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2017 (12) TMI 766

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 sustainable. - The main evidence on the basis of which the adjudicating authority has upheld the duty demand of ₹ 7,52,843/- is the private documents in the form of scribbling pads recovered from the factory premises of the assessee. Such scribbling pads are said to contain the details of the goods removed without payment of duty by the assessee - 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. - Cross-examination of witnesses - Held that: - We find that only one of the statements recorded from Shri Jawahar has been retracted subsequent to the date of recording.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 .....

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e deposed that such scribbling pads contain record of goods cleared clandestinely. (ii) On the basis of seized records in the form of scribbling pads, it was inferred that a total of 553.495 MT of goods were 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 the ingots covered by the said invoice to M/s. Gasha Steels and returned the documents as instructed by Shri Karunanidhi, Cashier of the assessee-company. (iv) A computer was seized from the factory of the assessee during the course of search operation and the data available therein was transferred to a CD. By the process of regeneration, two invoices bearing same serial No.181 with dates of issue as 27.7.2003 in favour of M/s. Kariraly and invoice 28.7.2003 in the name of M/s. Gasha Steels .....

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oducts, the show-cause notice was issued for demand of Central Excise duty amounting to ₹ 56,79,181/-. 2.2 After the due process of adjudication, the learned Commissioner passed the impugned order in which demand was confirmed only to the extent of ₹ 7,52,843/- and penalties were also imposed on the assessee as well as the Managing Director. The rest of the demand made in the show-cause notice was dropped by the Commissioner. 2.3 Appeal has been filed by the assessee challenging the confirmation of the duty demand amounting to ₹ 7,52,843/- as well as the penalties imposed on the assessee 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 made by the assessee and the Managing Director. (i) During the course of investigation, the depa .....

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ting 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 (351) ELT 264 (MP) Columbia Electronics Ltd. vs. CCE: 2002 (143) ELT 635 (Tri.-Del.) 6. Heard both sides and peruse the records. 7. At the outset, we consider the grounds advanced by the department in their appeal. In the show-cause notice, demand has been raised for the period May 2000 to July 2003 by working out the total quantity of ingots manufactured on the basis of the estimated production per month. The department estimated, on the basis of power consumption by the assessee, that each heat can 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 factor .....

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bbling pads are said to contain the details of the goods removed without payment of duty by the assessee. On the basis of these scribbling pads, it is alleged that a total of 553 MT of ingots have been clandestinely cleared. The authenticity of the information contained in these scribbling pads has been confirmed by Shri R. Jawahar, Commercial Manager in his statement recorded during the search conducted 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 found to have been issued on three different dates i.e., 27.7.2003, 28.7.2003 and 29.7.2003 in the name of three different customers showing different quantities. It was further noticed that another invoice bearing same Sl. No.181 was recovered from the possession of the driver of the vehicle .....

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regenerated invoice and gate register evidencing the clandestine removal of the ingots by the assessee. He has fairly dropped the demand which has been projected on the basis of theoretical calculation. In view of above discussions, we find no reasons to interfere with the demand of duty and imposing of penalty on the assessee. 9. Appeal has been filed by Shri Paramasivam, Managing Director against the penalty of ₹ 50,000/- imposed under Rule 26 of the Central Excise Rules, 2002. We find 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. Consequently, we find no reason to interfere with the penalty imposed on him, which is upheld and the appeal filed by him is also rejected. The appeal filed by assessee is rejected. 10. In view of the above discussions, we find no reason to interfere with the impugned order, which is sustained and all the appeals filed by the assessee, Shri Paramasivam, Managing Director as well as the department are .....

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