M/S Alaknanda Cement (P) Ltd. vs Commissioner Cenrtal Exccise
2017 Latest Caselaw 6166 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 
Reserved on 24.10.2017
 
Delivered on 02.11.2017
 
Court No. - 4
 

 
Case :- CENTRAL EXCISE APPEAL No. - 47 of 2008
 

 
Appellant :- M/S Alaknanda Cement (P) Ltd.
 
Respondent :- Commissioner Cenrtal Exccise
 
Counsel for Appellant :- A.P.Mathur
 
Counsel for Respondent :- C.S.C., Krishna Agarwal
 

 
Hon'ble Abhinava Upadhya,J.

Hon'ble Ashok Kumar,J.

(Per:- Hon'ble Ashok Kumar,J.)

This appeal arise from a decision of the Custom, Excise and Service Tax Appellate Tribunal (CESTAT) dated 30.08.2007.

The appeal has been filed by the assessee. Following questions of law have been framed by the assessee which are quoted hereinbelow:-

"(1) Whether the Hon'ble Tribunal was justified in rejecting the appeal without considering the contention of the appellants?

(2) Whether the Hon'ble Tribunal was justified in not deducting the quantity of cement from the alleged quantity of surreptitious removal on which duty has already been paid by the appellants accepting removal without payment of duty?

(3) Whether the Hon'ble Tribunal was justified in imposing penalty more than the duty evaded?"

In the present case the Tribunal confirmed the decision of the Commisioner Central Excise, Allahabad.

The brief facts of the case are that the assessee company is engaged in manufacutre of cement falling under Chapter 25 of the Central Excise Tarrif Act, 1985 and was registered for the same with the Central Excise Department.

On the basis of information received by the Anti Evasion Unit of the Central Excise Department, Allahabad with regard to the effect that the assessee company M/s Alaknanda Cement Private Limited (ACPL) is engaged in clandestine removal of cement, the said anti evasion unit kept surveillance over the unit of the assessee and thereafter intercepted a consignment of cement cleared by the appellant company, ACPL in a truck at a distance of about 500 meters from the unit of the appellant company.

On the interrogation the truck driver has informed the anti evasion officers that the truck was loaded with 360 bags of cement and the said cement bags had been loaded at the factory premises of appellant, ACPL. When the officers of anti evasion unit has asked the driver about the documents related to the consignment, the driver has produced the 'duplicate for transporter copy' of invoice No. 242 dated 15.08.2002 which has been issued by the appellant, ACPL and a weighment slip of the same date dated 15.08.2002 (in duplicate). In the said documents the goods, namely, the cement, that is 360 bags of 50 k.g. each, total weight of which was 18 metric ton (M.T.) were consigned to one M/s Chhatriya Traders, Achalpur, Pratapgarh. On verification regarding the genuineness of the documents it transpired that the same were not genuined and immediately the officers of the anti evasion unit has collected the information, in follow up proceedings, and at the factory premises the person, namely, a cashier and authorised signatory of the appellant company was present and on demand the said authorised representative produced a invoice book which was issued up to serial no. 241 dated 14.08.2002. When the departmental personal confronted with the 'duplicate for transporter copy' of invoice no. 242 dated 15.08.2002, which was resumed from the possession of the truck driver, the authorised signatory has admitted that the said invoice no. 242 dated 15.08.2002 has been issued under his signature for clearance of 360 bags of cement.

The authorised signatory has produced a 'parallel invoice book' at the factory from which the invoice no. 242 dated 15.08.2002 was issued.

On verification it is noticed that this parallel invoice book does not have pre-printed serial number. During the course of verification it is noticed and found that from invoice no. 242 dated 15.08.2002 total 18 more such invoices have been issued from the said parallel set of bill book.

A show cause notice has been issued and after the reply assessing authority of the appellant company, has passed a detailed order in original dated 31.08.2004.

In follow up action, which has been carried out further i.e. on 16.08.2002, at the residential premises of the director of the appellant company as well as at the office, certain documents are resumed and the statement of the director was also recorded under Section 14 of the Central Excise Act, 1944.

In the statement the director has categorically accepted that the clandestine removal of cement made from the appellant company on the strength of 19 fake invoices and the director has agreed to deposit the duty due on the clearance of the cement which has been affected under the said 19 invoices which are issued from the parallel set of invoice book. The adjudicating authority after due consideration of the entire material as well as the statement of the truck driver and the authorised representative as well as the director of the company has confirmed the demand of duty and has also imposed the penalty under Section 11 AC read with Rule 25 of the Central Excise Rules, 2002 for contravention of Rules, 4, 6, 10 and 11 of the Rules. The adjudicating authority has also imposed the personal penalty of the same amount against the director of the company vide order dated 31.08.2004.

