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TMI Blog2019 (8) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... einafter referred as SMS), located at Ghaziabad were engaged in the manufacture of Copper Wires and Copper Strips. Shri Sandeep Gupta was Proprietor of the said manufacture unit. Shri Subhodh Gupta was employee of SMS. M/s Mayank Metal, M/s Shivam Metals and M/s Vasudev Udyog were units manufacturing Copper Ingots and all of them were located in Mandoli Industrial Area, Delhi. Copper Ingots was raw material for manufacture of Copper Wires and Strips. On 27.07.2010 officers of DGCEI conducted searches at following premises:- i) Factory premises of SMS. ii) Residential Premises of Shri Sandeep Gupta, Proprietor. iii) Residential Premises of Shri Shubodh Gupta. iv) Shop Premises of M/s Sandeep Metal Supply at Chawri Bazar, Delhi. v) Factory premises of M/s Mayank Metals. vi) Factory premises of M/s Shivam Metal. vii) Factory premises of M/s Vasudev Udyog. At the factory premises of SMS, officers found two parallel invoices and few hand written 'Kacha Slips'. At the residential premises of Shri Sandeep Gupta Officers did not find any incriminating material. At the residential premises of Shri Shubodh Gupta Officers found 31 Small Spiral Pads which were maintained for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Vasudev Udyog and that to make up for the source of material they were using fake invoices issued by various traders. Therefore, all the appellants were issued with a show cause notice dated 18.04.2012, through the said show cause notice Central Excise duty demand of Rs. 6,71,05,300/- was raised against SMS with proposals for recovery of interest & imposition of penalties. Further, all the other appellants were proposed for imposition of penalties. It was alleged in the said show cause notice that SMS had indulged into clandestine manufacture and removal of Copper Strips and Wires, out of clandestinely procured copper ingots raw material by adopting following modus-aprandi. Shri Sandeep Gupta, Proprietor of SMS connived with Shri Subodh Gupta and arranged for some Copper Ingots manufactures such as M/s Mayank Metals, M/s Shivam Metals and M/s Vasudev Udyog to supply Copper Ingots to SMS on cash basis without invoices and without payment of Central Excise duty. The ingots manufacturers were located in Delhi. Therefore, to transport Ingots from Delhi to Ghaziabad a trading firm in the name of Shri Balaji Udyog, Ghaziabad was created in which Shri Subodh Gupta was Proprietor and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenging earlier Order-in-Original dated 30.05.2014 was allowed by way of remand. 4. According to the above stated directions, Original Authority has allowed cross examination and allowed cross examination of seven traders and Shri Muhammad Ishrar employee of SMS. In respect of Shri Subodh Gupta, Shri Anil Kumar, Driver, Shri Shyam Singh, Shri Ajay Kumar Dev and Shri Suresh Chandra Sharma, Commissioner observed that said persons could not be contacted inspite of repeated efforts and therefore could not be produced for cross examination and proceedings for cross examination were concluded on 01.06.2017 and appellants were directed to file final reply. On 24.05.2018 learned Original Adjudicating Authority had passed the impugned order, confirming the demand and imposing penalties on all the appellants. Aggrieved by the said order all the above stated appellants are in appeal before this Tribunal. 5. Another show cause notice dated 18.04.2012 was issued to M/s Mayank Metals, M/s Shivam Metal, M/s Vasudev Udyog and Shri Sandeep Gupta. Through the said show cause notice Central Excise duty of around Rs. 2.32 crores was demanded from M/s Mayank Metals, that of around Rs. 2.9 crores was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no.40 stated that Shri Subodh Gupta appeared for personal hearing before him on 01.02.2018. iv) Inspite of Shri Subodh Gupta appearing before learned Original Adjudicating Authority the said authority did not allow cross examination of Shri Subodh Gupta. It was held by Hon'ble Allahabad High Court in the case of Commissioner of Central Excise, Meerut-I Vs M/s Parmarth Iron Pvt. Ltd. reported as 2010 (260) ELT 514 (All.) that revenue cannot rely upon statement, if the person could not be produced for cross examination. It was held by Hon'ble Allahabad High Court that if revenue seeks to rely upon various statements the same to have made available for cross examination to establish whether such statements were Voluntarily given and/or are relevant for the issue and