Kunal Calcium Limited, Yamunanagar V. DCIT, Yamunanagar

ITA 46/CHANDI/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5254 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-02-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 09-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Period of limitation; Additional evidence; Tangible material; Reason to believe; Borrowed satisfaction
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R KUMAR, ACCOUNTANT MEMBER ITA NO. 46 & 47/CHD/2015 ASSESSMENT YEAR: 2005-06 & 2006-07 KUNAL CALCIUM LTD. 17-18F, DAV MARKET, YAMUNA NAGAR. VS. DCIT, CIRCLE- YAMUNA NAGAR. PAN : AABCK4507G (APPELLANT) (RESPONDENT) O R D E R PER DIVA SINGH, J.M. : THE PRESENT APPEALS HAVE BEEN FILED BY THE ASSESSEE ASSAILING THE CORRECTNESS OF THE CONSOLIDATED ORDER DATED 24/12/2014 OF CIT(A ), PANCHKULA PERTAINING TO 2005-06 AND 2006-07 ASSESSMENT YEARS ON VARIOUS GRO UNDS. 2. IT WAS A COMMON STAND OF THE PARTIES BEFORE THE BENCH THAT THE ARGUMENTS ADVANCED IN ITA NO. 46/CHD/2015 WOULD FULLY APPLY T O ITA NO. 47/CHD/2015 . THE LD. A R HAD MAINTAINED THE SAID STAND EXCEPT WI TH THE CAVEAT THAT IN THE 2006- 07 ASSESSMENT YEAR THE INFORMATION OF THE CENTRAL E XCISE DEPARTMENT RELIED UPON BY THE AO FOR REOPENING WAS ALWAYS AVAILABLE TO THE ASSESSING OFFICER BEFORE THE PASSING OF THE ASSESSMENT ORDER DATED 30/12/2008 UN DER SECTION 143 (3) WHICH WAS SUBSEQUENTLY SOUGHT TO BE REOPENED BY THE AO WHICH ACTION IS CHALLENGED IN THE PRESENT PROCEEDINGS. 3. THUS APART FROM THIS MINOR DISTINCTION THE OTHER ARGUMENTS OF THE BOTH THE PARTIES IN 200506 ASSESSMENT YEAR, IT WAS SUBMITTE D WOULD CONTINUE TO REMAIN THE SAME AS APART FROM THIS DISTINCTION THE FACTS, CIRC UMSTANCES AND POSITION OF LAW ON THE GROUNDS WOULD CONTINUE TO REMAIN THE SAME. APPELLANT BY SH. T. N. SINGLA, AR RESPONDENT BY SMT. CHANDERKANTA, SR. D.R. DATE OF HEARING 15-12-2017 DATE OF PRONOUNCEMENT 06 -02-2 018 4. ACCORDINGLY WE REPRODUCE HEREUNDER THE GROUNDS R AISED BY THE ASSESSEE FROM ITA NO. 46/CHD/2015: 1. THAT THE LEARNED C.I.T. (A) WRONGLY UPHELD ISSUE OF NOTICE U/S 147/148 AFTER LAPSE OF FOUR YEARS OF ASSESSMENT COMPLETED U/S 143 (3). 2. THAT THE LEARNED C.I.T. (A) WRONGLY UPHELD TH E ISSUE OF NOTICE U/S 147/148 ON THE INFORMATION RECEIVED FROM CENTRAL EXCISE DEPARTMENT WHICH BASED ON SURMISES AND CONJE CTURES. 3. THAT THE LEARNED C.I.T. (A) WRONGLY UPHELD TH E IMPUGNED ORDER U/S 147/143 (3) OF THE INCOME TAX ACT, 1961 W ITHOUT CONSIDERING VARIOUS FACTS, EXPLANATIONS, EVIDENCES AND MATERIAL ON RECORD. 4. THAT THE LEARNED C.I.T. (A) WRONGLY UPHELD ADDI TION BY APPLYING GROSS PROFIT RATE ON SALES ESTIMATED BY TH E CENTRAL EXCISE AUTHORITY, THEREBY MAKING IMPUGNED ADDITION OF RS.77,77,645/-. 5. THAT THE LEARNED C.I.T. (A) WRONGLY UPHELD ESTIM ATION OF TURNOVER AND GROSS PROFIT AFTER RELYING ON THE ORDE RS OF THE SETTLEMENT COMMISSION FOR OTHER YEARS. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, A MEND OR WITHDRAW ANY GROUNDS OF APPEAL 5. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSEE IN THE YEAR UNDER CONSIDERATION FILED ITS RETURN ON 30/10/2005 DECLAR ING NIL INCOME WHICH WAS THEREAFTER PROCESSED AND IN THE SCRUTINY ASSESSMENT ORDER UNDER SECTION 143 (3) DATED 27/12/2007 THE INCOME WAS ASSESSED AT RS. NIL . SUBSEQUENTLY 147 PROCEEDINGS WERE INITIATED UNDER SECTION 147 BY ISS UANCE OF NOTICE UNDER SECTION 148 ON 24/02/2012 LEADING TO THE PASSING OF THE ASS ESSMENT ORDER DATED 28/03/2013 PASSED UNDER SECTION 147/143 (3). THE CORRECTNESS O F THE SAID ORDER WAS UNSUCCESSFULLY CHALLENGED BEFORE THE CIT(A) LEADING TO THE FILING OF THE PRESENT APPEAL. 6. SIMILARLY IN 2006-07 ASSESSMENT YEAR THE ASSESSE E FILED ITS RETURN ON 27.11.2006 DECLARING NIL INCOME AND IT WAS ASSES SED AT NIL INCOME BY ORDER U/S 143(3) DT. 30/12/2008. NOTICE U/S 148 WAS ISSUED ON 24.02.2012 AND THE ASSESSMENT WAS REOPENED RESULTIN G INTO PASSING OF THE ASSESSMENT ORDER UNDER SECTION 147/ 143(3) DT. 28/0 3/2015. THE ASSESSEE IN ITS CHALLENGE BEFORE THE LD. CIT(A) FAILED LEADI NG TO THE FILING OF THE APPEAL BEFORE THE ITAT. 7. THE LD. AR IN THE AFORESAID BACKGROUND ADDRESSIN G FIRST THIS DISTINGUISHING FACT IN ITA NO. 47/CHD/2015 SUBMITTE D THAT THE ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED ON 30/12/2008. REFERRI NG TO THE RECORD IT WAS SUBMITTED THE INFORMATION FROM THE CENTRAL EXCISE D EPARTMENT WAS RECEIVED BY THE AO DURING THE PENDENCY OF ORIGINAL ASSESSMENT. THUS IT WAS HIS SUBMISSION THAT ADMITTEDLY AS PER RECORD WHEN INFORMATION FROM CENT RAL EXCISE DEPARTMENT WAS ALREADY AVAILABLE ON THE FILE OF THE ASSESSING OFFI CER WHILE FINALIZING THE ORIGINAL ASSESSMENT WHICH STOOD CONCLUDED ON 30/12/2008. TH E AO IN THE ABSENCE OF ANY FRESH INFORMATION OR MATERIAL OF ANY KIND RECEIVED AFTER THE SAID ORDER BY THE ASSESSING OFFICER WAS NOT PERMITTED TO REOPEN THE C ONCLUDED ASSESSMENT ON THE BASIS OF THE VERY SAME INFORMATION WHICH WAS ALREAD Y AVAILABLE ON RECORD AT THE TIME OF PASSING THE ORIGINAL ASSESSMENT ORDER. THUS THE ACTION IT WAS STATED AT THE OUTSET ON THIS FACT ALONE WAS BAD IN LAW. SINCE TH E SAID ARGUMENT AS PER FACTS WOULD APPLY ONLY TO 2006-07 ASSESSMENT YEAR REVERTI NG TO THE FACTS AS AVAILABLE IN ITA NO. 46/CHD/2015 FOR 2005-06 ASSESSMENT YEAR IT WAS HIS SUBMISSION THAT THE DEPARTMENTAL ACTION WAS CONTRARY TO LAW AND FACTS I N THE SAID ASSESSMENT YEAR ALSO. 7.1 CARRYING US THROUGH THE ASSESSMENT ORDER AND TH E IMPUGNED ORDER IT WAS SUBMITTED THAT IN THE FACTS OF THE PRESENT CASE NOT ICE UNDER SECTION 148 WAS ISSUED ON 24/02/2012 AND THUS ADMITTEDLY IT WAS AFTER A LA PSE OF FOUR YEARS OF COMPLETION OF THE ASSESSMENT UNDER SECTION 143 (3) WHICH WAS F INALISED ON 27/12/2007. ACCORDINGLY IT WAS HIS SUBMISSION THAT THE REOPENIN G WAS NOT SUSTAINABLE ON ACCOUNT OF THIS FACT ALONE AS THERE WAS NO FAILURE AS PER RECORD ON THE PART OF THE ASSESSEE TO DISCLOSE THE FACTS. THE ACTION CONSEQUE NTLY WAS BAD IN LAW. ADDRESSING THE ASSESSMENT ORDER IT WAS HIS SUBMISSION THAT THE AO HAS BLINDLY ACCEPTED AS CORRECT AND TRUE THE HALF BAKED ALLEGATIONS IN THE FORM OF INFORMATION RECEIVED AS CORRECT WITHOUT EVEN CARING TO INDEPEND ENTLY APPLY HIS MIND WHETHER THEY ARE APPLICABLE TO THE ASSESSEES CASE IN THE INCOME TAX PROCEEDINGS. IT WAS ARGUED THAT HE HAS BLINDLY REPR ODUCED IN THE COPY OF