M/S. Ashoka Dyg & Ptg Mills vs Commissioner Of Central Excise & S.T., ...

(Arising out of OIA-RKA/571-577/SRT-I/2009 dated 11.08.2009 Passed by Commissioner (Appeals) Central Excise & Customs, Rajkot)

M/s. Ashoka Dyg & Ptg Mills : Appellant (s) Shri Ramkishor Mishrimal Bindal M/s. Bindal Fashion Pvt Limited M/s. Nilu Tex M/s. Apple Creation Commissioner of Central Excise & S.T., Surat

VERSUS

Commissioner of Central Excise & S.T., Surat : Respondent (s)

M/s. Ashoka Dyg & Ptg Mills

Represented by :

For Appellant (s) : Shri M.N. Saiyed Consultant For Respondent (s) : Shri K. Sivakumar, A.R.

For approval and signature :

Mr. P.K. Das, Hon'ble Member (Judicial)

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Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether their Lordships wish to see the fair copy of the Order?

Seen 4 Whether Order is to be circulated to the Departmental authorities?

Yes

CORAM :

Mr. P.K. Das, Hon'ble Member (Judicial)

Date of Hearing / Decision : 08.01.2015

ORDER No. A/10026-10031/2015 Dated 08.01.2015

Per : Mr. P.K. Das;

These appeals are arising out of a common order and therefore, all are taken up together for disposal.

2. The relevant facts of the case, in brief, are that M/s. Ashoka Dyg. & Ptg. Mills (i.e. the Assessee) is engaged in the manufacture of MMF (P) Dyed and Printed fabrics. On 04.11.2003, the officers of DGCEI, Vadodara visited the factory premises of the Assessee and conducted preventive checks of stock and registers. Shri Ramkishor M. Bindal, Partner of Assessee, in his statement admitted that they have illicitly cleared the MMF (P) finished printed fabrics admeasuring 5,57,910 L.Mtrs. to the merchant manufacturers (shop keepers) without issuing any Central Excise invoices or any duty paying documents and without entering in to the daily stock register and payment of Central Excise duty. The appellant debited the duty amount of Rs. 12,17,056/- by RG-23A Part-II entry Srl. No. 769 dated 05.11.2003. A show cause notice dated 05.7.2007 was issued proposing demand of duty of Rs. 12,17,056/- alongwith interest and penalty and to appropriate the amount as deposited by the Assessee. It is also proposed to impose penalties upon the other appellants. The Adjudicating authority confirmed the demand of duty and appropriated the amount as deposited by the Assessee. Adjudicating authority also imposed penalty of equal amount under Rule 25 of Central Excise Rules, 2002 read with Section 11AC of the Central Excise on the Assessee. He has also imposed penalty on the other appellants as under:-

(a) Shri Ramkishor Mishrimal Bindal  Rs. 1,20,000/-

(Partner of the Assessee)

(b) M/s. Bindal Fashion Pvt. Limited - Rs. 90,000/-

(Merchant manufacturer)

(c) M/s. Nilu Tex - Rs. 10,000/- (Merchant manufacturer)

(d) M/s. Apple Creation - Rs. 12,500/- (Merchant manufacturer)

By the impugned order Commissioner (Appeals) upheld the adjudication order subject to the option as being given to the Assessee to deposit 25% of the duty confirmed as penalty provided that the reduced penalty with interest on the delayed payment of duty is paid within 30 days of the receipt of the impugned order. The appellants filed these appeals against the impugned order and Revenue has also filed appeal against the impugned order for allowing the option to pay 25% of duty as penalty.

3. Heard both sides and perused the records.

4. Learned Consultant on behalf of the appellants submits that the entire case is made up on the basis of statements and no enquiry was conducted. He submits that the Partner of the Assessee retracted his statement in the reply to show cause notice. He further submits that the imposition of penalty on the merchant manufacturers (shop keepers) is not sustainable without proper investigation and enquiry from them. He submits that there is no evidence that the shop keepers have received these fabrics from the Assessee. He submits that the shortage was detected during the stock verification and there is no material to indicate the clandestine removal and therefore Section 11AC will not be attracted as the Assessee paid the duty on the detection of shortage.

