9911796707
Advanced Search 
TMI Blog2018 (8) TMI 1575X X X X Extracts X X X X X X X X Extracts X X X X ..... wo units. Few labour delivery challans were found during the course of visit and were taken over by the officers. A statement was recorded from one Sri M. Kanagarajan, Managing Partner of SPF (4th respondent) on 08.02.2008. Investigations were also extended to seven buyers of the castings. From the investigations, it appeared to the department that these three units were not independent and that SPA and SSA were only dummy units of SPF floated for the purpose of availing unintended SSI exemption for all three units. It appeared that there was no production facility and no machinery available at SPA and SSA. Department took the view that the Profit & Loss Account for the year 2007-08 contained labour charges received for the year 2006-07, which is not permissible as per the IT Act, hence it appeared that labour charge bills were fabricated to evade Central Excise duty. In the statement of Shri M. Kanagarajan recorded on 08.02.2008, it had been admitted that goods manufactured at SPF were cleared under cover of sales invoices of SPF, SPA and SSA; that two other units neither had any manufacturing activity nor any machinery in the two units; that SPA was used as a godown and SSA as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PA and SSA did not have any facility to manufacture castings and that they were only dummy units of SPF. iii) Mr. Kanagarajan (4th respondent) is the main entity who is tied to all the three units. In the mahazardt. 28.8.2008 and in the statement dt. 8.2.2008 he has admitted that there was no manufacturing activity at SPA or SSP, hence the statement dt. 18.08.2008 where earlier admissions have been contradicted, has been made after a lapse of 4 months on legal advice and should be construed only an after thought. iv) The Certificate of Registration issued by Commercial Tax Department bears TIN number effective from 1.1.2007. However, SPA purportedly informed the department about this TIN vide their letter dt.28.05.2005 which is an impossible thing. v) From the Delivery Challans and invoices it is seen that 8 to 18 tons were transported through a single delivery challan which is not possible to be done on one bullock cart. This glaring anomaly was not considered by the adjudicating authority and also by Commissioner (Appeals). vi) With regard to the contention raised by the respondents in their synopsis that appeal by the department against Commissioner (Appeals) was only in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h should have been raised at the stage of SCN by alleging common funding, labour charge transactions and so on. Ld. Advocate placed reliance on the ratio of the judgement of the High Court of Gujarat in Commissioner Vs Reliance Ports and Terminals Ltd. - 2016 (334) ELT 630 (Guj.) wherein inter alia, it was held that SCN being foundation of the demand, the OIO and subsequent orders by the appellate authority would be confined to the SCN, hence the question of examining the validity of the impugned orders thereto on grounds which were not the subject matter of SCN would not arise. 5. Heard both sides and have gone through the facts. 6.1 We first intend to address the technical objections raised by the respondents against the appeals filed by the department. Ld. Advocate for respondent has pointed out that against order dt. 20.05.2009 dropping further proceedings initiated in the SCN against the four respondents, only one appeal had been filed by the department to the Commissioner (Appeals) in respect of M/s.Surya Prakash Foundary (SPF). Only by way of a letter dt. 18.11.2009, the department made a request to add the names of other three respondents. Ld. Advocate has argued that acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent on this score will therefore succeed. 6.3 The other technical objections raised by the respondent is that Revenue in paragraphs H, K, L, M of their grounds of appeal have tried to put forth grounds which were not at all raised in the SCN and hence the appeal on these grounds cannot be entertained. On going through the grounds of appeal in pages 62 to 67 of the appeal book, we find that the department has indeed brought forth the grounds which were not part of the SCN. In Ground "H", it has been argued by the department that flow back of funds need not be established. So also in "L", the department has sought to argue that the declaration dt. 25.08.2008 is fabricated, that there is no entry for its receipt in the inward corresponding register etc. In "M", an inference has been made from the non-deduction of TDS on account of labour charges by SPF in 2005-06 and 2006-07 but was included only in 2007-08, to argue that the labour charge bills had been fabricated. In "N", it is argued that 8 to 18 tons of goods which were said to have been transported on a single delivery challan would not have been possible through bullock carts. In our view, these grounds may, possibly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be confined to the show cause notice, the question of examining the validity of the impugned order on grounds which were not subject matter of the show cause notice would not arise." The above judgment was relied upon by the Tribunal in Dhananjay Industrial Engineer (P) Ltd. Vs CCE Mumbai - 2017 (52) STR 320 (Tri.-Mumbai) and in S.D. Fine Chem Ltd. Vs CCE, Cu & ST Vadodara - 2017 (354) ELT 412 (Tri.-Ahmd.). 7. In the event, we find merit in the technical objection by Ld. Advocate. Revenue appeals are devoid of merits by putting forth grounds which are beyond the scope of the SCN. Thus even at the threshold stage, we find that the Revenue appeals will fail the test of ratio decidendi as laid down by higher appellate forums. The appeals are therefore devoid of merits and requires to be rejected, which we hereby do. We note that the main edifice of the allegation brought out in the SCN is the statement of one Mr. M. Kanagarajan, Managing Partner of the SPF recorded on 08.02.2008. However subsequent to this, another statement dt. 18.06.2008 was recorded from Shri M.Kanagarajan, by the same officer who had recorded the first statement. In the second statement, Shri M.Kanagarajan ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
