TMI Blog2018 (12) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... ehendiratta in his statement as stated that is engaged in repairs as well as manufacturing of stone crushing machinery like jaw crusher, rotopactor etc, and having sufficient machinery in the manufacture of said goods i.e. two lathe machines, one shaper, one roller machine, one gas cutter and three chain pulleys in the factory. These facts have not been contraverted by any evidence by the Revenue. As M/s Harish Engg Works is having sufficient machinery to manufacture the goods in question and Shri Harish Mehendiratta have never stated that is not engaged in the business of manufacturing of stone crushing machinery, therefore, the said statement is having a piece of evidence to relied upon. Merely, rubber stamp and invoices were found in the premises of M/s AAR Kay is not sufficient to rely that M/s AAR Kay has used the invoices of M/s Harish Engg Works for clearance of their goods. Also, the buyers/sellers were not issued any show cause notice for aiding and abating the payment of duty, therefore, the statements of buyers/sellers are doubtful and can’t be relied upon - the clearances made by M/s Harish Engg Works cannot be clubbed with the clearances made by M/s AAR Kay. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harge of undervaluation is not sustainable. Consequently, no redemption fine can be imposed on M/s AAR Kay Industries. Consequently, the redemption fine of ₹ 4.00 Lacs is set-aside. The allegation has been made of the undervaluation on the invoices cleared by M/s Harish Engg Works and Mahalaxmi Engg Works - Held that:- As the clearances made by M/s Harish Engg Works cannot be clubbed with the clearances of M/s AAR Kay and all the clearances made by M/s Harish Engg Works remained with SSI exemption limit. Therefore, the charge of undervaluation on the invoice M/s Harish Engg Works is not sustainable. With regard to the three invoices issued by M/s Mahalaxmi Engg Works, we find that the charge of undervaluation has been made only on the basis of the statement of buyer Shri Ashwani Mehta, Proprietor of M/s Techno Crafts, but no evidence has been brought on record to prove that the said charge of undervaluation - the appellants were never confronted with the statement of Shri Ashwani Mehta to corroborate the charge of undervaluation and Shri Ashwani Mehta was not issued any show cause notice to allege aiding and abating the payment of duty, the statement of Shri Ashwani Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even Lakhs only) under Rule 25 of the Central Excise Rules, 2002. However, since the above seized goods have already been released provisionally on execution of B-11 Bond for ₹ 19,00,000/- and Bank Guarantee of ₹ 4,75,000/- of ICICI Bank, Nehru Place, New Delhi and is no more available for confiscation, I impose redemption fine of ₹ 4,00,000/- in lieu of confiscation of the above seized goods. I impose penalty of ₹ 10,00,000/- (Rupees Ten Lakhs only) on Shri Sumit Mehandiratta, Proprietor of M/s Mahalaxmi Engineering Works, Anangpur Road, Gurukul Indraprashtha, Saria Khwaja, Fridabad (Haryana) under Rule 26(1) of the Central Excise Rules, 2002. I impose penalty of ₹ 5,00,000/- (Rupees Five Lakhs only) on Sh. Harish Kumar Mehandiratta, Proprietor of M/s Harish Engineering Works, Shop No. 31, Shopping Centre, Pali Crushing Zone, Faridabad under Rule 26(1) of the Central Excise Rules, 2002. 2. The facts of the case are that the appellants are engaged in the manufacture of Stone Crushing Machineries and intelligence was gathered that the manufacturers namely, M/s AAR Kay Industries (in short M/s AAR Kay) is clearing the said goods by usin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o units using the same premises, therefore, the appellant has admitted the clearances of M/s Mahalaxmi Engg Works have to be clubbed with its clearances and after allowing SSI exemption, the total duty liability works out of ₹ 40,12,136/- and appellant has already paid ₹ 40.00 Lacs during the course of investigation. It is also submitted that the clearances may be taken as cum-duty-price, as the appellant has not recovered any amount over and above the amount shown in the invoices. It is her further submission that the main allegation against the M/s AAR Kay is that they have used invoices of four firms to clear goods manufactured by M/s AAR Kay as admitted by the appellant Shri Harish Kumar Mehndiratta, M/s DKV Enterprises and M/s Maa Luxmi Hardware Store. It is her submission that during the course of investigation one rubber stamp and two invoices of M/s Harish Engg Works were recovered from the premises of the appellant (M/s AAR Kay) and on the basis of that it was alleged that M/s AAR Kay is using the invoices of M/s Harish Engg Works. In fact, Shri Ramesh Kumar Mehndiratta never admitted to having used the invoices of M/s Harish Engg Works. It is her submission th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he