Shri Salasar Ispat Pvt. Ltd vs Commissioner Of Central Excise

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI

COURT No. II

APPEAL No.E/1136, 1137 & 1390/10

(Arising out of Order-in-Appeal Nos.AKP/NSK/90/2010 dated 26/03/2010, AKP/95 to 97/NSK/2010 dated 30/03/2010 and AKP/156 to 158/NSK/2010 dated 31/05/2010 passed by Commissioner of Customs & Central Excise (Appeals), Nashik)

For approval and signature:

Honble Mr. P.K. Jain, Member (Technical) Honble Mr. S. S. Garg, Member (Judicial)

1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy :Seen of the Order?

4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================

Shri Salasar Ispat Pvt. Ltd., Shri Salasar Ispat Pvt. Ltd., Appellants Shri Salasar Ispat Pvt. Ltd., Vs. Commissioner of Central Excise, Respondent Nashik

Appearance:

Shri.Ashok Kumar Singh, Advocate for appellant Shri.Rakesh Goyal, Addl. Comm. (AR), for respondent

CORAM:

Honble Mr. P.K. Jain, Member (Technical) Honble Mr. S.S. Garg, Member (Judicial)

Date of Hearing : 26/05/2015 Date of Decision : /2015

ORDER NO

Per: P. K. Jain

1. These appeals are directed against Order-in-Appeal Nos.AKP/NSK/90/2010 dated 26/03/2010, AKP/95 to 97/NSK/2010 dated 30/03/2010 & AKP/156 to 158/NSK/2010 dated 31/05/2010 passed by Commissioner of Customs & Central Excise (Appeals), Nashik, as far as these relate to present appellant.

2. Since all the three appeals have arisen out of the common investigations and are based upon broadly the similar facts. These are being taken up together.

3. Brief facts of the case are that based upon an intelligence that the appellant and another manufacturer were manufacturing and clandestinely clearing the goods, namely, TMT Bars and MS Ingots without payment of duty through a broker, namely, Shri Umesh Vrijlal Modi, simultaneous searches were conducted at number of places which included the appellants factory at Nashik and their office in Mumbai. In the appellants office in Mumbai, certain incriminating documents were recovered (in addition, incriminating documents were recovered in the factory at Nashik as also at the brokers place. However, the same are not being discussed as not relevant in the present appeals). In the search carried out in the appellants office in Mumbai among the various documents recovered, there were three diaries which are described as item No.23, 24 & 26 of the Panchnama. Shri Pravesh Gautam, who is the Director of the appellant was present and his statement was recorded on that date and also on various dates. The appellant explained the contents of these diaries. The diaries contain the details of MS ingots purchased by them from various manufacturers of MS ingots.

The details included consignment-wise, date, rate, suppliers name, brokers name, etc. Another diary (No.26) contains the details of the payments made. All the three diaries were explained by Shri Gautam in his statement. Based upon the details available in these diaries it was found that the appellant have received MS ingots from number of manufacturers and such MS ingots were both with payment of duty and also without payment of duty. Based upon the tabulation made from these diaries, statement of appellant as also other persons particularly suppliers were also recorded. Statements of brokers were also recorded. Both the suppliers as also brokers admitted of having supplied the MS ingots to the appellant without payment of duty. In fact most of the suppliers paid the duty involved on such MS ingots along with interest, penalty, etc. After the detailed investigation, show-cause notices were issued to the manufacturer of MS ingots for recovery of duty and penalty and to the brokers and the present appellant who was the purchaser of such clandestinely cleared MS ingots for penalty. After receiving the replies, the cases were adjudicated wherein the duty, interest and penalties were confirmed against the manufacturers of MS ingots and penalties were also imposed on the brokers and the present appellant who was the purchaser of such clandestinely cleared ingots.

In the present set of appeals, such notices were issued to three manufacturers of MS ingots, namely, M/s.Bhagwati Steel Cast Ltd., Nashik, M/s.Bhavshakti Steel Mines Pvt. Ltd., Nashik and M/s.Jai Prakash Strips, Nashik. The appellant was co-noticees in all the three notices and after adjudication, a penalty of Rs.75,000/-, Rs.75,000/- and Rs.30,000/- were imposed on the present appellant in the three cases. Aggrieved by the order, the appellant had filed appeals before the Commissioner (Appeals), who has upheld the order and aggrieved by the said order, the appellant is before us.

