2020-TIOL-351-CESTAT-BANG

MA Steels Pvt Ltd Vs CC, CE & ST

CX - The assessee-company manufactures MS Ingots - During the relevant period, its officers of the Preventive Unit visited its premises and noted that production and raw materials were not accounted for since a particular date - Some production slips, invoice books and scrap purchase slips, all of which had been found concealed, were recovered - The production manager at the assessee-company admitted that such records related to unaccounted procurement of scrap, manufacture of ingots and clearance thereof - Statements of several other employees were taken as well - Simultaneous searches were also conducted at the premises of three other companies, whereupon excess of MS Ingots were found therein - The statements also revealed concealment of receipt of scrap by the assessee, for use in production of MS Ingots which was also unaccounted, which thereupon was sold to the three other units - Hence it was alleged that the assessee suppressed production of MS Ingots - SCN was issued, raising duty demand - The excess stock of MS Ingots found that the recipient units was proposed to be confiscated - Personal penalties were imposed on various office bearers - Equivalent penalty was imposed u/s 11AC of the CEA 1944 - Option of redemption fine was offered as well - Hence the present appeals.

Held - Considering the figures of MS Ingots produced by the assessee in excess and those received by the other units, there is a discrepancy in the same - If the Adjudicating authority was of the opinion that the other units received received on a part of the MS Ingots cleared by the assessee, the duty demand cannot be pinned entirely on the assessee - The Adjudicating authority also observed that of the total amount of MS Ingots, only a part thereof were proven to have been cleared by the assessee to buyer units - The Revenue did not appeal against the O-i-O passed in respect of the buyer unit - Therefore as per available evidences, it must be construed that the assessee cleared only a relatively lesser amount of MS Ingots - The Commissioner cannot raise demand against the assessee while drop the demand raised in respect of the buyer unit, more so when both cases stand on the same set of documents, records and evidences & statements - The adjudicating authority should have reduced the demand raised against the assessee, to the extent of the MS Ingots allegedly not cleared by it, where it is concurrently held that receipt of such excess quantity by the buyer unit, is not evidenced - Hence if clandestine receipt by the buyer unit is not established, the logical conclusion is that clandestine clearance to such extent, by the assessee is not established - The assessee cannot be made scapegoat for any inconsistencies: CESTAT

Held - Moreover, the Commissioner recorded elaborate findings on the purchase of scrap, production and sale of ingots in an un-accounted manner - The clearances to these units and other units have not been quantified separately - It has been proven that the goods were manufactured and so the assessee is liable to discharge duty on the same - It is apposite that activities of this nature would not be well-documented and any trail of evidence would very likely be destroyed - It follows that such cases cannot be proven with arithmetical precision - The investigation reasonably satisfied all the pre-requisites for establishing clandestine removal - Hence the duty merits requantification: CESTAT

- Assessee's appeals partly allowed: BANGALORE CESTAT

2020-TIOL-346-CESTAT-DEL

Ganpati Industries Vs Pr.CCE

CX - The appellant-companies herein are all located in Chhattisgarh albeit on different plots of land - Two are registered with the Central Excise Department and avail SSI exemption - The other appellants are partners and proprietors in some of these firms - The premises of these companies were visited by Departmental officers who seized many incriminating documents and hard disk drives from computers installed in the factory premises - Documents were also seized from the residential premises of the proprietor - The Central Excise officer also conducted stock taking, whereupon shortage of stocks was found and demands were issued on this score - Upon investigation, the Department concluded that the turnover and value of clearance made by the two units be clubbed together to determine eligibility for SSI exemption - The Department also alleged that the appellants indulged in clandestine clearance of manufactued goods so as to remain within SSI exemption limit - Duty demands were raised with interet and penalties were imposed - Hence the present appeals.

Held: It is seen that the adjudicating authority permitted cross examination of various persons - None of the witnesses deviated from their earlier statements reiterated from earlier statements, which were relied upon by the investigation - Hence the provisions of Section 9D are certainly complied with by the adjudicating authority - There is evidence regarding pervasive control over these units by the appellant no 5 only - It is also seen that the record pertaining to payment of various units is interlinked - It is on record that there had been supply by one unit, but payments were received subsequenty by other units & evidence indicates transfer of this amount to the other units - Regarding transportation of raw material, finished goods and trading material, the same is substantiated by statements taken from the owner of the transport agency, who stated to have undertaken such work and to have received payment in cash - Regarding data retrieved from computer drives, it is seen that it is used by various persons and is not controlled by any one person - No certificate as per Section 36B of CEA is available on record - Hence it is concluded that the same is not obtained by the Department in course of investigation - Hence reliance cannot be placed on data retrieved from the hard drive - The appellant no 5 accepted the clearances in his statement and also paid duty voluntarily - Data regarding the clearance of finished Excisable goods has not been corroborated independently, but is accepted by the appellant no 5 - Hence it is evidence that the Revenue did not only rely on the data derived from the computer printout but also obtained the same from independent sources, which is accepted by the appellant no 5 - Moreover, there is huge variation in the electricity consumption, which proves the abnormal production of finished goods as recorded in private records - Such abnormal power consumption goes to show that there was manufacture of finished goods without bringing those on record - Such aspect if further proven through purchase of unaccounted coal - Hence benefit of SSI exemption is not available when there is mutuality of interest and pervasive control of one unit by the other, which is established in this case - Besides, clearance of winding wire, roll products without payment of duty is not accounted for but the same were maintained in private records - All such evidence is accepted by the appellant no 5 - Hence what is accepted need not be proven - Thus the O-i-Os warrant no interference with: CESTAT

- Appeals dismissed: DELHI CESTAT