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2015 (7) TMI 458 - CESTAT AHMEDABADClandestine manufacture and removal of goods - documents recovered from the third party, which are not accepted by the appellant - Held that:- For the purpose of clandestine removal, there has to be clandestine manufacture. We find on perusal of the record, that the Revenue authority, despite having engaged themselves in massive investigation, has not brought on record a single evidence of procurement of other major raw materials required for manufacture of Frit, either in the form of entries in the books of accounts or in the form of statements of supplier of the other major raw materials. It is undisputed that for manufacturing of Frit (the final product) major raw material is Quartz which is approximately 45% of the total inputs going in the manufacturing of Frit . We find from the records that Revenue has not produced a shred of evidence, to indicate that the appellant had been procuring Quartz without accounting them in books of account nor is there any evidence to indicate that other raw materials were also procured without recording them in books of accounts. There has to be an illicit manufacture of goods to indulge in clandestine removals for which extra raw-material, extra manpower, transportation of finished goods, cash payments etc are required to be established with a reasonable degree. In the absence of any corroboration on above factual details, the case of clandestine removals cannot be held as established on the basis of few parallel invoices recovered from a third party. Impugned orders demanding duty as alleged clandestine removal with equal penalty deserves to be set aside. However, duty demand of ₹ 24,905/- in respect of shortage of finished goods found at the time of search of factory on 3.7.2001 is required be confirmed with equal penalty. Penalty imposed on Shri Manan K Shan, Director of the main appellant, is also set aside as on merit appeal has been predominantly decided in favour of the main appellant. - Decided partly in favour of assessee.
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