THE SHOW CAUSE NOTICE U/S 148 THE EXACT INFORMATION RECEIVED COPY OF WHICH HAS BEEN PLACED AT PAPER BOOK 1 TO 4. ELABORA TING THIS ARGUMENT IT WAS SUBMITTED THAT THE AO HAS ALLEGED THAT THE ASSE SSEE IS MAINLY MANUFACTURING CALCIUM CARBONATE IGNORING THE FACT T HAT THE ASSESSEES BUSINESS WAS NOT ONLY MANUFACTURING CALCIUM CARBONA TE BUT EVEN CALCIUM POWER; LIME CILIATE ETC. THE CASE OF THE CENTRAL EX CISE DEPARTMENT HAD BEEN BUILT ON DUTY EVASION QUA CALCIUM CARBONATE WH ICH AS PER ORDER OF CESTAT TURNED OUT TO BE INCORRECT BUT THE AO IN THE PRESENT PROCEEDINGS ON THE RECEIPT OF THE SO CALLED INFORMATION ATLEAST SHOULD HAVE CARED TO CONSIDER THE MANUFACTURING ACTIVITIES OF THE ASSESS EE. WITHOUT EVEN CARING TO LOOK INTO THE RECORD OF THE ASSESSEE CASU ALLY PROCEEDED WITHOUT ANY ALLEGATION OF ANY IMPACT ON THE INCOME TAX PRO CEEDING, PROCEEDING ENTIRELY ON PRESUMPTIONS OF WRONG DOING. IT WAS SUB MITTED THAT THE DEPARTMENTAL ACTION IS BASED PURELY ON THE FACT THA T THE CENTRAL EXCISE AUTHORITIES TOOK A CERTAIN VIEW. INVITING ATTENTION TO THE ORDE R DATED 08/04/2016 OF CESTAT WHICH HAD BEEN PLACED ON RECORD IT WAS SUBMITTED TH AT IT WOULD SHOW THAT SINCE THE ISSUES HAVE ALL BEEN DECIDED IN FAVOUR OF THE ASSES SEE BY CESTAT THE ENTIRE DEPARTMENTAL ACTION STANDS DEMOLISHED. 7.2 ACCORDINGLY IT WAS HIS SUBMISSION THAT WITHOUT PREJUDICE TO THE ARGUMENTS ADVANCED EVEN ONCE THE ACTION OF THE CENTRAL EXCISE AUTHORITY ON THE BASIS OF WHICH THE PROCEEDINGS IN THE PRESENT CASE WERE REOP ENED STANDS DEMOLISHED THE OCCASION TO UPHOLD THE DEPARTMENTAL ACTION BASED ON CONJECTURES AND SURMISES DOES NOT ARISE. CARRYING US THROUGH THE CONSOLIDATE D ORDER OF CESTAT WHEREIN FACTS OF EACH OF THE PERSONS WHO WERE INTERACTING W ITH THE ASSESSEE FIRM WHO HAD BEEN PARTY TO THE PROCEEDINGS BEFORE THE CESTAT HAV E BEEN CONSIDERED VIS-A-VIS THE EVIDENCES FOUND IN THE SEARCH AND THE ADDITIONS BASED ON THE ALLEGATIONS OF CLANDESTINE EVIDENCES ETC IT WAS SUBMITTED THAT THE ACTION HAS NOT BEEN UPHOLD. ADDRESSING THE ORDER IT WAS SUBMITTED THAT THE ACTI ON OF THE CENTRAL EXCISE AUTHORITIES WAS BASED ON THE SUSPICION THAT THE ASS ESSEE FOR THE PURPOSES OF EVADING DUTY HAS TAKEN THE VALUE CERTAIN GOODS WHICH WERE E XCISABLE AT A HIGHER RATE I.E. SPECIFIC ITEM PRECIPITATE CALCIUM CARBONATE WHICH A CCORDING TO THE CENTRAL EXCISE AUTHORITY HAD BEEN DECLARED AS LIMESTONE POWDER, CA LCITE, WHICH WERE CHARGEABLE AT NIL RATE. ON ACCOUNT OF THIS INCORRECT PRESUMPTI ON THAT THERE WAS DUTY EVASION WHICH THE FINAL FACT FINDING AUTHORITY I.E; CESTAT HAS ALREADY HAD AN OCCASION TO CONSIDER AND COME TO A CONCLUSION THAT THE ACTION O F THE CENTRAL EXCISE AUTHORITIES WAS NOT TO BE UPHELD. IN THESE CIRCUMSTANCES RELYIN G ON THE ORDER IT WAS HIS SUBMISSION THAT IN THE INCOME TAX PROCEEDINGS TO ST ILL INSIST THAT THE ACTION BE SUSTAINED WOULD NOT BEEN ACCORDANCE WITH LAW. 7.3 INVITING ATTENTION TO THE ASSESSMENT ORDER IT W AS SUBMITTED THAT INFERENCES HAD BEEN DRAWN ON THE BASIS OF CERTAIN DOCUMENTS FO UND FROM THE POLICE CHECK POST BY THE CENTRAL EXCISE AUTHORITY AND ALSO QUA SH. VI NOD KHULLAR ASSESSEE REPRESENTATIVE. FOR THE SAID PURPOSES ATTENTION WAS INVITED TO THE ASSESSMENT ORDER AND THE ORDER OF THE CESTAT. CARRYING US THROUGH TH E ORDER OF THE SAID AUTHORITY IT WAS SUBMITTED THAT THE ADDITIONS WERE NOT ULTIMATEL Y MAINTAINED . IN THIS BACKGROUND REFERRING TO THE RECORD IT WAS HIS SUBMI SSION THAT THE ASSESSING OFFICER HAS BLINDLY ACCEPTED THE SO-CALLED RECEIPT OF INFOR MATION AS CORRECT AND TRUE AND PROCEEDED TO REOPEN A CLOSED AND CONCLUDED ASSESSME NT WITHOUT CARING TO CARRY OUT ANY INDEPENDENT ENQUIRY. IT WAS HIS SUBMISSION THAT THE CENTRAL EXCISE DEPARTMENT HAS NOWHERE MENTIONED THAT ANY BILL OF SALES OR QUA NTITY OF MATERIAL SOLD WAS NOT RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THERE IS NO SUCH ALLEGATION. THE CENTRAL EXCISE DEPARTMENT HAS SIMPLY TAKEN THE QUAN TITY AND VALUE OF THE MATERIAL SUPPLIED AND APPLIED THE ESTIMATED RATES OF PRECIPI TATED CALCIUM CARBONATE TO ASSESS THE DIFFERENCE IN VALUE OF THE SALES ON THE BASIS O F DIFFERENCE IN DESCRIPTION OF ITEMS SOLD AND NOWHERE IT HAS BEEN THE ALLEGATION OF THE EXCISE DEPARTMENT THAT IN THE QUANTITY SOLD THERE WAS ANY ALLEGATION OF DISCREPAN CIES. REFERRING TO THE RECORDS IT WAS SUBMITTED THAT THE CENTRAL EXCISE AUTHORITY COL LECTED INFORMATION FROM THE PUNJAB BARRIER REGARDING SALE DURING THE SPECIFIC P ERIOD AND THIS FACT WOULD BE EVIDENT FROM PAGE 12 OF THE ORDER OF CESTAT. READIN G FROM PARA 20 (I )OF THE SAID DECISION IT WAS SUBMITTED THAT THE ACTION OF T HE CENTRAL EXCISE DEPARTMENT ESTIMATING THE SALE PRICE OF PRECIPITATED CALCIUM C ARBONATE INSTEAD OF ACTUAL PRODUCE SOLD AND THERE WAS NO ALLEGATION THAT THERE WAS ANY SALE OUTSIDE BOOKS OR DIFFERENCE IN QUANTITY SOLD. THE CENTRAL EXCISE DEP ARTMENT IGNORING THE RECORDING OF SALE OF ACTUAL MATERIAL SOLD AS PER BOOKS OF ACC OUNTS OF THE ASSESSEE PROCEEDED TO TREAT IT AS PRECIPITATED CALCIUM CARBONATE INSTEAD OF WHAT WAS RECORDED IN THE BOOKS OF ACCOUNTS AND APPLIED A HIGHER RATE DISPUTING THE DESCRIPTION GIVEN ON THE BILLS AND VOUCHERS WITHOUT ANY EVIDENCE. THIS ACTION WAS NOT UPHELD BY THE CESTAT. IT WAS SUBMITTED THAT CESTAT WAS THE FINAL FACT FINDIN G AUTHORITY AND IN THE FACE OF THE SAID ORDER THE DEPARTMENTAL ACTION IN THE PRESE NT PROCEEDINGS CANNOT BE UPHELD EITHER ON THE GROUNDS OF ASSUMPTION OF JURISDICTION OR ON THE MERITS OF THE ADDITION. INVITING ATTENTION TO PAGES 14 AND 15 OF THE ORDER OF THE CESTAT IT WAS SUBMITTED THAT THE ALLEGATION THAT THE ASSESSEE HAD NOT DECLA RED THE TRUE VALUE OF THE GOODS I.E. PRECIPITATED CALCIUM CARBONATE WHICH IS HAVING H IGHER VALUE WHEREAS THE DESCRIPTION OF GOODS BY THE ASSESSEE WERE SHOWN AS QUICKLIME, LIME POWDER, LIMESTONE POWDER AND CALCITE POWDER WHICH HAD LOWER VALUE THESE ALLEGATIONS WERE FOUND TO HAVE BEEN BASED ON NO MATERIAL ON RECORD A ND WERE NOT UPHELD. SPECIFIC ATTENTION WAS INVITED TO PARA 20 (V) OF THE SAID OR DER. SIMILARLY INVITING ATTENTION TO THE RECOVERY OF BLANK GRS FROM THE PREMISES OF M/S SAPNA TRANSPORTS IT WAS SUBMITTED HAS ALSO BEEN HELD TO BE NOT CORROBORATED BY EVIDENCES. THE EVIDENCES GATHERED FROM SHRI. VINOD KHULLAR DURING THE SEARCH WHO WAS A SALES REPRESENTATIVE OF THE ASSESSEE WHICH FACT HAS ALSO WEIGHED WITH THE AO AS HE HAS BLINDLY ACCEPTED THE INFORMATION WITHOUT CARRYING A NY EXERCISE THAT THERE WAS A FORMATION OF BELIEF IS WAS SUBMITTED THAT THE EVIDE NCE RELATABLE TO MR. KHULLAR HAS ALSO BEEN CONSIDERED AND THE FINAL FACT FINDING AUT HORITY HAS HELD THAT THE ALLEGATIONS WERE BASELESS. 