further submits that with regard to the allegation that invoices of M/s AAR Kay is based on the statement of Shri Vinay Batra, proprietor of M/s DKV wherein he has stated that his firm was engaged in manufacture of belt conveyors, vibrator, jaali, drum pulley etc and he never manufactured jaw crushers. He also stated that whatever crushers and rotopactors have been sold in his bill books they were manufactured by M/s AAR Kay. With regard to the said allegation, it is her submission that out of the 30 invoices only 2 invoices were for jaw crushers and one invoice is for sale of rotopactors. All other invoices for sale of parts which have admittedly been manufacture by M/s DKV Enterprises. It is her submission that by assembling of the parts, the machinery can be manufactured and there is no evidence that the appellant got parts fabricated from M/s DKV Enterprises and there is no evidence that raw material purchased by M/s DKV Enterprises was unloaded in the premises of the appellant (M/s AAR Kay). It is further submitted that the sales made on the invoices of M/s DKV Enterprises, M/s DKV Enterprises have received the payment in cheque and no money was returned to M/s AAR Kay. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Dharmendra Batra, who has stated that his firm was manufacturing belt conveyors screen, drum pulley, loader which are parts of stone crushing and sale of machinery in their invoices were manufactured by M/s AAR Kay. To counter this allegation, it is her submission that a person manufacturing parts of machinery can assemble the machinery also. She further submitted that Shri Dharmendra Batra has admitted that they have received payment in cheque for the machinery sold on their invoices and did not return any money to M/s AAR Kay and he does not know the buyer of the jaw crushers. He also stated that they have fabrication for M/s AAR Kay and sending raw material purchased by it to M/s AAR Kay. To counter this allegation, it is her submission that there is no evidence that M/s AAR Kay got parts fabricated from M/s MAA Luxmi Hardware Store and no evidence on record that raw material purchased by M/s MAA Luxmi Hardware Store was unloaded in the premises of the appellant (M/s AAR Kay). She further submitted that the statement of Shri Anup Lohia, Account Manager of M/s Sandeep Steel Traders was also relied upon. To counter this statement, she took the argument which have already stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ta, the charge of undervaluation is not sustainable. 7. In view of the above submission, it is submitted by the Ld. Counsel that the clearances made by Harish Engg. Works, M/s DKV Enterprises, M/s MAA Luxmi Hardware Store cannot be clubbed with the clearances made by M/s AAR Kay Industries. Therefore, no penalty is imposable on Shri Harish Mehndiratta. It is her further submission that as on the clearances made in the name of M/s Mahalaxmi Engg. Works has admitted by the M/s AAR Kay during the course of investigation and duty has been paid thereon, therefore, the penalty to be reduced to 25% of duty confirmed in terms of proviso to Section 11 AC and penalty imposed on Shri Sumit Mehndiratta is on higher size, the same is to be reduced. 8. On the other hand, the arguments advanced by the Ld. Counsel were opposed by the Ld. AR who stated that Shri Harish Kumar Mehndiratta admitted in his statement that they were involved in the repair work of parts of stone crushing machineries and he had no designs for manufacturing of stone crushing machineries and its parts and he was not knowing about the issuance of the invoices and the statements of two employees were also recorded who st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Anand Road Carriers stated that they had handed over blank GRs to Shri Sumit Mehendiratta and their details filled by Shri Sumit Mehendiratta or any of his employee and that he had provided the vehicles and that whatever material has been mentioned in the bills shown to him were loaded by them from the premises of M/s AAR Kay and he did not know the owners of M/s DKV Enterprises. Shri Ramesh Kumar Mehendiratta has also certified the statements of the above buyers and transporters. 10. With regard to the seizure of the goods, it is his submission that it was found that the invoices were not showing weight of the machines. So the truck and the machines were got weighed and measured after bringing brought back into factory of M/s AAR Kay and Shri Ramesh Kumar Mehendiratta admitted that the size of the Jaw Crusher mentioned in the invoice was not correct and it was actually found to be correct which was valued at ₹ 525000/- each and not ₹ 375000/- as mentioned in the invoice. Hence, the said jaw crushers were correctly confiscated and keeping in view of the intention of the appellant M/s AAR Kay, therefore, the redemption fine is rightly imposed. 