2. The Ld. SDR appeared for the revenue. In the order impugned before me the Commissioner (A) has upheld the order of the
Adjudicating Authority. The
Adjudicating Authority has confirmed the duty demand of Rs. 6,45,150, imposed equal amount of penalty, ordered confiscation of land, building, plant & machinery allowed to be redeemed on payment of Rs. 1 Lakh, the penalty of Rs. 50,000
has been imposed on the
managing director and a further penalty of Rs. 20,000
has been imposed on the general manager. The case relates to clandestine removal. The appellants have paid the entire duty amount. In addition to the duty, they have also paid Rs. 1,61,288 being 25% of the penalty amount imposed on the appellant Vide TR6 Challan No. 003/2001 dated 21.11.2001. In their written submission the appellant have
inter alia contended that the goods were never removed from the factory without payment of
excise duty, all the goods were actual in balance. The fact is that the Angles, Beams and Channels in question were after production stocked in a storage yard in open area and due to recently passed monsoon, the said M.S. Angles, Beams and Channels were rusted due to oxidation with rain water and therefore they were removed from the stock yard to outside production area for cleaning of rust and to paint them with anti-oxide paint. When this was explained to the officers, they did not take any cognizance of their explanation and were only strict to what they had seen in the stock yard and did not want to consider to said stock removed for clearing of rust and paint anti-oxidation paint to outside production area. During the course of such examination no panchas were kept present and were called only after Panchanama was ready. The appellants also represented that to manufacture 140.200 Mt. Of Beams, at least the
raw material quantity more than the said 140.200 Mt. was required and to carry such
raw material, at least 14 Trucks were required. It was also represented that they were working under modvat and were entitled to take modvat credit on
raw material/inputs. They were also exempted from payment of
Sales Tax and also enjoying
Income Tax Holiday. The officers have never examined the receipt of total
raw material physically. Consumed in production and balance left
to arrive at the suppression of production of the said Beams manufactured and cleared without payment of duty and without accounting for it in to R.G. 1 Register. The Officers also did not extend their investigation to record statement of Excise Clerk of person who was
concerned in preparation of daily dispatch reports and also did not inquire the name of the excise clerk. The investigation at customer/Parties' end was not conducted and for that the SCN and the Order-in-Original is silent. It has also submitted that the officers did not investigate the matter with the owner/transporters/drivers of the vehicles numbers to prove that the Beams in question were removed in their vehicles. It was pointed that when the officers were having the truck numbers why
the statements of Transporters/drivers were not recorded as of proof that the beams in question were removed in their vehicles. It was also contended why the trucks were not put to seizure for use as a means of transport of the said Beams illicitly without payment of duty. It is further contended that their process is melting process and as such they require certain quantity of M. S. Ingots and other relevant
raw materials. It was also not investigated as to how such inputs were procured, from where and whether it was accounted for or not. It was also not investigated as to how and from where Furnace Oil was procured to fire the furnace. The officers did not investigate the transporter, drivers or the trucks used in transporting the said materials illicitly, no statements of the recipient parties were also recorded and as such how can it be possible
to establish the clandestine removal in the absence of these facts.
3. The Ld. DR appearing for the revenue inter alia contended that rough daily dispatch report dated 6.6.97 contains all the particulars. The entire duty has been paid without protest. The statement of the Director dated 29.10.98 itself is an admission to prove clandestine removal. Shri Lahoti, General Manager in 2 statements dated 7,6.97 and 3.4.98 has also admitted illicit removal. Thus, the contention of the Ld. DR is that the case of clandestine removal is proved beyond doubt.
4. After hearing both sides and perusal of the records, I am not able to gather from the records that the appellant has paid the duty amount under protest. Though the Department has failed to record the statements of the transporters/drivers/recipients which was essential to prove the clandestine removal. However, solely relied on the statement of Shri V.P. Agrawal, Shri Lahoti, without any corroborative evidence and particularly the duty not having been paid under protest, I confirm the duty demand. As regards the penalty on the firm and its partners Shri V.P. Agrawal, I find that the penalty could either be imposed on the firm or its partners. So far as the firm is concerned, it is seen that the appellants have already paid the penalty of Rs. 1,61,288 being 25% of the penalty amount. I, therefore, reduce the penalty amount to Rs. 1,61,288 on the firm. As regards the penalty on the partner Shri V.P. Agrawal the same being not maintainable is set aside. As regards the penalty on Shri Kamal Kishore Lahoti, General Manager and the redemption fine, I find that since there are lacunaes in the investigation for not having brought on record the statements of the transporters, drivers of the trucks and recipient parties neither any other documentary evidence like invoices etc. have been brought on record. I consider it reasonable to set aside the penalty on Shri Kamal Kishore Lahoti and the redemption fine in the interest of justice.