4. Ld. Counsel for the appellants main contention was that the documents have been recovered from Mumbai office and this office was common office for three firms which included M/s.Gautam Enterprises, which is a trading firm and is owned by Shri RL Gautam. It was his submission that the diaries which were recovered were common for all the three firms and many entries were made in the hand writing of Shri R.L Gautam and the Revenue has not bothered to record the statement of Shri RL Gautam and in the absence of his statement, it cannot be said that all the entries are relating to the present appellant. Keeping in view this factual mistake committed by investigators , penalty cannot be imposed on the appellant.

4.1 Second submission of the learned Counsel was that the statement of Shri Pravesh Gautam, Director in the appellant company were recorded under duress and after recording of the statement, on the next day, the statements were retracted by him and under the circumstances statements made by him cannot be relied upon by the Revenue.

4.2 The third submission made by the learned Counsel was that he has asked for the cross examination of the supplier of the goods as also the brokers who have given the statement about the clandestine clearance of the goods without payment of duty. Such cross-examination was not allowed by the original authority and since the cross-examination has not been allowed, their statements cannot be relied upon by the Revenue; hence, the whole case of the Revenue has no merit. In support of his contention, Ld. Counsel quoted following case laws:

a) Slotco Steel Products Pvt. Ltd. Vs. CCE  2012 (281) ELT 193 (Del)

b) Basudev Garg Vs. CC  2013 (294) ELT 353 (Del)

c) CCE Vs. Parmarth Iron Pvt. Ltd., - 2010 (260) ELT 514 (All.)

d) Vinod Solanki Vs. UOI  2009 (233) ELT 157 (SC) 4.3 The learned Counsel also submitted that the Revenue has not found any details about the transportation of the goods and under the circumstances, penalty cannot be imposed on the appellant.

5. The learned Additional Commissioner (AR) reiterates various points made in the three impugned orders. The learned ARs first submission was that it is not denied by the appellant that the place from where the documents recovered was their office. The fact that the same place was used by other two firms out of which one belongs to Shri Pravesh Gautams father and the other to Shri Pravesh Gautam himself will not make any difference. The Ld. AR further submitted that Shri Pravesh Gautam was available at the time of Panchanama and his statements were recorded number of times. In case, some of the entries were not belonging to the appellant but to M/s.Gautam Enterprises, Shri Pravesh Gautam could have explained the same and Shri Pravesh Gautam could have explained the remaining entries. Revenue thereafter would have called his father for his statement. He further submitted that Shri Pravesh Gautam explained all the entries and he did not indicate that any of the entries is belonging to M/s.Gautam Enterprises. Under the circumstances, the plea taken at this stage is without any basis and required to be outrightly rejected. Even today, Shri Pravesh Gautam is not stating which entries belongs to M/s.Gautam Enterprises.

5.1 As far as the second contention about the retraction of the statement is concerned, the learned AR submits that in all nine statements were recorded over a period of over one year. Out of the said nine statements, five statements were retracted and the remaining four were not retracted. It was also submitted that in the retraction, the appellants have not explained how the pressure was applied or what is wrong in the recorded statement. The learned AR further submits that in subsequent statement of Shri Pravesh Gautam has invariably confirmed the contents of earlier statements and under the circumstances the retraction is no consequences whatsoever. It was also submitted that in the statements Shri Pravesh Gautam has explained the contents of the diary for example, the name of the supplier written in brief was explained in full. Similarly, the name of the broker is written in brief. He has explained the same in detail. Other contents like, rate, etc. have been explained. Such details can be explained only by a person who is well versed and this cannot be put into the mouth of the appellant by the investigating officers. It is also submitted that the later statements were not even retracted wherein he has confirmed all the details. As far as the question of cross-examination is concerned, the learned AR submitted that the people to be cross-examined are co-noticees in the show-cause notices and calling them for cross-examination would imply them to admit the clandestine clearance and evasion of duty during cross-examination which is violation of article 20 (3) of the Constitution of India. Learned AR relied upon the decision of this Tribunal in the case of Maya Mahal Industries reported in 1995 (80) ELT 118 (Tri). Under these circumstances, co-noticees could not have been called for cross-examination and this plea is only to delay the adjudication proceedings. As far as the learned Counsels plea that during search no discrepancies were found in the stock and the transporters details, etc. have not been found by the investigating officers, the learned AR submits that the present case was made based upon the intelligence and by the recovery of documents, substantial amount of duty evasion has been found. The fact that no discrepancy was found in stock does not imply that documents recovered are not truthful.

