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M/s. Paragon Steels (P) Ltd., Shri M. Paramasivam Managing Director M/s. Paragon Steels (P) Ltd. Versus The Commissioner of Central Excise, Customs & Service Tax And Vice-Versa

2017 (12) TMI 766 - CESTAT BANGALORE

Clandestine removal - it was alleged in the show-cause notice that total quantity of 3440.500 MT ingots was clandestinely cleared - Held that: - It is settled position of law that quantification of alleged clandestine clearance only on the basis of theoretical estimation of production cannot be sustained in the case of R A Castings Pvt. Ltd. vs. Commissioner [2015 (7) TMI 29 - CESTAT NEW DELHI]. The Tribunal observed that duty demand made on basis of theoretical calculations of production is not .....

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ter as well as regenerated invoices. This clearly establishes the charge of removal of ingots without payment of duty and confirms the practice of multiple transportation under the same invoice. - Cross-examination of witnesses - Held that: - We find that only one of the statements recorded from Shri Jawahar has been retracted subsequent to the date of recording. However, Shri Jawahar has confirmed the facts in his subsequent statements nullifying the retraction. In the absence of retraction .....

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ging Director - Held that: - Shri Paramasivam, Managing Director has admitted the clearance of excisable goods without payment of duty as is evident from his letter dated 29.7.2003 admitting the duty liability. He has concerned himself with the production and removal of excisable goods which were liable to confiscation - penalty upheld. - Appeal dismissed - decided against appellant. - E/129, 130, 362/2007 - Final Order No. 23172 - 23174 / 2017 - Dated:- 14-12-2017 - Shri V. Padmanabhan, Tec .....

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ocuments indicating large-scale unaccounted production. Statements of various connected persons were recorded on the day of the search operations and also during the course of detailed investigation. The main documentary evidences which were brought on record during the course of investigation are as follows: (i) Certain small scribbling note pads said to contain the details of goods removed without payment of duty by the assessee. In the statement dated 29.7.2003 recorded from Shri R. Jawahar, .....

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re clandestinely cleared without payment of duty. (iii) A vehicle bearing registration No.KL 9D 756 driven by one Shri Suresh Babu reached the factory during search on 29.7.2003. The driver was found in possession of a copy of invoice No.181 dated 29.7.2003 of the assessee for 12.420 MT of MS ingots issued to M/s. Gasha Steels (P) Ltd. A duplicate copy of the weighment slip matching with the above seized of invoice was also found. In his statement, Shri Suresh Babu stated that he had delivered t .....

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uantities 11.54 MT and 10.76 MT respectively were found. In this connection, when Shri Malarmannan, Accounts Assistant of the assessee, who was in charge of the preparation of invoices, was questioned, he admitted in his statement dated 29.7.2003 that he used to generate invoices with the same number more than once and used to delete such invoices from the computer. The invoices re-generated from the computer bear the same number 181 which was also recovered from the possession of the driver Shr .....

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ies in the gate register correlated with the multiple clearances as bearing from the same invoice no.181. (vii) Commercial Tax Authorities carried out verification in the premises of the assessee on 23.1.2002 when shortage of certain raw materials in the form of scrap was noticed by them. (viii) Enquires were made by the departmental officers with Kerala State Electricity Board (KSEB) and it was found that the KSEB had carried load survey from 14.6.2003 to 24.7.2003 (40 days) and also for the pe .....

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output of 3 MT per heat and 26 working days in a month. By adopting this calculation for the period 1.5.2000 to 29.7.2003 (39 months), the total clandestine clearance was projected at 30,420 MT and after deducting the quantity already accounted by the assesse, it was alleged in the show-cause notice that total quantity of 3440.500 MT was clandestinely cleared. On these quantum of finished products, the show-cause notice was issued for demand of Central Excise duty amounting to ₹ 56,79,181 .....