11. It is his sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant, the demand of interest is to be calculated and adjusted against the said amount of ₹ 40.00 Lacs. If any amount is pending then the same is to be paid by the appellant within 30 days of the receipt of this order and in said circumstances, the appellant M/s AAR Kay is entitled for reduced penalty to 25% confirmed if the same is paid within 30 days of receipt of this order as per the proviso to Section 11AC of the Act. 14. Now, we consider the clearances of M/s Harish Engg Works sought to be clubbed with the clearances of M/s AAR Kay. The allegations are on the basis of the investigation wherein one rubber stamp and two invoices of M/s Harish Engg Works were found in the premises of M/s AAR Kay, the statements of Shri Mahendra, Shri Jitendra (both employees) and the statement of Transporter Shri Gopal Ahuja, and the statement of Buyers, namely, M/s Techno Crafts, M/s Mewat Grit Udyog and corroborative of statements Shri Ramesh Mehndiratta. 15. We have examined the statements whereas the Ramesh Mehndiratta has stated that the rubber stamp and the invoices must have been left by Shri Harish Kumar his brother in his premises by mistake and the invoices has been written ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson who was dealing with the transportation was not examined, how the statement of Shri Gopal Ahuja can be relied. Moreover, drivers of the vehicles were also not examined. In that circumstances, the statement of Shri Gopal Ahuja is cannot be the basis to allege the clubbing of clearances of M/s Harish Engg Works with M/s AAR Kay. We have also gone through the statement of the buyer Shri Ashwani Mehta, Proprietor of M/s Techno Crafts who has stated that they have placed a verbally order on M/s AAR Kay and received the machinery on the invoices of M/s Harish Engg Works and M/s Mahalaxmi Engg Works. Admittedly, the purchase order was placed verbally and the invoices were issued by M/s Harish Engg Works, who received the payment through cheque and no cash transaction were taken place. There is no evidence to show that the machinery cleared on the invoices of M/s Harish Engg. Works were manufactured by M/s AAR Kay. We also take a note of the fact that another statement of buyer M/s Mewat Grit Udyog was recorded to allege that the goods were manufactured by M/s AAR Kay. In fact, the statement of Supervisor Shri Jagdish Prasad Sharma was recorded who stated that he has no knowledge reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arts, therefore, the said clearances of parts which have been admitted by Shri Vinay Batra have manufactured by him cannot be clubbed in the clearances of M/s AAR Kay. We also take a note of the fact that these jaw crushers and rotopactors have been cleared on the invoices of M/s DKV Enterprises and payment thereon have been received by M/s DKV Enterprises through cheque and no cash was returned back to M/s AAR Kay, but, Shri Vinay Batra in his statement as stated that they have compensated by doing fabrication for the appellant M/s AAR Kay and sending raw material purchased by it to the appellant. In support of this statement, there is no evidence on record to show that raw material purchased by M/s DKV Enterprises have been unloaded in the premises of M/s AAR Kay. Moreover, no evidence has been brought on record in support of the statement of Shri Vinay Batra that they have done any job work or fabrication work on behalf of the M/s AAR Kay. Merely, on the basis of the statement of Shri Vinay Batra clearances of M/s DKV Enterprises cannot be clubbed with the clearances to the M/s AAR Kay in the absence of corroborative evidence. We have also gone through the statement of Shri Anup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the person who can reveal the truth, but, the same has not been examined, therefore, the transporter s statement is not admissible evidence. With regard to the statement of Shri Ramesh Mehndiratta, we have dealt the same in the case of M/s Harish Engineering Works and same observations are to be taken here as it is. We also take a note of the fact that the buyers/sellers were not issued any show cause notice for aiding and abating the payment of duty, therefore, the statements of buyers/sellers are doubtful and can t be relied upon. 23. In view of the above analysis, we hold that the clearances made M/s Maa Laxmi Indt. Hardware Store cannot be clubbed with the clearances of M/s AAR Kay in the absence of any positive evidence on record. 24. We further take a note of the fact that the redemption fine of ₹ 4.00 Lacs has been imposed on M/s AAR Kay industries alleging that misdeclaration of size and value of the jaw crushers seized on 20.04.2010. We find that the allegation is of undervaluation based on the clearances of other jaw crushers cleared by M/s AAR Kay during the relevant time. No investigation was conducted with the buyer whether the buyer has agreed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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