7.4 REFERRING TO THE RECORD IT WAS ALSO HIS SUBMISS ION THAT THE CIT(A) HAS TAKEN THE POSITION THAT THE ASSESSEE HAS GONE BEFORE THE SETTLEMENT COMMISSION FOR 2004- 05, 2007-08 AND 2008-09 ASSESSMENT YEARS ACCORDINGL Y, IT WAS PRESUMED THAT IN THE YEARS UNDER CONSIDERATION ALSO THE ASSESSEE MUST NE CESSARILY BE PENALIZED BY REOPENING HIS CONCLUDED ASSESSMENTS. IT WAS HIS SUB MISSION THAT THIS POSITION TAKEN BY THE CIT (A) IS CONTRARY TO FACTS AND RECORD ADD RESSES THE DEPARTMENTAL MINDSET IN UPHOLDING THE ASSESSMENT ORDERS ON SOME GROUND O R THE OTHER. IT WAS SUBMITTED THAT THE ORDER OF THE SETTLEMENT COMMISSION WAS RE CEIVED ON 22/06/2012 AND THE NOTICE UNDER SECTION 148 WAS ISSUED ON 24/02/2012 T HUS THE ASSUMPTION OF JURISDICTION CANNOT BE SAID TO BE JUSTIFIED ON THE GROUND AS THE EVENT TOOK PLACE SUBSEQUENTLY THAT IS MUCH AFTER THE ISSUANCE OF NOT ICE UNDER SECTION 148 WHICH WAS DATED 24/02/2012 I.E; THE ORDER OF THE SETTLEMENT C OMMISSION AT THE COST OF REITERATION WAS PASSED MUCH AFTER THE SAID DATE. IN THESE CIRCUMSTANCES ON THE BASIS OF THIS FACT THE REOPENING COULD NOT BE JUSTIFIED. 7.5 DEHORSE THE SAID FACT ALSO IT WAS SUBMITTED MER ELY BECAUSE THE ASSESSEE WENT BEFORE THE SETTLEMENT COMMISSION ON THE BASIS OF WH ATEVER ADVISE IT MAY HAVE RECEIVED AT THE RELEVANT POINT OF TIME CONSIDERING WHATEVER FACTS WERE AVAILABLE HOWEVER MERELY ON THIS GROUND THE REOPENING CANNOT BE JUSTIFIED. IT WAS HIS SUBMISSION THAT THERE MAY HAVE BEEN ANY NUMBER OF R EASONS WHY A PARTICULAR PERSON CHOOSES TO GO BEFORE ONE FORUM OR THE OTHER WHICH WOULD DEPEND UPON THE QUALITY OF ADVICE RECEIVED, THE PERCEPTION OF THE A SSESSEE, THE FACTS ON RECORD OR FOR THAT MATTER THE IGNORANCE OF THE ASSESSEE HOWEVER T HE REOPENING CANNOT BE JUSTIFIED MERELY BECAUSE THE ASSESSEE WENT TO BE A PARTICULAR FORUM. IN THE FACTS THE PRESENT CASE IT WAS HIS SUBMISSION THAT THERE IS NO EVIDENC E OR MATERIAL ON RECORD ON THE BASIS OF WHICH REOPENING CAN BE HELD TO BE JUSTIFIE D. THERE IS NO INDEPENDENT FORMATION OF BELIEF; THERE IS NO INDEPENDENT APPLIC ATION OF MIND OF THE AO. REITERATING IT WAS SUBMITTED THAT THE ASSESSING OFF ICER DID NOT EVEN CARE TO SEE AS TO WHAT WAS THE NATURE OF ASSESSEES MANUFACTURING WOR K AND PURELY GUIDED BY THE REASONING TAKEN BY THE EXCISE AUTHORITIES REPEATED THE SAME. THUS THE DECISION CANNOT BE JUSTIFIED MERELY BECAUSE THE ASSESSEE WEN T BEFORE THE SETTLEMENT COMMISSION AS THE FACT REMAINS THAT IN THE YEAR UND ER CONSIDERATION THE ASSESSEE FIRST MUST BE FAULTED WITH AND THE DEPARTMENTAL ACT ION CANNOT BE SUSTAINED AS THERE IS NO ALLEGATION ANYWHERE ON RECORD THAT THERE WAS A LAPSE ON THE PART OF THE DISCLOSURES OF THE ASSESSEE IN ITS RETURNS OF INCOM E, APART FROM THE FACT THAT THE ASSESSEE HAS GONE IN SETTLEMENT COMMISSION IN SOME OTHER YEARS THERE WAS NOTHING AVAILABLE ON RECORD FOR JUSTIFYING THE ACTION. IT W AS HIS SUBMISSION THAT NO EFFORTS WERE MADE BY THE ASSESSING OFFICER TO GET ANY DETAI LS OF ANY ALLEGED GOODS SOLD OUTSIDE THE BOOKS OR ANY DIFFERENCE IN THE QUANTITY SOLD FROM THE CENTRAL EXCISE DEPARTMENT BEFORE THE ISSUANCE OF NOTICE UNDER SECT ION 148 ON 24/02/2012 AND THE FACT REMAINS THAT THE INFORMATION AS PER THE DEPART MENTAL RECORD WAS AVAILABLE WITH THE AO ON 08/08/2008. THE NOTICES WERE ISSUED ON 24 /02/2012. THE AO SIMPLY SLEPT OVER THE INFORMATION . IN THE CIRCUMSTANCES I T WAS HIS SUBMISSION THAT THERE WAS MORE THAN SUFFICIENT TIME WITH THE ASSESSING OF FICER TO CALL FOR ANY DETAILS OF ANY SALES OUTSIDE THE BOOKS OF THE CENTRAL EXCISE D EPARTMENT WHICH EXERCISE ADMITTEDLY WAS NOT DEEMED TO BE NECESSARY BY THE AS SESSING OFFICER. REFERRING TO THE SETTLED LEGAL POSITION IT WAS HIS SUBMISSION TH AT IN THE PRESENT CASE BETWEEN THE REASONS RECORDED AND THE INFORMATION RECEIVED THERE IS NO LIVE LINK TO DEMONSTRATE THAT THERE WAS SUFFICIENT MATERIAL FOR THE FORMATIO N OF ANY BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. RELIANCE WAS ALSO PLACED UPON T HE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF ACIT VS. B HARAT BHUSHAN (2015) 377 ITR 189 (P & H) COPY OF WHICH HAD ALSO BEEN PLACED AT P AGES 98-102 OF THE PAPER BOOK FOR THE PROPOSITION THAT MERELY BECAUSE THE ASSESSE E WAS BEING PROSECUTED FOR KEEPING SUGAR BEYOND THE PERMISSIBLE LIMIT AND WAS TRADING IN THE SAME BY CARRYING OUT SALE AND PURCHASE IT WOULD NOT ENTITL ED THE ASSESSING OFFICER TO ADD THE VALUE OF THE SUGAR TO HIS UNDISCLOSED INCOME ON THE BASIS OF CONJECTURES. RELIANCE WAS ALSO PLACED UPON THE DECISION OF THE JURISDICTI ONAL HIGH COURT IN THE CASE OF ARORA ALLOYS LTD 12/2015/60 TAXMANN.COM 67 (P&H) FO R THE PROPOSITION THAT ONCE THE CENTRAL EXCISE DEPARTMENT HAD DELETED THE ADDITION OF EXCISE DUTY AS A RESULT OF THE ORDER OF THE CESTAT THE OCCASION TO M AKE AN ADDITION ON THE ALLEGATIONS OF CLANDESTINE MANUFACTURE EVEN WHERE S TATEMENT OF A DIRECTOR WAS ON RECORD COULD NOT BE MADE. 7.6 INVITING ATTENTION TO THE PAPER BOOK CONSISTING OF CASE LAW RELIED UPON. IT WAS HIS SUBMISSION THAT THESE DECISIONS ARE HEAVILY RELIED UPON AND ALTHOUGH FOR THE SAKE OF NOT WASTING THE VALUABLE TIME OF THE CO URT SPECIFIC REFERENCE TO EACH OF THESE DECISIONS IS NOT BEING MADE HOWEVER SPECIFIC REFERENCE WAS MADE TO THE DECISIONS MENTIONED: I. SIGNATURE HOTELS PVT. LTD. VS. ITO, 338 ITR 51 ( DELHI). II. PR. CIT VS. G & G PHARMA, ITA NO. 545/2015 (DEL HI) III. ITO VS. COMERO LEASING ITA NO. 4281 ITR 126 (G AU) IV. RMG POLYVINYL (I) LTD. VS. DY. CIT, 46 CCH 0440 (DEL TRIBUNAL) V. CIT VS. BHARAT BHUSHAN 377 ITR 189 (P & H) VI. CIT VS. ARORA ALLOYS LTD. VII. CIT VS. CENTRAL PROVINCES MANGANESE 296 ITR 21 7 (BOMBAY) VIII. PR. CIT VS. MEENAKSHI OVERSEAS (P) LTD. 154 D TR 100 (DEL) IX. M/S ARORA ALLOYS LTD. VS. ITO LUDHIANA ITAT CHA NDIGARH 8. THE LD. SENIOR DR ON THE OTHER HAND DID NOT CONT ROVERT THE ARGUMENTS BASED ON FACTS PECULIAR TO 2006-07 ASSESSMENT YEAR AS THE FACT THAT THE INFORMATION WAS AVAILABLE TO THE ASSESSING OFFICER ITSELF BEFORE TH E PASSING OF THE ORIGINAL ORDER IS COMING OUT FROM THE ORDER