Page 245 - ELT_1_1st April 2020_Vol 372_Part

2020 ] SYNERGY STEELS LTD. v. COMMISSIONER OF CENTRAL EXCISE, ALWAR 131

(i) Rs. 45,15,387/- by undervaluing finished goods sold to/through the
consignment agent, M/s. Jai Bhawani Concast Pvt. Ltd. (JBCPL),
New Delhi.
(ii) Rs. 98,29,809/- by undervaluing finished goods sold to/through
their dealer, M/s. Maa Beri Steel Co. (MBSC) Jodhpur.
(iii) Rs. 8,58,107/- in respect of 156.894 MT of finished goods allegedly
found short at the time of stock taking at the factory premises.
(iv) Rs. 79,87,489/- by way of irregular Cenvat credit on the basis of in-
voices of four suppliers of scrap, without any accompanying goods.
Penalties were also imposed on the various persons to the extent of amount
shown against their name under the provisions of Rule 26 of Central Excise
Rules.
On the aspect of undervaluation, the Department entertained a view that
the appellant has collected over and above the invoice value in cash from the
buyers in respect of sales to or M/s. JBCPL as well as M/s. MBSC. In respect of
irregular availment of Cenvat credit, it was held by the Department that the main
appellant have received only invoices without actual receipt of inputs, also the
raw materials/inputs used in the manufacture of finished product by the appel-
lant was purchased from local scrap supplier in cash.
2.2 In the adjudication order demand in respect of sales made through
consignment agent, M/s. JBCPL, was confirmed to the extent of Rs. 40,76,894/-
instead of Rs. 45,15,387/- on account of a typographical error in the show cause
notice. However, the adjudicating authority dropped the demand of
Rs. 98,29,809/- in respect of goods sold to the dealer, M/s. MBSC, Jodhpur, due
to inadequate evidence. The adjudicating authority also confirmed demand of
Rs. 8,58,107/- in respect of shortages detected at the time of stock taking of
Rs. 79,87,489/- was confirmed along with the penalty on the appellant company
and penalty of Rs. 15 lakhs on Shri Subhash Chander Kathuria, MD.
3. The department is also in appeal against the dropping of the demand
of Rs. 98,29,809/- against MBSC.
4. The main appellant has filed the appeal on the grounds :
4.1 That the whole demand of Rs. 40,76,894/- is based on the evidence
of third party seized from the residence of Shri Raman Bhatia and the statement
of Director of JBCPL. It is an established law that the third party evidences, par-
ticularly those of the co-noticee, is not to be relied upon without independent
corroboration thereof. Since Shri Raman Bhatia was neither summoned and ex-
amined by the Learned Adjudicating Authority in terms of Section 9D of the
Central Excise Act. Further, he was also not permitted to the cross-examined and
hence the statement tendered by him should not have been relied upon by the
Learned Adjudicating Authority in the adjudication proceeding.
4.2 M/s. JBCPL is the consignment agent of the main appellant in New
Delhi, was also purchasing the goods from them, on their own account and re-
selling them to their buyer. M/s. JBCPL’s own sale, were generally confined to
Delhi and nearby area. M/s. JBCPL was also selling their goods to the main ap-
pellant also. It is submitted that out of the total quantity of 2195.995 MTs of SS
flats received by M/s. JBCPL from the main appellant, a quantity of 2206.725
MTs, probably including the remaining stocks of past purchase was further sold
by M/s. JBCPL on their own account for which M/s. JBCPL functioned as a
EXCISE LAW TIMES  1st April 2020  293