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Shri Onkar Nath Goel Prop. Versus Commissioner of Central Excise, Kanpur

2017 (12) TMI 1081 - CESTAT ALLAHABAD

Clandestine removal - pig iron - evidences - penalty - Held that: - the allegation appears to be presumptive, as the investigating officers have not stated a single instance, the name of the party etc. to whom Pig Iron was sold by the appellant, M/s Goyal. The allegation of sending of consignment of pig iron by M/s Apparent Iron & Steel Pvt. Ltd. Goa, is also presumptive - Mr. Onkar Nath Goyal had retracted his statement recorded on 09th March, 2005 and the same cannot be weighted for imposition .....

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earned Commissioner, adjudicated show cause notice dated 28.10.2005 being SCN No. DZU/INV/87/03/2597 issued to M/s Venus Costing Pvt. Ltd., Venus Loha Ltd., Venus Enterprises, Kanpur and 5 others including the present appellant. Among others, the present appellant, it is alleged, had contravened the provisions of Central Excise Act, and Rule 209A of Central Excise Rules, 1944 read with Rule 26 of Central Excise Rules, 2002 and they were instrumental in selling of pig iron at Agra, which was cons .....

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persons namely M/s Venus Casting Pvt. Ltd, M/s Venus Loha Udyog Ltd. and M/s Venus Enterprises were engaged in evasion of Central Excise duty by manufacturing and clandestinely/removal of MS Ingots, without payment of duty. Acting on this intelligence, the officers of DGCEI searched the premises of abovementioned persons and of transporters and certain records were seized. Further, during the scrutiny of the records recovered it has been observed that the above-mentioned persons had shown recei .....

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s were unloaded at Delhi or at a place which is between Mathura and Agra, and not at Agra as mentioned on the invoices issued by Apparent and lorry receipt issued by Different transporter. Further, statement of Shri R.M. Mishra was recorded on 28.01.2005, he stated that they had arranged trucks from M/s Agra Koshi Hariana Road Carriers, Delhi and M/s Agra Gwalier Road Lines, Delhi for transporting pig Iron of M/s Venus Loha Udyog Ltd. from Delhi to Agra/Sashni, that pig iron was unloaded at abov .....

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ading of Iron & Steel scrap and pig Iron; that he was not registered with Central Excise Department, either as manufacturer or as a trader. He was working as a commission Agent for M/s Apparent Iron & Steel Pvt. Ltd. Goa for sale of their pig Iron. He further stated that he was getting ₹ 100/- per MT as commission from M/s Apparent Iron, Goa; that all pig iron dispatched from M/s Apparent to Venus Casting Pvt. Ltd./Venus Loha Udyog Ltd. was unloaded by transporter at different plac .....

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the same. Further, from the above Department is of the view that ₹ 48,36,242/- shown as paid by M/s Goyal Iron & Steel Works (India), Agra for bogus purchase of 458.655 MT of MS Ingots was the sale proceed of pig Iron which was consigned to M/s Venus Loha Udyog Ltd. through the appellant. Further, the Department invoked extended period of Limitation under proviso to Section 11A (1) of Central Excise Act, 1944. 4. The appellant contested the show cause notice by filing the reply, as fo .....

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fake/fabricated/manipulated, it is unlawful to allege that we had not received MS Ingots from M/s Venus Loha Udyog Ltd. The invoices are the statutory documents showing payment of duty and cannot be rejected for any reason. 4.4 The allegation that the appellant had sold pig iron of M/s Venus Loha Udyog Ltd. at Agra was purely hypothetical, imaginary and presumptive. The investigating officer had not cited a single instance i.e. name of the party etc. to whom pig iron was sold by Shri Goyal. It .....

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cise Rules. Unless the invoices were proved to be fake, the purchase of MS Ingots could not be termed as bogus. 4.6 The Revenue had not been able to locate even one person who may admit that he had purchased pig iron of M/s Venus Loha Udyog Ltd. through the appellant. It was hardly logical to allege that amount of ₹ 48,36,242/- was the sale proceeds of pig iron which had been remitted by Shri Goyal, in the guise of the value of alleged purchased of Ingots. 4.7 The appellant also cited vari .....

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mposable upon him under Rule 209A or 26 of the Central Excise Rules. 4.8 The consultant of the appellant attended the personal hearing and submitted that appellant was only a trader and he did not have anything to do with manufacture of steel ingots. The Consultant stated that at the behest of the DGCEI officials Shri Goyal had given a statement that he had never received any ingots from M/s Venus Loha Udyog. The Consultant further submitted that appellant had never accepted that the money remit .....

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ns and case laws cited by the appellants and is of the view that the appellant was the proprietor of M/s Goyal Iron and Steel Works India, Agra and he was instrumental in selling of pig iron at Agra which was consigned to M/s Venus Casting Pvt. Ltd./M/s Venus Loha Udyog Ltd. and the amount received from the sale of pig iron was returned to the above mentioned firms by him by showing bogus purchases of MS ingots, purportedly manufactured by above mentioned persons and sold to his firm and the app .....

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Ingots could not be termed as bogus, the learned Commissioner has held that the contention putforth by the appellant does not carry any force as the appellant himself in his statement dated 09.05.2005 clearly confessed that although he had a business deal with M/s Venus Loha Udyog Ltd. for purchase of MS Ingots but he had neither purchased nor received any ingots from M/s Venus Loha Udyog Ltd. even though payment for these bogus consignments was made by him. The learned Commissioner held that t .....

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er, the retraction of his confessional statement which was done at a very belated stage, cannot be accepted being an afterthought only, and imposed a penalty of ₹ 50,000/- on the appellant. 5. Being aggrieved, the appellant is in appeal on the following grounds:- (A) That, the impugned order is patently against law, contrary to the facts on record, unjust, erroneous and passed with complete non application of mind. The same merits to be quashed on this ground alone. (B) That the learned Co .....

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ade payment of duty. (D) That the learned Commissioner failed to appreciate the settled principle of Law that Apparent state of affairs is real unless the contrary is proved. In the case of the appellant the Department is unable to produce on record any evidence to prove that the appellant had not received the MS Ingots or the appellant dealt with the Pig Iron in any manner. Entire case of the Department is based upon the statement of the appellant, which was recorded under pressure, coercion. ( .....

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ned Pig Iron to M/s Venus Loha Udyog, through the appellant. (G) That the learned Commissioner failed to appreciate the material on record that the appellant had received a number of consignments of MS Ingots under proper Central Excise Invoices showing payment of duty from M/s Venus Loha Udyog Ltd., Hamirpur and payments of these consignments were made through proper banking channels and the MS Ingots which the appellant received from M/s Venus Loha Udyog Ltd. were sold in the market by the app .....

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of the party to whom the Pig Iron was sold by the appellant. 6. The learned Counsel also relies on the ruling of Hon ble High Court in the case of M/s Continental Cement Company Vs Union of India reported at 2014 (309) E.L.T. 411 (All.) wherein the Hon ble High Court have held that unless there is clinching evidence of the nature of purchase of raw materials, use of extra electricity, sale of final products, clandestine removals, transportation, payment, the mode and flow back of funds, demands .....

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d at 2014 (308) ELT 655 (Guj.) wherein the duty was demanded on the charge of clandestine removal along with penalty. On challenge, this Tribunal has set aside holding that in case of clandestine removal of excisable goods, there needs to be positive evidence for establishing the evasion, and on facts, there was no material reflecting the purchase of excessive raw material, shortage of finished goods, excess consumption of resources, etc. and the confessional statements had been retracted soon a .....

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