SATENDRA VIKRAM SINGH

M/s Tarun Polymers, Village- Kachigam, Daman (Appellant) are engaged in manufacture of Plastic Bags falling under Chapter 39 of the Central Excise Tariff Act, 1985. The departmental officers searched their unit on 10.01.2012 and recovered certain documents and records such as files containing Lorry receipts (LRs), bank statements, balance sheets, job work challans, private notebooks, invoices etc. After examining the resumed documents, the officers found that some of the LRs matched exactly with duty paying invoice(s) issued by the appellant but against some LRs, no duty paying invoice was issued. After analyzing such lorry receipts, the officers found that the appellant has suppressed taxable turn over in the year 2010-11 and 2011-12 as detailed in para 6.3 of the show cause notice.

1.1 After conducting investigation, Revenue issued them a show cause notice dated 01.10.2015 demanding differential central excise duty of Rs. 5,69,381/- under Section 11A(4) of the Central Excise Act 1944 along with interest under Section 11AA and penalty under Section 11AC of the Central Excise Act, 1944 read with Rule 25(1) of the Central Excise Rules, 2002. The show cause notice also proposed penal action under Rule 26(1) of the said rules against Shri Chandrakant F Jain, Partner of the appellant firm.

1.2 The matter was decided by the Assistant Commissioner vide order dated 30.11.2016, wherein he confirmed the duty demand of Rs. 5,69,381/- along with interest and equal penalty on the company. He also imposed penalty of Rs.5,50,000/- on Shri ChandraKant Jain, (Appellant 2). Aggrieved with this order, both the appellants filed appeals before the Commissioner (Appeals) who vide impugned order dated 28.02.2018 upheld the order of the lower authority and rejected their appeals. Hence, the present appeals before this Tribunal.

2. The Appellant M/s Tarun Polymers took following grounds in their appeal:-

• The learned Commissioner (Appeals) has upheld demand which was based on presumption and assumption and the order was passed without giving proper findings on various contention of the appellant. The entire demand is based on LRs recovered from their premises without verifying their authenticity from the recipient whether or not they had received the final goods. Such demand is not sustainable as held in the case of Aum Aluminum Pvt Ltd Vs. CCE, Vadodara reported at 2014 (311) ELT 354 (Tri.-Ahm.).

• LRs are prepared by concerned clerk of the transporter or handed over to assessee for filling the details of finished goods before it’s transportation. If for some reason, order is cancelled at the last moment, clearances are not affected. In such cases, LRs could not be cancelled, due to mistake or ignorance of the dispatch clerk or the transporter’s person and kept lying in drawers.

• LRs only contained the quantity of goods whose value has randomly been taken by the Revenue on the basis of value of other goods cleared during the said period without confirming quality/grade/specification etc. The valuation taken on such basis is not sustainable as held by Hon’ble Delhi High Court in the case of Commissioner of C. Ex., Delhi Vs. Bihariji Manufacturing Co. Pvt. Ltd reported at 2015 (323) ELT 106 (Del.) which was also upheld by the Apex Court by dismissing the SLP filed against this order as reported in 2015 (319) ELT A117 (SC). They also rely on the decision in the case CCE, Chandigarh Vs. Saakeen Alloys Pvt ltd. reported at 2015 (319) ELT A117 (SC) and of CESTAT Ahmedabad in Gupta Synthetics Ltd Vs. CCE Ahmedabad-II case.

• While recording the statement, partner was shown copies of LRs and other documents but since these were voluminous, it was not possible for him to check each and every document and thus, demand confirmed on the basis of such statement is not legally correct.

• The Adjudicating authority completely ignored their submissions and therefore, such order passed is not legally sustainable. They rely on the decision of