TMI Blog2019 (4) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... kash Industries Ltd, cannot be relied upon and has to be eschewed from evidence - the department has also relied upon the documents recovered from the premises of the appellant, however, we find that there is neither any signature of the appellant or panchas or even officers of DGCEI, and the said documents have never been confronted to the proprietor of the appellant. This clearly raises a suspicion on the genuineness of the said documents, as rightly argued by the learned Counsel for the appellant, especially, when there is no other cogent and positive evidence adduced by the department in the nature of purchase of raw material, use of electricity, sale of final products, payment, realization of sale proceeds, mode and flow back of funds. There is no iota of evidence on records as per law - Appeal allowed - decided in favor of appellant. - Excise Appeal No. 51298 of 2018, 51301 of 2018, 51743 – 51744 of 2017 - Final Order Nos. 50528 – 50531/2019 - Dated:- 12-4-2019 - Mr. Anil Choudhary, Member (Judicial) And Mr. Bijay Kumar, Member (Technical) Sh. Jitin Singhal Sh. Manish Saharan, Advocates for the appellant Sh. H. C. Saini, Authorised Representative for the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The learned Counsel for the appellant appearing on behalf of the appellant vehemently submitted that the huge demand has been confirmed merely on the basis of records of M/s Deepak Industries, M/s Prakash Industries Limited and the appellant, without adducing any other corroborative evidence. It is well settled law that as held by the Hon ble High Court of Allahabad in the case of Continental Cement Company Vs Union of India, 2014 (309) ELT 411 (All.), the department is required to adduce clinching evidence of the matching purchase of raw material, use of electricity, sale of final products, payment, realization of sale proceeds, mode and flow back of funds. The relevant extract of the judgment is reproduced here for ready reference:- 12. Further, unless there is clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal in Appeal No. E/51274/2017. It is submitted that, if this Tribunal allowed the appeal of M/s Deepak Industries, thus the present case does not survive against the appellant and impugned order is bad in law and on facts and liable to be set aside. 3.2 It was further submitted that even on merits of the present case, the impugned order is liable to be set aside. The department is heavily relying upon the ledgers recovered from the premises of M/s Deepak Industries wherein the details of supply of HB Wire had been written by pencil. Firstly, the said ledger is not reliable inasmuch as there is no signature of any person either authorised person of M/s Deepak Industries or panchas or central excise officers. This clearly raises a suspicion that the said documents are not reliable and cannot be relied upon. Secondly, the department itself admits that many entries are not legible, therefore, Shri Ravindra Singh was asked by the DGCEI officers to prepare a computerized or typed statement on its basis. When entries in the ledgers are not legible, then it cannot be relied upon, by guessing the entries and typing them on a computer in excel format. It is well settled law that when p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is no admission that the appellant had received goods without bill, in fact it has been clearly stated that the appellant had received goods on bill only. This clearly shows that the department is falsely alleging/mentioning wrong facts in the SCN. It is submitted that when the department is mentioning wrong facts in the SCN, from the statements, then it raises a strong suspicion on reliability of documents as none of the documents have signature of the appellant or any other person. It is pertinent to note that, the search has been conducted by the officers of DGCEI, Pune vide search warrant dated 05.02.2014 at the factory premises of the appellant, which is at Raipur, Chhattisgarh on 05.02.2014. The distance between both the cities is around 1000 Kms. It is pertinent to note that, on perusal of the Panchnama it is clear that the department did not recover any document from the factory premises of the appellant. The appellant in his statement recorded on 05.02.2014 (on same day) has clearly stated that, his documents are lying with Chartered Accountants and he promises to give the same within a week, however, suddenly, he gives the documents to the officers of the DGCEI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statement (RUD-14) clearly brings on record that there is no admission that the appellant had received goods without bill, in fact it has been clearly stated that the appellant had received goods on bill only. This clearly shows that the department is falsely alleging/mentioning wrong facts in the SCN. It is submitted that when the department is mentioning wrong facts in the SCN, from the statements, then how the documents can be relied upon in the absence of any other positive evidence. It is further submitted that, the department had not confronted the said records with the appellant, then on what basis the department assumed that the said entry relates to production or clearance or production order or anything else, hence the said records are not reliable. 