J.N.J. INDUSTRIES Vs. CCE

JUDGEMENT

(1.) THESE are four appeals filed by M/s. J.N.J. Industries, Delhi (hereinafter referred to as JNJ) and three others, namely, M/s. Meenakshi Wire Products (MWP), M/s. Lakshmi Wire Netting Industries (LWN) and M/s. Weldmesh Industries (WI) against the order of the Principal Collector, New Delhi dated 16.3.1989. By the said order a duty demand of Rs. 5,01,814.01 for the period 1982 -86 was confirmed against M/s. JNJ and penalties of Rs. 25,000 each were imposed on M/s. JNJ Industries, M/s. Lakshmi Wire Netting Industries, M/s. Meenakshi Industries and M/s. Weldmesh Industries.

(2.) WE have heard Shri Naveen Mallick, Ld. Advocate, who appeared for the four appellants and Mr. S. Nunthuk, Ld. JDR, who represented the Respondent Commissioner.

(3.) BY SCN dated 20.10.1987 the Department alleged that S/Shri R.K. Gupta and S.K. Gupta along with Shri K.K. Gupta, Mrs. Shoba Gupta, Mrs. Anita Gupta and Mrs. Pushpa Gupta had been engaged in the manufacture and clearance of excisable goods i.e., welded wire mesh in two plants, one located at B -3/1 Jilmil Industrial Area, Shahdara, Delhi and another at Plot No. 7, Gali No. 2, Friends Colony, Shahdara, Delhi without payment of Central Excise duty. It was alleged that the said persons had adopted the modus operandi of creating a number of firms, namely, M/s. JNJ at Jilmil Industrial Area, Delhi, M/s. LWN at Friends Colony, Shahdara, M/s. MWP at Friends Colony, Shahdara and M/s. WI at Jilmil Industrial Area, Shahdara by changing the constitution of the firms from time to time with a view to evading Central Excise duty. It was alleged that on 12.11.1986 when the premises of M/s. JNJ was visited by the officers of Anti -Evasion, M/s. JNJ were found engaged in the manufacture of wiremesh falling under Chapter heading 7308.90 (erstwhile TI -68) for which declaration had been filed and accepted by the Department. The Accounts Registers maintained by M/s. JNJ were found to be written upto only 23.6.1986. For the period 24.6.1986 to 12.11.1986 i.e., the day of the visit of the Central Excise Officers no accounts had been prepared by M/s. JNJ and as on 12.11.1986 a stock of 569 bundles of welded wiremesh of assorted sizes were lying in the factory premises in finished condition which was valued at Rs. 1,28, 390. Further investigations showed that at the Friends Colony, Shahdara premises M/s. MWP were engaged in cutting and straightening of iron and steel wire and within the same premises without any demarcation, another firm in the name and style of M/s. LWN were found engaged in the manufacture of welded wiremesh. Shri S.K. Gupta, authorised signatory of M/s. JNJ was also found to be authorised signatory both for M/s. LWN and as well as for M/s. MWP. Shri S.K. Gupta in his statement dated 12.11.1986 at the Friends Colony premises stated that the cut and straightened wire products manufactured by M/s. MWP were consumed by M/s. LWN located in the same premises (Plot No. 7, Gali No. 2, Friends Colony, Shahdara) and also by M/s. JNJ located at B -3/1, Jilmil Industrial Area, Shahdara. He also stated that the sale and purchase accounts of M/s. MWP, LWN and M/s. JNJ were not maintained. Further, though M/s. LWN had declared that their address as Gali No. 2, Plot No. 7, Friends Colony, they were shown to be operating at B -3/1, Jilmil Industrial Area, Shahdara. This fact came to be revealed from the correspondence with Delhi Electric Supply Undertaking (DESU). Both M/s. JNJ Industries and M/s. LWN were engaged in the manufacture of welded wiremesh as per their declarations. Further, M/s. Weldmesh Industries with Registered Office at 756/1, Gali Kundewalan, Ajmeri Gate, Delhi had also works at B -3/1, Jilmil Industrial Area, Shahdara. M/s. WI were also found to be engaged in the manufacture of welded wiremesh. Shri R.K. Gupta, Proprietor of M/s. Weldmesh Industries had in his Bank account shown the address of M/s. Weldmesh Industries as Jilmil Industrial Area, Shahdara. Since the actual clearance of welded wiremesh manufactured and sold by the said four firms during the past five previous years could not be ascertained as no accounts of purchases of raw materials and sale of welded wire mesh were maintained by them, the Department relied on the total purchase of H.B. and G.I. wire by them and for purposes of calculating production, the raw material purchased was taken into account. As regards conversion charges, the written statements given by S/Shri R.K. Gupta and S.K. Gupta on 21.4.1987 and 2.3.1987 was relied upon by the Department. The Department calculated that during the period between 1982 -83 and 1986 -87, the four units/firms had cleared welded wiremesh to the tune of Rs. 1,98,19,760.47 with a duty liability of Rs. 6,04,979.46.