TMI Blog2019 (4) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... dmitted position in Para 6 and Para 18 respectively of the Show Cause Notice, which ruled out relevance of these documents with the Appellant-Rishabh. The fact of Smt Rashmi Jhawer s organizing and handling business activities from Calcutta is unambiguously clarified by Shri Sandeep Maheshwari in his statement recorded on the spot, on the day of search on 08.01.2016. While specifying his own responsibilities in the activities of maintenance of the records of the Appellant-Rishabh, at Hathras. We do not find any evidence on record to support the Revenue s claim of issue and /or service of any of the five summons to Smt. Rashmi Jhawar and thus her avoidance to tender evidence. Reliability on statements - HELD THAT:- The Adjudicator had denied cross examination of Shri Santosh Jhawer , on the grounds of being co-accused and also at the same time relied on his statement recorded behind the back of the Appellant-Rashmi Jhawer , implicating Smt. Rashmi Jhawar. As per settled law, the statement of co-accused is a evidence but the statement of so claimed co-accused Shri Santosh Jhawer have been heavily relied against the Appellant-Rishabh, disregarding and by passing other direct evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i and brought them to the premises of SKJ and included these in the panchnama of SKJ, as having been found and resumed from there. That physical stock of goods-scrap, ingots etc, was taken, and found as follows:- S.No Description of goods No. of pieces Weight in Kgs. Value in Rupees Remarks Finished goods (i) Zinc Ingot 4734 41798.400 5015808.00 (@ 120/- per kg.) (ii) Aluminium Ingots 672 2688.000 322560.00 (@ 120/- per kg.) Imported Goods (iii) Zinc Ingot 1160 23200.000 3480000.00 (@ 150/- per kg.) Raw Material (iv) Aluminium Wire 1500.00 225000.00 (@ 130/- per kg.) (v) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ingots, the duty was worked out and demanded invoking the extended period of limitation as follows:- M/s SKJ Metals Co. Pvt. Ltd. Financial Year period Quantity cleared (in Kgs.) as per Balance Sheet) Value (in Rs) (As per Balance Sheet) Average Rate of goods as per incriminating documents Dutiable Value (in Rs.) Rate of Duty Total Duty Liability (in Rs) 1 2 3 4 5 6.(3x5) 7 8 2011-12 01.04.11 to 16.03.12 1678624.81 162948279.21 126.88 212983916.00 10.30% 21937343.00 2011-12 17.03.12 to 31.03.12 72983.69 7084707.79 126.88 9260171.00 12.36% 1144557.00 2012-13 01.04.12 to 31.03.12 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.36% 14908722.00 2013-14 01.04.13 to 31.03.14 1250466.55 124397833.00 139.31 174202495.00 12.36% 21531428.00 2014-15 01.04.14 to 28.02.15 1356877.91 161997870.83 166.80 226327235.00 12.36% 27974046.00 2014-15 01.03.15 to 31.12.15 123352.54 14727079.17 166.80 20575204.00 12.50% 2571900.00 2015-16 01.04.15 to 31.12.15 71709595.00 160.40 71709595.00 12.50% 8963699.00 Total 4608220.00 554100776.00 730480728.00 88105944.00 8. Thereafter common Show Cause Notice No. IV CE (9)CP/Agra/SKJ/03/2016/30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us is as to whether the findings of the Adjudicator holding that both the Appellants were operating from the same common premises and were engaged in the manufacture and Clandestine removal the Zinc Ingots, since inception , by mis-declaring the same as Zinc scrap / Zinc in the respective invoices or without invoices, and consequent confirmation of Demand of duty and penalty, is tenable in the facts and circumstances of the case . 13 The ld Advocate took us through the relied upon evidences as mentioned in para 46 of the impugned Order, relied by the Revenue, to establish involvement of Appellants in the alleged manufacturing activities since inception. He had put forth various reasons and argued that the credibility and admissibility of the relied upon documents and statements do not stand on the legal anvil. Ld DR Shri Rajeev Ranjan, Additional Commissioner submitted that the present demand has been confirmed by the Adjudicating Authority for valid reasons and cannot be faulted. 14 (a). On perusal of the documents, we find that the witnesses to the Panchanama and representatives of the Appellants were not associated in the search proceedings, is also evident from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch proceedings, do not substantiate recovery of any private records but invoices other records relating to the Appellants, without mentioning the exact place where such records, if any, were found located and from where their recovery was effected, the identity of the officers who allegedly claimed to have found such records, the fact of recovery in presence of witnesses and/ or the authorized signatory of the Appellant, the description of documents and their contents. 16(b). We have however gone through the relied upon private records ie Note pads, Writing Pads and Registers and notice that contrary to the claim of Revenue the relied upon documents do not bear the names of either of the Appellants and there is no other indication in these records to connect the documents to the Appellants . 16(b)(i). We notice that the Note Pads do not contain the details of receipt of Raw-materials , manufacturing of Zinc Ingots and clearance thereof ; that each page of these Note Pads indicate some names and dates with some figures scribbled thereon ; that there is no signature, name or designation of the scribe of the documents , that the Note pads used nomenclature namly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s described by any other nomenclature and brands other than RJ, PJ and LM were not manufacture of the Appellant. 