9911796707
TMI Blog2018 (12) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... 97,013/- from M/s AAR KAY Industries, Anangpur Road, Gurukul Indraprastha, Sarai Khwaja, Faridabad (Harayana) under Section 11AB of the Central Excise Act, 1944. I impose penalty of Rs. 87,97,013/- on M/s AAR KAY Industries, Anangpur Road, Gurukul Indraprastha, Sarai Khwaja, Faridabad (Harayana) under Section 11AC of the Central Excise Act, 1944. However, in terms of proviso to Section 11AC if the entire amount of duty and interest as due thereon is paid by the party within 30 days from the date of receipt of this Order, then the amount of penalty will be equal to 25% of the total amount of duty so determined provided the reduced amount of penalty is also paid within 30 days from the date of receipt of this order. Further the no separate penalty under Rule 25 of the Central Excise Rules, 2002, as proposed in the impugned show cause notice, is required to be imposed once the penalty has been imposed under Section 11AC of the Act. I order confiscation of the seized Jaw Crushers valued at Rs. 11,00,000/- Rs. Eleven 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 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mand duty and for confiscation of goods seized were proposed to be held liable for confiscation and to impose penalty of all the above said firms/persons involving in clandestine removal of goods. The show cause notice was adjudicated and impugned order as above in para 1 was passed holding that the appellant M/s AAR Kay has made clearances in the name of all these firms to evade payment of duty by availing SSI exemption limit. It was also held that the goods are liable for confiscation. Consequently, redemption fine of Rs. 4.00 Lacs was imposed and penalty on the co-appellants were also imposed. Apart from the above mentioned appellants, no other co-notices is before us. Therefore, we are disposing of the appeals which are listed before us filed by the above appellants mentioned herein above. 3. Ld. Counsel appearing on behalf of the appellants submits that M/s Mahalaxmi Engg Works is stituated in the same premises of M/s AAR Kay and SSI exemption is not available to two 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 wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statement of Shri Gopal Ahuja, transporter. She further submits that one of the buyer M/s Techno Crafts was also visited in respect of invoices issued by M/s Harish Engg Works for sale of jaw crushers. The statement of Shri Ashwani Mehta, is not inculpatory. In fact, he has stated that there was no written order placed and payment against the machinery received by them were made to M/s Harish Engg Works. Therefore, the statement is in favour of the appellants. She also submits that another buyer M/s Mewat Grit Udyog was also investigated in respect of the invoices issued by M/s Harish Engg Works for sale of vibrating screens and the supervisor Shri Jagdish Prasad Sharma has stated that he has no knowledge regarding purchase of machinery and Shri Kishan Lal Gupta can explain but no statement of Shri Kishan Lal Gupta was recorded. In that circumstances, the clearances made by M/s Harish Engg Works cannot be clubbed with the clearances made by M/s AAR Kay. 4. She 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the goods were loaded from the appellant's premises and the GR'S written by Shri Sumit Mehendiratta and all the vehicles were arranged and freight was paid by M/s CHM Projects. To counter this allegation, it is her submission that drivers/owners of the vehicles were not examined, Shri Sumit Mehndiratta was also not confronted with the statement of the transporter and transporter's statement is recorded in 2010 whereas the invoices issued in 2006. Therefore, without any corroborative evidence, the statements cannot be relied upon. Further, Shri Ramesh Mehndiratta nowhere admitted that they have used the invoices M/s DKV Enterprises for sale of goods manufactured by them. It is contended that the clearances made by M/s DKV Enterprises cannot be clubbed with the sale made by M/s AAR Kay. 5. With regard to the clearances on the bills allegedly used by M/s AAR Kay of M/s MAA Luxmi Hardware Store. The allegation has been made on the basis of the statement of Shri 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 coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with the department and has to be treated as the cum duty price. It is her further submission that the show cause notice has alleged undervaluation of five invoices which were issued to Technocrafts by M/s Harish Engg Works and M/s Mahalaxmi Engg Works. The said allegation is based on the statement of Shri Ashwani Mehta wherein it has been stated that the differential amount over and above the invoices was paid in cash. It is her submission that the two invoices issued by M/s Harish Engg Works are dated 11.09.2009 and 13.01.2009, these invoices do not mention the size of the machines and three invoices are issued by M/s Mahalaxmi Engg Works wherein no size of the machines was written. Size of the machines cannot be verified as the goods are available. Moreover, Shri Sumit Mehndiratta, Shri Ramesh Mehndiratta and Shri Harish Kumar were not confronted with the statement of Shri Ashwani Mehta. Therefore, without any corroborative statement of Shri Ashwani Mehta, 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 canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the order on M/s AAR Kay only and received all the machines from the premises of M/s AAR Kay but on the bills of M/s Mahalaxmi Engg Works and M/s Harish Engg. Works. The buyer, namely, M/s Mewat Grit Udyog have also admitted that they have made purchase order on M/s AAR Kay and received the machinery