9911796707
TMI Blog2017 (5) TMI 1336X X X X Extracts X X X X X X X X Extracts X X X X ..... -I, Delhi Road, Meerut (hereinafter referred to as M/s PPPL, Unit-II) were indulging in large scale evasion of Central Excise duty by way of unaccounted production and clearances of excisable goods namely; Digestive Tablets & Ayurvedic Medicines without payment of Central Excise duty. Another Unit namely; M/s Panchwati Prayogshala Pvt. Ltd., Kashipur, Saharanpur road, Roorkee (hereinafter referred to as M/s PPPL - Roorkee) were misusing the area based exemption provided to the industrial unit located in Uttarakhand. That search was conducted at all these premises or the factories & office of M/s PPPL, 20-B, Mohkampur, Phase-I, Delhi Road, Meerut on 15th July, 2011. In the search at the factory of M/s PPPL Unit-I DGCEI Officers seized stock of excisable goods amounting to Rs. 15,05,466/-. During the course of search at godown cum factory premises of M/s PPPL, at 20-B, Mohkampur, Phase-I, Delhi Road, Meerut DGCEI Officers seized finished goods valued at Rs. 7,08,720/- and during the course of search at office cum factory of M/s PPPL - Unit-II, the Officers seized the finished goods valued at Rs. 2,95,664/-. The statement of Shri Pankaj Goel, Director of M/s PPPL was recorded on 16/07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as quantity dispatched. He agreed to deposit an amount of Rs. 50 lakhs towards the duty liability. The officers also resumed kacha ledger for the period 2007-08 to 2011-12 (upto 13/07/2011). The said ledger contained accounts of the customers of the M/s PPPL for purchase ayurvedic churan, aurvedic goli & digestive tablets. The amount of goods sold was mentioned (debit column) and the amount paid/realized (credit column). Only a few of the entries contained in the kacha ledger were found to be matching with the invoices issued by M/s PPPL. The said kacha ledgers were shown to Shri Sudhir Kumar, Sales Clerk who confirmed that those records were maintained by him or Shri Surinder Pal and contain details of the goods dispatched and amounts realized against the same. 3. Enquires were also made from the suppliers of packing material to M/s PPPL. Most of them confirmed the supply of packing material to M/s PPPL as per their private records and receipt of sale proceeds in cash. Among others, it appeared that M/s Spack Coaters Limited - appellant was also engaged in the manufacturing and supplied packing material i.e. Printed Laminated Plastic Film in Roll & Pouch Form to M/s PPPL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty. Scrutiny of document No.57 (RUD - 7) seized from the premises 20-B, Mohkampur, Delhi, Meerut of M/s PPPL revealed that it is a duplicate note book containing date wise details of receipt of packaging material for the period from 14/11/2010 to 23/04/2011 by M/s PPPL. The said document contain details such as name of the item received, name of the supplier in short, number of bundles/roll, gross weight, tare weight and net weight. Similar details of packaging material were also found in document No.58, 59 & 61 (RUD - 8, 9 & 10) seized from the aforesaid premises of M/s PPPL for the period 26/02/2011 to 05/07/2011. The details of packaging material found in the said document No.58, 59 & 61 (RUD - 8, 9 & 10) tally with the details of document No.63 (RUD - 3). Following entries were found in document No.57 in the name of "Spack" which pertain to M/s Spack Coaters Limited. Sl. No. Date Description of goods No.of box/rolls Net weight Corresponding entry in document No.63 at page No. 1 25.12.2010 Aam Bambaiya 51 1554.250 121 2 24.01.2011 do 16 478.30 115 3 23.04.2011 do 346 2852.00 97 The corresponding entries of the aforesaid receipt entries of document No.57 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the printouts. Separate entries for M/s PPPL & M/s PPPL, Roorkee were found mentioned in the said printouts, month wise. From the Annexure-C to SCN, it appeared that M/s PPPL received 1,13,431.28 kgs of packaging material from M/s SCL during the period from August, 2007 to June, 2011. In the course of investigation the statement of Shri Surendera Kumar Gupta, Director of M/s SCL was recorded on 22/12/2011 who stated that they are engaged in manufacture of flexible packaging material in rolls and pouch form and they were also supplying packaging material of M/s PPPL Unit - I, M/s PPPL Unit - II & M/s PPPL, Roorkee. That identical packaging material having same address and manufacturing license were supplied to both the units at Meerut, however, as per requirement they billed the