5. On the other hand, learned Authorised Representative for the Revenue reiterates the findings of the Commissioner (Appeals). He submits that appellant in their statement dated 04.11.2003 admitted and accepted the clandestine removal of the goods. This statement was retracted on 27.8.2007 in reply to the show cause notice. He submits that such a retraction can not be acceptable in the eyes of law. He submits that the appellant has not paid 25% of duty as penalty along with interest and therefore Commissioner (Appeals) should not given option under the proviso to Section 11AC. It is also submitted that merchant manufacturers have also admitted that they had sent the grey fabrics and receipt finished goods from the Assessee without payment of duty.

6. After hearing both the sides and on perusal of the records, I find that the Shri Ramkishor M. Bindal, Partner of Assessee admitted the processing of grey fabrics and clandestine removal of the finished goods without payment of duty. They have paid the duty at the very next date of the visit of the officers. After about more than four years he had retracted the statement only in reply to the show cause notice, which can not be accepted as retraction of statements. For the purpose of proper appreciation of the facts of the case, relevant portion of the adjudication order is reproduced below:-

3. A statement of Shri Ramkishor Mishrimal Bindal, Partner of Unit was recorded under Section 14 of the Central Excise Act, 1944 on 05.11.2003 wherein he interalia stated that he was one of the three partners of the Unit; that he looked after all the day to day activities of the Unit including the work related to despatch and Central Excise matters; that he agreed with the facts and figures of the Panchnama dated 04/05.11.2003 drawn at the Unit.; that on being asked regarding the shortage of 6,19,900.25L. Mtrs. Of Man Made Grey fabrics, noticed during the physical verification of stock, he stated that the Grey fabrics admeasuring 6,19,900.25 L.Mtrs. was processed in the Unit and resultant 5,57,910.00 L.Mtrs. of finished printed gabrics valued at Rs. 1,21,70,569.00, was illicitly cleared to the concerned merchant manufacturers, without issuing Central Excise invoices or any other duty paying documents, without payment of Central Excise duty and without entering in Daily Stock register and Lot register, during the period September 2003 to October 2003; that they availed CENVAT credit on the said Grey fabrics; that they received the printing charges at an average rate of Rs. 4/- per L. Mtrs on the said finished printed fabrics; that the assessable value Rs. 1,21,70,569.00 of the said finished printed fabrics shown in the Panchnama dated 04/05.11.2003 drawn at the Unit includes the job charges, but did not include the Central Excise duty; that on being asked to show the account of payment received for the above said transactions, he stated that he received the payment in cash and therefore, he did not maintain any account of the same; that on being asked to show the LRs regarding transportation of above said fabrics, he stated that the concerned merchant manufacturers used to send Grey fabrics by their own tempo and also used to collect the finished printed fabrics by their own tempo, therefore, he did not have LRs of the same.

7. I find that the other appellants (i.e. merchant manufacturers) also supplied the grey fabrics and received the processed grey fabrics with full knowledge that the goods are not duty paid and therefore, imposition of penalties on the other appellants are warranted. It is also noted that the Assessee had not disputed the payment of duty. On a query from the Bench, learned Consultant for the Assessee submits that the Appellant Assessee had not availed the option of payment of 25% of duty as penalty under Section 11AC of the Central Excise Act, 1944, as per the order of the Commissioner (Appeals). So, there is no need to go into the grounds of appeal filed by the Revenue.

8. In view of the above discussion, the appeals filed by the Assessee and other appellants are rejected. Appeal filed by the Revenue is also dismissed, without going into merits as the assessee had not exercised the option as allowed by the Commissioner (Appeals). The applications for extension of period of stay order filed by the appellants are dismissed as infructuous.

(Dictated and pronounced in the Court)

(P.K. Das) Member (Judicial) ..KL

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