Maa Foundry Private Limited Vs Commissioner of Central Excise (CESTAT Kolkata)
Conclusion: Duty could not be demanded on the ground that there was absence of corroborative evidence on allegation of clandestine manufacture and removal of finished goods as ,the allegation of clandestine manufacture and removal of finished goods by the Appellant made in the Show Cause Notice, was merely on assumption and presumption, without sufficient material evidence corroborating the said allegations.
Held: Appellant-company was engaged in the manufacture of C.I. Ingot Moulds (C.I. Mould), Pig Iron and C.I. Scrap etc. which were used as raw materials. On receipt of intelligence, a search was carried out and certain incriminating document was recovered. It was alleged that appellant had purportedly clandestinely produced and removed 1283 MT, 660.230 MT and 20.770 MT aggregating to 1964.970 MT of C.I. Moulds without payment of duty of Rupees forty-four lakhs. Assessee, submitted that there was no tangible, cogent and corroborative evidence on record and that here was no confession of guilt. No independent investigation carried out and hence demand was confirmed on mere comparison of private records with Central Excise Invoice. In the instant case the entire case was based on the private records seized from the residence of the employee and office of the Appellant. There was considerable force in the contention of the Appellant that the private records relied upon by the Revenue could not be a basis to uphold the serious charge of clandestine clearance. It was settled legal position that charge of clandestine clearance was a serious charge and the onus to prove the same was on the Revenue by adducing concrete and cogent evidence. In the absence of corroborative evidence, the issue in the instant case i.e. “the charge of clandestine clearance” could not be labeled against the assessee. In view of the above discussion and settled position of law,the allegation of clandestine manufacture and removal of finished goods by the Appellant made in the Show Cause Notice, was merely on assumption and presumption, without sufficient material evidence corroborating the said allegations. Therefore, the order was set aside.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The instant Appeal has been filed by the Appellant against Orderin-Appeal No.21-22/CE/RKL-GST/2017 dated 20.11.2017 passed by the Ld.Commissioner(Appeals), GST, CX & Customs, Bhubaneswar.
2. Briefly stated, the facts of the case are that the Appellant is engaged in the manufacture of C.I. Ingot Moulds (C.I. Mould). Pig Iron and C.I. Scrap etc. are used as raw materials. Acting on an intelligence received by the Directorate General of Central Excise Intelligence, the Officers carried out simultaneous search operations on 23.03.2011 at (1) Factory-cum-office premises of M/s. Maa Alloys (P) Ltd., Chikatmati, Kalunga, Dist. Sundergarh, Odisha, (2) Factory-cum-office premises of Maa Foundry (P) Ltd., Chikatmati, Kalunga, Dist.Sundergarh, Odisha, (3) residential premises of Pitabass Chhotray, Director situated at Deogan, Fertilizer Township, Rourkela, (4) Residential premises of Anirudha Sutar, Accountant situated at Plot No.M/32, Chhend Colony (Ground floor), Rourkela and (5) residential premises of Ajay Kumar Das, Office Assistant situated at Kansbahal Jhopri Patti, Kansbahal Chowk, Dist.Sundergarh, Odisha. During the search conducted in the factory-cum-office premises of M/s. Maa Foundry (P) Ltd., several documents were seized with marking for identification of document No. 1/DGCEI/RRU/MFPL/F/1 1 to 20/DGCEI/RRU/MFPL/F/1 1. Further, joint physical stock verification of finished product was also done and 71.140 MT of C.I. Ingot Mould was physically found. In the residential premises of Pitabass Chhotray, Director, situated at Deogan, Fertilizer Township, Rourkela, he was not present. Search was conducted in presence of Smt. Nirmala Chhotray, wife of Shri Pitabass Chhotray. During the search, 2 unused Invoice books in quadruplicate of M/s.Maa Foundry (P) Ltd. were found and were seized with marking for identification as No.0 1/DGCEI/PRU/MFPL/1 1 and 02/DGCEI/RRU/MFPL/11. The original copies of all 50 sets have been numbered by hand. Further, one unused Invoice book in quadruplicate of M/s. Maa Alloys (P) Ltd. was also found and was seized with marking for identification as No.03/DGCEI/RRU/MAPL/11. The original copies of all 55 sets have been numbered by hand. In course of search on 23.03.2011 in the residential premises of Anirudha Sutar, Accountant of M/s.Maa Foundry (P) Ltd., he was available and the search was conducted in his presence and in presence of the independent witnesses called by the DGCEI Officers. During the search, several incriminating documents were recovered by the said Officers and for the purpose of identification marked as document No.0 1/DGCEI/PRU/MAPL/AS(R)/1 1 to 14/DGCEI/PRU/MAPL/AS(R)/1 1. During the search of the residential premises of Ajay Kumar Das, Office Assistant was present and one incriminating document was recovered and for the purpose of identification marked as document No.01/DGCEI/PRU/MAPL/AKD-Resi/11 and seized.
3. Show Cause Notice dated 24-12-2012 was issued on the basis of the said two private records i.e. (i) Note Book (Document No.01/DGCEI/RRU/MFPL/F/11) and (ii) Ledger (Document No.08/DGCEI/RRU/MFPL/AS (R)/1 1) purportedly seized on 23-03-2011 in the course of search and (iii) purported shortages of 20.770 MT of C.I. Moulds. On comparison of entries in the said private records with the Excise Invoice, it was purportedly noticed that some of the entries for the period from 17-10-2009 to 31-03-2010 and 24-01-2011 to 23- 03-2011 did not have corresponding Excise Invoices and on that basis it was alleged that the Appellant had purportedly clandestinely produced and removed 1283 MT, 660.230 MT and 20.770 MT aggregating to 1964.970 MT of C.I. Moulds without payment of duty of Rs.44,24,025/-.
Breakups of the demand raised in the Show Cause Notice as upheld in the OIO/OIA
