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TMI Blog2024 (5) TMI 1109X X X X Extracts X X X X X X X X Extracts X X X X ..... nts are referred to as Coronation Group of Companies, (hereinafter also referred to as "CGC"). 2. On intelligence received from the Directorate General of Goods & Service Tax Intelligence (DGGI), Chennai Zonal Unit, which was further developed by the officers of DGGI, Madurai Regional Unit, indicated that CGC indulged in evasion of Central Excise duty and GST on clearance of fireworks/crackers by receiving part of the consideration/sales proceeds in cash by various means including receiving commission through agents/conduits/local hawala brokers engaged by them. The amounts received in cash by CGC did not form part of transaction/dutiable value in the bills/invoices issued by them, and therefore escaped excise duty. 3. Simultaneous search operations were conducted on 8.10.2020 at several premises connected to CGC including their head office premises at Sivakasi. The officers of the department recovered various incriminating documents, records, electronic gadgets and these were seized under Mahazar proceedings, on the reasonable belief that the same would be useful for further investigation. 4. An amount of Rs. 1,82,25,000/- was seized from the residential premises of Shri K. Jey ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng final products without issuance of invoices in collusion with others. Shri. K. Jeyasankar, was arrested and remanded to Judicial custody on 17.02.2021, thereafter he was released on bail. The appellants made deposit of Rs.2.67 crores during investigation. 7. According to the department the modus operandi adopted by the appellants for evasion of Excise duty is as below: - 7.1 On receipt of orders from their dealers orally through mobile phones or by WhatsApp messages or in emails or through sales representatives, Shri. K. Jeyasankar will give instructions to their partner, Shri K. Jeyakumar, to raise invoices offering various discounts for different products. Such discounts on different products on different dealers will be decided by Shri K. Jeyasankar in consultation with his father Shri. P. Kanagavel. On raising the invoices, the same would be communicated and handed over to the dispatch team in their factory to arrange for packing the products as per invoice and for loading in the transport carrier for dispatch. Fireworks can be sold by the dealers at much higher rate than the value shown in the bills for the reason that the MRP printed on packing of the fireworks are much ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d excise duty along with interest and for imposing penalty. After due process of law, the original authority passed the impugned order against which the appellants have preferred these appeals. The operative portion of the impugned order reads as below: 33. ORDER 33.1 M/s The Coronation Fireworks Factory [SCN No.04/2O21-C.Ex] i) I confirm the demand of differential Central Excise duty of Rs.1,72,56,579/- (Rupees One crore Seventy Two Lakhs Fifty Six Thousands Five Hundred and Seventy Nine Only) [Rs.1,38,05,263/- in respect of Central Excise Registration Number AAAFT5790QXMOO1 and 34,51,316/- in respect of Central Excise Registration Number AAAFT5790 QXMoo3, (in proportion to their assessable value declared in the ER1 Returns)being central excise duty not paid by M/s The Coronation Fireworks Factory, collected/ received in cash from the dealers/customers towards differential value between the actual transaction/taxable value of the manufactured goods cleared/supplied & lesser/suppressed transaction/taxable values reported in the invoices and value of the manufactured final products supplied/cleared/sold without issuance of invoices under Section 11A(4) of the Central Excise Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by M/s Sri Coronation Fireworks Private Limited, collected / received in cash from the dealers/customers towards differential value between the actual transaction/taxable value of the manufactured goods cleared/supplied & lesser/suppressed transaction./taxable values reported in the invoices and value of the manufactured final products supplied /c1cared/sold without issuance of invoices under Section 11A(4) of the Central Excise Act 944; ii) I drop the proceedings being central excise duty not paid by M/s Sri Coronation Fireworks Private limited on suppressed / short declared in the ER1 Returns filed by them when compared with total value of the invoices issued by them during the period from August 2016 to June 2017 under Section 11A(4) of the Central Excise Act 1944; iii) I confirm demand of interest as applicable on the Central Excise duty amount mentioned at (i) above under Section 11AA of the Central Excise Act 1944; iv) I impose a penalty of Rs.1,95,30,192/- (Rupees One Crores Ninety- Five Lakhs Thirty Thousands One Hundred and Ninety Two Only), being central excise duty not paid by M/s Sri Coronation Fireworks Private Limited, collected / received in cash from the deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act 1944; iii) I confirm demand of interest as applicable on the Central Excise duty amount mentioned at (i) and (ii) above under Section 11AA of the Central Excise Act 1944; and iv) I impose a penalty of Rs.31,32,722/- (Rupees Thirty one Lakh Thirty two Thousand and Seven Hundred and Twenty two