ITSELF. HOWEVER ADDRESSI NG THE FACTS IN 2005-06 ASSESSMENT YEAR HEAVY EMPHASIS WAS LAID ON THE FACT THAT MERELY BECAUSE THE ADDITION HAS BEEN DELETED BY THE ORDER OF THE CESTA T IT WAS SUBMITTED THE ASSESSEE CANNOT BE SAID TO HAVE BEEN STAMPED THE AS SESSEES TRANSACTIONS AS BEING ABOVE BOARD NECESSARILY. IN THE FACTS OF THE PRESEN T CASE IT WAS HER SUBMISSION ADDRESSING THE OBSERVATIONS IN THE ASSESSMENT ORDER THAT BLANK GRS HAVE BEEN FOUND FROM M/S SATNAM TRAVELS AND ON CONSIDERING TH E LEDGERS MAINTAINED BY MR VINOD KHULLAR THE SALES REPRESENTATIVE OF THE ASSES SEE ADDITIONS WERE WARRANTED. IT WAS ALSO HER ARGUMENT THAT THE FACT THAT THE ASSESS EE HAS GONE BEFORE THE SETTLEMENT COMMISSION IN THE PRECEDING ASSESSMENT YEAR AND SUB SEQUENT YEARS ITSELF SPEAKS VOLUMES ABOUT THE CONDUCT OF THE ASSESSEE. ACCORDIN GLY, IT WAS HER SUBMISSION THAT THE ASSESSING OFFICER HAS REOPENED THE PROCEEDINGS ON THE BASIS OF INFORMATION WHICH EVIDENTLY DEMONSTRATED THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT AND THE EXERCISE OF POWER VESTED IN THE ASSESSING OFFICER IT WAS HER SUBMISSION IS FULLY IN ACCORDANCE WITH LAW. RELYING UPON THE WRITTEN SUBMISSIONS FILED BEFORE THE BENCH IT WAS SUBMITTED THAT SHE WO ULD WANT TO RELY UPON OF THE DECISION OF THE DELHI HIGH COURT DATED 14/02/2017 I N THE CASE OF PRINCIPAL CIT VS. PARAMOUNT MEDICATIONS PRIVATE LIMITED REPORTED IN ( 20 17) 392 ITR 0444. IT WAS HER SUBMISSION THAT THE FACTS ARE FULLY IDENTICAL A ND SLP AGAINST THIS JUDGEMENT OF THE HONBLE DELHI HIGH COURT HAS BEEN DISMISSED BY THE SUPREME COURT VIDE ORDER DATED 11/9/20/06/2017 AS WOULD BE EVIDENT FROM 2017 TIOL- 253- SC- IT. ADDRESSING THE ORDER OF THE CESTAT WHICH HAS BEEN F ILED AS AN ADDITIONAL EVIDENCE THOUGH IT IS AVAILABLE IN THE PUBLIC DOMAI N IT WAS HER SUBMISSION THAT THE ASSESSEE IS UNDER A MISTAKEN BELIEF THAT IT WOULD B E OF ANY HELP TO THE ASSESSEE. SINCE WRITTEN SUBMISSIONS WERE FILED AND RELIED UPO N FOR READY REFERENCE THE RELEVANT EXTRACT OF THE WRITTEN SUBMISSIONS IS REPR ODUCED HEREUNDER: 2. WITH REGARD TO THE ADDITIONAL EVIDENCE IN FORM OF CESTAT ORDER SUBMITTED BY THE ASSESSEE, IT IS SUBMI TTED THAT THE RELIANCE PLACED BY THE ASSESSEE ON THIS OR DER TO GET RELIEF IS MISPLACED. IN THIS ORDER CLANDESTINE REMO VAL TO GOODS RESULTING IN UNACCOUNTED SALES HAS NOT BEEN D ISPUTED / DOUBTED. WHAT IS DISPUTED IS THAT WHETHER THE GOO DS REMOVED CLANDESTINELY ARE DUTY FREE GOODS OR TAXABL E GOODS. CESTAT HAS HELD THE GOODS REMOVED CLANDESTIN ELY ARE DUTY FREE GOODS SUCH AS QUICK LIME, LIME STONE POWDER, CALCITE ETC AND NOT PRECIPITATED CALCIUM CARBONATE (PCC) WHICH CHARGEABLE TO DUTY AND HENCE THE DEMAND ON DU TY WAS SET ASIDE. PARA 17 TO 23 , PAGE 10 TO 17 OF THE REFERRED ORDER MAKES THIS POSITION VERY CLEAR. SINCE THERE H AS BEEN CLANDESTINE REMOVAL OF GOODS ALBEIT DUTY FREE; THE ADDITION MADE BY AO ON ACCOUNT OF UNACCOUNTED SALES DESERVES TO BE UPHELD. SECONDLY, THE HONBLE ITSC ON SIMILAR FAC TS OF OTHER AYS HAS HELD THAT THERE HAS BEEN UNACCOUNTED SALES AND ESTIMATION OF INCOME AS WAS MADE BY THE HONBLE ITSC HAS BEEN FOLLOWED BY THE AO. 8.1 ACCORDINGLY IT WAS HER SUBMISSION THAT ASSESSEE S APPEAL MAY BE DISMISSED. 9. THE LD. AR INVITING ATTENTION TO THE DEPARTMENTA L RELIANCE PLACED UPON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF PAR AMOUNT COMMUNICATION CITED SUPRA STATED THAT IT WAS MISCONCEIVED. INSTEAD RELI ANCE WAS PLACED UPON THE LATEST DECISION OF THE DELHI HIGH COURT IN THE CASE OF MEE NAKSHI OVERSEAS LTD. (CITED SUPRA) INVITING ATTENTION TO THE PAPER BOOK FILED I T WAS SUBMITTED THAT THE SAID DECISION IS AVAILABLE AT PAGES 135 TO 140 AND IT IS BEEN PASSED ON 26/05/2017 THUS IT IS LATEST IN POINT OF TIME. CARRYING US THROUGH THE SAID DECISION IT WAS SUBMITTED THAT REOPENING ON THE BASIS OF INFORMATION RECEIVED FROM DIRECTOR OF INVESTIGATION WAS NOT SUSTAINED AS IT WAS HELD TO BE ON THE FACTS OF THE SAID CASE A CASE OF BORROWED SATISFACTION AND THE SAID RATIO IT WAS S UBMITTED FULLY APPLIES TO THE FACTS IN THE PRESENT CASE ALSO AS THERE IS NO INDEPENDENT EXERCISE OF THE AO WHO HAS VERBATUM REPRODUCED THE INFORMATION RECEIVED. 10. WE HAVE HEARD THE SUBMISSIONS AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. ON A READING OF THE IMPUGNED ORDER FOR 2005-06 ASSE SSMENT YEAR IT IS SEEN THAT THE ASSESSEE FILED ITS RETURN ON 30/10/2005. ASSESSMENT WAS CONCLUDED BY AN ORDER UNDER SECTION 143 (3) ON 27/12,/2007. ON A READING OF THE ASSESSMENT ORDER IT IS SEEN THAT ON 06.06.2007 THE CENTRAL EXCISE AUTHORIT IES CARRIED OUT SEARCHES AT THE FACTORY PREMISES OF THE ASSESSEE SITUATED AT JAGADH RI ROAD, BILASPUR, HARYANA AND ALSO ITS REGISTERED OFFICE AT 17-18F, DAY MARKET, J AGADHRI ROAD, YAMUNA NAGAR, RESIDENTIAL PREMISES OF ITS DIRECTORS, OFFICE RS, BUYERS, DEALERS, RAW MATERIAL SUPPLIERS ETC. THE EXCISE AUTHORITY DURING THE COU RSE OF SEARCH NOTICED THAT THE ASSESSEE COMPANY M/S KUNAL CALCIUM LTD., V&PO SH AHPUR (BILASPUR), DISTRICT YAMUNA NAGAR HAD FLOATED THREE BOGUS FIRMS AND F INISHED GOODS MANUFACTURED BY THE ASSESSEE COMPANY WERE BEING SOLD. IT WAS ALS O DISCOVERED BY THE EXCISE AUTHORITY DURING THE SEARCH THAT INVOICING/BILLING OF THE GOODS MANUFACTURED AND SOLD WAS GROSSLY UNDER VALUED. THE ASSESSEE CO MPANY AS PER RECORD WAS ENGAGED IN MAINLY MANUFACTURING OF CALCIUM CARBONAT E. HOWEVER, THE MANUFACTURED GOODS WHILE BEING SOLD AS PER THE EXCI SE AUTHORITY WERE BEING REPRESENTED/SHOWN IN THE BILLS AS CALCITE POWDER, L IME POWDER OR-QUICK LIME POWDER, WHICH INVOLVED COMPARATIVELY VERY LOW VALUE AS AGAINST VALUE OF CALCIUM CARBONATE AND THUS THE VALUE SHOWN IN THE BILLS WAS CONSIDERED TO BE VERY LESS. ON THE BASIS OF INFORMATION CALLED FOR THE PERIOD OCTO BER, 2002 TO JUNE, 2007 FROM THE CHECK POST, DEPARTMENT OF EXCISE AND TAXATION AND A LSO FROM THE RECORD FOUND FROM THE FACTORY PREMISES, RESIDENCE OF SALES R EPRESENTATIVE SH. VINOD KHULLAR BASED AT DELHI AND ALSO AT THE BUSINESS PREMISES OF TRANSPORTER THROUGH WHICH THE GOODS WAS TRANSPORTED, THE CENTRAL EXCISE AUTHORITI ES HAD WORKED OUT THE UNACCOUNTED TURNOVER OF THE ASSESSEES COMPANY AS F OLLOWING:- 10.1 ON THE BASIS OF THESE SALE VALUES THE COMMISSI ONER, CENTRAL EXCISE PASSED ORDER DATED 05-03-2009. THIS INFORMATION WAS PASSED ON TO THE AO ALSO THROUGH THE O/O. THE JT. COMMISSIONER OF INCOME-TAX, YAMUNA NAGAR VIDE LETTER NO. 1664 DATED 08-08-2008. THE SAME WAS MADE THE SUBJECT MAT TER OF ISSUANCE OF NOTICE U/S 148. THE LD. AR HAS PLACED THE CONSOLIDATED ORDER OF THE CESTAT DT. 08/04/2016 PASSED IN THE CASE OF ASSESSEE ITS DIRECTORS, PARTN ERS, CONNECTED CONCERNS, SUPERVISORS, REPRESENTATIVES, EMPLOYEES, TRANSPORTE RS RESPECTIVELY ETC. ON THE BASIS OF WHICH IT HAS BEEN ARGUED THAT THE ENTIRE EDIFICE OF THE PRESENT ACTION HAS BEEN DEMOLISHED. WE NOTE ON A READING OF THE SAID DECISI ON THAT THE ENTIRE ACTION OF THE SEARCH HAS BEEN HELD TO BE NOT SUSTAINABLE BY CESTA T. THE FOLLOWING EXTRACTS OF THE DETAILED ORDER BRINGS OUT THE RELEVANT FACTS. 