6. We have considered the rival submissions.

6.1 At the out set we observe that whole case of the department is based upon the documents recovered from the appellants office in Mumbai. The documents are diary No.23, 24 & 26. It is not disputed that these diaries were recovered in Mumbai from a place where the appellants office exists. A plea is being made that the office is a common office for three firms. Out of other two firms, one is owned by the father of Shri Pravesh Gautam in the name and style of M/s.Gautam Enterprises and other firm is owned by Shri Pravesh Gautam. The fact that the place is used as common office will not make any difference.

6.2 We also note that the learned Counsel for the appellant has submitted that no statement of Shri RL Gautam, who was the proprietor of M/s.Gautam Enterprises was recorded. We find that the whole case is based upon the three diaries, namely, 23, 24 & 26 and contents of each diary has been explained by Shri Pravesh Gautam, Director in the appellants firm. We also note that based upon these diaries detailed tabulations were prepared by Revenue indicating various suppliers from whom clandestinely cleared goods were purchased by the appellant. These were again shown to Shri Pravesh Gautam who after going through the diary and the tabulation has confirmed the details in the statements prepared. He has not stated in any of the statements about any particular entry that the said entry pertains to M/s.Gautam Enterprises or any other firm. Under the circumstances, we are of the considered view that the plea of the learned Counsel requires outright rejection and we accordingly do so.

6.3 The other plea of the learned Counsel is relating to retraction of the statement. We have gone through the statement as also the retraction letters, we find that the statements of Shri Pravesh Gautam were recorded over a period of more than one year and there are as many as nine statements. We do not find anything contradictory in these statements. We also find that in the subsequent statements including the ones which have not been retracted, Shri Pravesh Gautam has confirmed the details given in the initial statements. It is also see that the retraction letters were sent under Certificate of Posting and not by Speed Post/Registered Post. We have also gone through the retraction letters which do not indicate which portion of the statement is incorrect or recorded under duress.

6.4 Keeping in view the overall circumstances of the case and the contents of the statements as also the so called as retraction letter, we hold that the statements given are correct and can be used as an evidence in the present proceedings and the retraction letter needs to be rejected outright.

6.5 Another contention of the learned Counsel for the appellant is about not permitting the cross-examination of the supplier of the goods and the brokers. We note that the whole case is based upon the documents recovered from the appellants own office and the contents of the documents as explained by the appellant. This itself proves that the fact that the appellant has purchased clandestinely cleared goods from M/s. M/s.Bhagwati Steel Cast Ltd., Nashik, M/s.Bhavshakti Steel Mines Pvt. Ltd., Nashik and M/s.Jai Prakash Strips, Nashik, and hence is confirmed by the appellant himself. It is well settled law that whatever has been admitted need not be proved. Under the circumstances, even if we ignore the statement of the suppliers and the brokers, the case will stand on the statement and the documents recovered from the appellant alone. In view of the said position, we dont consider it necessary to discuss the case law submitted by learned Counsel for appellant as also the argument of learned AR. The learned Counsels another contention was that the department has not found any discrepancy during their visit to their factory is of no consequences. It is not under dispute that the diaries were recovered from their office and the contents of the diaries are also not under dispute and the contents clearly indicate that the appellant has purchased clandestinely cleared goods without payment from various manufacturers. Under the circumstances, we do not see any reason to give any importance about the non-availability of transportation details or not able to find discrepancy in the factory in the facts and circumstances of the present case.

7. In view of the above, all the three appeals are dismissed.

(Pronounced in Court on ..)

(S.S. Garg) Member (Judicial) (P.K. Jain) Member (Technical)

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