that the findings cannot be arrived at against the assessee on the basis of uncontested material. The Hon'ble Court has further observed that if revenue chooses not to examine any witnesses in adjudication then their statements are not considerable as evidence. v) By relying on the said ruling by Hon'ble Allahabad High Court if all the statements of Shri Subodh Gupta are removed from the proceedings then there are no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsons from whose possession the documents were recovered is not allowed to be cross-examined. Therefore, in the absence of evidence of statements of said person the documents recovered from him are not admissible evidence. Further, the said documents were also not corroborated. xiii) Revenue did not bring any evidence to support transportation of such excess quantity of finished goods. The raw materials and finished goods as alleged would have required transportation of raw material and finished goods between Delhi and Ghaziabad for which transport vehicle needs to cross border check post. No evidence from Authorities regarding such interception of any vehicle coming to or coming from the appellant's factory. xiv) It is settled law that the charge of clandestine removal of excisable goods is to be established by revenue and onus is on revenue to establish the same. Hon'ble Allahabad High Court in the case of Continental Cement Vs Union of India reported at 2014 (309) ELT 411 (All.) has held that the allegation of clandestine removal is a serious charge which is required to be proved by revenue by production of sufficient documentary evidences. The Hon'ble High Court has observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant. Out of the said demand a demand of Rs. 2,10,59,744/- was on the basis of private records recovered from the residential premises of Shri Subodh Gupta. Further, a demand of around Rs. 22 lakhs was on the basis of private records recovered from the factory premises of the appellant. The said demands were confirmed with interest and penalties. The said order was challenged before this Tribunal. This Tribunal through the Final Order Nos.70198-70204/2017 dated 30 January, 2017 remanded the matter to Original Adjudicating Authority with directions which are already stated in the foregoing paragraphs. Accordingly, appellants requested to call prosecution witnesses for cross examination through 7 letters sent to the adjudicating authority during the period from 27.04.2017 to 01.04.2018. The learned Counsel submitted that the adjudicating authority did not make available Shri Subodh Gupta for cross examination inspite of directions of Tribunal in the aforesaid final order dated 30.01.2017. Further, he has submitted that since the cross examination was not allowed, the said witnesses cannot be taken into consideration for decision against the appellant as held by the Hon'ble Allahab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gupta demand was confirmed by learned Original Authority and he confirmed the demand in violation of directions of this Tribunal. Further, no evidence was relied upon in the form of procurement of raw materials and excess manpower used, excess electricity used and use of transport etc. for alleged clandestine removal. Further, the allegation of clandestine removal was from a place in Delhi to another place in Ghaziabad and the said transaction requires interstate crossing where record of truck movement is maintained at State Entry Point. Revenue did not bring any such record to establish that any such clandestinely cleared Copper Ingots were transferred to SMS. Therefore, relying on the ruling by Hon'ble Allahabad High Court ruling in the case of M/s Parmarth Iron Pvt. Ltd. the demand is not sustainable. 9. Heard Shri Rajesh Chhibber on behalf of M/s Vasudev Udyog Ltd. He has submitted that on the basis of third party evidence demand of Central Excise duty of around Rs. 41 lakhs was confirmed along with interest and penalty against the appellant. Shri Sanjeev Gupta Proprietor of M/s Shivam Metal had stated before the Central Excise officers that they had supplied Copper Ingots on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said spiral pads and files containing loose papers and decoded information revealed that SMS was receiving raw materials i.e. Copper Ingots from M/s Mayank Metals, M/s Shivam Metals and M/s Vasudev Udyog without payment of Central Excise duty and without raising of invoice on cash basis. The said fact was also accepted by the representative of M/s Mayank Metals, M/s Shivam Metals and M/s Vasudev Udyog