10.2 A PERUSAL OF THE FOLLOWING PARAS WOULD SHOW TH AT THE ISSUES WHICH FORM THE BASIS FOR CONSIDERATION OF ADDITION IN THE PRESENT PROCEEDINGS WERE ADDRESSED ON BEHALF OF THE CENTRAL EXCISE AUTHORITY BEFORE CESTA T IN THE FOLLOWING MANNER: 7. HE FURTHER SUBMITTED THAT THE APPELLANT IS NOT A VAILING THE FACILITY OF CENVAT CREDIT DURING THE MATERIAL PERIOD AND FURTHER LIME STONE AND CHARCOAL WERE CHARGEABLE TO NIL RATE OF DUTY. THE APPELLANT HAS C LEARED THE EXEMPTED GOODS FROM THEIR FIRMS M/S. R. K. ENTERPRISES, M/S. HITEC H MINERALS, M/S. S.N. TRADERS. 8. HE FURTHER SUBMITTED THAT THE DEMAND OF RS.2,50, 70,800/- HAS BEEN DEMANDED ON ALLEGED CLANDESTINE CLEARANCE ON THE BA SIS OF CHECK POST DETAILS OF PUNJAB BORDER. THE OFFICERS ON THE BASIS OF CHECK POST DETAILS REVEALED THAT THERE IS NO MENTION OF PRODUCT LIKE QUICK LI ME, LIME POWDER, LIME STONE AND CALCITE POWDER ARE CHARGEABLE TO NIL RATE OF DUTY AS PER TARIFF ENTRY. THEREFORE, THIS DEMAND CANNOT BE SUSTAINABLE AND CA NNOT BE JUSTIFIED AS THESE ARE CLEARED AS PRECIPITATED CALCIUM CARBONATE. 9. WITH REGARD TO THE DEMAND, RS.1,03,69,193/-, THE DEMAND HAS BEEN CONFIRMED ON ACCOUNT OF CLANDESTINE CLEARANCE OF CA LCIUM CARBONATE ON THE BASIS OF LEDGER OF SHRI VINOD KHULLAR HAVING ACCOUN T OF SHRI VARUN KHULLAR AND OTHERS. IT IS SUBMITTED THAT THE SAMPLES WERE DRAWN ON 6.6.2007 FROM SHRI VARUN KHULLAR - PARTNER OF M/S. MAHAVIR CHEMICALS, DELHI AND TEST REPORT SAYS THAT THE SAMPLES DO NOT CONFORM SPECIFICATION OF PRECIPITATE D CALCIUM CARBONATE AND NOTHING HAS BEEN BROUGHT ON RECORD THAT THE APPELLA NT HAS CLEARED PRECIPITATED CALCIUM CARBONATE TO VINOD KHULLAR/VAR UN KHULLAR AND OTHERS. 10. REGARDING THE DEMAND OF RS.45,21,421/-, WHICH H AS BEEN CONFIRMED ON THE BASIS OF DOCUMENTS/NOTEBOOK RECOVERED FROM MUKUL KU MAR, LAB ASSISTANT. SHRI MUKUL KUMAR WAS MAINTAINING DIARY FOR DIFFERENT PRO DUCTS AND THEREFORE, IT CANNOT BE STATED THAT IT WAS ONLY FOR PRECIPITATED CALCIUM CARBONATE AND THERE IS NO CORROBORATIVE EVIDENCE TO SUPPORT THAT CHARGE , 11. REGARDING THE DEMAND OF RS.9,58,622, WHICH HAS BEEN CONFIRMED ON THE BASIS OF BLANK GR'S RECOVERED FROM PREMISES OF M/S. SATNAM TRANSPORT CO. THE QUANTITY AND COMMODITY @ 12 MT OF CALCIUM CARBONATE PER GR HAS BEEN ARBITRARILY TAKEN AS GR DOES NOT CONTAIN ANY PARTIC ULARS, THEREFORE, THE SAID DEMAND IS NOT SUSTAINABLE. 12. REGARDING THE DEMAND OF RS.L,06,41,860/-, WHICH HAS BEEN CONFIRMED ON ACCOUNT OF UNDER VALUATION BY CONSIDERING THE GOODS CLEARED AS PRECIPITATED CALCIUM CARBONATE, IN ABSENCE OF ANY EVIDENCE TO SU BSTANTIATE THE SAID ASSERTIONS. THERE WERE NO INCRIMINATING DOCUMENTS I N REGARD TO UNDERVALUATION RECOVERED DURING THE SEARCH OF APPELLANT PREMISES. 13. WITH REGARD TO THE DEMAND OF RS.78,26,500/- , IT IS SUBMITTED THAT THE ADJUDICATING AUTHORITY HAS ARBITRARILY INCLUDED THE VALUE OF ALLEGED PRECIPITATED CALCIUM CARBONATE TOWARDS AGGREGATE VALUE OF HOME C LEARANCE. HE SUBMITTED THAT THE APPELLANT WAS MANUFACTURING BOTH DUTIABLE AND EXEMPTED GOODS AND THEIR AGGREGATE VALUE OF HOME CLEARANCE A LREADY EXCEEDED RS.3 CRORE DURING THE FINANCIAL YEAR 2003-04. HE SUBMITT ED THAT ON 28.7.2004, THERE WAS SEARCH CONDUCTED IN THE FACTORY PREMISES OF THE APPELLANT WHO VERIFIED THE MANUFACTURING ACTIVITY, STATUTORY RECORDS A ND RESUMED CERTAIN RECORDS. FURTHER ON THROUGH INVESTIGATION, FOUND THAT THERE WAS NO CASE AGAINST THE APPELLANT AND AN INTIMATION TO THIS EFFECT GIVEN TO APPELLANT VIDE LETTER DATED 8.4.2005. THEREFORE, THE DUTY CANNOT BE DEMANDED BY INVOKING THE EXTENDED PERIOD OF LIMITATION ON AGGREGATE VALUE OF CLEARANCES ARRIVED ON ACCOUNT OF CLEARANCE OF PRECIPITATED CALCIUM CARBON ATE, WHEN AGGREGATE VALUE OF DUTIABLE AND EXEMPTED CLEARANCES ALREADY E XCEEDED RS.3 CRORE DURING 2003-04 AND THE SAME WERE IN THE KNOWLEDGE O F DEPARTMENT. 14. WITH REGARD TO THE DEMAND OF RS.4,43,344/-, THE SAID DEMAND HAS BEEN CONFIRMED ON ACCOUNT OF SEIZURE EFFECTED FROM DIFFE RENT BUYERS PREMISES. IT IS SUBMITTED THAT THE SAMPLE WERE DRAWN FROM BUYER PRE MISES, AND SENT TO CRCL FOR CHEMICAL EXAMINATION. IT IS SUBMITTED THAT SAMP LE, TEST REPORTS RECEIVED FROM CRCL VIDE LETTER DATED 29.11.2007 IS NOT CONCLUSIVE AND IT WAS CLEARLY SAYS THAT THE SAMPLE DOES NOT CONFORM TO THE SPECIFICATION OF PRECIPITATED CALCIUM CARBONATE AND THERE IS NO EVIDENCE TO SUPPORT THAT SEIZED GOODS WERE PRECIPITATED CALCIUM CARBONATE. THEREFORE, THE SAID DEMAND IS NOT SUSTAINABLE. IN VIEW THIS, IT IS SUBMITTED THAT THE IMPUGNED ORD ER IS TO BE SET ASIDE AND THE APPEALS ARE TO BE ALLOWED. 15. ON THE OTHER HAND, THE LEARNED AR REITERATED TH E FINDINGS OF THE IMPUGNED ORDER AND SUBMITTED THAT THE APPELLANT IS ENGAGED I N THE ACTIVITY OF CLANDESTINE MANUFACTURE AND CLEARANCE OF PRECIPITATED CALCIUM C ARBONATE IN THE GUISE OF LIME STONE POWDER, CALCITE, QUICK LIME WHICH ARE EX EMPTED FROM DUTY AND THE SAME HAS BEEN CONFIRMED BY CRCL IN THEIR REPORT DAT ED 29. FC5.200.8 AS THE DRAWN OF SAMPLES HAS NOT BEEN DISPUTED BY THE APPEL LANT. THEREFORE, THE SAID REPORT IS ADMISSIBLE EVIDENCE, TO HOLD AGAINST THE APPELLANT. IN VIEW ABOVE, THE ADJUDICATING AUTHORITY HAS RIGHTLY HELD THAT THE AP PELLANT WAS ENGAGED IN THE ACTIVITY OF CLANDESTINE MANUFACTURE AND CLEARANCE O F PRECIPITATED CALCIUM CARBONATE IN THE GUISE OF LIME STONE POWDER, CALCIT E, QUICK LIME TO EVADE PAYMENT OF DUTY. 10.3 THE DECISION ARRIVED AT ON CONSIDERING THE AL LEGATIONS AND EVIDENCES RELIED UPON BY THE CENTRAL EXCISE AUTHORITY HAS BEEN ARRIV ED AT IN THE FOLLOWING SPEAKING FINDING OF CESTAT: 16. HEARD BOTH SIDES AND CONSIDERED THE SUBMISS IONS. 17. WE HAVE HEARD BOTH SIDES IN DETAIL AND