TMI Blog2014 (2) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) is set aside and Revenue's appeal is allowed by restoring the order of original adjudicating authority - Decided in favour of Revenue. - Excise Appeal Nos.1481-1482 of 2005 - Final Order Nos. A/58339-58340/2013-EX(DB) - Dated:- 21-10-2013 - Archana Wadhwa And Mathew John, JJ. For the Appellant : Shri R K Verma, JDR For the Respondent : None PER : Archana Wadhwa Being aggrieved with the order passed by the Commissioner (Appeals), Revenue has filed the present appeal. 2. We have heard Shri R.K. Verma, learned DR. Nobody appeared for the respondents. 3. As per facts on record, the respondents are engaged in the manufacture of MS ingots and cast article of iron and steel falling under Chapter 72 and 73 of the schedule to the Central Excise Tariff Act, 1985. Their factory was visited by the Preventive Central Excise officers on 25.7.96. Various checks and verifications were conducted. The stock of final product was found to be tallying with the recorded balance in RG I register. However, some of the raw materials like scrap, ferro manganese and ferri silicon were found short to the extent of 166.758 MT, 3.920 MT and 0.050 kg respectively. A panchnama was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. He accordingly reduced the penalty on the respondents to Rs.10,000/- by observing that inasmuch as the period was prior to introduction of section 11AC of Central Excise Act, the same cannot be invoked for imposition of penalty. In addition penalty of Rs.5,000/- was imposed upon Shri Suresh Sharma, Director of the company. In respect of confirmation of demand on the basis of shortages of raw material and the hypothetical calculations of production of final product and clandestine clearances of the same, he dropped the demand by relying upon various decisions of the Tribunal. The said part of the order of Commissioner (Appeals) is impugned before the Tribunal. 9. On going through the impugned order of Commissioner and the grounds of appeal, we find that the Revenue has again reiterated their stand taken before the original adjudicating authority and have submitted that inasmuch as clandestine clearance of 11.056 MT of casting stand established even from the order of Commissioner (Appeals), it is to be presumed that they are indulging in clandestine activities and shortage of raw materials should be held as having been converted into the final product, cleared clandestinel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d below for convenience. "Further on scrutiny of their seized records one letter No.S/96/278 dated 6.2.96 was found kept in the Bank file of Noticee No.1 annexed with the panchnama dated 2.8.96. The said letter was issued by Chief Manager of State Bank of India to the Noticee No. 1 in connection with the non-submission of renewal/financial data and stock statement for the months of May-June 1996. The relevant para is as under:- "When our field staff along with Zonal office functionaries visited the factory on 5th July, 1996, they found no stocks of raw material and finished goods i.e. scraps, iron sponge ingots. This clearly shows that the material obtained under the banks have been sold after converting them into finished goods but the sale proceeds have not been deposited in the account." 14. I am recording the facts again for a better appreciation of the case. This is a case of alleged clandestine manufacture and clearance of excisable goods on the basis of the following evidences: (i) Shortage of physical stock of raw material as compared to accounted stock on the date of surprise verification; (ii) Certain loose sheets of paper recovered from the factory; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... afore narrated circumstances, the court has to presume the existence of certain facts. Presumption is a course recognised by the law for the court to rely on in conditions such as this. Presumption of fact is an inference as to the existence of one fact from the existence of some other facts, unless the truth of such inference is disproved. Presumption of fact is a rule in law of evidence that a fact otherwise doubtful may be inferred from certain other proved facts. When inferring the existence of a fact from other set of proved facts, the court exercises a process of reasoning and reach a logical conclusion as the most probable position. The above principle has gained legislative recognition in India when Section 114 is incorporated in the Evidence Act. It empowers the court to presume the existence of any fact which it thinks likely to have happened. In that process court shall have regard to the common course of natural events, human conduct etc. in relation to the facts of the case." 17. In my view the evidence, in the case under consideration, as stated above clearly proves that the Respondent indulges in unaccounted manufacture and clearances. The position that there was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue in respect of the entire demand confirmed by the adjudicating authority that is for Rs.6,65,309/-. Penalty also need to decided on the basis such quantum of duty evasion. Mathew John, J. POINTS OF DIFFERENCE OF OPINIOIN 20. the facts and circumstances of the case,- Whether the case of clandestine removal made out by Revenue is to dropped in respect of the quantities for which Commissioner (Appeal) has given relief? OR Whether the case of clandestine removal made out by Revenue is to be upheld in respect of all the goods for which the adjudicating authority had confirmed the duty demand and penalty also to be imposed accordingly. (Pronounced on 15.5.2012) Archana Wadhwa, J. Mathew John, J. 21. The Registry is directed to place the matter before the Hon. President of CESTAT for resolving the above difference in opinion between Members. Archana Wadhwa, J. Mathew John, J. PER : D N Panda 22. None appeared for Respondent even though notice had gone. 23. Revenue is represented by ld. DR. 24. This reference against appeal of Revenue gave rise to following questions for answer by third member in view of difference in decision arose while deciding the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of finished goods out of missing raw-materials and clandestine clearance thereof resulting in evasion of duty. He discarded the plea of "presumption" and assumptions which needs appreciation in the context of the fact situation of the case following the ratio laid down by Apex Court in the case of State of West Bengal vs. Mir Mohammed Omar Ors-2000(8) SCC 382. 29. Panchnama dated 02.08.1996 was examined by ld. Technical Member. He appreciated non availability of physical stock and that was proved from weighing slips. He found statement of Shri Suresh Sharma, Director of the assessee company recorded on 27.08.1996 to be credible proving clandestine manufacture and clearance of finished goods. 30. In para 18 of the order, ld. Technical Member recorded that private records were recovered from the factory of the assessee which proved nexus thereof to the clandestine manufacture of the finished goods. Revenue successfully proved its case establishing evasion which was also corroborated from the letter No.5/96/278 dated 6.2.96 of State Bank finding place in Para 13 of appeal order. He accordingly opined that Adjudication should sustain. 31. Submission of Revenue supporting order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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