9911796707
TMI Blog2020 (2) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... premises of the appellant on 17.12.2002. During the course of physical verification, department found shortage of finished goods and raw materials, as compared with the stock records. The department during the course of search, also found some private records/Note Books and these documents were resumed along with other records under Resumption Memo dated 17.12.2002. The department also recorded statements of the Authorized signatory and various persons and on the basis of statements and records recovered, a show cause notice dated 13.09.2006 has been issued on the following issues:- 2.1 Demand of Rs. 44,06,966/- on alleged manufacture of 2118.733 MT of SS Ingots, clandestinely cleared for the period 18.08.2002 to 16.12.2002, on the basis of records recovered and statements recorded under Section 14 of the Central Excise Act. 2.2 Demand of Rs. 5,76,425/- on alleged shortages found in physical verification of finished goods and raw materials. 2.3 Denial of Cenvat credit of Rs. 64,244 availed on the strength of invoices were no goods allegedly were received in the factory of the appellant. 3. The appellant filed reply dated 17.08.2007 to the show cause notice denying all allegatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant does not have capacity to manufacture such a huge quantity of Ingots as alleged by the department. It is submitted that the appellant was using second hand machinery of 1980 make, which does not have capacity to produce 3000 MT in short period of 5 months. Therefore, the appellant does not have the capacity to manufacture the quantity as alleged in the show cause notice. 4.4 It is further submitted that to manufacture 3000 MT of Ingots during a period of 5 months, the appellant would require a huge labour of around 100 persons, while the appellant had only 15-16 labours during that time. 4.5 It is submitted that, the alleged note books have been written by Sh. Bharat and Sh. Pradeep (as stated by one subey singh), however, they have not been examined in the instant case. It is submitted that the appellant had not directed any one to maintain any kind of note book. Therefore, no reliance can be placed on such diary/note books. 4.6 That the learned Commissioner have relied upon the statements of Sh. Rajesh Sharma, Auth. Signatory of the appellant, Sh. Satish Kumar, Prop of M/s Haryana Punjab Transport Co and Sh. Rajendra Kumar- Driver, Sh. Subey Singh-gatekeeper, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale proceeds, mode and flow back of funds. 4.8 In view of the above, demand of Rs. 44,06,966/- is liable to be set aside. 4.9 Demand of Rs. 5,76,425/- on alleged shortages found in finished goods and raw materials. 4.10 It is respectfully submitted that the entire stock verification has been conducted on eyes estimation basis, therefore, demand on the alleged shortages is liable to be set aside, without any evidence of clandestine removal of goods. It is submitted that, the Pachanama does not disclose how physical verification has been done. It merely states that on physical verification, goods were found short, but nowhere it states whether the goods were weighed and how it has been done. 4.11 It is further submitted that even otherwise, duty cannot be demanded unless there is evidence on record to show that said shortages occurred on account of clandestine removal of goods. In the impugned order, there is no finding to that effect. It is further submitted that Sh. Raman Bhatia, Director of the appellant in his statement, has only accepted the shortages of goods and nothing else. It is further submitted that shortages can happen on account of improper accounting, manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andestine removal of goods. 5. The learned Authorized Representative appearing on behalf of the revenue reiterated the findings in the impugned order and prays for dismissal of appeals. 6. We have heard the counsel for the both sides and pursued the record. We find that this is the second round of litigation before this Hon'ble Tribunal. In the first round, this Hon'ble Tribunal vide its Final Order No. A/53701-53702/2016-Ex (DB) dated 19.09.2016 held that the case of the department is not based only on the documents, and they are relying on various statements recorded under Section 14 of the Central Excise Act. Therefore relying upon the decision of Hon'ble High Court of Punjab and Haryana in the case of G-Tech Industries Vs UOI, 2016 (339) ELT 209 (P&H), set aside and directed the learned Adjudicating Authority, in de-novo proceedings to follow the procedure set out n Section 9D of the Central Excise Act and guidelines as explained by the Hon'ble High Court of Punjab and Haryana. However, on perusal of the impugned order passed by the learned Commissioner, we find that the he has neither followed the provisions of Section 9D of the Central Excise Act, 1944, nor the law laid dow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consumption of electricity, employment of labour and many other relevant material as noticed in the decisions reported in 2014 (309) E.L.T. 411 and 2017 (345) E.L.T. 187 rendered by the High Court of Allahabad and High Court of Jharkhand, respectively." 7. We further find that the department has also not enquired at the end of the buyers and there is no positive evidence adduced by the department. We find that the demand has been confirmed on the basis of assumption and presumption. Therefore, demand of Rs. 44,06,966/- on alleged 2118.733 MT of SS Ingots clandestinely cleared for the period 18.08.2002 to 16.12.2002 is hereby set aside. 8. We further find that, the stock taking has been conducted on eyes estimation basis, as can be seen from the Panchnama drawn at the factory premises. However, the director Mr. Raman Bhatia and the Authorized Signatory Mr. Rajesh Sharma had expressed satisfaction and agreed with the shortage computed. They also deposited the duty in course of investigation. Therefore, demand on the alleged shortages is hereby confirmed. However, relying upon the decision of the Hon'ble High Courts in the case of CCE, Kanpur Vs. Minakshi Castings, 2011 (274) ELT 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
