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Adithya Ferro Alloys (P) Ltd., C. Sukumaran, G Rangarajan, R. Saravana Sankar Versus Commissioner of Central Excise, Tiruchirapalli And Vice-Versa

2017 (10) TMI 553 - CESTAT CHENNAI

Clandestine removal - MS ingots, CTD bars and TMT bars - it appeared that more than one invoice was issued under the same serial number - Department took the view that the invoices seized from the premises of Mr. Koteeswaran are the parallel set of invoices of assessee used for clearing bars and rods without accounting and without payment of Central Excise duty, involving evasion of duty of ₹ 16,18,197/- major grievance that has been voiced by the assessee right from the adjudication stage .....

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and Rangarajan that they were concerning themselves in the activities of clandestine production, removal and suppression of facts and in the case of Shri Saranana Sankar, that he was concerned with purchasing and dealing with excisable goods which he knew or reason to believe are liable for confiscation under Central Excise law. When the department themselves did not find any infraction, abetment or implicatory role on the part of Mr.Koteeswaran, his non-inclusion as a noticee in the Show Cause .....

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ahazar drawn at the residence of Mr.Koteeswaran on 1.7.2005, but also the statement recorded from Mr.Koteeswaran and the made up file recovered under mahazar from his residence. The claim of the assessee that statement of Mr.Koteeswaran was not received by them does not merit acceptance since in their response to the SCN vide letter dt. 18.1.2007 of the assessee, referred to in para-10 of the order of adjudicating authority, they have made reference to the claims made by Shri Koteeswaran in his .....

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on of the witnesses was permitted and done by the counsel for the assessee on 12.2.2007 of all the 9 persons as per the request of the assessee. This being so, the lower authorities cannot be faulted for not having cross examination of Mr. Koteeswaran. - Coming to the demand of differential Central Excise duty, it is seen that whereas the SCN had proposed total demand of ₹ 39,85,598/- on various counts, each of these allegations have been analyzed in detail by the adjudicating authorit .....

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penalty u/s 11AC - Held that: - the extended period of limitation is very much invokable in this case and accordingly, the demand of duty of ₹ 14,20,482/- under Section 11A (2) of the Central Excise Act, 1944 will sustain - So also penalty imposed under Section 11AC of the Act read with Rule 25 of Central Excise Rules, 2002 will also sustain. - Decided against appellant. - Appeal Nos. E/137-138, 142, 146/2009, Appeal No. E/565/2009 - Final Order No. 42305-42309 / 2017 - Dated:- 10-10-2 .....

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bars and TMT bars. Shri C. Sukumaran is the Managing Director of the company. Based on intelligence that assessee is indulging in clandestine removal of their final products without payment of Central Excise Duty, their factory premises and office premises, residential premises of Shri. G. Rangarajan, Manager of assessee and some of the dealers premises were searched by the departmental officers and various documents seized. As a follow-up, premises of certain other dealers and the premises of M .....

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ices with the invoices of assessee seized from the factory premises of the company, it appeared that the clearances shown in the invoices seized from the premises of Mr. Koteeswaran were not accounted by assessee. Department took the view that the invoices seized from the premises of Mr. Koteeswaran are the parallel set of invoices of assessee used for clearing bars and rods without accounting and without payment of Central Excise duty, involving evasion of duty of ₹ 16,18,197/-. 2.2 The s .....

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with the invoices of assessee, it was noticed that assessee have cleared CTD Bars to Annai Agencies without accounting in their statutory records. The duty on the clearances made to Annai Agencies as noted in the notebooks worked out to ₹ 11,55,697/-. 2.3 The search conducted at the residential premises of Shri Rangarajan resulted in seizure of various invoices of Sri Vari Traders, Peralam. On perusal of the same, it appeared that more than one invoice was issued by Sri Vari Traders under .....

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ly, on verification of the documents recovered from Shri Balaji Traders, Madurai it appeared that the said dealer maintained parallel set of invoices; that the documents found in Pages 43 to 52 of the made-up file recovered from the dealer pertain to unaccounted sale of bars and rods received from assessee. 2.5 Further one of the purchase invoice No.140 dated 28.06.2005 of Sri Vari Traders for purchase of bars and rods was not accounted in the books of Shri Balaji Traders. On comparison of the s .....

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books of accounts. The duty on the above clearance worked out to ₹ 17,961/-. Similarly, from the documents recovered from the Driver of Universal Transport, Karaikal and from the Trip Sheets in respect of the Lorries PY028 5008 and PY028 0010 submitted by Ashok Transport Service, Karaikal, it appeared that assessee had cleared bars and rods without accounting and the duty on such unaccounted clearances worked out to ₹ 6,00,345/-. 2.7 Accordingly, a show cause notice dt. 25.09.2006 fo .....

