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TMI Blog2005 (11) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... s Managing Director, the business premises of M/s. Vandana Enterprises, Hyderabad (hereinafter referred as 'VE') and the business premises of M/s. Anuradha Agencies, Vijayawada (hereinafter referred to as 'ARA'). In the factory of SPCPL the officers detected shortages and excess of raw materials and finished products. The goods were seized. In the residential premises of Shri R. Shankar, MD incriminating document viz., Lorry Receipts, Cash Collection Books (CCBs), Cash Memo Books (Kutcha Bill Books) and some documents in loose condition were found. The above documents were also seized. In the business premises of M/s. VE, unaccounted quantities of various varieties of finished goods of SPCPL valued at Rs. 19,02,653/- were found. Incriminating documents viz., purchase and sales register, Credit Bill Books, Cash Bill Books, Cash Credit Memo, Ledgers, etc., were found. Further an amount of Rs. 1,85,450/- in Indian currency related to the sale of unaccounted goods of SPCPL was found. Statements of Shri R. Shankar, MD, Shri K. B. Vijay Kumar, Managing Partner of VE and Mr. R. Sridhar, Son of Shri R. Shankar and Director of SPCPL were recorded under Section 14 of the C.E. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-10-2002 and redemption fine of Rs. 5,000/-. (iii) Finished goods worth Rs. 19,02,653/- were seized from M/s. VE on 7-10-2002 and redemption fine of Rs. 1,00,000/- (e) Interest under Section 11AB have also been demanded. 4. The appellants have strongly challenged the finding of the adjudicating authority. Hence they have come before this Tribunal for relief. 5. Shri A. Mahadev, learned Advocate appeared for the appellants and Shri R.M. Viswanath, learned SDR for the Revenue. 6. The learned Advocate adduced the following arguments. (i) The learned Advocate stated that the show cause notice has been issued without the prior approval of the Chief Commissioner of Central Excise. Since the demand was for more than Rs. 1 crore at the relevant period the approval of the Chief Commissioner was necessary, since that has not been done the show cause notice cannot be sustained. (ii) The statements made before the Central Excise authorities were taken under coercion and threat. This has been stated in the reply to the show cause notice. But this has not been taken into account by the adjudicating authority. (iii) The adjudicating authority has denied the right of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the penalty equivalent to the duty evaded could be imposed. (xiii) The learned Advocate relied on the following judgments (a) M/s. Sunder Ispat Limited v. CCE, Hyderabad reported in 2002 (141) E.L.T. 24 (A.P.) - Natural Justice - Documents relied on by the Department to be supplied to petitioner at an early date - Also, witnesses examined on behalf of Department to be produced for cross-examination in accordance with principles of natural justice -Section 35K of Central Excise Act, 1944 - Article 226 of Constitution of India. (b) M/s. Swadeshi Polytex Ltd. v. CCE, Meerut reported in 2000 (122) E.L.T. 641 (S.C.) - Classification of goods - Natural justice -Cross-examination - Tribunal finding breach of principles of natural justice thus remanding the matter for a fresh decision but at the same time upholding the Collector's finding to deny cross-examination of witnesses whose statements Collector had relied to determine whether subject goods were waste or good fibre-HELD : When case is to be decided afresh, opportunity should be given to cross-examine the witness whose statement the Collector intent to reply - Sections 11A and 33 of the Central Excise Act, 1944. (c) Khem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h were found. Even in the premises of M/s. VE unaccounted finished goods were found. It should be borne in mind that M/s. VE were dealing only with the goods manufactured by M/s. SPCPL. Shri R. Shankar, MD appears to have admitted the irregularities in the statements given before the authorities. Shri R. Shankar has admitted to the fact of procurement of raw materials illicitly for the manufacture of finished products. In fact, various raw materials have been procured under fictitious names. Shri R. Sridhar, Director of SPCPL has admitted to the fact of removal of goods without payment of duty. The goods seized at VE were also not duty paid. This fact was admitted by R. Shankar and later excise duty to the tune of Rs. 3,04,425/- was paid 464 copies of LRs issued by SSKLS were recovered from the residence of Shri R. Shankar. It is seen that they all relate to the transportation of paints from SPCPL to ARA. In respect of goods on which no duty is paid, the consignor and the consignee are shown as ARA. They have been cleared on Kutcha Bill. The Kutcha Bill Book also has been recovered. 11 Cash Memo Books also were recovered from the premises of R. Shankar. Shri R Sridhar has stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as no merits because when the show cause notice was issued the relevant provision pointed out by the appellant has been deleted. Shri V. Radha Krishna Proprietor of ARA, Vijayawada has admitted that they are sole distributors of paints manufactured by SPCPL and also LRs and Kutcha Bills showing details of goods booked and consigned by ARA from Hyderabad to Vijayawada relates to the paints received along with the goods. He further stated that as per R. Shankar's instructions they have not rendered the goods in their account. They destroyed the transport and other documents after receipt of this. The sales proceeds were handed over by him personally to R. Shankar when he visited Hyderabad. As regards, the Chartered Engineer's certificate, the adjudicating authority has stated that the same does not relate to the period mentioned in the show cause notice. All the persons involved, viz., Shri K. Vijaya Kumar of VE, Shri R. Shankra, MD, Shri R. Sridhra, Director and V. Radha Krishna of ARA in their statements have admitted that most of the transactions were done without any payment of central excise duty from SPCPL through Vandana Enterprises. The Adjudicating Authority has also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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