TMI Blog2017 (1) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... aw that cross-examination has to be allowed normally before using such statements for confirmation of demand. If the witnesses do not turn up for cross-examination it is open to the Adjudicating Authority to proceed with the adjudication without relying on those statements. The onus is definitely on the Department to establish manufacture and clearance of such goods and also the receipt of payments. Demand fails - appeal allowed - decided in favor of assessee. - Excise Misc. Application No. 52155 of 2015 in Appeal No. 2135 of 2009 - A/55936/2016 -EX[DB] - Dated:- 20-12-2016 - Dr. Satish Chandra, President And Shri V. Padmanabhan, Member (Technical) Shri Abhinav Srivastava, Advocate for the appellant. Shri G.R. Singh, Authorized Representative (DR) for the Respondent. ORDER Per V. Padmanabhan The Appellant company is a Joint Sector Company started as Joint Venture between RIICO and M/s. IDL Chemicals Ltd. in the year 1979. In the year 1991, M/s. IDL Chemicals Ltd. disposed of their share in favour of a private promoter Shri Rajesh Jain who became its Managing Director. The Appellant company is engaged in manufacture of Electric Detonators (EDN) and R-C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een received from various suppliers, one of the main supplier being M/s. H.N. Explosives(P) Ltd., Sohna (HNEPL) with Shri Ganesh Mathur as its MD, without accounting for the same in the statutory records and these purchases had been made in cash. The unaccounted purchase of OD/SOD/SPD was admitted by Shri A.K. Jain, Vice President (Production) stated in his statement dt.19.5.98. Shri A.K. Jain in his statement also deposed that while for manufacture of one meter of R-cord, 10 gms of PETN was required, they were, in practice, using only 8 gms. to 9.5 gms of PETN for manufacture of one meter of R-cord and the quantity of PETN saved in this manner was being used for manufacture of unaccounted R-cords. The enquiry also indicated that on the instructions of Shri Rajesh Jain, Shri B.D. Agarwal, Shri A.K. Jain, clandestine clearances of EDNs, R-cords/Detonator fuses, Slurry Explosives etc. were made, one of their main buyer being M/s. HNEPL, under parallel invoices and the fact of clearances of these items without payment of duty and without being accounted for in the statutory records was also admitted by Shri A.K. Jain in his statement dated 19/05/1998. It is on this basis that a show c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Ganesh Mathur. Denovo adjudication in pursuance to the Tribunals order was done by the Commissioner vide order-in-original No.36/2000 dated 03/11/2000 by which the Commissioner again confirmed the entire duty demand alongwith interest, imposed penalty of equal amount on the Appellant company under Section 11AC and imposed penalties of ₹ 25 lakhs on Shri Rajesh Jain and ₹ 10 lakhs each on Shri B.D. Agarwal and Shri A.K. Jain, penalty of ₹ 5 lakhs on Shri Ganesh Mathur of H.N. Explosives (P) Ltd., Sonha. Appeals were filed before the Tribunal against the above order-in-original dated 03/11/2000 of the Commissioner and the Tribunal vide Final Order No.A/403-411/2002 dated 15/04/2002 again remanded the matter for denovo adjudication with direction to pass a speaking and well reasoned order. Third round of adjudication was done by the Commissioner vide order-in-original No.46/2006 dated 08/09/2006 by which an order identical to the earlier order No. 36/2000 dated 03/11/2000 was passed. Again the appeals were filed before the Tribunal and the Tribunal in respect of the appeals filed by the Appellant company, Shri Rajesh Jain, Shri B.D. Agarwal and Shri A.K. Jain pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f these appeals will cause undue hardship. He also pleaded that prima-facie, there is no evidence against Shri Rajesh Jain to warrant imposition of penalty on him under Rule 209A of Central Excise Rules, 1944. In view of this, it was pleaded that the demand of duty, interest and penalty from the Appellants may be waived for hearing of these appeals. 2.2 Shri G.R. Singh, learned DR pleaded that the incentive sheets recovered from the residence of Dy. General Manager Shri M.L. Agarwal are authentic documents containing actual details of the production of EDNs and R-cords; that authenticity of the details of the production recorded in the incentive sheets has been confirmed by Shri A.K. Jain, Vice President(Prod.), Shri R.D. Agarwal, Vice President(Commercial), Shri A.K. Gupta, Manager(Finance), Shri Ram Charan Agrawal, Manager(Prod.), Shri Hari Singh, Production-in-charge, Shri V.P. Suresh and Shri G.C. Bahuguna both Chief Manager(Prod.) in their respective statements; that the production as recorded in the incentive sheets is much higher than that recorded in the RG.I Register which shows that the production not accounted for had been cleared clandestinely without payment of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of demand stands confirmed on the basis of invoices resumed from the premises of M/s H.N. Explosives Pvt. Ltd. one of the main buyers. These photocopies of invoices have been considered as parallel invoices and the goods covered therein has been considered as cleared without payment of duty. Before coming to the conclusion that these photocopies actually covered goods which are cleared without payment of duty, the Revenue should have at least carried out investigations from the end of the consignees of both sets of invoices. No investigation appears to have been conducted at the end of the transporter also. 5. Another allegation made is that the appellant were practically using only 9 to 9.5 gms. of PETN a highly explosive chemical in the manufacture of R-CORDS, but later on started using 8 gms. It was alleged that the difference of 1.5 gms. was diverted for clandestine activities. The claim of the appellant is that the allegation has been made on the basis of a fax message which was recovered during search and relied upon in the show cause notice. Their submission is that the entire fax message read like this :- You may produce 150 cases of R-CORD 8 gms. and then swit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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