from M/s AAR Kay under the invoices of others. He also submitted that M/s CHM Projects was also visited and Shri Niranjan Singh, Accountant of the company has stated that Shri Ramesh Mehendiratta informed him that he will supply the goods to them on the bills of M/s DKV Enterprises and M/s Maa Luxmi Indl. Hardware Store and also asked them to make payments in favour of these firms only. He also submitted that the statement of Shri Gopal Ahuja, was also recorded who in consultation with his employee stated that they have received orders from Shri Sumit Mehendiratta for transportation of goods from the premises of M/s AAR Kay. Another transporter namely, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... four firms to clear the goods manufactured by them to remain under SSI exemption limit. We find that during the course of investigation, the clearances made by M/s Mahalaxmi Engg Works under proprietorship of Shri Sumit Mehandiratta have been admitted by Shri Ramesh Kumar Mehandiratta proprietor of M/s AAR Kay as both the units are located in the same premises and SSI exemption is not available to two units using the same premises and made a payment of Rs. 40.00 Lacs. We have gone through the details of the clearances made by M/s Mahalaxmi Engg. Works, which is as follows:- On going through the said details, we find that if the clearances of M/s Mahalaxmi Engg Works are clubbed with the clearances of M/s AAR Kay then the total duty works out of Rs. 40,12,136/. The said demand of duty is to be considered as cum duty price. Therefore, the said benefit is to be given and after giving the benefit to the appellant, the demand of interest is to be calculated and adjusted against the said amount of Rs. 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 entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied upon. We have also seen the statement of Shri Sumit Mehndiratta, the said statement is not inculpatory. In fact, he has stated in the absence of or on the request of his uncle Shri Harish Mehndiratta, he prepared the invoices of M/s Harish Engg Works. Shri Sumit Mehndiratta never admitted that the machinery sold on the invoices of M/s Harish Engg Works was manufactured by M/s AAR Kay in their premises. The revenue has heavily relied upon the statement of Shri Gopal Ahuja. We have gone through the statement of Shri Gopal Ahuja, he has stated that his firm does not have any transport vehicle and arranged the vehicles from outside and one Shri Jagdish Chander was providing of vehicles to M/s Harish Engg Works, but, unfortunately the statement of Shri Jagdish Chander who is the actual person dealing with the transportation was never recorded. This puts a question-mark on the investigation when a person 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 clearanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terprises have been used by M/s AAR Kay. We find that the main evidence relied upon by the Revenue is the statement of Shri Vinay Batra, Proprietor of M/s DKV Enterprises, Shri Anup Lohia, Account Manager of M/s Sandeep Steel Traders, the statement of one buyer M/s CHM Projects and the statement of Transporter, Shri Ashok Kumar Arora, Proprietor of M/s Anand Sports Carrier, also the statement of Shri Ramesh Mehndiratta Proprietor of M/s AAR Kay Industries. 19. Shri Vinay Batra, in his statement has stated that they were engaged in manufacture of belt conveyors, vibrator, jaali, drum pulley etc (parts of stone crushers plants), but he never manufactured jaw crushers. We find that 30 invoices were alleged to be used by M/s AAR Kay for clearances. Out of these 30 invoices, only two invoices are for jaw crushers and one invoice is for sale of Rotopactors. All other invoices are for sale of parts, 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njan Singh is not inculpatory. The said statement merely says that the goods will be delivered on the invoices of M/s DKV Enterprises, which does not mean that the goods shall be manufactured by M/s AAR Kay and shall be delivered on the invoices of M/s DKV Enterprises. Therefore, the said statement cannot be relied upon. With regard to the statement of transporter of Shri Ashok Kumar Arora, we find that he has stated that he has given GRs to Shri Sumit Mehndiratta and all these GRs have been written by Shri Sumit Mehndiratta or the employee. The goods were transported by the vehicles arranged by him and not owned by him, we find that no statement of any owner of the vehicles or the drivers of the vehicles have been recorded to prove that the machines have been supplied by M/s AAR Kay or machines have been loaded from the premises of M/s AAR Kay. In fact, the driver of the vehicle 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvaluation. Moreover, 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 Mehta is doubtful and can't be relied upon. In that circumstances, due to lack of evidence on record, the charge of undervaluation is not sustainable. 26. We take a note of the fact that a penalty of Rs. 10,00,000/- has been imposed on Shri Sumit Mehndiratta which is on higher side. In view of the above discussion, the same is reduced to Rs. 1,00,000/-. 27. In view of the above discussion, we pass the following order:- (a) The clearances made M/s Mahalaxmi Engg Works are clubbed with the clearances of M/s AAR Kay and cum duty benefit is to be given to the appellant (M/s AAR Kay). M/s AAR Kay has paid a sum of Rs. 40.00 Lacs during the course of investigation, therefore, the said amount shall be appropriated and the remaining demand of interest shall be paid by the appellant alongwith 25% of duty as penalty under Section 11 AC of the Act within 30 days of the receipt of this order. (b) The clearances ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