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s. After due process of adjudication, original authority vide an order dt. 26.04.2007, inter alia held that the charges of procurement of raw materials by assessee and the charge of unaccounted manufacture of MS ingots were not proved, however confirmed the other proposals for demand of duty liability along with interest thereon. In the result, demand of duty of ₹ 14,20,482/- was confirmed along with interest liability and equal penalty imposed under Section 11AC of the Central Excise Act, .....

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mp; E/146/2009. 3. Department is also aggrieved by the non-confirmation of some of the proposals in the SCN and is therefore before us. Hence Appeal No. E/565/2009. 4.1 On 03.10.2017, when the matter came up for hearing, on behalf of assessee, as also appellants viz. S/Shri C.Sukumaran, G.Rangarajan and R. Saravana Saankar, Ld. Advocate Shri K. Natarajan made a number of oral and written submissions which can be broadly summarized as under : (i) Departmental officers seized some invoices from pr .....

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interested person cannot be counted. (iii) All the scrap dealers, witnesses, transport people had stated that the statements had been recorded under duress during cross examination. The copy of the statement recorded from Kotteswaran was not made available to the assessee while issuing the SCN. (iv) They relied upon the ratio of the following case laws : (1) CCE, Delhi Vs. Mayfair Industries 2016 (338) E.L.T. 594 (Tri. Del.) (2) Balajee Structurals (India) Pvt. Ltd. Vs. CCE, Raipur 2016 (341) E .....

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erabad 2017 (348) E.L.T. 321 (Tri. Hyd.) 4.2 In respect of appeal filed by department in Appeal No.E/565/2009, Ld. Advocate submits that the adjudicating authority has dropped the demand of duty for purchase of unaccounted raw materials since the same was based only on statement of scrap dealers without any evidence to corroborate the version and which statements have been recorded in cross examination. In respect of department s grievance against dropping of demand on allegation of unaccounted .....

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E/142/2009 & E/146/2009, the confirmation of demand and penalties has been done by adjudicating authority and upheld by Commissioner (Appeals) based on the evidences available. He submits that the statement of Mr. Koteeswaran was very much a part of the relied upon documents (RUD) which was supplied along with SCN. In respect of the department appeals, he reiterated the grounds of appeal. 6. Heard both sides and have gone through the facts of the case. 7.1 We first intend to take up the appe .....

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given by him has also been relied upon, however no notice was issued to Mr. Koteeswaran. Hence entire proceedings are vitiated. Assessee is also aggrieved that Mr.Koteeswaran was not cross examined by the adjudicating authority. 7.3 Coming to the contention of non-issue of notice to Koteeswaran, we find from the SCN that said Mr. Koteeswaran comes into the picture for the reason that a made up file containing certain documents was recovered from his premises. We find that 53 sets of invoices mad .....

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The SCN only gives narration of the recovery and seizure of these documents from the residence of the said Mr. Koteeswaran. However, there has been no role ascribed to Mr.Koteeswaran in the whole modus operandi. Neither is there any charge or allegation in the body of the SCN that he has aided or abetted in facilitating clandestine removals/unaccounted clearances by the assessee and consequent evasion of central excise duty. On the other hand, specific contraventions have been listed in respect .....

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-inclusion as a noticee in the Show Cause Notice cannot be touted as a ground by the assessee to set aside the entire proceedings ab initio. The contention of the assessee on this point will therefore not succeed. 7.4 Coming to the contention that no copy of statement of Mr.Koteeswaran was supplied to the assessee, a perusal of the lists of relied upon documents in Annexures A, B, C & D to the SCN indicates otherwise. The SCN not only encloses the mahazar drawn at the residence of Mr.Koteesw .....

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ontention would not be able to be made without having received a copy of statement of Mr. Koteeswaran. 7.5 Coming to the contention that Shri Koteeswaran was not cross-examined. Facts on record brings out that in their own letter dt. 8.1.2007, in response to SCN, assessee had inter alia requested for cross examination of 9 persons, however they had not sought such cross examination of Mr.Koteeswaran. It is also seen that in response to the said request, cross examination of the witnesses was per .....

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nd of differential Central Excise duty, it is seen that whereas the SCN had proposed total demand of ₹ 39,85,598/- on various counts, each of these allegations have been analyzed in detail by the adjudicating authority. In fact, the adjudicating authority has taken note of the retraction of the earlier statements by various persons during the cross examination. After detailed analysis, the adjudicating authority has found that the charge of unaccounted procurement of raw material is not su .....

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