through the statements recorded before the Central Excise Officers. On the basis of decoded information revenue was able to know that M/s Mayank Metal supplied around 7.1 lakhs Kg of Copper Ingots to SMS without payment of Central Excise duty. Further, it was revealed through decoding that M/s Shivam Metal supplied around 11.5 lakhs Kg of Copper Ingots and M/s Vasudev Udyog supplied around 1.41 lakh Kg of Copper Ingots to SMS in similar manner. On the basis of said decoding demand of Central Excise duties were raised against M/s Mayank Metals, M/s Shivam Metals and M/s Vasudev Udyog The said raw material received by SMS was used in the manufacture of Copper Wires and Copper Strips by SMS and the manufactured final products were cleared by SMS without payment of Central Excise duty and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order-in-Original No.02 is essential:- "40. The opportunity of Personal Hearing was given to the notice Shri Subodh Gupta on 19.05.2017, 24.05.2017, 01.06.2017, 26.09.2017, 30.11.2017, 01.02.2018 and 12.02.2018. Shri Subodh Gupta (appeared on 01.02.2018) and Shri Jatin Mahjan, Advocate appeared for personal hearing on the behalf of the above notice and reiterated their written submissions dated 01.02.2018 and 12.02.2018. 40.1. In the reply dated 01.02.2018 of Shri Subodh Gupta submitted that the counsel/authorized person who pursued the matter is out of station in connection with some personal urgent matter and at the time of hearing today at 15.30 hrs dated 01.02.2018, I am personally present and submits as under - 1.) In the aforesaid matter. I have been falsely implicated. I am not connected with M/s SMS (Proprietor Sandeep Gupta) and others against when allegations of evasion of excise duty has been made. That I pray for giving me an opportunity for written and/or submission on next earliest possible date. That Sandeep Gupta, Prop. M/s SMS had already made the submission and other notices have also already made their submissions in the aforesaid context in competent co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not a voluntary statement at all. Hence the impugned SCN is liable to be dropped. (v) It is submitted that whatever stated in the statement by the noticee are all dictated terms by the department and the noticee is not at all aware of any of any code language used as stated in the statements. It is submitted that the department forcefully made the noticee to write such statement giving the code language so used in the statement. It is submitted that the noticee was at no fault as he was not aware of any of the wrong activities if at all going on. Hence the penalty on noticee not imposable. (vi) It is submitted that it is an admitted fact in the SCN that the noticee was not the proprietor of the SBU and he was only an employee used by the main noticee, therefore admittedly there is no involvement on the part of the noticee in any evasion of duty. Hence it is submitted that the noticee under any circumstance is liable for imposition of any penalty." 13. We further note that the appellants have relied on the ruling by Hon'ble Allahabad High Court in the case of Commissioner of Central Excise, Meerut-I Vs Parmarth Iron Pvt. Ltd. (supra) and in the case of M/s Continental Cemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SMS. We further note that revenue has not collected any evidence of procurement of raw materials by M/s Mayank Metals, M/s Shivam Metals and M/s Vasudev Udyog nor they have collected any evidence in respect of excess production, dispatch of the goods, transport of goods, realization of sales proceed etc. and therefore, as held by Hon'ble Allahabad High Court in the case of Continental Cement Vs Union of India clandestine manufacture & removal of Copper Ingots by M/s Mayank Metals, M/s Shivam Metals and M/s Vasudev Udyog is not establish. Further, Shri Subodh Gupta though had appeared before the Original Adjudicating Authority on 01.02.2018 was not offered for cross examination by the Original Adjudicating Authority. The main case of revenue is based on decoding of the information from 31 small spiral pads and nine files containing loose papers recovered from the residential premises of Shri Subodh Gupta. Applying the ruling of Hon'ble Allahabad High Court in the case of Commissioner of Central Excise, Meerut-I Vs Parmarth Iron Pvt. Ltd. the evidence recovered from Shri Subodh Gupta is not admissible in the present case. For that reason also the clandestine manufacture and clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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