TMI Blog2017 (7) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... to have been issued by the department to comply with this statutory time limit and confining the proposal for confiscation, imposition of fine, penalty and duty demand to such allegation only. Though the date of recording of statements may be before issuance of first show cause notice (6.6.2002), we have to consider the fact that department would require more time for investigation, follow-up action, formulation of allegations based on such statements and invoices for issuing of the second show cause notice raising the allegation of clandestine removal of goods and duty demand on this count. Considering the voluminous nature of evidences, we do hold that the issuance of the second show cause notice dated 7.5.2004 is legal and proper and not hit by limitation. Appeal dismissed - decided against appellant. - E/451 to 454/2006 - Final Order Nos. 41146-41149 / 2017 - Dated:- 4-7-2017 - Ms. Sulekha Beevi C.S., Member ( Judicial ) And Shri Madhu Mohan Damodhar, Member ( Technical ) Shri S. Murugappan, Advocate for the Appellant Shri R. Subramanian, AC (AR) for the Respondent ORDER Per Bench The issue involved in all these appeals being connected, they are hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of production registers, cone winding registers and reeling registers. Again in the reeling registers, the production of hank yarn was inflated than the actual production by showing production against workers who had not actually attended to duty. The clandestine activity of AMSM was evident from the fact that AMSM was having only one 3 HP motor to run 20 reeling machines whereas the 3 HP motor can run at the maximum only four double sided reeling machines at a time which would show that the production of hank yarn was inflated in the registers. Statements of the Managing Director of AMSM Shri M. Ramamoorthy, Shri A.N. Bharathy, Mill Manager and Proprietrix Smt. P. Manimegalai of SVA was recorded among other statements. Based upon such evidences, the department was of the view that Shri M. Ramamoorthy, Managing Director and Shri A.N. Bharathy, Mills Manager had fully and knowingly associated themselves with clandestine removal as well as incorrect accounting and determination of duty thereby resulting in non-payment of Central Excise duty to the Government. Based upon such evidences, another show cause notice dated 7.5.2004 was issued to the appellants herein proposing the demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation since nothing prevented the department from including all such allegations in the first instance itself. 5. Against this, the learned AR Shri R. Subramanian submitted that both the show cause notices are entirely different and therefore the contention of the appellants that the second show cause notice is barred by limitation is erroneous. That in the first show cause notice, the demand was raised on account of confiscation of the seized goods based on eight invoices only whereas in the second show cause notice the demand of duty is for ₹ 32,73,025/-, for the period October 1999 to December 2001 for the clandestine clearances of goods. The first show cause notice dated 6.6.2002 was issued by the department complying with the statutory time limit (six months) prescribed under section 110 of the Customs Act, 1962, as made applicable to Central Excise seizure cases wherein confiscation of seized goods is proposed. Thereafter, on follow up action as well as further investigation, detail show cause notice was issued subsequently for the clandestine removal of the goods for the period between October 1999 and December 2001. It is also pointed out by him that the first sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly. The first show cause notice is thus limited to the duty demand pertaining to the seized quantity of goods only. The allegations are with regard to why the goods should not be confiscated and why duty should not be demanded for the confiscated goods. In the first show cause notice the relied upon documents are only 25. Whereas show cause notice dated 7.5.2004 is a detailed show cause notice wherein the modus operandi adopted by AMSM for clandestinely clearing cotton yarn in the guise of hank yarn has been explained in detail. The evidences regarding each of the traders, transporters have been stated along with the details of invoices that have been recovered by the department. The method adopted by AMSM is that at the time of clearance of cone yarn, they would raise invoices for cone yarn. Once the yarn reaches the destination, the cone yarn invoices would be substituted with hank yarn invoice bearing the same serial number as if they had cleared only hank yarn. The invoices recovered from AMSM showed that some of the invoices bore the same serial number, for example, Sl. Nos. 291/1.9.2001, 308/11.9.2001, 401/ 5.11.2001, 401/5.11.2001, 414/16.11.2001, 414/16.11.2001, 450/7.12.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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