The order in original of the adjudicating authority has been challenged by the appellant company before the Commissioner (Appeals) of Customs, Central Excise and Service Tax, Allahabad. The Commissioner (Appeals) has considered the entire material as well as the submission of the appellant and the finding recorded by the adjudicating authority and thereafter he has concluded that the proceedings adjudicated by the Assistant Commissioner are competent enough however he has reduced the penalty both on the company as well as the director to the tune of Rs. 2,66,272/- each, considering the fact that the duty of Rs. 51,817/- has already been deposited by the appellant company. Rest of the order passed by the adjudicating authority has been affirmed by the Commissioner (Appeals) vide order dated 29.04.2005.

Aggrieved by the order of the Commissioner (Appeals) the appellant company has filed an appeal before the CESTAT which has been registered being Appeal No. E/2601/2005-2602/2005-SM[BR].

Learned counsel for the appellant has submitted that both, namely, the adjudicating authority as well as the Commissioner (Appeals) were not justified in fixing the liability of duty upon the appellant company as the appellant has deposited the duty by accepting the liability of duty at the initial stage itself.

Learned counsel for the appellant has further submitted that the adjudicating authority has not justified in fixing the liability over and above the value of the goods, namely, 360 bags of cement, of which the Central Excise duty has been paid by the appellant.

Learned counsel for the appellant has further submitted that the only dispute involved in the present appeal is with regard to the calculation of duty. He has referred para 15 of the order of the Commissioner (Appeals).

The contents of the para 15 of the order of the Commissioner (Appeals) is quoted hereinbelow:-

(15) "The appellants in their grounds of appeal have laid stress upon the calculation of excess/shortage of stock. As per version of the appellant, unaccounted excess stock should have been 572 bags instead of 932 bags calculated by the Central Excise Officers. The 360 bags of cement seized out side the factory should not have been taken into consideration while making the physical verification of the stock. The appellant further submit that provisionally released goods have been cleared after payment of duty and after accounting for in Central Excise records, therefore, the same should have been considered and redemption fine should have been imposed proportionately as the redemption is too high".

On the other hand, learned counsel appeared on behalf of the department has submitted that the Commissioner (Appeals) has discussed the issue in detail and has further elaborately mentioned the details of complete stock which was found at the time of inspection and thereafter the verification carried out by the anti evasion unit on 15.08.2002. In support of his contention the counsel for the Revenue has havily relied upon the contents of para 16 and 17 particularly of the order of the Commissioner (Appeals) which are quoted hereinbelow:-

(16) "It is undisputed fact that 360 bags of cement was being transported on 15.08.2002, without any legal invoice after having been cleared from the factory. It is an indicative of the fact that the impugned goods had been cleared without payment of duty or with an intent to evade duty payable thereon. As regard calculation mistake in physical verification of the stock, it is observed that as per statutory records, the verification of stock on 15.08.2002 was as under:-

(1) Operning balance on 15.08.2002                 =	2530 bags
 
(2) Production on 15.08.2002                            =	840 bags
 
(3) Total                                                              = 	3370 bags
 
(4) Clearance up to 17:00 hrs. on 15.08.2002   =	360 bags
 
(5)  Closing balance on 15.08.2002                   = 	3010 bags
 

(17) From the above, it transpires that as per statutory records, the stock should have been 3010 bags, whereas on physical verification, the stock had been found 3942 bags. Therefore, it is established beyond doubt that the stock was excess by 932 bags which had not been accounted for. In view of the above, the appellant's plea does not merit consideration particularly when the said excess has been well admitted by Shri P.S. Chaturvedi, the authorised signatory of the appellant No. 1".

Sri Krishna Agarwal, learned counsel for the Revenue has also submitted that no question of law is involved in the present appeal as such the authorities below as well as the CESTAT have clearly recorded the finding of fact and in fact it is admitted case of the appellant company that the company was involved in evasion of duty which fact is not disputed by the learned counsel for the appellant company as such is admitted to some extent.

We have heard the learned counsel for the parties and perused the orders of the authorities below as well as the order impugned of the CESTAT.

In fact the appellant company has failed to show any deduction as has been claimed by the learned counsel for the appellant. The authorities below have categorically recorded the finding of fact which has not been disputed by the appellant company. From the perusal of the orders of the authorities below as well as from the perusal of impugned order of the CESTAT, it is crystal clear that the appellant company was trying to evade the payment of duty by issuing the forged invoices which are being admittedly prepared by the cashier of the appellant company through a parallel set of invoice book.

We see no error in any of the orders of the authorities below, as neither there is any irregularity in calculating the demand nor any material has been placed by the learned counsel for the appellant to substantiate his submission.

Admittedly, the appellant company was found committing irregularity and under the garb of parallel set of invoice book as such issuing the fake invoices, the company was trying to evade the payment of duty.

In view of the aforesaid facts and upon the facts and circumstances of the present case, we have no option but to dismiss the appeal filed by the appellant. The order impugned passed by the CESTAT is hereby confirmed.

Since the CESTAT has affirmed the order passed by the Commissioner (Appeals), the effect of the order passed by the Commissioner (Appeals) be given effectively.

The appeal is, accordingly, dismissed.

Order Date :- 02.11.2017

SK Srivastava

.

(Ashok Kumar,J.)            (Abhinava Upadhya,J.)