16(d). We further find that the above named records lack corroboration by any tangible evidence. That the entries in resumed private records, not bearing name of factory and description of goods, enquiry at the buyers end to establish the co-relation between these records and the manufacture and reflected sale transactions, receipt of sale consideration to prove the event of manufacture, not sufficient to establish charges of clandestine manufacture and clearances thereof. 16(e). We, on perusal of the Table 2 of Show Cause Notice itself further find that the Revenue itself had serious doubts about the veracity of contents of the Note / Writing Pads and Register as expressed in note appended to the said Table-2. 16 (f). We also observe that the result of the cross-examination of alleged buyers and also their written communications duly supported by the entries in their books of accounts do not corroborate transactions found recorded in the incriminating note/writing pad. Therefore the said revelation also discredits the authenticity of these note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have however failed to produce any evidence to establish maintenance and linkage of these documents with the Appellants. 16(j). We, in light of the aforesaid deliberations and findings have no option other than to reject the evidence value of the said private records, resumed from the premises of the SKJ and linkage of the said private records to the Appellants. 17(a). As regards the lone sheet of computer printout titled ZINC UNDER LEDGER : MAMA JI CALCUTTA 12.03.13 TO 25.05.13 the same was resumed from the residence of Shri Anil Malik, Director of M/s Cartoon Sanitation Pvt. Ltd., Mathura. These are relied upon to establish manufacture and clandestine clearance of Zinc Ingots , based on deposition of Shri Anil Malik on the details recorded therein. We on hearing both sides and perusal of document, hold that the print out is devoid of even rudimentary details to connect it to the Appellant. The Print out lacked specific description of goods , name and identity of the supplier of the goods , nature of transactions i.e. whether pertaining to receipt of sums, trading, clearance, sales and the description of goods transacted, mode of transportation of goods, payment det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uncertain terms opted to give up its witness, and his statement becomes inadmissible as evidence. 17(f). We also discover from the Ld Advocate s submissions that Under Section 36A of the Central Excise Act 1944, the truth of contents of the subject print out cannot be presumed , as M/s Cartoon Sanitation Pvt. Ltd., Mathura or Shri Anil Malik, Director from whose custody or control the print out has been seized, have not proceeded against severally or jointly with the Appellants . Therefore the resumed print out have been unlawfully relied as evidence against the Appellants, particularly when there is no independent corroboration. 17(g). The ld DR, did not dispute the provisions of Section 36A but without specifying, claimed that there were other corroborations to substantiate authenticity of the print out. We however observe that there is total lack of corroboration and even the Books of accounts do not support the print out leave aside their linkage with the Appellants . 18(a). Coming to evidentiary value and reliance on the retracted statements of S/Shri Santosh Jhawer dated 15.01.2016 (Proprietor of SKJ), Ramesh Chandra Tiwari and Sandeep Maheshwari representat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Deponent for cross-examination or allowed the cross-examination by the Department. 18(c). We also discover that the Adjudicator did not record findings on the decisions cited by the Appellants, on the admissibility of statement recorded under Section 14 . On the contrary, relying on a suitable part of observation of Hon ble Tribunal in the case of CCE, Mumbai-V Vs. Nippon Zip Industry Pvt. Ltd. [2009 (236) ELT 554 (Tri. Mumbai)] the facts of which are distinguishable, the Adjudicator held that statement under Section 14 of Central Excise Act, 1944 is reliable as evidence. He overlooked the substantial portion of the judgement holding that such confessional statements are acceptable only if is found to be voluntary, and if retracted, court is required to examine whether it was obtained by threat, duress or promise and whether the confession is truthful, as held in decision of Hon ble Delhi High Court Delhi in the case of S.N. Ojha Vs. Commissioner of Customs 2016 (331) E.L.T. 33 (Del.) 21.----------- the broad principle that statements made have to be voluntary and not under threat, coercion, would nevertheless apply------------- 18(d). We find that the observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have carefully perused the Photographs of search operation. We agree with the observations of the Adjudicator that Photographs of search operation show manufacturing of Ingots on 07.01.2016, but do not subscribe to the view that the Appellants were engaged in the manufacturing ingots in the past , for which direct and positive documentary evidences of manufacture are needed . The Adjudicator s findings that both the Appellants were undertaking manufacture from the same premises relying on the photographs is totally delusive in the absence of any indication/clue what so ever about the conduct of operation by both the units in the photographs . 