material in the name of M/s Panchwati Prayogshala (Ayurvedic Division) or Panchwati Prayogshala (Food Division) 19-A Mohkampur, Delhi Road, Meerut. For supply of packaging material to M/s PPPL, Roorkee, address and manufacturing license No.of Roorkee was printed on the same. When it was shown that the entries in the name of Spack (in the registers, diaries, etc.) recovered and seized from the factory-cum-g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered from the premises 20-B, Mohkampur, Phase-I, Delhi Road, Meerut under panchnama dated 15/07/2011 revealed that these are the Panchwati estimate pads containing details of payment realization from the customers and the payments made to the suppliers of the raw material. These documents are for the period 01/03/2009 to 17/01/2009. The amount shown in these documents are in hundreds instead of full amount. For example, if payment of Rs. 5,00,000/- was made to a supplier, the mode of payment like cheque, DD, Cash was also found in the said documents. Further the details of such payment to M/s SCL are compiled as Annexure- D to SCN. It appeared that during the period from 01/03/2009 to 17/11/2009, 3 Units of M/s PPPL have made payment of Rs. 54,48,387/-. Out of the said payment, Rs. 28,98,655/- was paid by cash or by demand draft. Further, it appeared that all payments by M/s PPPL, Roorkee was by cheque but all the payments by M/s PPPL to M/s SCL were by cash or by demand drafts. It further appeared that all the appellants colluded with each other in clearing the dutiable goods clandestinely and the Proprietor/Director of M/s PPPL have aided and abetted in receiving dutiable good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its Directors had moved before the 'settlement commission' and the dispute was settled vide Final Order dated 14/10/2015, in Settlement Application No.4633/2015 relating to the period 01/07/2007 to 14/07/2011. The learned counsel have filed the copy of the order of settlement commission wherein they held that the applicant - M/s PPPL have accepted liability for the period 01/04/2011 upto the date of search. However, the applicant - M/s PPPL is not liable to pay the Central Excise duty up to 31st of March, 2011, because it has taken over the two units (proprietorship units of Shri Pankaj Goel & MRs.Pooja Goel), with effect from 01/04/2011 only, and as per the agreement between the company and the proprietors, the Central Excise dues up to 31st of March, 2011 are to be paid by the respective units, which were taken over by M/s PPPL (Company) from 1st April, 2011. The Central Excise duty amounting to Rs. 38,96,729/-, for the period 1st April, 11 to 14th July, 2011, was determined. The applicant - M/s PPPL has indulged in clandestine clearance of the goods and therefore violated the law and hence are liable for penalty. The Bench observed that the applicant has made full and true discl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on the ruling of this Tribunal in Naresh M Bali Versus Commissioner of Central Excise, being Final Order No.E/50025-50028/2016' EX(DB) (Tri). The learned counsel further states that neither there is any admission on the part of these appellants, nor there are any corroborative evidences on the basis of which demand can be sustainable. It is settled law that charge of clandestine removal cannot be proved solely on the basis of third-party documents. The learned counsel relies on ruling of Hon'ble Karnataka High Court in the case of PV Verghese Versus CEGAT, 2008 (232) E.L.T. 420. Further, referring to the ruling of the Coordinate Bench of this Tribunal in the case of Arya Fibres Pvt. Ltd. versus Commissioner of Central Excise reported at 2014 (311) E.L.T. 529 (Tri. Ahmedabad), wherein after considering the earlier judgments, this Tribunal has laid down certain norms for establishing whether clandestine removal has taken place or not. There being no material evidence on record to establish any clandestine manufacture and removal, the demand is fit to be set aside along with penalty. The learned counsel further states that Revenue have placed heavy reliance on the Data obtained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s only a supplier of packing material, to "M/s PPPL". It is further stated that in the Order-in-Original arising from Show Cause Notice issued dated 13/07/2012 issued to M/s PPPL and its directors, these appellants M/s SCL & its Director Mr. Surendra Kumar Gupta were also made noticees and penalty under Rule 26 of the Act was imposed on them, vide Order-in-Original. 