TMI Blog2018 (6) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... xcessive and the same is reduced to ₹ 2 lakhs. Even by the rule of thumb, and the production reworked out on the basis of admitted average production, there exists element of clandestine production and removal. Appeal allowed in part. - APPEAL Nos. E/50433 & 50564/2017-EX[SM] - A/52066-52067/2018-SM[BR] - Dated:- 18-5-2018 - Mr. Anil Choudhary, Member (Judicial) Shri Virendra Kumar Shri Jitendra Singh, Advocates for Appellants Shri K. Podar, (AR), for Respondent Per: Anil Choudhary As these appeals arise from common investigation and Order-in-Original, they are taken up together for disposal. The issue in these appeals is whether the appellants have resorted to suppression of production and clandestine removal of their finished goods. 2. As per the facts on record the appellants were engaged in the manufacture of MS rods, channels and angles etc. falling under Chapter 72 of the Central Excise Tariff Act. Their factory was visited by the Central Excise officers on 20/02/2009, who conducted various checks and verifications. As a result finished goods to the extent of 6.379MTs were found in excess and raw material i.e. MS ingot to the extent o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice dated 18/07/2011 are that the appellant during the period 2008 09 suppressed production and removed clandestinely 1443.588 MT of MS Rod which was calculated on the basis of Dispatch Register (Private record) and other records withdrawn from the appellant's factory premises by the preventive officers of the Department. This quantity was not accounted for in their specified records by the appellant, during the relevant period and further alleged that the said goods were removed clandestinely valued at ₹ 3,42,13,036/- without issuing Central Excise invoices and without payment of duty amounting to ₹ 35,23,943/- (including cess). It was also alleged that the appellants have contravened the rules by willful suppression of facts with ulterior motives and with intent to evade payment of duty. The SCN was adjudicated on contest and the proposed demands were confirmed, along with equal amount of penalty under Section 11 AC of the Act. Further, personal penalty of ₹ 5 lakhs was imposed on Shri Sumit Agarwal, Director of M/s B.P. Ispat Pvt. Ltd. Being aggrieved, the appellants preferred appeal before the learned Commissioner (Appeals) who was pleased to dism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (till date and time of verification). A detailed chart showing quantity of M.S. Rods dispatched during the said period, as found recorded in the dispatch register, was worked out and annexed as Annexure-B to the show cause notice. On comparing these recorded quantities with the triplicate copy of Central Excise invoice nos.01 dated 02/04/2008 to 196 dated 20/02/2009, issued by appellant company, it was found that only one Central Excise invoice, viz., 165 dated 06/02/2009 matched with the entry on page no.31 of Dispatch Register in respect of Truck No.MP-20 G-2320 dated 06/02/2009 showing dispatch of 21.00 MT (Sr. no.71 of Annexure-B to the SCN). No other Central Excise invoice was found issued by the appellant company in respect of other dispatches recorded in the Dispatch Register. Thus, it appeared that the appellant company have dispatched or cleared 1443.588 MT (1464.588-21.0) of M.S. Rods clandestinely, during the period from 22/01/2009 to 20/02/2009 without issue of invoices and without paying duty. These clandestinely clearances appeared to be corroborated with account of suppression of production (private record). 10. Being aggrieved, the appellant preferred appeal bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gan was shown to him on the date of search nor any question in this regard or concerning to the so-called production register was asked, except his signatures on some records recovered from the factory. Moreover, signature on first and last page of certain records, does not amount to admittance of the contents of the records or entries made therein. Further, the Courts below have erred in observing that Sumit Agarwal, Director in his statement dated 08th May, 2009 in reply to question no.85 admitted that entries were related to number of pieces of M.S. Ingots. The learned counsel states that from perusal of the statement dated 08/05/2009, it is evident that in reply to question no.85 it is revealed that the words in question pieces and M.S. Ingots were super scribed and moreover the entire statement being recorded subsequently, in the office by Preventive Staff, evidently was under duress and coercion. Further, in absence of any corroborative evidence, cannot be relied upon. Moreover, the Director, Sumit Agarwal was not making any entry in the said production register and Shri Raju Dewangan who had claimed to have maintained the register, clearly in reply to question no.2 sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter recovered from weighbridge, is untenable, firstly, being written by some unknown and unauthorised person and secondly containing some vague entries like- drawn lines (sign language), have been misconstrued to be dispatch entries of M.S. Bars. Necessary details like agreement of goods, name of the consignee, Bill number, or amount, etc. are missing and hence not admissible, as an evidence. 14. As regards the finding that 1443.588 MT of M.S. Rods worked out on the basis of dispatch register, clandestinely removed, tallied with unaccounted production of 1496.850 MT of M.S. Bars worked out from the number of pieces of Ingots, recorded and consumed during the period 22/01/2009 20/02/2009 in the production register. The learned counsel states that the said production register was for the period from 03rd January, 2009 to 20th February, 2009, did not correspond to the period in the dispatch register being 22/01/2009 to 20/02/2009. As per the statement of Raju Dewangan, the production register shows the production of 10 MM Bars only whereas the Dispatch Register as summarized (Annexure-B to SCN) shows the production of various sizes including 10 MM. So both the quantities did not ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the whole case of revenue is based on presumptions and assumptions and as such no penalties are exisible. 16. The learned Counsel have placed reliance on the following rulings: 1. Concrete, direct and authoritative evidence required instead of unauthenticated entries by Labour- CCE Vs Ravishankar Industries Ltd. [2002 (150) ELT 1317 (Tri.-Chennai)] 2. Statement of few vehicle owners/drivers not applicable to remaining others carrying goods under majority invoices that too when not produced for cross examination. 2015 (325) ELT 130 (Tri.-Mumbai). 3. Cross examination is integral part of principles of natural justice-Manek Chemicals Pvt. Ltd. Vs UOI [2016 (334) ELT 302 (Guj)] 4. Statements recorded behind back of assessee cannot be relied upon in adjudication proceedings without allowing assessee an opportunity to test evidence by cross examining makers of said statements- Jindal Drugs Pvt. Ltd. Vs UOI [2016 (340) ELT 67 (P H)] 5. For establishing the factum of clandestine manufacture, the revenue is required to establish the guilt beyond doubt. The entries in the note books recovered from Shri Singh who have been denied by the Appellant to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the impugned order it is on record that the appellant had not requested to the adjudicating authority for allowing cross-examination of the witnesses and accordingly agreeing with the discussions, as recorded by the adjudicating authority, upheld the denial of cross-examination. Accordingly, the learned A.R. prays for dismissing the appeals. 18. Having considered the rival contentions and on perusal of the records, I hold that the statement recorded by the revenue authority from the transporters is not an admissible evidence, being in violation of the provisions of Section 9D of the Act. I find that leading questions have been asked to the transporters like from one Shri Pappal Agarwal owner of Vehicle No.CG 13 D-1144, Question, please tell, by the said vehicle on 1st February, 2009 M.S. Rod loaded from M/s B.P. Ispat Ltd. where was it transported? Answer on the said vehicle whether M.S. Rod was loaded on the said date from M/s B.P. Ispat, I cannot remember. I enquired from my driver who is also unable to recall. Further, one of the transporter namely Shri Pravesh Kumar Chaturvedi owner of Truck No.CG 11 AB 0361, in reply to query whether the said truck on the dates 04th, 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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