19(a). As regards the reliance on the Statements of 9 buyers of Appellants whose names are claimed to appear on such Note Pads, Registers, etc., we notice that the Adjudicator had himself in para-53.8 of the impugned Order observed that Out of these, 10 persons responded and 8 persons appeared for cross-examination. One person, on behalf of his two firms, submitted written submissions and expressed his inability to attend cross-examination due to his old age and illness. All these persons, except Shri Anil Malik, Director of M/s Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and LM brands capable of manufacturing Ingots of around 9Kgs each and thus agree with the ld Advocate that the seized/ confiscated Aluminum Ingots bearing Star brand as described in impugned Order and weighing differently (avg 2.7 Kgs/ piece) are not produce of the Appellant-SKJ. Thus not only the Imported Zinc Ingots but the Aluminum Ingots were also those retrieved from the Imported Scrap consignments by the Appellants. Consequently the seizure and confiscation of these goods is not justified under the Central Excise Law, by any stretch of imagination. 20(d). We further find that by virtue of Nil value of clearance of the manufactured Zinc Ingots during the year 2015-16 (upto 02-01-2016) the Appellant-SKJ was neither obliged to take registration nor was liable to pay duty vide Notification No-8/2003-C.Ex dated 1.03.2003 and the seizure of own manufactured goods based on their liability and confiscation on the grounds that the said quantity attracted Central Excise duty was also not called for . The Adjudicator had also arbitrarily and unlawfully ordered appropriating the involuntary deposit of ₹ 10 lakhs towards duty, without assigning any reason . We find from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the Show Cause Notice, that too from the alleged common premises of the Appellants and clandestine removal thereof.. 21(a). We also observe that the Appellants are not required to prove the negative, and had furnished sufficient evidences to counter the bald allegations . The Revenue had however arbitrarily and whimsically declared the contra documentary evidences produced by the Appellants as fabricated 22(b). We find from the Bills /Challans and payment documents of Pollution control Equipment, machinery / equipments required for the manufacture of Ingots, chemicals for regular maintenance of the production machinery/ equipments, chemicals used in the production and inputs used for firing of Furnaces were all purchased by Appellant-SKJ, during the period between July 2015 to Dec 2015. We further find that the Agreements with labour organizer for segregation / sorting of Scrap and later for production of Zinc Ingots were also submitted by the Appellant-SKJ in support of commencement of the production activities from 02.01.2016. In light of these evidences we do not subscribe to the Adjudicator s action to arbitrarily declare these documents as fabricated, without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts to the Commissioner Central Excise, Agra . We do not feel that any further evidence was required to substantiate the claim .That if at all any further evidence is needed by the Revenue, the same could have been gathered by acceding to the Appellant s request for testimony of Smt Sandhya Maheswari, along with the officers who were associated in the search or by acceding to Shri Sandeep Maheshwari s request of recording his statement before some other officer. We also take notice that the departmental officers were withheld from testimony , after having permitted their cross-examination. Further we do not find any evidence of issuance or service of summons to Shri Sandeep Maheshwari, except the summon dated 12.01.2016 for tendering statement the same day, that too at Agra. We therefore do not have any hesitation to hold that the officers picked up the records of the Appellant-Rishabh from their office located near Canara Bank, Circular Road, Hathras, and shown as resumed from Appellant-SKJ s premises. 23(c). Further in so for as the linkage of the private records like Note Pads , Writing Pads and Register and the Computer print out with Appellant-Rishabh is concerned , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s about 5 Km from the Appellant-SKJ premises at Ruheri. We have perused the documents evidencing possession/ title over the premises located near Canara Bank at Circular Road Hathras, to buttress receipt, discharge, storage of the imported scrap consignments of the Appellant- Rishabh, after transportation from Calcutta Port, in their own premises and further sale there from. We have also seen the copies of the transport Bilties/GR s evidencing transportation of the imported Zinc Scrap of the Appellant-Rishabh from Sick Lane Yard of Calcutta to their go-down/ yard located at Circular Road, Hathras and the corresponding freight payment, vouchers for these transportation, freight payment, confirmations issued by the concerned transporters evidencing delivery up to the godown yard of the Appellant at Circular Road, Hathras, and set of sample documents pertaining to disposal/ delivery of Zinc Scrap, from the Circular Road Godown of the Appellant-Rishabh to various buyers. 23(g). We further observe that the Adjudicator had denied cross examination of Shri Santosh Jhawer , on the grounds of being co-accused and also at the same time relied on his statement recorded behind the back of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