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ssessee as well as Shri M. Paramasivam, Managing Director. 2.4 The Revenue has filed appeal against that portion of the impugned order in which duty demand to the extent of ₹ 49,36,338/- was dropped. 3. With the above background, we heard Shri B. Venugopal, the learned advocate for the assessee and Shri Paramasivam, the Managing Director as well as Shri Pakshirajan, learned DR representing the Revenue. 4. Shri B. Venugopal, learned advocate highlighted the following grounds in the appeal m .....

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terms of Section 9D of the Central Excise Act, 1944, before the statement of any witness is used during the course of any quasi-judicial proceedings, the same is required to be admitted by the adjudicating authority, then the witnesses are required to be made available for cross-examination. In the present case, the procedure outlined in Section 9D has not been followed by the adjudicating authority and hence, such statements will have no evidentiary value. He relied on the following case laws: .....

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ed that demand, in the worst case, can be only on the basis of three invoices bearing same serial number 181 for which demand will be much lesser than the confirmed amount of about ₹ 7 lakhs. 5. The learned DR, not only justified the impugned order, but he also put forth the grounds of the departmental appeal. He submitted that the adjudicating authority should have confirmed the demand as proposed in the show-cause notice. It is his submission that the assessee is capable of manufacturing .....

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that the said decision was given by the Hon ble High Court in writ petition which does not become a binding precedent and will be applicable only to that particular case. He further submitted that the provisions of Section 9D are directly applicable only in the case of criminal proceedings pending before the court. 5.1 The learned DR also placed reliance on the following case laws. Collector of Customs, Madras and Ors. Vs. D. Bhoormull: 1983 (13) E.L.T. 1546 (S.C.) R.S. Company vs. CCE: 2017 (35 .....

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an manufacture 3 MT of steel ingots and in a day as many as 14 heats can be manufactured by the assessee using the equipments installed in the factory. However, taking into account various factors, it was estimated that a reasonable production can be arrived at by taking 10 heats per day. Taking the number of working days in a month as 26, quantity produced in a month was derived as 780 MT, projecting the production on the basis of the above calculation for 39 months, the total quantity manufact .....

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meter. He has further categorically stated that no incidence of power theft by the assessee has come to his notice. On this basis, the adjudicating authority has taken the view that the demand proposed, only on the basis of power consumption is not sustainable. But Revenue in their grounds of appeal has argued that the opinion of Mr. Sashidaran Pillai, Assistant Executive Engineer cannot be taken into account since he was in-charge of the factory only for the period from 6.12.2003 to 9.11.2004 .....

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by the Hon ble Supreme Court. By following the above decision, we are of the view that there is no infirmity in the impugned order in which the duty demand, projected only on the basis of number of heats per day, has been set aside. In the result, the appeal filed by the Revenue is rejected. 8. Next, we turn to the grounds of appeal taken up by the assessee. The main evidence on the basis of which the adjudicating authority has upheld the duty demand of ₹ 7,52,843/- is the private document .....

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ed in the assessees premises. Though such statement was retracted, a further statement was recorded from him on a later date in which he has confirmed that the scribbling pads indeed contained record of goods cleared clandestinely. 8.1 Some of the entries found in the scribbling pads have been corroborated by other evidences. From the computer, recovered from the factory premises, certain invoices were regenerated and printed. It was noticed that three invoices, all bearing same Sl. No.181, were .....

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hat he was in-charge of preparation of invoices and further admitted issuing three invoices with the same number 181 on three different dates. The invoice number, quantities and date pertaining to invoice No.181 tallied in respect of the entries found in scribbling pads, gate register as well as regenerated invoices. This clearly establishes the charge of removal of ingots without payment of duty and confirms the practice of multiple transportation under the same invoice. 8.2 The main ground on .....

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d that the provisions of Section 9D will be equally applicable to departmental proceedings and also criminal proceedings in the court. But the adjudicating authority has justified the non-production of 9 witnesses for cross-examination, on the ground that 9 witnesses were the employees of the company and since they are under the control of the assessee, the cross-examination will not serve any purpose as the assessee has hold over them and they can be made to retract the facts contained in their .....

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