ALSO VER IFIED THE RECORDS PLACED BEFORE US. ON THE BASIS OF RECORDS PLACED BEFORE US , WE FIND THAT THE DEMANDS HAVE BEEN CONFIRMED AGAINST THE APPELLANT ON THE FO LLOWING GROUNDS: SR. NO. COMPONENT OF DEMAND AMOUNT (1) (2) (3) 1. DUTY ON ACCOUNT OF CLANDESTINE CLEARANCES ON THE BASIS OF CHECKPOST DETAILS OF PUNJAB BOARDER RS.2,50,70,800/- 2. DUTY ON ACCOUNT OF CLANDESTINE CLEARANCES ON THE BASIS OF LEDGERS NO. 10/1 & 20/3 OF SHRI. VINOD KHULLAR RS.1,03,69,193/- 3. DUTY ON ACCOUNT OF CLANDESTINE CLEARANCES ON THE BASIS OF DOCUMENTS OF SH. MUKUL KUMAR RS. 45,21,421/- 4. DUTY ON ACCOUNT OF CLANDESTINE CLEARANCES ON THE BASIS OF GRS OF M/S SATNAM TRANSPORT CO. & OTHERS. RS.9,58,622/- 5. DUTY ON ACCOUNT OF UNDER VALUATION RS.1,06,41,860/- 6. DUTY ON ACCOUNT OF WRONG AVAILMENT OF SSI EXEMPTION RS. 78,26,500/- TOTAL A RS.5,93,88,396/- 7. DUTY ON ACCOUNT OF SEIZURES EFFECTED AT FOLLOWING BUYERS (I) M/S SAMANA PLASTIC, SAMANA RS. 9,000/- (II) M/S SAKSHI MARKFIN, DELHI RS.12,525/- (III) M/S SHUBHRA CHEMICALS, DELHI RS. 11,948/- (IV) M/S MAHAVIR CHEMICALS, DELHI RS.7,079/- (V) M/S MAHAVIR CHEMPLAST PVT. LTD., JALLANDHAR RS.33,680/- (VI) M/S INDO CHEMICALS PVT. LTD., DELHI RS.3,69,152/- TOTAL-B RS.4,43,344/- GRAND TOTAL (A+B) RS.5,98,31,740/- 18. THE THRUST OF THE IMPUGNED ORDER IS THAT THE AP PELLANT IS A MANUFACTURER OF PRECIPITATED CALCIUM CARBONATE WHICH IS CHANGEABLE TO DUTY UNDER CTH 2835 50 00 AND IS CLEARING THE GOODS IN THE GUISE OF LIM E STONE POWDER, CALCITE, QUICK LIME ARE CHARGEABLE TO NIL RATE OF DUTY UNDER CTH 2 521 00 90. 2522 10 00 AND 2530 90 30. DURING THE COURSE OF INVESTIGATION, THE SAMPLES WERE DRAWN FROM THE PREMISES OF BUYERS AS WELL AS FROM THE APPELLANT TO ASCERTAIN THE FACTS WHETHER THE SAMPLE OF PRECIPITATED CALCIUM CARBONATE FALLIN G UNDER CTH 2835 50 00 OR CALCIUM POWDER. THE REPORT HAS BEEN SUBMITTED BY TH E CRCL ON 29.11.2007 WHEREIN IT HAS BEEN CLEARLY STATED AS UNDER: EACH OF THE TEN SAMPLES IN THE FORM OF WHITE FINE P OWDER. EACH HAS THE FOLLOWING CONSTANTS- S. NO. LAB. NO. & DT. SAMPLE NO. % OF CALCIUM CARBONATE OIL ABSORPTION BULK DENSIT Y LOSS OF IGNITION 1. C. EX/CLD/INT/MISC/25 3/TPPL/6/6/0 7 98.1 22.0 1.4 44.2 2. C. EX/CLD/INT/MISC/26 04/WHITE 97.6 21.0 1.1 45. 2 3. C. EX/CLD/INT/MISC/27 03/YELLOW 98.2 25.0 1.2 45 .8 4. C. EX/CLD/INT/MISC/28 1/07-08 97.8 25.7 1.0 42.9 5. C. EX/CLD/INT/MISC 1/07-08 98.0 17.0 1.2 45.4 6. C. EX/CLD/INT/MISC/30 9/KUNAL/07 98.2 24.0 1.1 4 3.7 7. C. EX/CLD/INT/MISC/31 8/KUNAL/07 97.8 22.0 1.2 4 4.0 8. C. EX/CLD/INT/MISC/32 7/KUNAL/07 98.0 25.1 1.1 4 3.8 9. C. EX/CLD/INT/MISC/33 5/KUNAL/07 98.3 26.0 1.0 4 3.6 10. C. EX/CLD/INT/MISC/34 . 98.1 23.4 1.2 43.2 ON THE BASIS OF ANALYTICAL FINDING AS ABOVE SAMPLES DO NOT CONFORM TO THE SPECIFICATION OF PRECIPITATED CALCIUM CARBONATE AS PER IS: 8767-1978. SEALED REMNANT RETURNED. 19. THE SAID REPORT CLEARLY SHOWS THAT THE SAMPLES DRAWN DO NOT CONFIRM TO THE SPECIFICATION OF PRECIPITATED CALCIUM CARBONATE AS PER 15:8767-1978. ON THE SAID REPORT, NO FINDING HAS BEEN GIVEN BY THE CHEMI CAL EXAMINER WITH REGARD TO CLASSIFICATION BUT CLEARLY STATED THAT THESE ARE TH E SAMPLES DRAWN ARE NOT OF PRECIPITATED CALCIUM CARBONATE. AS IT IS FACT ON RE CORD, THE APPELLANT IS MANUFACTURE OF LIME STONE, QUICK LIME POWDER, CALCI TE WHICH ARE CHARGEABLE TO NIL RATE OF DUTY UNDER CTH 2521 00 90. 2522 10 00 A ND 2530 90 30 'RESPECTIVELY. . IN THAT CIRCUMSTANCE, WITHOUT ANY CORROBORATIVE EVI DENCE, IT CANNOT BE ALLEGED AGAINST THE APPELLANT THAT THE APPELLANT IS ONLY MA NUFACTURING PRECIPITATED CALCIUM CARBONATE. 20. WE HAVE ALSO SEEN THE DEMAND HAS BEEN CONFI RMED ON THE APPELLANT UNDER DIFFERENT HEADS AS DISCUSSED HEREINABOVE AS P ER TABLE ABOVE, EACH HEAD IS DEALT AS UNDER:- (I) DUTY ON ACCOUNT OF CLANDESTINE CLEARANCE ON THE BASIS OF CHECK POST DETAILS OF PUNJAB BORDER- WE HAVE EXAMINED THE DOCUMENTS IN DETAILS PROVIDED BY THE EXCISE AND TAXATION COMMISSIONER, PATIALA WHEREIN THE DESCRIPT ION OF GOODS IS SHOWN QUICK LIME, LIME POWDER, LIME STONE POWDER AND CALCITE PO WDER AND NOWHERE THE DETAILS SHOW THAT IT WAS PRECIPITATE-CALCIUM CARBON ATE. APART FROM THAT, NO EFFORT HAS BEEN MADE BY THE AUTHORITIES BELOW TO AS CERTAIN THE FACTS WHETHER DESCRIPTION OF GOODS GIVEN IN THE DETAILS PROVIDED BY THE CHECK POST IS INCORRECT, OR, NOT AND THERE IS NO SUCH INVESTIGATION. THER EFORE, IN THE ABSENCE OF CORROBORATIVE EVIDENCE, THE DEMAND CANNOT BE CONFIR MED AGAINST THE APPELLANT ON ACCOUNT OF CLANDESTINE CLEARANCE OF PR ECIPITATED CALCIUM CARBONATE, THEREFORE, THE DEMAND OF RS.2,50,70,8007 - IS SET ASIDE. (II) DUTY OF RS.1,03,69,193/- HAS BEEN DEMANDED ON ACCOUNT OF CLANDESTINE CLEARANCE OF CALCIUM CARBONATE ON THE BASIS LEDGER OF SHRI VINOD KHULLAR WE HAVE SEEN THAT THE SAMPLES WERE DRAWN FROM THE P REMISES OF SHRI VINOID KHULLAR AND TEST REPORT DATED 29.11.2007 WHICH IS N OT CONCLUSIVE WHETHER THE SAMPLES DRAWN CONFORM SPECIFICATION OF PRECIPITATED CALCIUM CARBONATE OR NOT? THE SHOW CAUSE NOTICE IS ALSO ISSUED ON THE BA SIS OF SAID REPORT. WE ALSO FIND THAT THE ADJUDICATING AUTHORITY HAS HEAVILY RE LIED ON THE TEST REPORT DATED 29.05.2008, THE SAID REPORT IS NOT RELIABLE DOCUMEN T IN THE PROCEEDING AS THE SAID REPORT HAS BEEN OBTAINED AFTER ISSUANCE OF SHO W CAUSE NOTICE, THEREFORE, THE TEST REPORT DATED 29.05.2008 HAVE NO EVIDENTIAR Y VALUE IN THE EYE OF LAW. IN THAT CIRCUMSTANCE, THE DEMAND AGAINST THE APPELLANT ON THIS ACCOUNT OF RS.1,03,69,193/-IS ALSO SET ASIDE. (III) THE DEMAND OF RS.45,21,421/- HAS BEEN DEMANDE D ON ACCOUNT OF CLANDESTINE REMOVAL ON THE BASIS OF DOCUMENTS/NOTE BOOK RECOVERED FROM MUKUL KUMAR, LAB ASSISTANT. WE FIND THAT DURING THE COURSE OF INVESTIGATION, TH E SAMPLES WERE DRAWN AND ON THE BASIS OF DIARY RECOVERED FROM MUKUL KUMAR,LAB A SSISTANT, WHO WAS MAINTAIN THE DIARY FOR ALL PRODUCTS. IN THAT CIRCUMSTANCE, I N THE ABSENCE OF ANY CORROBORATIVE EVIDENCE TO SHOW THAT ALL RECORDS MAI NTAINED BY SHRI MUKUL KUMAR OF ;-PC.' THE DEMAND IS NOT SUSTAINABLE AND THEREFORE, THE DEMAND OF RS.45,21,421/- IS SET ASIDE. (IV) THE DUTY OF RS.9,58,622/- HAS BEEN DEMANDED ON THE BASIS OF BLANK GR-S RECOVERED FROM PREMISES OF M/S.SATNAM TRANSPORT- WE HAVE SEEN GR'S RECOVERED FROM PREMISES OF M/S.SA TNAM TRANSPORT ARE BLANK GR'S. GR DOES NOT DESCRIBED THE QUANTITY AND DESCRI PTION OF