Only), being central excise duty not paid by M/s Naya Carnation Fireworks, collected / received in cash from the dealers/customers towards differential value between the actual transaction/taxable value of the manufactured goods cleared / supplied & lesser / suppressed transaction / taxable values reported in the invoices and value of the manufactured final products supplied /cleared/sold without issuance of invoices under Section IIAC of the Central Excise Act 1944. with an option to pay penalty equal to 25% of the penalty imposed if the entire amount of excise duty along with interest and reduced penalty is paid within 30 days from the date of receipt of this order; and v) Since I have already imposed penalty under Section 11AC of Central Excise Act, 1944, I consider that it is not required to impose penalty under Rule 26 & 27 of the Central Excise Rules, 2002 again for the same o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara no. 33.4 (i); and (vi) Since I have already imposed penalty under Section 11AC of Central Excise Act, 1994, I consider that it is not required to impose penalty under Rule 26 & 27 of the Central Excise Rules, 2002 again for the same offence on the company, therefore I drop the penalty proposed under Rule 26 & 27 of the Central Excise Rules, 2002; 34. Penalty for Key persons 34.1 (i) I impose penalty for Shri K. Jeyasarikar, Residence: No. 122, Velayutham Road, Sivakasi - 626123, of Rs.10,00,000/- (Rs. Ten Lakhs only) for the acts of commission and/or omission (as discussed in above paras), separately in terms of Rule 26 of the Central Excise Rules, 2002. (ii) I drop penalty for Shri K. Jeyasankar, Residence: No.122, Velayutham Road, Sivakasi 626123 for the acts of commission and/or omission (as discussed in above paras), separately in terms of Rule 27 of the Central Excise Rules, 2002 34.2 (i) I impose penalty for Shri. K. Balaji, No.127-A/1, Velayutham Road, Sivakasi - 626123 Rs.10,00,000/- (Rs. Ten Lakhs only) for the acts of commission and/or omission (as discussed in above paras), separately in terms of Rule 26 of the Central Excise Rules, 2002; (ii) I drop pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Fireworks Private Limited, M/s Naya Carnation Fireworks, and M/s Bee Cee Fireworks Industries of Sivakasi by the Additional Director General of GST Intelligence, Coimbatore stands disposed of, accordingly. 8. The Ld. Counsel Sr. S. Jaikumar appeared and argued for the appellant. It is submitted that the origin of these proceedings are based out of an investigation conducted against M/s. Standard fireworks Pvt Ltd, Sivakasi (hereinafter referred to as SFW) by the Directorate General of GST Intelligence (hereinafter referred to as DGGI), Chennai Zonal Init, Chennai during October 2017. The said investigation resulted in a Show Cause Notice against M/s. SFW. During the said investigation, the DGGI recovered few electronic evidences, namely a laptop and a pendrive allegedly from the premises of M/s. SVPNSN Balashivaji & Co, (hereinafter referred to as Bala) Virdhunagar and Mumbai. Statements were recoded from Sri. B. Saravanan, proprietor of Bala and also from Shri B. Thirumani Selvan an employee of Bala. 8.1 Subsequently, during the adjudication proceeding of M/s. SFW, a cross examination of Shri B. Saravana and Shri B. Thirumani Selvan, was conducted wherein they had totally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred to as below; * Whether the evidences, including electronic evidences, recovered by the investigating officers during earlier proceedings for another company can be considered and relied as evidence in a subsequent investigation and proceedings initiated against the noticees namely CGC and others. * whether the evidences more particularly the electronic evidences have complied with the provision of Section 36B of the Central Excise Act, 1944 (hereinafter referred to as "CEA") to be considered as an evidence for the purpose of demand of Central Excise Duty under the CEA? * Whether the quantification of demand as arrived in the Show Cause Notice vide para 7.1 to 7.17 adopting percentage of cash to invoice value is correct or the same needs to be arrived at only based on the evidences available on record? * Whether demand of Central Excise Duty on CGC on the amounts collected in cash over & above the value is correct or not; * Whether interest to be demanded; and * Whether suppression clause is to be invoked and consequently penalty is imposable on the assessee and Co-Noticees. 8.5 It remains an undisputed fact and as observed by the adjudicating authority in his fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the spirit of SVLDRS scheme as spelt out by the CBIC in their circular no 1071/4/2019-CX dated 27.08.2019 and also the related FAQ (Q 42) released by the department. The AA has not only ignored the legal provisions but has also disregarded all judicial pronouncements in this regard cited by the appellant in their reply. 8.8 It is also a curious observation of the AA in para 29.10 that "the consistently inconsistent depositions of B. Saravanan right through the proceedings has not only rendered his depositions as unstable and unreliable thus making his application under SVLDRS scheme as the only credible, stable and reliable act from his end and hence I have no hesitation in holding that the electronic evidence resumed from B Sarvanan and relied upon in the current proceedings are credible in law". 