Full Judgment
Purushottam Bajaj is the sole proprietor of M/s. P.G. Sales. It shows that the manufacturing unit and trading unit are their family concerns and the the movements of the goods and documents are controlled form the place i.e. from the office of P.G. Sales by same set of persons.
(ii) Mr. Girdarilal has stated in his statement, that M/s. P.G. Sales Corporation is sole distributor for their goods i.e Bajaj brand of welding electrodes. Even the bills and invoice copies as on the letter pads of M/s. P.G. Sales Corporation mention taht M/s.
P.G. is a sole distributor for welding electrodes of M/s. BI. (iii) On that day of search i.e. on 30.03.1993, Mr. Purushottam Bajaj, sole proprietor of M/s. P.G. Sales was found present in the factory of M/s. Bajaj Industries, monitoring production and clearances therein.
(iv) Mr. Girdharilal Bajaj had already stated that, the production and clearances of M/s. Bajaj Industries were not being recorded on day to day basis and the proper records were being maintained as they had failed to make a licence after crossing a limit of Rs. 15 lakhs and also failed to pay duty after crossing the limit of Rs. 20 lakhs. This fact has been confirmed by the Commissioner and in fact no evidence was advanced by M/s. Bajaj Industries on this charge. In fact everything was being controlled from the office of M/s. P.G. Sales Corporation.
(v) Nowhere during the course of investigation ether P.G. Sales or M/s. Bajaj Industries or anyone else stated that M/s. P.G. Sales were dealing in 'Bajaj brand' of welding electrodes manufactured by any other company/unit except M/s. Bajaj Industries, Amravati.
Accordingly, the investigating officers have not gone into this aspect that M/s. P.G. Sales were also purchasing and selling the welding electrodes manufactured by other manufacturers of UP or Bihar or for that matter any manufacturer from anywhere in the country. This was altogether a different story and version which was raised at the stage of adjudication and which was erroneously found acceptable by the adjudicating authority. In fact, the department have been denied the opportunity to meet altogether new submission which was advanced at the stage of adjudication proceedings. This was an extraneous point and should not have been taken into consideration at the stage of adjudication.
(vi) When the stock was taken by the investigating officers of the purchasers of Bajaj Brand electrodes and M/s. P.G. Sales, not a single piece of Bajaj brand electrode was found in stock, manufactured from anyone else except of M/s. Bajaj Industries, Amravati.
(vii) M/s. P.G. Sales have not shown any ledger or any purchase documents or any payment to any such alleged manufacturer of Bajaj brand electrodes from anywhere else and accordingly their submission before the adjudicating authority was devoid of any substance and it ought to have been rejected in toto.
(viii) Mr. Girdarilal Bajaj also admitted in his statement that no records were being maintained in the factory and only on the basis of oral inquiries from their offices, where the office of M/s. P.G. Sales alongwith other 2 firms of the same family members were housed, the production was being recorded and the sales were being made.
(ix) There was no justification on part of the adjudicating authority to have a double standard inholding the excess clearance of Rs. 10.09 lakhs as unaccounted and to accept the excess clearance of Rs. 35.17 lakhs as having been manufactured by M/s. BI. The adjudicating authority ought to have accepted the independent evidence of the purchasers of welding electrodes who have stated that the electrodes were wrongly described as M.S. rods in the sales documents of P.G. Sales, the adjudicating authority likewise, should not have admitted a totally extraneous piece of evidence adduced at the time of personal hearing, which the investigating officers did not have any opportunity to investigate and refute. The investigation had clearly brought out the fact of interconnection between P.G. Sales & B.I. and the fact that the former were the sole distributor of the electrodes manufactured by the latter.
(x) M/s. P.G. Sales have failed to account for receipt of M.S. Rounds or M.S. Rods from any source into heir books of account beyond Rs. 3 Lakhs or so and therefore there was no scope for making sales of M.S. Rods or M.S. Rounds to the accounts/invoices/bills.
(xi) The transporters also had described the consignments of M/s.
P.G. Sales, which were carried form Amravati to various destinations as welding electrodes/rods only and not as MS Rods of M.S. Rounds.
The Commissioner ought to have admitted this point in his findings.
(xii) The fact of manufacture of welding electrodes, unaccounted was found to be correct as on the day of raid, the goods which were found unaccounted were seized and the same modus operandi was being adopted for day-to-day manufacture and clearance even for the entire prior period of the year 1992-93.
(xiii) M/s. P.G. Sales Corporation have misdescribed the welding electrodes as M.S. Rounds and on the basis of their own sales bills/invoices, it was found that during the year 92-93 they had sold 38.17 lakhs worth of welding electrodes to their various customers, as has been recorded in para-20 and 21 of the Order-in-Original.
(xiv) The welding electrodes seized from the premises of five notices, who were traders, at different places were non duty paid goods and accordingly were rightly seized and were liable for confiscation. Accordingly, the Commissioner ought to have confiscated the same and should have released only on payment of redemption fine.
(xv) Even though the demand was confirmed for unaccounted clearances to M/s. P.G. Sales but the Commissioner failed to impose penalty on them." 2. Since the adjudicating Commissioner has not taken into account certain evidences as pointed out by the Board as above, the impugned order passed by him is set aside and the matter remanded to the successor Commissioner for re-adjudication taking into account the entire evidence and after affording reasonable opportunity of hearing to both sides.