THE GOODS, THE DEMAND CANNOT BE CONFIRMED ON THE BASIS OF ASSUMPTI ON AND PRESUMPTION. AS NO CORROBORATIVE EVIDENCE HAS BEEN PRODUCED ON RECO RD, THEREFORE, THE DEMAND OF RS.9,58,622/-IS SET ASIDE. (V) THE DEMAND OF RS.1,06,41,860/-, THE SAID DEMAND HAS BEEN CONFIRMED ON ACCOUNT OF UNDER VALUATION BY CONSIDERING THE GOODS CLEARED AS PRECIPITATED CALCIUM CARBONATE- WE HAVE SEEN THAT IT IS ALLEGED THAT THE APPELLANT HAS NOT DECLARED THE TRUE VALUE OF THE GOODS ON THE CHARGE THAT THE GOODS WER E PRECIPITATED CALCIUM CARBONATE WHICH IS HAVING HIGHER VALUE WHEREAS IN T HE DESCRIPTION OF GOODS BY THE APPELLANT HAS SHOWN AS QUICK LIME, LIME POWDER, LIME STONE POWDER AND CALCITE POWDER WHICH ARE HAVING LESS VALUE. AS DISCUSSED ABOVE, THERE IS NO CONCRETE EVIDENCE T O SHOW THAT AS THE CLEARANCE MADE BY THE APPELLANT IS PRECIPITATED CAL CIUM, CARBONATE, THEREFORE, THE CHARGE OF UNDER VALUATION IS NOT SUSTAINABLE. CONSEQUENTLY, THE DEMAND IS SET ASIDE. (VI) THE DEMAND OF RS.78,26,500/- WE HAVE SEEN THAT THE APPELLANT IS MANUFACTURING QU ICK LIME, LIME POWDER, LIME STONE POWDER AND CALCITE POWDER WHICH ARE EXEMPTED GOODS AND PRECIPITATED CALCIUM CARBONATE IS DUTIABLE AND AVAI LED EXEMPTION UNDER NOTIFICATION NO.8/03. THE SSI EXEMPTION DENIED TO THE APPELLANT ON THE GROUND THAT DURING 2003-04, CLEARANCE ALREAD Y EXCEEDED RS.3 CRPRE, THEREFORE, THEY ARE NOT ENTITLED TO SSI EXEMPTIO N. WE HAVE SEEN THAT ON 28.7.2004, THERE WAS SEARCH CONDUCTED IN THE FACTO RY PREMISES OF THE APPELLANT, WHEREIN THE DOCUMENTS WERE V ERIFIED WITH RECORD TO THE MANUFACTURING ACTIVITY, STATUTORY RECORDS AND C ERTAIN OTHER RECORDS WERE RESUMED. THEREAFTER AFTER COMPLETION OF ENQUIRY, NO CASE WAS MADE AGAINST THE APPELLANT AND' ALL. THE DOCUMENTS RESUMED WER E ALSO RETURNED ON 8.4.2005. IN THAT CIRCUMSTANCE, WHEN SEARCH ITSELF TOOK PLACE D IN JULY, 2004 AND THE SSI EXEMPTION WAS GRANTED TO THE APPELLANT, SSI EXEMPTI ON AVAILED BY THEM CANNOT BE DENIED TO THE APPELLANT. IT IS ALSO A FAC T ON RECORD THAT THE APPELLANT HAS NOT AVAILED CREDIT ON THE INPUTS. THEREFORE, TH E DEMAND ON ACCOUNT DENIAL OF SSI EXEMPTION OF RS.78,26,500/- IS SET ASIDE. (VII) WITH REGARD TO THE DEMAND OF RS.4,43,344/-, WE HAVE SEEN THAT THE GOODS SEIZED AT THE PREMISES OF VARIOUS BUYERS AND THE SAMPLE WERE DRAWN FROM BUYER PREMISES AND SENT TO C RCL FOR CHEMICAL EXAMINATION AND TEST REPORTS RECEIVED FROM CRCL VID E LETTER DATED 29.11.2007 IS NOT CONCLUSIVE AND IT WAS CLEARLY SAYS THAT THE SAM PLE DOES NOT CONFORM TO THE SPECIFICATION OF PRECIPITATED CALCIUM CARBONATE AND THERE IS NO EVIDENCE TO SUPPORT THAT SEIZED GOODS WERE PRECIPITATED CALCIUM CARBONATE. THEREFORE, THE SAID DEMAND IS NOT SUSTAINABLE. THEREFORE, THE DEMA ND OF RS.4,43,344/- IS SET ASIDE. 20. AS THE ALLEGATION MADE AGAINST THE APPELLANT AR E NOT SUSTAINABLE, THEREFORE, THE QUESTION OF CONFISCATION OF SEIZED GOODS DOES N OT ARISE. CONSEQUENTLY, THE REDEMPTION FINE AND PENALTY IS NOT IMPOSABLE ON THI S GROUND. 21. WE HAVE SEEN THAT DURING THE COURSE OF INVES TIGATION IT IS ALLEGED THAT STOCK OF 337 MT OF PRECIPITATED CALCIUM CARBONATE A ND 42 MT OF QUICK LIME POWDER WHICH ARE NOT ENTERED IN THE RG-1 REGISTER. WE HAVE SEEN THAT OPENING BALANCE ON 5.6.2007 AS PER RG- 1 REGISTER. AS. 95. MT, 27 MT, 118 MT, 110 MT AND 11 MT OF PRECIPITATED CALCIUM CARBONATE AN D PRODUCTION FOR THE DAY 5.6.2007 WAS TO BE RECORDED ON 6.6,2007 AND THE SAM E COULD NOT BE RECORDED DUE TO VISIT OF DGCEI OFFICERS ON 6.6.2007. IF ALL THESE RECORD TAKEN INTO CONSIDERATION, IT CANNOT BE ALLEGED THAT THE SEIZ ED GOODS WERE NOT ENTERED IN THE RG-1 REGISER. THEREFORE, THE SAID CHARGED IS NO T SUSTAINABLE AND THE DEMAND ON THIS ACCOUNT IS SET AISE. 22. WE FURTHER FIND THAT THE RAW MATERIAL I.E. LIME STONE 40000 MT, PET COKE 1000 MT AND CHARCOAL 1000 MT WERE ALSO SEIZED. THE SAID QUANTITY HAS BEEN ARBITRARY TAKEN BY EYE ESTIMATION AND NO VERIFICATION REPORT/ CHART PREPARED AND IT IS NOT POSSIBLE TO VERIFY THE SAID HUGE QUANTITY OF RAW MA TERIAL IN A SINGLE DAY. THEREFORE, THE RAW MATERIAL AND FINISHED GOODS CANN OT BE SEIZED. IN THAT CIRCUMSTANCE, THE ALLEGATION OF NON ACCOUNTAL OF GO ODS IN THE STATUTORY RECORD IS NOT SUSTAINABLE. 23. IN VIEW OF ABOVE OBSERVATIONS, WE HOLD THAT THE DEMANDS CONFIRMED AGAINST THE APPELLANT I.E. M/S KUNAL IS NOT SUSTAIN ABLE THAT THE SEIZED GOODS ARE ALSO NOT LIABLE FOR CONFISCATION, CONSEQUENTLY, RED EMPTION FINE AND PENALTY ARE NOT IMPOSABLE ON M/S KUNAL AND PENALTIES ON VARIOUS OTHER CO-APPELLANTS ARE NOT IMPOSABLE. 10.4. IN THE AFOREMENTIONED PECULIAR FACTS AND CIRC UMSTANCES AS HAVE BEEN BROUGHT OUT HEREINABOVE WE FIND THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A) ON FACTS ADMITTEDLY WAS NOT JUSTIFIED. SINCE THE WHOLE CASE IS BUILT ON THE BASIS OF THE SEARCH CARRIED OUT BY THE CENTRAL EXCISE AUTHORITY WHEREIN AS NOTED ABOVE THE ENTIRE FOUNDATION HAVING COLLAPSED AS A RESULT OF THE FINDINGS ARRIVED AT BY CESTAT WE ARE OF THE VIEW TH AT IN THESE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE THE ADDITIONS CAN NOT BE SUSTAINED. THE STARTING POINT IN THE FACTS OF THE PRESENT CASE ADMITTEDLY I T IS SEEN IS THE PRESUMPTION OF THE ASSESSING OFFICER THAT NECESSARILY THE ASSESSEE WAS ENTERING INTO CLANDESTINE UNDISCLOSED TRANSACTIONS ON THE BASIS OF WHICH IT W AS PRESUMED THAT INCOME HAS ESCAPED ASSESSMENT. IT IS NOTED THAT THE WHOLE FOCU S AND PURPOSE OF THE CENTRAL EXERCISE AUTHORITY WAS TO SEE WHETHER THERE WAS ANY DUTY EVASION BY THE ASSESSEE WHO IT WAS ALLEGED HAD DISCLOSED THAT IT WAS MANUFA CTURING IN ITS THREE CONCERNS, QUICKLIME, LIME POWDER LIMESTONE AND CALCITE POWDER WHEREAS IN FACT THE ASSESSEE WAS ALLEGED TO HAVE BEEN MANUFACTURING PRECIPITATED CALCIUM CARBONATE WHICH CARRIED HIGHER RATE OF DUTY AS OPPOSED TO THE OTHER ITEMS WHO WHICH DID NOT ATTRACT ANY DUTY. THE CESTAT HAS CATEGORICALLY COME TO THE CONCLUSION THAT THE ALLEGATIONS OF THE CENTRAL EXCISE AUTHORITIES BASED ON THE SEARCHED MATERIAL WERE NOT CORRECT. AFTER HAVING CARRIED OUT THE SEARCH ON THE ASSESSEE; ITS TRANSPORTERS; THE PARTNERS; THE DIRECTORS; ITS FACTORIES; ITS REPRESE NTATIVES; ITS EMPLOYEES ETC. WHOSE STATEMENTS HAVE ALSO BEEN RECORDED AND CONSIDERED A ND AFTER CARRYING OUT THE ENTIRE GAMUT OF ACTIVITIES AND GATHERING THE SEARCHED MATE RIAL WHICH WAS PLACED BEFORE THE CESTAT