Full Judgment
2. On 14.10.1997, separate teams of officers of Central Excise had visited the factory of M/s TFL and the business premises of the appellants and conducted search in which certain records were recovered. It appeared that M/s TFL were engaged in the manufacture of Sulphuric Acid (a dutiable product) and Single Super Phosphate (exempt from duty) while another company viz. M/s Pokhrayan Alum & Chemicals (P) Ltd. in the same premises were engaged in the manufacture of Sulphuric Acid and Ferric Alum. It further appeared from the records recovered from the two premises and the statements of some functionaries of the two companies as well as of Shri Neeraj Kumar Tulsiyan, son of Shri P.D. Tulsiyan that M/s TFL had clandestinely removed Sulphuric Acid without payment of duty through their traders including the appellants. In his statement dated 14.10.1997, Shri Neeraj Kumar Tulsiyan stated inter alia as under:
(1) They were dealing in purchase and sale of Sulphuric Acid and Spent Acid and M/s TFL were one of their main suppliers;
(2) They normally made and received payments though cheques and drafts but whenever they received goods without bills they disposed them of on priority and that such transactions took place in cash;
(3) They maintained a ledger in the name of M/s ABC & Co. in their computer to keep the records of unaccounted transactions with M/s TFL;
(4) At times such transactions were also mentioned on loose slips or weighment slips which were destroyed once the transactions were over;
(5) The officers had recovered a few computer ledger sheets of M/s ABC & Co in his presence showing their unaccounted transactions with M/s TFL from 1.4.1996 to 31.3.1997 and the bill numbers mentioned in these sheets were fictitious;
(6) They received the payments of such unaccounted transactions in cash but when the payments were delayed, they kept tract of the transactions by recording them;
(7) They did not have any godown for storing the materials and the goods were delivered to their buyers directly by their suppliers.
The officers again visited the premises of the appellants on 15.10.97 and resumed some documents and recorded further statement of Shri N.K.Tulsiyan. Again further statements of Shri N.K. Tulsiyan were recorded on 5.6.98 and 23.12.98. The records recovered from the appellants' premises included computerised accounts of "ABC & Co." and "Sale and Purchase Register". These and other records coupled with the statements of N.K. Tulsiyan and others indicated that M/s TFL had clandestinely removed 1830.985 MTs of Sulphuric Acid (involving Central Excise duty of Rs. 7,32,394) during 1996-97 and another quantity of 46.29 MTs of Sulphuric Acid (involving Central Excise duty of Rs. 14,156) during October 1997.
3. In respect of the clandestine clearance of Sulphuric Acid, the modus operandi of M/s TFL, as evidenced by the records and the statements, was that, whenever they were to make such clearances through their traders like the appellants, they issued instructions to them not to enter the transaction in their statutory records. The statements given by Shri N.K. Tulsiyan also corroborated this fact and showed that the appellants had abetted the clandestine activity of M/s TFL. It was on this basis that the Department alleged in the show cause notice that the appellants facilitated clandestine removal of goods by M/s TFL and rendered themselves liable for penal action under Rule 209A. It was alleged that the appellants had acquired possession of excisable goods and were concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing such goods, which they knew or had reason to believe, were liable to confiscation under the Central Excise Act, 1944 or the Rules framed thereunder.
4. After more than one year since the receipt of the show-cause notice, Shri P.O. Tulsiyan submitted an affidavit dated 7.12.2000 in which it was pleaded that M/s P.O. Tulsiyan & Sons had been registered as a dealer with the Central Excise Department but surrendered the registration on 1.9.97 and discontinued their business forthwith; that, during of period of dispute, they were not conducting any business and N.K. Tulsiyan was not working with the firm in any capacity; that N.K.Tulsiyan was a chronic psychiatric patient and hence incapable of giving any valid statement during the said period; that his statements recorded by the Central Excise officers were not reliable; that the accounts of "ABC and Co." had nothing to do with the appellants' business and the appellants had never maintained any such accounts; that any connection between the appellants and the accounts of "ABC & Co." could not be inferred as any floppy or hard disc relating to the accounts was not recovered from the appellants' premises; that the appellants had not received or dealt with any unaccounted excisable goods of M/s TFL in any manner nor had they helped M/s TFL in clandestine removal of such goods.
5. M/s TFL, in their reply to the show-cause notice, denied having supplied any goods to the appellants as indicated in the computerised accounts of "ABC & Co". They also wanted to cross-examine the appellants to ascertain the correct source and authenticity of the computerised accounts of "ABC & Co" as well as the 'Sale and Purchase Register' recovered by the Department from the appellants' premises.
Though the adjudicating authority allowed the request of M/s TFL for cross-examination of P.D. Tulsiyan and 'N.K. Tulsiyan, the Tulsiyans did not turn up for being cross-examined. Only one person was cross-examined on behalf of M/s TFL before the adjudicating authority and he was Shri R.A. Dubey, Executive Director of M/s TFL. In answer to a question put to him, Shri Dubey stated that he knew Shri P.D.Tulsiyan and that whatever money was collected, whether in the form of draft or cheque, from Shri P.D. Tulsiyan was sent to their Lucknow Head Office. After examining all the available evidence, the adjudicating authority passed the impugned order.
6. Examined the records and heard the SDR. The appellants were not present, nor represented by anybody.
7. We have carefully considered the grounds of this appeal which are based on what have been stated in the affidavit dated 7.12.2000.
According to the appellants, the statements of N.K. Tulsiyan recorded by the officers are not to be relied on as he was allegedly suffering from a serious mental disease and was mentally incapable of giving any statement at the material time. Another ground raised in this appeal is that N.K. Tulsiyan's statements had been taken behind the back of the appellants and the appellants were never confronted with such statements. The appellants have also denied having any computer in their premises from where the computerized statement of accounts of "ABC & Co." was recovered. The appellants, have also prayed for vacating the penalty imposed on N.K. Tulsiyan on the ground that he was not mentally fit to file a separate appeal At the outset, we may say that the prayer for setting aside the penalty on N.K. Tulsiyan cannot be entertained in this appeal. Such a prayer can be entertained only in an appeal filed by N.K. Tulsiyan or, if he is mentally unsound, by his guardian duly appointed by a competent Court. In the present appeal, we are only concerned with the penalty imposed on M/s P.D. Tulsiyan & Sons. The challenge against this penalty is wholly based on the affidavit dated 7.12.2000. We have scrutinized this document and we note that the deponent's signatures in the affidavit are distinctly different from Shri P.D. Tulsiyan's signatures given in the memorandum of appeal and connected applications filed with the Tribunal. The signature of Shri P.D. Tulsiyan in the letter dated 1.9.97 submitted to the department surrendering Central Excise registration looks like the signatures given in the appeal memo. Therefore, considering the signatures of P.D. Tulsiyan in the appeal memo as his genuine signatures, we have to treat the affidavit dated 7.12.2000 as not that of the appellant. Consequently nothing contained in the affidavit can be relied on in this case.
8. The learned Commissioner has dealt with the contents of the affidavit on merits without checking the authenticity and genuineness of the document. We must hold that nothing contained in the affidavit is admissible as pleadings or evidence in this case. The allegations in the show-cause notice as against M/s P.O. Tulsiyan & Sons will be treated as uncontested. As the grounds of the appeal are entirely based on the affidavit dated 7.12.2000, none of them can be sustained and, therefore, we dismiss the appeal.