8.9 It is also worthwhile to mention that there is an apparent contradiction in para 29.10 & 29.11 of the impugned OIO wherein on one hand the AA holds that the electronic evidences relied upon in the current proceedings is only pendrive or a laptop and not mobile phones. On the other hand he has proceeded to conclude that Whatsapp chats can be used as evidence as they are virtua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is relied upon as RUD No. 38 of SCN. In response to the said letter the deputy director DGGI, Madurai vide reply dated 02.02.2022 at para 7 stated that the print outs referred as RUD 38 in the Show cause notice was retrieved by Government forensic laboratory. b) Further another Letter dated 09.02.2022 issued by the authorised representatives of the appellants wherein at para 6.2 a request was made to provide documents relating to retrieval of data from the laptop at the Government Forensic Laboratory. No reply was received for this letter. 8.12 From the above, it can be seen that despite specific requests the department had not provided to the appellant the details as requested, making the relied upon documents (data from pendrive and laptop) under cloud and inadmissible in these proceedings. 8.13 Further, in para 29.12 and 29.13 of the impugned OIO, the AA has observed that there is excess cash transaction over and above the invoice value as per the statements of dealers. It is a surprising fact that, in the instant proceedings though there are around 200 dealers for CGC across various states of West Bengal, Andhra Pradesh, Delhi, Gujarat, Maharashtra, Madhya Pradesh, Kera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the statement were given till the Show Cause Notice was issued, C) There was an impending threat of arrest induced by the investigation supported by the arrest of Sri K Jeyshankar in the proceedings and, D) The untimely and unexpected demise of Sri Kanagavel the founder of CGC. Ignoring all the above, the Commissioner just brushed aside the entire depositions obtained during cross-examination. 8.16 Last but not least, the SCN has proposed a novel method of determination of differential duty. Relying on the clouded electronic evidences allegedly retrieved from Sri B Saravanan during a proceeding in an erstwhile investigation, and which were neither legally retrieved nor corroborated with any of the dealers, and which corresponds to the states of Gujarat and Maharashtra alone, the department has arrived at a percentage of 192.63% over and above the invoice price considering the transactions in those two states. In other words, the department has considered the entire figures as appearing in these electronic evidences to correspond to the clearances effected by the appellants during the relevant period to the states of Gujarat and Maharashtra and has arrived at a percentag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 9. The Ld. AR Ms. Anandalakshmi Ganeshshram appeared and argued for the department. It is submitted that the data from the seized electronic gadgets were retrieved under mahazar proceedings following due procedures as per Section 36B of CE Act, 44 and relevant provisions of CGST Act, 2017 read with Indian Evidence Act, 1872 & Information Technology Act 2000 and were stored in the external had discs for further investigation and seized electronic gadgets were sealed once again after retrieving the data from them in the presence of the owners of the electronic gadgets and independent witnesses. 9.1. The extract of Section 36 B of the Central Excise Act, 1944 is given below: Section 36B in the Central Excise Act, 1944 36B. Admissibility of microfilms, facsimile copies of documents and computer printouts as documents and as evidence. - (1) Notwithstanding anything contained in any other law for the time being in force, (a) a microfilm of a document or the reproduction of the image or images embodied in such microfilm (whether enlarged or not); or (b) a facsimile copy of a document; or (c) a statement contained in a document and included in a printed material produced by a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that period shall be treated for the purposes of this section as constituting a single computer; and references in this section to a computer shall be construed accordingly. (4) In any proceedings under this Act and the rules made thereunder where it is desired to give a statement in evidence by virtue of this section, a certificate doing any of the following things, that is to say,-- (a) identifying the document containing the statement and describing the manner in which it was produced; (b) giving such particulars of any device involved in the production of that document as may be appropriate for the purpose of showing that the document was produced by a computer; (c) dealing with any of the matters to which the conditions mentioned in sub-section (2) relate, and purporting to be signed by a person occupying a responsible official position in relation to the operation of the relevant device or the management of the relevant activities (whichever is appropriate) shall be evidence of any matter stated in the certificate; and for the purposes of this sub-section it shall be sufficient for a matter to be stated to the best of the knowledge and belief of the person