BY THE ASSESSEE IN THE PRESENT PROCEEDIN G AND OTHERS CHALLENGING THE ACTION THE SAID AUTHORITY HAS ADMITTEDLY AND CONCLU SIVELY HELD THAT THE ALLEGATIONS OF THE CENTRAL EXCISE AUTHORITY WERE NOT SUSTAINABL E. ON A READING OF THE ASSESSMENT ORDERS FOR THE TWO YEARS UNDER CONSIDERA TION AND ON A CAREFUL READING OF THE FINDINGS ARRIVED AT IN THE IMPUGNED ORDERS IT I S SEEN THAT THE ALLEGATION CONSISTENTLY MADE ON BEHALF OF THE ASSESSEE THAT TH ERE WAS NO INDEPENDENT ENQUIRY BY THE ASSESSING OFFICER IS BORNE OUT TO BE CORRECT AND TRUE. NOTHING HAS BEEN PLACED BEFORE US BY THE LD. SR. DR TO MEET THE CHAL LENGE THAT THERE WERE ANY INDEPENDENT ENQUIRIES BY THE ASSESSING OFFICER. THE ARGUMENT THAT THE ASSESSEE HAS GONE BEFORE THE SETTLEMENT COMMISSION IN THE PRECED ING ASSESSMENT YEAR AND SUBSEQUENT YEARS CANNOT BE THE BASIS FOR A DECISION IN THE YEARS UNDER CHALLENGE. THE SAID FACT AT BEST CAN BE A REASON FOR AROUSING SUSPICION THAT ALL MAY NOT BE CORRECT IN THE FACTS OF A PARTICULAR ASSESSEE HOWEV ER THE PRESUMPTION THAT NECESSARILY IT MUST BE A CASE WHERE REOPENING CAN B E SAID TO BE JUSTIFIED WOULD REQUIRE DRAWING OF PRESUMPTIONS CONJECTURES AND SUR MISES . IN THE FACTS OF THE PRESENT CASE ADMITTEDLY NO EFFORT WAS MADE BY THE A SSESSING OFFICER TO CALL FOR ANY RECORD FROM THE CENTRAL EXCISE AUTHORITY OR LOOK IN TO ANY MATERIAL BEFORE THE FORMATION OF HIS BELIEF . IT IS SEEN THAT INFACT WH ETHER ANYTHING WAS DONE FOR THE FORMATION OF HIS BELIEF ITSELF IS NOT EVIDENT. IT I S SEEN THAT FROM THE DATE OF RECEIPT OF THE INFORMATION UP TO THE DATE OF ISSUANCE OF NOTIC E MORE THAN SUFFICIENT TIME WAS AVAILABLE TO THE ASSESSING OFFICER . IN THE FACTS F OR 2006-07 ASSESSMENT YEAR AS HAS BEEN ARGUED ON BEHALF THE ASSESSEE AND WE HAVE NOTI CED THAT THIS FACT IS NOT DISPUTED BY THE LD. SR. DR THAT THE INFORMATION WAS ALREADY AVAILABLE TO THE ASSESSING OFFICER BEFORE THE PASSING OF THE ORIGINA L ORDER UNDER SECTION 143 (3). WE NOTE THAT ON ACCOUNT OF THIS FACT THE SAID ACTION H AS POSSIBLY NOT BEEN DEFENDED AS VEHEMENTLY BY THE REVENUE ALSO. IN THESE PECULIAR F ACTS AND CIRCUMSTANCES OF THE CASE WE FIND THAT THE APPEAL OF THE ASSESSEE BOTH O N THE ASSUMPTION OF JURISDICTION AS WELL AS ON MERITS HAS TO BE ALLOWED. WE HAVE TAK EN INTO CONSIDERATION THE DECISIONS RELIED UPON BY THE PARTIES BEFORE THE BEN CH EVEN IF SPECIFIC REFERENCE TO EACH OF THESE DECISIONS IS NOT BEING MADE. SPECIFIC REFERENCE MAY BE MADE TO THE ORDER OF THE ITAT IN THE CASE OF M/S ARORA ALLOYS L TD VS. ITO IN ITA NO. 1048/CHD/2008 DATED 24/06/2011. COPY OF THIS DECISI ON HAS BEEN PLACED AT PAPER BOOK PAGES 141 TO 160. IT HAS BEEN SUBMITTED AND W E NOTE THAT THE SAID DECISION HAS BEEN APPROVED BY THE JURISDICTIONAL HIGH COURT IN CASE OF CIT VS. ARORA ALLOYS LTD (2015 60 TAXMANN.COM 67 (PUNJAB AND HARYANA) C OPY OF THIS DECISION HAS ALSO BEEN PLACED AT PAPER BOOK PAGES 103 TO 108. SINCE T HE CONCLUSION ARRIVED AT PROCEEDS PURELY ON FACTS PECULIAR TO ITS OWN AND TH ESE FACTS ARE FOUND TO HAVE MATERIAL SIMILARITY WITH THE FACTS AS NOTICED IN TH E CASE OF ACIT VERSUS ARORA ALLOYS LTD WHEREIN THE ORDER OF THE COORDINATE BENC H HAS BEEN APPROVED BY THE JURISDICTIONAL HIGH COURT WE FIND THAT THE APPEALS OF THE ASSESSEE APART FROM THE OTHER REASONS GIVEN HEREINABOVE HAS TO BE ALLOWED O N ACCOUNT OF THE SAID REASON ALSO. 10.5 AS NOTED THOUGH SPECIFIC REFERENCE TO EACH OF THE DECISIONS RELIED UPON BY THE PARTIES HAS NOT BEEN MADE HOWEVER THE RATIO LAI D DOWN THEREIN APPLICABLE TO THE FACTS OF THE PRESENT CASE AT HAND HAS FULLY BEEN TA KEN INTO CONSIDERATION. SPECIFIC REFERENCE MAY ALSO BE MADE TO THE DECISION OF THE H ONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS. PARAMOUNT COMMUNICATION PVT. LT D. DATED 14/02/2017 WHICH HAS HEAVILY BEEN RELIED UPON BY THE LD. SR. DR. ON A PERUSAL OF THE SAID DECISION RENDERED BY THE HONBLE DELHI HIGH COURT IT IS SEEN THAT THE DECISION HAS BEEN RENDERED IN THE PECULIAR FACTS WHERE THE INFORMATIO N RECEIVED BY THE ASSESSING OFFICER THROUGH THE COMMISSIONER OF CENTRAL EXCISE WAS THAT WITH REGARD TO THE BOGUS PURCHASES MADE FROM A COMPANY WHICH DID NOT H AVE ANY MANUFACTURING FACILITY ACCORDINGLY IT WAS THIS INFORMATION WHICH WAS HELD TO BE AMOUNTING TO TANGIBLE MATERIAL. FOR READY REFERENCE THE RELEVA NT EXTRACT IS REPRODUCED HEREUNDER: THE INFORMATION RECEIVED THROUGH THE COMMISSIONER OF CENTRAL EXCISE WITH REGARD TO THE BOGUS PURCHASES MADE FROM A COMPANY WHICH DID NOT HAVE ANY MANUFACTURING FACILITY, AMOUNTED TO TANGIBLE MATERIAL POINTING TO SUPPRESSION OF MATERIAL FACTS. (EMPHASIS SUPPLIED) 10.6 HOWEVER WE NOTE THAT APART FROM THE OTHER REA SONS WHICH HAVE BEEN ELABORATED IN THIS ORDER EARLIER EVEN OTHERWISE THE CASE CITED IS MATERIALLY DISTINGUISHABLE. AS OPPOSED TO THIS THE SAID THE L D. AR IN HIS REPLY HAS INVITED ATTENTION TO THE LATEST DECISION ALSO OF THE THE H ONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS. MEENAKSHI OVERSEAS(P) LTD. ( CITED SUPRA). COPY OF THE SAID DECISION HAS ALSO BEEN PLACED AT PAPER BOOK PAGE NO . 135 TO 140. REFERRING TO THE SAID DECISION IT HAS BEEN SUBMITTED THAT THE HONBL E HIGH COURT CALLED FORTH FOR THE REASONS RECORDED BY THE ASSESSING OFFICER BEFORE I T AND ON A PERUSAL OF THE SAME CAME TO THE CONCLUSION THAT THE REOPENING HAD BEEN DONE ON THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTOR OF IT (INVES TIGATION) AND NOT ON FORMATION OF ANY INDEPENDENT BELIEF. THEIR LORDSHIP HELD IT T O BE A CASE OF A BORROWED SATISFACTION. ON A CAREFUL PERUSAL OF THE SAID DEC ISION WE FIND THAT THE SUBMISSION OF THE LD. AR IS CORRECT ON FACTS. THE RELEVANT DIS CUSSION HAS TAKEN PLACE AND PARAS 19 TO 26 AND THE HONBLE HIGH COURT WAS PLEASED TO HOLD THAT INSTEAD OF HAVING REASON TO BELIEVE IT WAS ONLY ONE CONCLUSION AFTER ANOTHER WHICH POSITION OF FACT IS BORNE OUT FROM THE RECORD IN THE FACTS OF THE PRESE NT CASE ALSO. ACCORDINGLY WE HOLD THAT THE APPEALS OF THE ASSESSEE ON BOTH COUNTS FOR THE DETAILED REASONS GIVEN HEREINABOVE HAVE TO BE ALLOWED. 11. IN THE RESULT THE APPEALS OF THE ASSESSEE ARE A LLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT AT THE TI ME OF HEARING ITSELF ON 06 /02/2018. SD/- SD/- (DR. B.R.R KUMAR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AKV/AG COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT