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Raj Ratan Castings Pvt. Ltd., Shri Sunil Khatri, Director Versus Commissioner of Central Excise, Kanpur

2017 (5) TMI 948 - CESTAT ALLAHABAD

Clandestine manufacture and removal - It has been alleged in the said show cause notice that the appellant cleared 8178 MT of ingots by clandestinely manufacturing and clandestinely removing without maintenance of record, evaded Central Excise Duty of ₹ 1,36,05,002/- as mentioned in loose slips - Held that: - there are no evidence about the excess raw material procured, instances of actual removal of unaccounted finish goods, discovery of such finished goods outside the factory, the partie .....

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that Raj Ratan stated on the slips was appellant and contrary to the statement of Shri Pawan Agarwal dated 25.02.2004 wherein Shri Pawan Agarwal did not state that he used to do broking for appellant, revenue has framed charges. Therefore, the said SCN is not sustainable. - Demand set aside - appeal allowed - decided in favor of appellant. - E/MISC/691, 802,803 &692/2010, E/2633 & 2634/2008-EX[DB] - A/70468-70469/2017-EX[DB] - Dated:- 27-4-2017 - Mr. Anil Choudhary, Member (Judicial) And Mr. .....

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engaged in the manufacture of M.S. Ingots falling under chapter sub heading no.7204.90 of the first schedule to the Central Excise Tariff Act, 1985. The officers of Central Excise Intelligence conducted searches on 25.02.2004 at the factory and office premises of RRCPL, office premises of M/s Raj Ratan Industry Limited ( hereinafter referred to as RRIL), residential premises of Shri Atma Ram Khatri Managing Director of RRCPL, residential premises of Sunil Khatri Director of RRCPL and residential .....

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23 loose slips. Various statements were recorded. Statement of Shri Pawan Agarwal was recorded on 25.02.2004, statement of Shri Sunil Khatri was recorded on 07.06.2005, statement of Sri Abhishek Jaiswal, director of Vijay Ispat Private Limited was recorded on 16.05.2005 and statement of Shri Amit Jain, director of M/s Premier Ispat Limited, Jainpur, Kanpur, was recorded on 19.05.2004. Shri Sunil Khatri in his statement dated 07.06.2005 stated that in respect of above stated 23 loose slips, the .....

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ayment of duty. It has been alleged in the said show cause notice that the appellant cleared 8178 MT of ingots by clandestinely manufacturing and clandestinely removing without maintenance of record, evaded Central Excise Duty of ₹ 1,36,05,002/-. Therefore, through the said show cause notice appellants were called upon to show cause, as to why Central Excise Duty amounting to ₹ 1,36,05,002/- should not be recovered under proviso to Sub Section (1) of Section 11 A of Central Excise Ac .....

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g the cross of examination and on the basis of evidence that was relied upon for issue of show cause notice was taken into consideration by the original authority to confirm the demand and imposition of equal penalty on the appellant. Further, Shri Sunil Khatri was imposed with penalty of ₹ 15 lakhs. Aggrieved by the said order, the appellants are before this Tribunal. 3. The grounds of appeal are as follows:- (i) At the time of search, one of the employee of appellant's company Shri M .....

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the premises of Shri Pawan Kumar Agarwal, he has stated that the search at the premises of Shri Pawasn Kumar Agarwal was not made before him and officers did not retrieve any loose slips in his presence and that he was forced to sign the documents. (iv) There was no conclusive evidence that the said loose slips were recovered in the presence of any of the panch witnesses of the Panchnama. (v) During the cross examination Shri Pawan Kumar Agarwal categorically stated that he worked for M/s Raj R .....

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er submitted that the appellants and its Managing Director have not accepted the contents of the said loose slips. He has further stated that there was a doubt about the recovery of said loose slips from the residence of Shri Pawan Agarwal. He has further stated that handwriting on the loose slips was also not got verified through the hand writing expert to indicate that the slips were prepared by Shri Pawan Agarwal. He submitted that except the said 23 loose slips there was no evidence relied u .....

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that is required to establish clandestine manufacture and clearance of goods has been dealt with by Hon ble High Court of Delhi in the said paragraph no.55 and no such evidence has been relied upon by Revenue for framing of charges in the said show cause notice dated 15.11.2007 5. Learned DR has supported the impugned Order-in-Original. 6. We have carefully gone through the submissions by both sides, perused show cause notice and carefully gone through the ruling of Hon ble High Court of Delhi i .....

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s 7027 MT. It is further alleged that unaccounted sale to M/s Anil was 300 MT and same to M/s. Somani was 100 MT. Further it is alleged that unaccounted sale to M/s Vajay Ispat on the basis of said loose slips was 751 MT. The contents of loose slips have been given in para 6.1of the said show cause notice. It has been stated in said para 6.1 that Shri Pawan Agarwal in his statement dated 25.02.2004 stated that the said slips contained particulars of material sold from Raj Ratan Casting Private L .....

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Shri Pawan Agarwal but it is stated in said para 6.1 that Shri Pawan Agarwal stated that he used to do broking for appellant. We find that para 6.1 also reproduced the contents of those loose slips. In the last column Raj Ratan is mentioned. The officers of revenue conveniently presumed that Raj Ratan stated therein to be appellant. Under such mistake of understanding of the word Raj Ratan stated on the loose slips to be the appellant without establishing that Raj Ratan stated on the slips was a .....

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ow for appreciation: 55. Mr. Hari Shanker, learned Senior counsel for the appellant, has also drawn the attention of the Court to a decision of the CESTAT in Arya Fibres Pvt. Ltd. v. CCE, Ahmedabad-II - 2014 (311) E.L.T. 529 (Tri.-Ahmd.) where the entire law concerning clandestine removal has been discussed and the legal position has been summarised as under : "(i) There should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions .....

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