statin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terthought to escape consequences of the violations committed. These judgement are squarely applicable to the present case. 9.7 It is submitted that it is clear that CGC, their directors/partners, employees and Sales Representatives colluded among themselves and also with their dealers and commission agents engaged by them and ensured that excisable firecrackers manufactured by their firms namely M/s The Coronation Fireworks Factory, M/s Sri Cornation Fireworks Private Ltd., M/s Naya Carnation Fireworks & M/s Bee Jee Fireworks Industries were cleared by them under the bills with lesser/suppressed transaction value issued by them at the time and place of their removal. They had put in place a well-oiled mechanism to make sure that amounts corresponding to the extent of the cash transactions as reflected in the various evidences including the electronic evidences correspond to the cash receipts received over and above the invoice value of the clearances made by the noticees towards the value of their final products. Thus, it is clear that the cash receipts mentioned in the various evidences including electronic evidences correspond to the under valuation of excisable goods manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be arrived at only based on the evidences available on record? d. Whether demand of Central Excise Duty on CGC on the amounts collected in cash over & above the value is correct or not; e. Whether interest to be demanded; and f. Whether suppression clause is to be invoked and consequently penalty is imposable on the assessee and Co-Noticees. 12. The first issue (a) being dependent on other issues, unless we first discuss issues (b), (c), and (d), we would not able to answer issue (a). Hence, we proceed to analyse these issues first. The period involved is from August 2016 to June 2017. The Show Cause Notice is dated 03.09.2021 and has been issued invoking the extended period. 12.1 Some of the significant facts are as under: (i) the main evidence relied for demand of duty are the data retrieved from electronic evidence in the nature of a pen drive and laptop. (ii) This pen drive and laptop was not recovered in the investigation initiated in 2020 against the appellants or from the premises belonging to the appellant group companies. (iii) This pendrive and laptop was recovered in 2017 in an earlier investigation initiated against M/s Standard Fire Works Ltd., conduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used in the current proceeding has been brushed aside by the adjudicating authority by observing in the impugned order, that though the appellant contend that the evidence cannot be used in a subsequent proceeding, there is no legal bar and that appellants have not substantiated their contention with relevant legal provision or judgements. The discussion of the adjudicating authority in this regard is as under: Now coming to the question before me as to whether the evidences collected in an earlier proceeding against the another company could be relied upon as an evidence in any other/ subsequent proceeding against another company / person, I find that there is no legal bar against the same. Though the notices have brought out this in their defence, they have not substantiated the same with any corresponding legal provision or judgement to that extent. In absence of any such legal prohibition, I am of the considered view that the evidences collected by the investigation in an earlier proceeding against different company could be well used against the noticees, as long as the integrity 36B not followed of the evidence as well as the evidentiary value are not negotiated and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter such seizure and recording of statements in regard to investigation against M/s Standard Fire Works Ltd., a show cause notice was issued to M/s. SFW and others which was concluded or closed after the noticees there in opted for SVLDR Scheme. In such circumstances, we are left to guess that after the closure of that case, the department has opened these sealed evidences (one pen drive and lap top) again to view and retrieve the data. The evidence, gathered in a case looses relevance as to whether they are kept safe and sealed when the case is concluded. We have no clue as to who was in custody of this evidence after the closure of the case against M/s Standard Fireworks Ltd. Further, copies of data in these electronic evidence would have been furnished to all noticees of the earlier proceedings, who may also be competitors in business. 12.8 The very same evidence is used to issue the present show cause notice. In the case of electronic evidence, the law prescribes certain conditions to be complied with at the time of recovery as well as retrieving data. This is because, it is easy to interfere with the data contained in electronic items. We are not able to understand how the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid seized Mobile Phones carefully and sealed the same with adhesive tapes & paper sealed the cover. We, the witnesses, Shri. B. Saravanan and Shri R. Surreandar and the Senior Intelligence Officer have affixed our dated signature on the said paper seal. The officers informed that the all the aforesaid seized Mobile phones were again taken over into the custody of the officers. The Pen drive (Sandisk 64GB) used to store the above retrieved data was put into a separate package and covered the same with adhesive tapes paper sealed the cover. We, the witnesses, Shri B. Saravanan and Shri R. Surreandar and the Senior Intelligence Officer have affixed our dated signature on the said paper seal. The same was kept as "Master copy". Second Pen drive (Sandisk 64GB) with the retrieved data was kept as "Working Copy". 