3.6 It was submitted that, it has been alleged that as per Annexure-VII of SCN, the appellant had cleared 2469.901 MT (1125.483 MT+1344.418MT) of Binding Wire during the period 2010 to 2012 (July, 10 to March, 11 + 2011-12), whereas on the contrary, it has been alleged in para 7.2 of SCN that quantity cleared by the appellant was 3410.313 MT during the period July, 2010 to November, 2011, which is contrary and totally in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransportation of finished goods when the registration number of vehicles is present c) Production capacity of the appellant especially when the appellant has stated that they could manufacture only 1.5 MT of Binding wire per shift and they are working in one or two shifts depending on the demand. If the appellant works to the fullest of its capacity, then it would be able to manufacture 2,625 MT for the three and half years (250 working days per year), whereas the department have alleged 5125 MT. d) No unexplained cash recovered as according to the department this would have involved ₹ 23 crores on sale of 5125 MT. e) No excess consumption of electricity and manpower. It is submitted that no evidence had been brought on record by the revenue to allege clandestine removal of goods. It is submitted that the clandestine removal of goods is a serious charge and has to be proved beyond reasonable doubt as held by the Hon ble High Court of Patna in the case of CCE Vs Brims Products, 2011 (271) ELT 184 (Pat.). The appellant also places reliance on following judgments: - i) Sakeen Alloys Pvt Ltd Vs CCE, Ahmedabad, 2013 (296) ELT 392 (Tri-Ahmd), also upheld by High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m-duty benefit as held by this Tribunal in the case of 2014 (312) ELT 699 (Tri-Del.). 3.12 It was further submitted that the appellant herein is simply redrawing wire, to make binding wire. Hence, the impugned activity does not amount to manufacture and not liable to pay central excise duty. 3.13 Even otherwise, it is submitted that, if the appellant is liable to pay central excise duty, then the appellant is entitled to get the benefit of cenvat credit. It is submitted that the learned Commissioner had allowed the cenvat benefit in his Order-in-original No. RPR/Excus/000/Com/08/2017 dated 22.5.2017. It is also submitted that value addition on drawing of HB Wire to Binding Wire is not much, the net demand of duty in respect of appellant, would be meagre. It is further submitted that the appellant would not indulge in clandestine activities with an intention to evade payment of duty, when net effect of payment of duty would be meagre. Therefore, the extended period of limitation would not be applicable to the facts of the present case. He, therefore, prayed that appeal may be allowed by setting aside the, impugned order. 4. The learned AR appearing on behalf of the revenue, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods have been purchased and cleared on bills. We further find that the department has also relied upon the documents recovered from the premises of the appellant, however, we find that there is neither any signature of the appellant or panchas or even officers of DGCEI, and the said documents have never been confronted to the proprietor of the appellant. This clearly raises a suspicion on the genuineness of the said documents, as rightly argued by the learned Counsel for the appellant, especially, when there is no other cogent and positive evidence adduced by the department in the nature of purchase of raw material, use of electricity, sale of final products, payment, realization of sale proceeds, mode and flow back of funds as held by the Hon ble High Court of Allahabad in the case of Continental Cement Company Vs Union of India, 2014 (309) ELT 411 (All.) and CCE, Delhi-II Vs. Balaji Perfumes, 2017 (358) ELT 87 (Del.). We further find that there is no iota of evidence on records as per law. We also hold that in the facts of the present case, the allegations are not sustainable. 6. In view of the above findings and observation as well as legal position, we thus hold t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are by the manufacturer M/s Maa Durga Wire and Shri Ram Chandra Jaiswal. The facts are more or less similar to the facts of M/s Shri Ram Wires. Here also based on the follow up action pursuant to search on M/s Deepak Industries was conducted at the premises of the appellant and certain records were recovered and statement dated 13.05.2015 was recorded of Shri Ram Chandra Jaiswal, wherein he admitted that they received goods from M/s Deepak Industries both with bills and without bills and the same has been used in manufacture and clearance. Based on such investigation statement was recorded. Show cause notice dated 04.09.2015 was issued and it appeared that duty on 1938.63 MT of HB Wire despatched by M/s Deepak Industries as per their ledger, only 95.970 MT have been accounted for by this appellant. Thus, it appeared that appellant have cleared 1843.060 MT of binding wires valued at ₹ 9,85,91,193/-. The Central Excise duty found involved of ₹ 1,14,07,042/- In the course of enquiry, it was revealed that appellant was manufacturing and clearing binding wire on job work basis for various buyers. As the stipulated procedure for job work was not followed, the tax liability ..... X X X X Extracts X X X X X X X X Extracts X X X X
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