TMI Blog2023 (10) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant had given cogent explanation during the course of investigation being that as the goods were not accepted by the Saurabh Rolling Mills Pvt. Ltd., the same were diverted by way of sale in transit to M/s. Om Kiran Ispat Udyog - the court below erred in confirming this amount, solely based on the statement of the Director of Saurabh Rolling Mills, without examining the said Director in the adjudication proceedings. Such evidence is not reliable as in spite of request by the appellant, cross examination was not allowed. Thus, the evidence of Shri M.K. Gupta is hit by the provisions of Section 9 D of the Act - there is no other evidence or reason to reject the cogent explanation given by the appellant - Demand deleted. Goods rejected by consignee - demand of Rs.54,550/- Rs.32,603/- - HELD THAT:- The goods were rejected by the consignee /buyer. The same were returned to the factory of the appellant. In his statement, Shri Sanjay Nachrani, Director had explained that the goods have been received back on the rejection by the buyer and further, in support thereof, submitted the goods receipt note for proper accounting of the same - Revenue had not made further investigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d goods on basis of sectional weight-estimation, by measuring length and quantity of the billet and compared with the recorded balance. The stock of billet was calculated at 692.985 metric tons, whereas the recorded balance as on 08/01/2008 was 718.150 metric tons. Thus there appeared to be a shortage of billets by 25.030 metric tons. 3. On scrutiny of lose papers in file marked SP 1, invoices bearing i) serial No. 2429 dated 06/01/2008 (duplicate for transporter), page 269 of the file SP 1 and ii) invoice No. 2439 dated 07/01/2008 at page No. 275 of file SP 1, were found. It appeared these were issued for sale of 22.850 metric tons and 22.350 metric tons of sponge iron to m/s Sunil steels, Raipur. Similarly the original for buyer and duplicate for transporter copies of invoice No. 2360 dated 02/01/2008 was also found, even after lapse of 6 days from the date of issue. Further invoice No. 2439 dated 07/01/2008 (quadruplicate- extra copy) was found issued for captive consumption of 13.550 metric tons of billet (end cuttings). It appeared that these invoices were never cancelled nor any intimation in this regard was given to the Department, as required under Rule 11 of CER r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoices, it was found that incoming particulars in some of the entries tally with details in corresponding purchase invoices, but against 44.750 M.T. of scrap, 5.04 M.T. of silicon manganese, 33.740 M.T. of pig iron and 31.370 M.T. of sponge iron, no purchase invoice is available. 7. On scrutiny of the documents the officers came to the conclusion that the appellant No. 1 has clandestinely removed excisable goods without payment of central excise duty to M/s Sunil Steels (A sister concern of the appellant No.1) engaged in the manufacture of MS Billet and Re-rolled Products of Iron and Steel. In follow-up action, the Central Excise Officers conducted verification in the factory of M/s Sunil Steel on 11.01.2008 and withdrew some incriminating documents such as loose Papers, Notebooks etc. and Panchanama dated 11.01.2008 was prepared. In further follow-up action the officers visited the Registered/City office of the appellant Sunil Sponge and withdrew certain incriminating documents and a CPU of the computer. On scrutiny and comparing the records of appellant Co. and M/s Sunil Steels, it appeared that no invoice was issued by the appellant to M/s Sunil Steels against supply of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalties. 12. In appeal on behalf of all the appellants, Ld. counsel Sh. Bipin Garg made issue wise submissions and also submitted a chart explaining the details of demand. Submissions of the counsel are as follows: (i) Rs.90,749/- : It was submitted that out of recorded quantity of Billet of 718.015 MT, on verification 692.985 MT was found hence there was a shortage of 25.030 MT, which comes to around 3.5% which is a meager shortage. It is also submitted that that there was no actual weighment but only on estimation basis. It was explained by Sh. Sunil Nachrani in his statement. Hence the demand is not sustainable. He relied upon the case of Super Iron Steel Pvt. Ltd. vs. CCE [2021 (378) ELT 180]. (ii) Rs.69,648/- : It is alleged that the appellants made clearances under parallel invoice No. 2360 dt. 02.01.2008. It was explained in the statement dt. 09.01.2008 by Shri Sanjay Nachrani that invoice No. 2360 dt. 02.01.2008 was issued in the name of M/s Sourav Rolling Mill Pvt. Ltd. Raipur, however material was rejected by them and the same Truck was diverted to M/s Om Kiran Ispat Udyog. The appellants filed invoice issued to Sourabh Rolling Mill Pvt. Ltd as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rance. (c) S. No. 3 of the chart: the goods were sold to M/s Iskan Strips. Loha Udyog is a broker through whom the goods were sold against proper invoice. Copy of Invoice issued to M/s Iskan Strips, Ledger and Bank Statement was submitted. (d) S. No. 4 to 6 of the chart : The demand has been raised on the basis of dispatch advice which is merely an instruction advice to dispatch department. It is not the document for removal of goods. However the goods at S.No. 5 were cleared to M/s Sunil Steel under invoice No. 1689 dt.27.10.2007 on payment of duty, which is on record. (v) Rs.38,58,809/- : Whole of the demand is dropped. (vi) Rs.10,88,887/- + 1,80,042/-: The allegation was that evasion of Central Excise duty of Rs.18,42,036/- and Rs.1,80,042/- in respect of Finished Goods and Inputs respectively, removed clandestinely. This allegation was made on the basis of incriminating records recovered from the premises of the consignee M/s Sunil Steels. It was submitted that the demand is confirmed on the basis of some record(s) recovered from the premises of the consignee. The Director of the consignee s unit denied the maintenance of such records at their instruct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and only on the basis of some unauthenticated rough note books resumed from the consignee M/s Sunil Steels, and some unauthenticated kaccha parchi/record resumed from the factory of the appellants, it is presumed that the appellants had cleared the goods clandestinely. It is important to submit that the department did not provide non-relied upon documents even after directions given by this Hon ble Tribunal. It is further submitted that originally total demand was of Rs.1,18,51,503 out of which the adjudicating authority was satisfied with the submissions of the appellants, however confirmed only an amount of Rs.17,41,352. 14. it is further submitted that neither the adjudicating authority examined the witnesses nor allowed cross examination. Only for this reason the impugned order is not sustainable and liable to be set aside. 15. The Authorized Representative of the department reiterated the findings given by the adjudicating authority and submitted that all the appeals filed by the appellants should be rejected. 16. I have gone through the rival submissions. The appellants explained all the issues in detail and relied upon the judgements. Firstly the department did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be false. Thus, due to some error in record keeping or procedural lapse on the part of the appellant, the demand is held to be unsustainable. Accordingly, this ground is also allowed and the demand of Rs.54,554/- and Rs.32,603/- is deleted. 20. So far (the demand of 4th issue) of Rs.3,98,700/- is concerned, this demand has been confirmed out of the total alleged duty evaded of Rs.14,41,275/-, on the allegation of removal of excisable goods clandestinely. I find that the said demand has been confirmed on the basis of the kachcha parchi(s), which was found and resumed from the factory of the appellant during search. The appellant had given cogent explanation during investigation, that these kachcha parchies are not the statutory records or the records maintained on the instructions of the Management. These are generated by the staff at different sections of the unit for internal control purposes. Further, no author of the kachcha parchies has been identified. Further, there is no evidence of clearance of Sponge Iron clandestinely. Further, there is also no evidence that in the garb of invoice for dolochar, sponge iron was cleared. Thus, I find that the demand has been confirme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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