12.10 The above mahazar seems to have recorded the procedure adopted by department to retrieve the data/whatsapp messages contained in the mobile phones, which were seized in 2017. The procedure explained in the mahazar shows that one pen drive with retrieved data is kept as Master copy and another as working copy. It is not understood why these mobile phones which were se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 witnesses were there. The witnesses have not given any statement against the notices/co-noticees. Therefore you are requested to give the reason for your request for cross examination of all witnesses to the Mahazars". 12.13 Again to the request of the appellant to supply the data retrieved from electronic items, the department has issued reply dated 02.02.2022 which reads as under: "The printouts of contact details and images (Sl.Nos.54 & 55 in Annexure - A to the referred Show Cause Notice) referred in para 3.2(d) of your letter were taken from the electronic gadget which was retrieved by Government forensic laboratory". The printouts of ledgers in the name of M/s. Sri Saravanan Traders and M/s Ganesh Traders (sl.no.12 in Annexure - A to the referred SCN) which has been mentioned in para 3.3(i) of your letter, were taken from the pen drive seized during the course of search at M/s SvPNSN Balasivaji & Co., 140/1, Dr. Ambedkar Street, Virudhunagar - 626001 under Mahazar dated 26.10.2017 (sl.no. 20 in Annexure - A to the referred SCN). All the pages of the printouts were authenticated by Shri. B. Saravanan, Proprietor of M/s.SvPNSN Balaji & Co., Virudhunagar. Extract of said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer while collecting evidence in the nature of electronic gadgets is provided in Section 36B of the Central Excise Act 1944 has been already noticed in para 8.1. As per Section 36B a certificate has to be made to the effect that such computer / laptop / pen-drive during the material period was operating properly, was ordinarily being used in the course of business, being supplied with information etc. No such certificate is before us. Without complying Section 36B it is not possible to hold that the data retrieved from pen-drive and laptop (seized in 2017) is admissible in evidence. This is more important as this pen-drive and laptop are the only documents relied by AA for confirmation of demand of the duty. The relevant para of (29.10) of the impugned order is as under. "So, I am constrained to discard the various attempts made by the notices namely M/s CGC and others to dispute the integrity of the electronic evidences and hold that the electronic evidences resumed from the pen drive and the laptop are in compliance with Section 36B of the CEA and thus are admissible evidence under the CEA. Further Shri B. Saravanan has been consistently inconsistent in his depositions, rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectronic record, it is permissible provided the following conditions are satisfied : (a) There must be a certificate which identifies the electronic record containing the statement; (b) The certificate must describe the manner in which the electronic record was produced; (c) The certificate must furnish the particulars of the device involved in the production of that record; (d) The certificate must deal with the applicable conditions mentioned under Section 65B(2) of the Evidence Act; and (e) The certificate must be signed by a person occupying a responsible official position in relation to the operation of the relevant device. 15. It is further clarified that the person need only to state in the certificate that the same is to the best of his knowledge and belief. Most importantly, such a certificate must accompany the electronic record like computer printout, Compact Disc (CD), Video Compact Disc (VCD), pen drive, etc., pertaining to which a statement is sought to be given in evidence, when the same is produced in evidence. All these safeguards are taken to ensure the source and authenticity, which are the two hallmarks pertaining to electronic record sought to be us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is nothing to indicate compliance with the strict stipulations contained in sub-sections (1) and (2) of Section 36B of the Act in the present case. We, therefore, find no reason to interfere with the findings of the CESTAT regarding non-compliance of Section 36B of the Act either". 12.20 The pen drive and laptop are not seized from the appellant. Therefore Section 36A does not apply. These were seized in 2017 from M/s SvPNSN Balasivaji who was a co-noticee in the earlier proceedings. These are therefore nothing but third-party documents as regards the appellants. From the aforesaid analysis we hold that the data from electronic items i.e. pen drive and laptop are not admissible or acceptable in evidence. 