S K Pansar vs Principal Commissioner, Central Excise And Customs

The present order dispose off 14 appeals with such orders-in-original as mentioned above.

Above all appeals are being decided by the common order as all these appeals arise out of common search for similar demand on same allegations. The appellants otherwise has applied for settlement under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. However, the discharge certificate has not been issued in their favour for want of requisite payments to be made prior to issue of discharge certificate. Vide order dated 12.7.2021 it is clear that learned Counsel appearing on behalf of these appellants had endorsed no objection for these appeals to be disposed of on merits. The appeals are accordingly adjudicated by the present common order. The facts relevant for the purpose are as follows:

That the appellants are engaged in the manufacture of Metal Steel ingots (MS ingots) and rolling products of iron and steel. Their main raw materials are sponge iron, pig iron, steel scrap and ferrous alloys. Acting upon the intelligence that some of the iron and steel manufacturers are engaged in manufacture and clandestine removal of MS Ingots, through M/s. Monu Steels commission agent broker, the Central Excise officers of the headquarters (Prev) Raipur conducted search in the business premises of M/s. Monu Steels and present appellants on 15.1.2007 when incriminating documents were recovered under Panchnama dated 15.1.2007 in presence of Shri S K Pansari, the proprietor of M/s. Monu Steels. Statement of Shri S K Pansari was also recorded on 15.1.2007 itself and later on 19.9.2007, 21.9.2007, 30.5.2008 and 2.6.2008. Based upon the said recovered documents and upon the statements not only of Shri S K Pansari but of all others who were investigated by the investigating team the Department observed that the appellants were making clandestine clearance of M S Ingots without payment of duty. Resultantly respective show cause notices were issued to the appellants proposing the demand of requisite duty against the clearance of impugned final goods along with the penalty which was also proposed to be imposed. The said proposal has been confirmed vide the respective Order in Originals as mentioned above.

I have heard Shri Vinay K Jain, learned Counsel appearing for the Appellant and Shri Ravi Kapoor, learned Authorised Representative appearing for the Department.

It is submitted on behalf of the appellants that the Order under challenge has been passed without appreciating the facts and the evidence. The elaborate reply to the respective show cause notices were submitted by the appellants denying the allegations. Demand still has been confirmed merely on the basis of assumption and presumptions and without even any corroboration to the statement of Shri S K Pansari, proprietor of M/s. Monu Steels Ltd. It is submitted that there is no evidence of manufacture and clandestine removal on record. The demand has wrongly been confirmed by the adjudicating authority below. It is also submitted that once the demand is not sustainable question of demand of interest imposition of penalty also does not arise. Learned Counsel appearing for the appellants has also submitted that demand against, the other co-noticees has already been set aside for the reason that demand has been confirmed based upon the documents/ ledger maintained by the third party which is unauthenticated and not reliable and cannot be read against the other manufacturers.

Learned Counsel for the appellant have relied upon the following decisions :

CCE Meerut I vs. R A Castings Pvt. Ltd. [2011 (269) ELT 337 (All)];

CCE Hyderabad vs. Dr. Reddy's Laboratories Ltd. [2006 (200) ELT 445]

Reliance has also been placed upon the decision of CCE vs. Brindaban Beverage Pvt. Ltd. reported as [2007 (213) ELT 487 (SC)]; Oxy Fisheries Pvt Ltd. vs. UOI reported as [2011 (266) ELT 422]; Sarvana Alloys Steel Pvt. Ltd. vs CCE, Bangalore II reported as [2011 (274) ELT 248 (Tri-Bang)] Sulekhram Steels Pvt. Ltd. vs. Commissioner of Central Excise Ahmadabad reported as [2011 (273) ELT 140 (Tri-Ahmadabad).

On behalf of the appellants in addition, it has also been submitted that extended period of limitation is not applicable for the present appellant. It is submitted that the consumption of electricity was always known and could have easily be inquired by the Departmental Authorities. Such details are otherwise not to be furnished specifically, hence non submission of few details cannot amount to suppression of facts. Decision of Hon’ble Apex Court in the case of Pushpam Pharmaceuticals Co. vs. CCE Bombay reported as [1995 (78) ELT 401] has been impressed upon. Decision of Tribunal Bangalore in the case of GTN ENTERPRISES LTD. vs. CCE, Calicut [2006 (200) ELT 76] has also been impressed upon. Imposition of penalty has also been challenged while relying upon the decision of this Tribunal in the case of Veer Bahadur Products vs. CCE Kanpur reported as [2006 (201) ELT 359]. The appellants Shri S K Pansari, Proprietor M/s. Monu Steel have also laid emphasis upon Final order No. A/51186-51187/2018 SM(BR) dated 04.04.2018 and upon Final Order bearing No. A/52058-52063/2018 dated 29.05.2018 where the demand has been confirmed against the appellants based on records of M/s Monu Steels. Orders under challenge in respective appeals are accordingly prayed to be set aside and appeals are prayed to be allowed.

