority adjudicated the show cause notice through Order-in-Original No.08/Commr./MP/2007 dated 29.11.2007. The Original Authority at Page 252 and 253 of his Order-in-Original stated that he has no reason to believe that the statements were taken under threat, duress, pressure or promise as claimed by the advocates of the noticee and that the evidenciary value of the statements was examined by him and it was found that they were corroborative and supportive of th .....

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Unit No.1 of the Noticee No.1. As the goods have already been released to the Noticee No.1 vide provisional release order of dated 11.10.2006 after execution of B-11 Bond and furnishing cash security of ₹ 2,086/- (Rs.Two thousand eighty six only). I ordered to appropriate the cash security in lieu of redemption fine. (ii) confiscate the goods seized at Unit No.1 of the Noticee No.1 i.e. 31.6 Kg of Jeet brand lamination valued at ₹ 4,650/- (Rs. four thousand six hundred fifty only) 1 .....

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Fifty Five only) and 8 bags of Andaaz brand Gutkha valued at ₹ 26,192 (Rs. Thirty Six thousand one hundred Ninety Two only) under Rule 25 of the Central Excise Rules, 2002 sized at Unit No.II of the Noticee No.1. As the goods have already been released to the Noticee No.1 vide provisional release order dated 11.10.2006 after execution of B-11 Bond and furnishing cash security of ₹ 23,876/- (Rs.Twenty Three Thousand Eight Hundred Seventy Six only), I order to appropriate cash securit .....

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377; 4,50,279/- (Rs.Four Lac Fifty Thousand Two Hundred Seventy Nine Only) and 98 bags of Andaaz brand Gutkha valued at ₹ 4,43,352 (Rs.Four Lac Forty Three Thousand Three Hundred Fifty Two Only) seized at 34/54/4A, near Sita Ram Colony, Agra Godown premises of the Noticee No.1 under Rule 25 of the Central Excise Rules, 2002. As the goods have already been released to the Noticee No.1 vide provisional release order of dated 11.10.2006 after execution of B-11 Bond and furnishing cash securit .....

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rder of dated 11.10.2006 after execution of B-11 Bond and furnishing cash security of ₹ 9,396/- (Rs.Nine Thousand Three Hundred Ninety Six Only), I order to appropriate cash security as redemption fine in lieu of confiscation the goods. (vii) confiscate the 2 bags of Jeet brand Gutkha valued ₹ 8,262/- (Rs. Eight Thousand Two Hundred Sixty Two only) seized at M/s Akhil Sales Agency, Jaipur dealer of the Noticee No.1 vaued at ₹ 8,262/- (Rs. Eight Thousand Two Hundred Sixty Two On .....

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. However, I give an option to the Noticee No.1 to redeem the same, in lieu of confiscation, on payment of redemption fine of ₹ 18,590/-(Rs. Eighteen Thousand Five Hundred Ninety only) (ix) confiscate the Jeet brand lamination & outer valued at ₹ 7,61,875/- (Rs.Seven Lac Sixty One Thousand Eight Hundred Seventy Five only) and HDPE outer bags & HDPE bags valued at ₹ 9,600/- (Rs. Nine Thousand Six Hundred Only) seized at Godown of the Noticee No.1, near Ajay Jewelers unde .....

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tral Excise Rules, 2002. However, I give an option to the Noticee No.1 to redeem the same, in lieu of confiscation, on payment of redemption fine of ₹ 2,09,875/-(Rs.Two lac Nine Thousand Eight Hundred Seventy Five only). (xi) I confirm the demand of Central Excise duty of ₹ 5,63,686/- (Rs.Five lacs Sixty Three thousand Six Hundred Eighty Six only) surcharge of ₹ 56,639/- (Rs.Fifty Six Thousand Six Hundred Thirty Nine only) cand cess ₹ 12,401 (Rs. Twelve Thousand four hund .....

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e demand of Central Excise duty for the extended period upto 5 years. They removed 49956 bags of finished goods without accounting for the same in their records and cleared clandestinely without payment of Centeral Excise duty. As the Noticee No.1 has already deposited ₹ 1.25 crore. I appropriate the same against the demand and order for recovery of the remaining amount. (xiii) I impose a penalty of ₹ 13,06,19,045/- (Rs. Thirteen Crore Six Lac Nineteen Thousand Forty Five only) upon .....

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ose a penalty of ₹ 20,00,000/- (Rs.Twenty Lac) upon Shri Yogendra Kumar Singhal (the Noticee No.3) under Rule 26 of the Central Excise Rules, 2002 for contravention of the provisions of the Central Excise Act, 1944, and rules made thereunder . 7-A. Aggrieved by the said Order-in-Original dated 29.11.2007, the appellants are before this Tribunal. The grounds of Appeal are repetition of submissions before the Original Authority. 8. Heard the learned counsel for the appellants. He pleaded tha .....

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d payments received from the buyers of the final product and stated that there was no evidence brought on record by Revenue to establish any of the said aspects. He further made following submissions during hearing : (a) Shri Vijay Singh during his cross-examination on 16.10.2007 before the Original Authority has stated that their transport company never carried Jeet and Andaaz brand Gutkha in the guise of Pashu Ahaar and that he totally denied that his transport company was engaged in transport .....

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007, has stated that his statement was recorded under threat by the Officers and that he was compelled to say that statement of Shri Vijay Singh and Shri Uttam Chand were correct and further stated that infact he was not aware of anything about the manner of transportation of Gutkha, manufactured by either M/s P & J Aromatics or any other Company. (b) Had there been any clearance of Gutkha in the guise of Pashu Ahaar then during the simultaneous raid of 17 premises, it was possible for the I .....

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y something which might suit to their case and that no witness came forward to lodge any complaint against the behavior of the Officers and further observed that he was of the view that there was no need to cross-examine them. He further observed that confessional statement given by the noticee and their acceptance of statements given by Raw material suppliers, their dealers situated at different places in Rajasthan and Railway booking agents were sufficient to adjudicate the case. The learned c .....

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not relied upon document for issue of show cause notice. Since the billty books and challans are not the case records, the Annexure-A does not have any strength of evidence to reliy upon for issue of show cause notice. (e) RUD 27 relied upon for issue of impugned show cause notice is the information about the goods Zarda Gutkha/Zarda Pouch booked from Agra Railway Station during the period of show cause notice. The said record does not anywhere indicate that said Zarda Gutkha/Zarda Pouch was eit .....

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were cleared by M/s P & J Aromatics without payment of duty and on perusal of information available at Pages 1784 to 1990 of Appeal paper book indicate that there is no proof that said goods were manufactured by M/s P & J Aromatics. (f) Nothing incriminating was found in the statement of account given to investigators by supplier of bettle nuts Shri Vimal Kumar Jain and that bettle nut is a major ingredient for manufacture of Gutkha and there was no evidence that there was un-accounted .....

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llans resumed from transporter. Annexure-A indicates that 9403 number of bags of Gutkha were cleared through M/s BFC in the guise of Pashu Ahaar. The statements as stated above of the witnesses which were dealing with goods in BFC have categorically stated during their cross-examination that Gutkha was never booked in the guise of Pashu Ahaar. Therefore, we hold that there is no evidences to establish that 9403 bags of Gutkha was manufactured by M/s P & J Aromatics. We further find from Page .....

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