TMI Blog2014 (4) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... s to how such huge quantum of final product allegedly manufactured and cleared by the appellants, without payment of duty was transported, sold to whom and how the consideration for the same was received. There is also no evidence for purchase of the unaccounted raw-materials. - Decided in favor of assessee. Confiscation of cash found at factory premises - Held that:- It is well established that the onus to show that the Indian currency was the sale proceeds of the clandestinely removed goods is upon the Revenue, which is required to be discharged by production of affirmative evidences. - Decided in favor of assessee. Confiscation of cash found at residence - Held that:- Admittedly, the residential premises were common residential premises of appellants as also all the brothers and their wives, it is not coming up on record as to at whose instance and as to from which room the said cash was recovered. - Decided in favor of assessee. - Appeal Nos. E/721, 722 & 724/2007 -EX[SM] - Final Order Nos.51005-51007 - Dated:- 13-3-2014 - Mrs. Archana Wadhwa, J. For the Appellant : Shri K.K. Anand, Advocate For the Respondent : Shri BB Sharma, AR JUDGEMENT Per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the products being manufactured by others. The physical verification of stock of zarda and paan masala manufactured by M/s. Sarin Sarin was also carried out and 170 bags of zarda and 16 bags of paan masala and 420 small tin boxes of paan masala were found. Shri Nirankar Nath Mittal, one of the partners of the firm could not produce any stock register or any other document like central excise invoices, etc. showing the receipt of the goods. The officers accordingly detained the said stock of the goods totally valued at Rs.13,77,342/- (Rupees thirteen lakh seventy seven thousand three hundred and forty two only). 5. Shri Nirankar Nath Mittal, one of the partners of the said firm, in his statement, deposed that the stock register of the firm as also the other accounting documents have been taken by him for checking and in as much as the residential premises are also being searched by the officers simultaneously, they must have recovered the same. The documents recovered from the residential premises of Shri Nirankar Nath Mittal were four note-books containing details of stocks maintained in pencil and re-written after rubbing several times. Shri Nirankar Nath Mittal, in his subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forty nine only) involved on the unaccounted manufacture of sadha paan masala based upon the cut supari, the shortage of which was not reflected. Further, demand of duty of Rs.32,88,080/- (Rupees thirty two lakh eighty eight thousand and eight only) involved on the unaccounted manufacture of gutka with the help of supari, which was reflected in their stock register but not explained and a demand of duty of Rs.66,000/- (Rupees sixty six thousand only), Rs.5,775/- (Rupees five thousand seven hundred and seventy five only), Rs.10,500/- (Rupees ten thousand five hundred only) and of Rs.4,20,750/- (Rupees four lakh twenty thousand seven hundred and fifty only) on various products based upon the allegations of non-explanation of the supari recorded in their register were also made. The duty proposal in respect of the goods seized from the premises of M/s. Basudeo Prasad Sons was also made. The Notice also proposed imposition of penalties on various Noticees. 10. The said Notices resulted in confirmation of demand by original adjudicating authority and imposition of penalty and also confiscation of the seized cash as also the goods. The said order was upheld by the Commissioner (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue, apart from referring to the shortages noticed by the visiting officers, has not referred to any other evidence to substantiate the allegation of clandestine removal. It is well settled law that the shortages by itself cannot be held to be sufficient evidences so as to lead to the inevitable conclusion of the clandestine removal. Tribunal in the case of Nissan Thermoware Pvt. Ltd. Vs. CCE, Daman [2009 (246) ELT 191) (Trib.-Ahmd)] has held that shortages in one of the raw-materials cannot be adopted as the basis for alleging clandestine manufacture and removal in the absence of any independent evidence available on record. The said decision stands upheld by the Hon ble High Court of Gujarat in the case of CCE, Daman Vs. Nissan Thermoware Pvt. Ltd. [2011 (266) ELT 45 (Guj.)]. It was observed by the Hon ble High Court that shortage of one of the raw-materials and even the admission by the director cannot be held to be sufficient evidence so as to indicate clandestine removal. For better appreciation, I reproduce the relevant paragraph from the said order:- 5. As can be seen from the impugned order of the Tribunal, the Tribunal has noted that before the Commissioner (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stands confirmed against M/s. Sarin Sarin on the allegations and findings of clandestine removal of their final product, i.e., sada paan masala and gutka, during the period April, 2000 to March, 2004. The said demand is confirmed on the basis of quantum of various ingredients required for the manufacture of final product by the appellants. The officers scrutinised the statutory records maintained by the appellants for all their major raw-materials, i.e., supaari (both uncut and cut), Khattha tobacco and packaging materials. The appellants were reflecting the wastage of various raw-materials in the said accounts. The officers scrutinised the accounts maintained for the month of December, 2002 and concluded the percentage of the various ingredients required for manufacture of paan masala and gutka. Based upon the said percentage, comparisons were made with the consumption of raw-materials during the month of December, 2002 and differences were found. Based upon that, the quantum of final product was alleged to have been manufactured in the month of December. The said result arrived at by the officers was applied to the entire period from 2000-01 to 2003-04 based upon number of pou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period. Apart from the above, there is not even an iota of evidence on record indicating towards any clandestine activities of the appellants as neither transporters stand identified nor any buyers stand identified and investigated. (iii) The Tribunal in the case of Hilton Tobaccos Ltd. Vs. CCE, Hyderabad [2005 (183) ELT 378) (Tri.-Bang)] has observed that allegation purely based on theoretical working out, without any corroborative evidence are not sustainable. Similarly, in the case of Hyderabad Electrodes Vs. CCE, Hyderabad [2005 (191) ELT 1164 (Tri.-Bang.)], it was observed that quantity manufactured arrived at on the basis of consumption of one of the inputs, in the absence of corroboration of procurement of raw-materials cannot be upheld. It has been the ratio of number of decisions upheld by the various courts that the charges of clandestine removal, being serious charges, are required to be established by production of evidences. The Revenue has failed to advance any evidence to show as to how such huge quantum of final product allegedly manufactured and cleared by the appellants, without payment of duty was transported, sold to whom and how the consideration for the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umentary evidences placed on record by the appellants have to be accepted in the absence of any contrary evidences to show that the said affidavits were factually incorrect. Further, in the absence of any evidence produced by the Revenue, the said affidavits have to be held as reflecting the correct factual position. I also do not find any merits in the reasonings of the authorities that the car was sold at Rs.3.5 lakhs, whereas the seized amount was only 3.46 lakhs. (iii) As regards the confiscation of balance amount of Rs.15.97 lakhs, it is seen that apart from the fact that there is no particular room/place mentioned in the Panchnama showing the recovery of the said cash, the appellants have explained the possession of the same by various members of the family. Admittedly, the residential premises were common residential premises of appellants as also all the brothers and their wives, it is not coming up on record as to at whose instance and as to from which room the said cash was recovered. The appellants have given the break-ups of the said amount along with documentary evidences including the certificate from the Income Tax Department that the said cash belonged to various ..... X X X X Extracts X X X X X X X X Extracts X X X X
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