While rebutting these submissions learned Departmental Representative wherein it has been held that statements given before the officers of Revenue is admissible evidence and the confusion therein does not get hit by article 20 (2) of Constitution of India as has been clarified by Hon’ble Apex Court in the case of Hazari Singh vs UOI reported as [1999 (110) ELT 406 (SC)] as has been clearly been discussed by the Adjudicating Authority below in the order under challenge. The statement of Shri S K Pansari is sufficient admission of intentional clandestine removal with intent to evade duty. There is no infirmity in the order under challenge. Otherwise also it is rational principle and that in case of illicit transit lots of records were maintained and incriminating information gets revealed only from the minimal record which was not possibly destroyed before being seized. The entries in the records of M/s. Monu Steels are impressed upon to be sufficient to indicate the malafide intentions of other appellants for suppressing the production and clandestinely removing their product without payment of Central Excise duty and without issuance of Central Excise invoices. Hence there is no infirmity in the Order under challenge. Appeals are accordingly prayed to be allowed.

After hearing the rival contentions, perusing the entire records I observe and hold as follows:

The Department conducted investigation in this case with the search in the premises of M/s. Monu Steels. The appellant, Shri S K Pansari, proprietor of said propriety concern who apparently and admittedly was working as commission agent between the sellers and buyers of iron and steel products and used to get commission from either the seller or buyer or from both of them depending upon the finalisation of the deal and the nature of goods. During the said search, documents like diaries, files, ledgers etc. were recovered by the investigating team from the premises of M/s. Monu Steels under the Panchnama dated 15.1.2007. No doubt there have been final orders in favour of M/s. Shree Banke Bihari Ispat Ltd., Ispat India Raipur Shri Anush Choudhary Shri Syam Iron and Power Pvt Ltd. Raipur. Prakash Kailash Traders, Raipur who were also served with the notice of demand pursuant to impugned search. But it is observed that the documents and statement based where upon were the demands against others including other manufacturers or raw material providers were of M/s. Monu Steel and Shri S K Pansari, the present appellant. Those orders are passed based upon the fact that the demand cannot be confirmed based upon such a record which was not recovered from the concerned assessee but from the possession or premises of third party.

In the present appeals, I have no reason to differ from those findings. But as far as Shri S K Pansari, proprietor of M/s. Monu Steels are concerned, I observe that the demand has been confirmed based upon certain entries in the private ledger book of M/s. Monu Steels itself where Shri S K Pansari, Appellant himself is the proprietor. The premises of M/s. Monu Steel and of Shri S K Pansari were searched. The incriminating documents were got recovered from the appellant’s own premises. Physical inspection of furnance of 4000 MT installed in appellant’s premises when got compared with the electricity consumption record and the production record of the appellant it correctly led the adjudicating authority to conclude the suppression of production of M S Ingots by the Appellant and clandestinely removing those ingots without proper assessment and payment of duty. Not only this statement of Shri S K Pansari has sufficient admission for the alleged clandestine removal of goods without payment of excise duty. The statement being given to Customs Officer is very much admissible in evidence. Reliance upon the decision of Hon’ble Apex Court in the case of Jethmal vs Union of India reported in [1999 (110) ELT 379 (SC)] is held as correct. There is otherwise no retraction ever been made by Shri S K Pansari, the statement cannot be held to be made under pressure or coercion and thus is held to be sufficient proof of alleged clandestine removal of goods . Hence, I do not find any infirmity when the adjudicating authority has confirmed the alleged guilt based on said admission and the demand based on said statement has also been confirmed.

The benefit of the decision of Superior Court or even of this Tribunal as given to others in the same investigation, whose premises never got searched and whose statements never got recorded was purely due to no direct evidence against them except the third party evidence. Hence the said benefit cannot be extended to the present appellant because of there being the direct evidence against the appellant that too in the form of appellant’s own admission. As per section 52 of Indian Evidence Act, Admissions need no further proof unless retracted. As already observed above, there is no retraction on part of the appellant. Documents recovered from the premises of appellant rather corroborate the said admission. I am therefore, of the opinion that demand has rightly been confirmed against the appellant. Therefore, I do not find any infirmity in the order under challenge. The same is hereby upheld. Consequent thereto the

14 appeals herein stand dismissed.

(Pronounced in the open Court on 06-01-2022)