12. The learned A. R. for Revenue have relied on the impugned ordeRs.The learned A. R. further submits that the demand is confirmed on the basis of documents and records resumed from the factory and office of M/s PPPL. These documents clearly show that M/s SCL cleared packing material to M/s PPPL both with and without cover of Central Excise invoices. 13. The learned A. R. further states that that M/s PPPL, in their application and submissions before the settlement commission have admitted that they resorted to clandestine manufacture and clearance of the finished products, as alleged by the Revenue. The settlement has been done mainly with respect to the period i.e. the cut-off date of 01/04/2011 was adopted, being the date on which M/s PPPL acquired the proprietorship business of M/s Panchwati Prayogshala owned by M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PPPL, Meerut. After having seen the said pages - in this regard, I have to state that we supplied packing materials to M/s PPPL, Meerut & Roorki Units since 2008. The entries in the name "Spack" in the seized document number 63 pertains to supplies of packing material to M/s PPPL (Ayurvedic Division), Meerut. I will check my accounts, to confirm whether goods are supplied on bills or not and revert back." 15. In the subsequent statement recorded on 12/01/2012 recorded before Senior Intelligence Officer, DGCEI, Mr. Surendra Kumar Gupta stated - "on being asked, I produce copies of bills/invoices along with Ledger account of M/s PPPL, Roorki & M/s PPPL, Meerut. With respect to the entries in seized document No.63 on various pages" referred hereinabove, he stated - (I have seen entries in name of "Spack" in question in seized document No.63. It is stated that bill have been issued by us in respect of all the entries in question for supply of packing material to M/s PPPL (Ayurvedic Division), Meerut. I have been shown print out of account of "Spack" retrieved from the pen drive 'GB Data Traveller' seized from M/s PPPL located at 19-A Mohakampur, Delhi Road, Meerut and asked to commen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on during that part of that period was not such as to affect the production of the documents or the accuracy of the contents & (iv) the information contained in the statement reproduced or is derived from information supplied to the computer in the ordinary course of the said activities. In the present case, the printouts have been reproduced by the DGCEI Officers from a pen drive, seized from the possession of one of the employees of M/s PPPL, the data on which had been stated to be copied from the computer belonging to M/s PPPL which was used by them. For the purpose of adjudication of M/s SCL, such data being not maintained by M/s SCL, for their business activities, is not reliable or have no evidentiary value in the facts and circumstances. The person Mr. Amit Kumar Kansal - Accountant of M/s PPPL from whose possession, the said pen drive was recovered, in his statement have inter-alia stated that Shri Surendra Pal, GM Marketing used to tell him the details of goods cleared without bills/invoices from the factory of M/s PPPL and he made entries in the computer accordingly. Thus it is evident that the said Accountant was himself not knowing about the genuineness of the data ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent/noticee. The word "corroboration" means, not mere evidence tending to confirm other evidence. The purpose of corroboration is not to give validity or credence to evidence which is deficient or suspect or incredible, but only to confirm and support that which as evidence is sufficient to satisfaction and credible, and corroborative evidence will only fill its role, if it, itself is completely credible. There can be, therefore, no corroboration of evidence, which is itself unworthy of credence. I further find that the demand for the period prior to 01/04/2011 cannot be sustained also on the ground that no Show Cause Notice has been issued to the proprietorship firms who were owning and running the business M/s PP (Ayurvedic Division) & (Food Division) with respect to the same investigation. I further find that Revenue have failed to establish certain fundamental criteria for the allegation of clandestine removal, as there is no tangible evidence of clandestine manufacture by these appellants, and the whole demand is based on mere assumptions and presumptions. There is no investigation with respect to usage of unaccounted or excess raw materials, discovery of any finish ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
