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TMI Blog2004 (12) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... ), Raj Petroleum Agency Hyderabad premises were conducted, further inquires made and show cause notice dated 24-5-1999 was issued to Nature of contravention Section/Rule contravened (i) Removal of excisable goods without valid invoice Rule 52A/173G(2) (ii) Non-accounting of manufacture & clearance of excisable Goods in RG 1 register. Rule 53/173G(4) (iii) Non accounting of manufacture & clearance of Excisable goods in the RT 12 returns. Rule 54/173G(3) (iv) Clearance of excisable goods without determining & discharging Central Excise duty. Rule 173F/173G(1) (v) Modvat Credit without physical receipt of inputs. Rule 57A (vi) Availment of qty. credit & duty credit, incorrectly. Rule 57G(7) & (8) In statutory records RG23 Pt. I & II. & demanded duty of Rs. 97,21,742/- on Clandestine Removal or excisable goods the period 1994-95, 1995-96, 1996-97, 1997-98 & 1998-99 as detailed in Annexure A-7 to the notice & demand & recovery of Modvat Credit of Rs. 39,59,631.90/- availed at RPM, which was not eligible & consequent penalties & interest liabilities. 1.4 These appeals are consequent to an order as :- T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tine removal, are also required to be relied upon documents. The concerned persons of the Transport companies/agencies in their statements recorded under Section 14 of the Act, have confirmed the facts of transporting goods without valid cover of duty payments or without bills/challans and for which bills were not raised but only entries were made in their private records. For such activities Transporters were paid in cash. Hence these documents such as Gate Register, Lab Register and the records of the Transporters are taken as relied upon documents as these records are contemporary. And therefore, the contention of RP-M that these documents cannot be relied upon is non-sustainable (i) RP-M has submitted that JIT is an independent partnership firm and have submitted various copies Registrations issued by Government Authorities, Municipal Corporation etc. It is also submitted that RP-M has no way concerned with clearances of JIT whether clandestine or otherwise. Further they were not able to correlate entries of Lab Register as alleged. They have stated that JIT had cleared some goods from their Mumbai-9 godown and these would not appear in the Gate Register. (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in their reply have merely stated that transport details through Sanket Transport are denied, and have not at all produced any supporting evidence for such denials. Further JIT had purchased 40 Tankers of Spray oil from one Sagar Industries amounting to Rs. 72 lakhs (apprx). These purchases were not accounted with RP-M or JIT, but Gate Register showed the receipts of the materials and the Lab Register showed testing and using in the process of manufacture. RP-M has produced just one or two bills issued by Sagar Industries for entire 40 tankers purchase, and for remaining quantities they have preferred to maintain silence. Such receipts of raw materials in unaccounted way has been confirmed by the employees of RP-M; viz. S/Shri Anil Lad, Production Supervisor and Kakubhai in their statements. Even the Directors of RP-M who are also Partners in JIT failed to explain such transactions in their statements as well as in reply to the questionnaire given to them. (d) From above paragraphs it is clear that RP-M has clandestine removed the finished goods in guise of clearances by JIT. RP-M also received the raw materials in the name of JIT and also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d given only Invoices to Shri Yogin Porecha, Director, RP-M, and who in turn handed over the acknowledgements. Shri Anil Lad, Production Supervisor of RP-M in his statement had accepted the receipts on invoices of panama though the goods in actual were never received in the premises of RP-M. Similarly, the consignments from IPCL were actually received at RP-P, Gujarat, but billing was made to RP-M and the staff of RP-M has acknowledged the challans. The staff of RP-P Shri Chintan Sonara has confirmed these facts in his statement. The documents seized at HRL, also indicates this transactions. During the period of 3-8-96 to 19-11-1998, RP-M had availed credit of 133 tankers of materials of IPCL, but as per the records of HRL, only 13 tankers were delivered to RP-M and even these were not entered in the Gate Registers. In reply to this allegations RP-M has only submitted the statement showing the Credit of duty availed RP-M & RP-P and no other submissions, which appears that they have nothing to say against the allegation. Hence, the Modvat credit of Rs. 39,59,631/- wrongly availed by RP-M is required to be recovered under Rule 57-I(1) of the Central Excise Rules, 1944. The details of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; As