13. The other evidence mainly relied by department is the statement given by co-noticee Shri. B. Saravanan. He was a co-noticee in the proceedings against M/s Standard Fireworks Ltd. As already stated, he had opted for the SVLDR Scheme and paid duty as per scheme. In para 29.10 of impugned order (reproduced in para 10.26 above) the adjudicating authority has held that the electronic evidence is admissible as Shri B. Saravanan from whom it was seized has filed application un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the evidences more particularly the electronic evidences in compliance with Section 36B of the CEA. As narrated above, the reliance of electronic evidences recovered from M/s SvPNSN Balasivaji & Co by way of a pen drive and a laptop vide Mahazar dated 26.10.2017, has been used as an evidence under the earlier proceeding and the said proceeding has culminated by way of, all the notices settling their case under SVLDRS scheme. It is also pertinent to mention that Shri B. Saravanan who is the proprietor of M/s. SvPNSN Balasivaji & Co from whose premises the said evidences including electronic evidences were recovered and who had also given various admissions, has also applied for SVLDRS scheme as a co-noticee. The patent admission by Shri B. Saravanan who is the author of the evidences including the electronic evidences is nothing but a testimony of the integrity and evidentiary value of the various evidences including the electronic evidences and compliance to Section 36B of the CEA. That being so when the author of the evidences including electronic evidences has himself accepted and filed the SVLDRS application as a co-noticee in the earlier proceeding, any attempt to con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment was fully aware that they had denied the allegations as well as pendrive and laptop during cross-examination in earlier investigation. The statement so recorded in present proceeding is in a question-answer form, and recording the statement they have deposed supporting the case of the department. Question No.7 and its answer is relevant and reads as under: Q.7 Please go through the printouts of the ledgers (bound into 5 books) in the names of M/s. Sri Saravanan Traders, Virudhunagar at Bombay and M/s Ganesh Traders, Virudhunagar at Virudhunagar, which were seized from your Virudhunagar office on 26.10.2017 and append your dated signature on first and last pages of all the books as a token of having seen the same. Please explain about these ledgers. A-7 I have gone through the printouts of the ledgers (bound into 5 books) in the names of M/s Sri Saravanan Traders, Virudhunagar at Bombay and M/s Ganesh Trader, Virudhunagar at Virudhunagar, which were seized from our Virudhunagar office on 26.102017 and appended my dated signature on first three pages and last three pages of all the books as a token of having seen the same. As per my directions the ledgers were maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t can be an afterthought as department was already aware that they have denied the allegations during cross-examination in earlier proceedings. The adjudicating authority observes that Shri B Saravanan has been consistently inconsistent but however, proceeds to make his application under SVLDRS as a reliable, stable act. Though adjudicating authority considers the deposition of Shri B Saravanan to be unreliable, has based his entire findings, merely on the act of Shri B Saravanan in preferring an application under SVLDRS. 13.8 A mere retraction may not make a statement irrelevant or inadmissible. In the present case, the witnesses were already subject to cross examination in 2019 as per Section 9 D of the Central Excise Act, 1944. After such cross-examination and filing of SVLDRS application, he is again summoned to give statement under Section 14 on the very same set of facts. It is deposed by him that on 09.03.2021 and 10.03.2021 he has given statements before the officers only because he was assured that he would not be implicated in the proceedings. 13.9 The entire investigation is in a skeptical manner which lacks credibility. Though huge number of mobile phones were seized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings. (emphasis supplied) 13.11 In page 80 of the SCN at point (xi), it is stated that CGC supplied goods to dealers without issuance of invoices. The undervaluation alleged in SCN to demand duty is on the basis of both suppressing the actual value in the invoices and also supply of goods without invoices and thereafter colleting the consideration in cash. In para 5.12 of SCN at page 83/108 while explaining the modus operandi, it is stated that the cash so collected was handed over to M/s Vijaya Jewellery & others. But none of them have been made co-noticees or any investigation made in this regard. The relevant part of SCN reads as under: "One of the person/places, as per the instruction of Shri. Jeyasankar, to whom where commission agents particularly. Shri. Hitesh Jain handed over the amounts in cash is M/s. Vijay Jewellery, Sivakasi." Though SCN was issued to Shri Hitesh Jain the penalty proposed against him has been dropped by adjudicating authority holding that there is no involvement by Shri Hitesh Jain in the current proceedings. 13.12 The crux of allegation in SCN is that appellant has received consideration in cash over and above the invoice value which was co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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