regards, the gate register, the same is maintained by an employee of the Security Agency as per statement of Harish N. Singh (relied upon). It is a record maintained, by third party, does not belong to RPM, this gate register is common for all receipts and discharges of goods from and at 124, G.D. Ambedkar Marg, the common compound area in which premises the existence of two independent entities conducting business has been established, ipso facto cannot lead to a conclusion that all removals shown therein are of goods of proprietary interest of RPM. Reliance in this connection, placed on the statutory registrations of JIT with different authorities in respect of Compound at 124, G.D. Ambedkar Marg, rent receipts. Bank record and insurance company policy to show that JIT was actually conducting business and/or operating out of 124, G.D. Ambedkar Marg (were extensively relied upon in reply to show cause notice. Nothing is on record, why the said clearances as taken from Gate Register could not be of JIT & are necessarily of RPM, would be a presumption & assumption. Submission that all goods received at or discharged from common Gate of Compound at 124, G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The notice seeks and subjects to rely on the statements of the 3 Directors of RPM along with the statements of the Production Supervisor (Anil Lad) and Chemists (Prakash Suryavanshi) as also the Manager (Dungar C. Chothani alias Kakubhai). These statements cannot be read in isolation and when read in the context of the Gate Register and Lab Register as found above are not relevant for establishing clandestine removal. Force is found in this submission. As the documentary evidence does not establish clandestine removal, the oral statements based thereon, which travel beyond the documentary evidence have to be viewed with suspicion and in the event of a conflict, the documentary evidence should prevail; thereby when documentary evidence does not establish clandestine removal, the statements based thereon cannot prove [see R.P. Industries v. Collector, 1996 (82) E.L.T. 129]. Besides, these statements are qualified and conditional. The statements have to be read together and as a whole are not in part and pieces, when so read, the statements do not establish clandestine removal. (x) The second part of the demand related to and on the document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated to have dealt with any person at Mumbai of RP-M. The statement of Lakhani indicates payment by cash through angadia, however no further independent confirmation of that has not shown to us. This statement relied upon indicates that payment is made in the name of M/s. Raj Petroleum Mumbai & the same is confirmed by Yogin Surinder Ashar. However, the relevant para of the statement starts with the sentence "We also purchase materials for J.I. Trader Mumbai on cash basis, without any billing. These goods are received under cover of fake Bills…." How the deponent has concluded and made out the Bills, i.e., invoices, to be "fake" is not forthcoming in the statement, nor the reasons why is the next sentence the deponent records " Payments of purchase from J.I. Traders are made in cash though". The payments are made in the name of Raj Petroleum Mumbai and I receive telephonic confirmation of receipt by cash from Shri Yogin or Shri Surendra Ashar of Raj Petroleum..." No further explanations are, on record, indicating any clarification to have been sought; from this willing witness, as to why he made cash payments in name of Raj Petroleum for Cash Bill supply by & on Bills of J.I.T.? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defense plea. RPM should not be denied to credit availed at the Mumbai unit for inputs received there. For the inputs received and consumed at the Panoli unit, credit would be eligible. If the duty paying documents, in the name of Bombay office i.e., RP-M are endorsed to RP-P following Larsen & Toubro Ltd. - 1994 (72) E.L.T. 948 and catena of decisions following the said decision. It is also an admitted finding of fact that for all the documents for which credit was availed at RPM only part of the goods were received the other goods were received at RP-P. (d) The submissions made that while the show cause notice was issued in the present case on 24-5-1999, inter alia seeking to Modvat credit reversion under Rule 57-I and that Rule did not exist on the date when the impugned Order was passed by the Commissioner on 12-9-2000. [Held by the Honorable Tribunal in Sunrise Structural and Engg. Ltd. v. CCE, (Final Order No. A/711 to 722/WZB/04/C-II, dated 27-8-2004) wherein following judgments of the Honourable Supreme Court in Kolhapur Canesugar Works Ltd. v. Union of India [2000 (119) E.L.T. 257 (S.C.)] it was held that due to substitution of 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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