TMI Blog2019 (1) TMI 429X X X X Extracts X X X X X X X X Extracts X X X X ..... n ₹ 4.53 Crores. The entire case has been made upon the recovery of some documents from the third party premises. It is well settled law that allegations and findings of clandestine removal are required to be made upon cogent and positive evidence which corroborate unaccounted production and clearance of finished goods - In the present matter, no such evidence is available on record at all, except the third party records which cannot be relied upon as admissible piece of evidence. The allegation of clandestine manufacture and removal of finished goods cannot be proved merely on the basis of third party records without independent corroboration. Cross-examination of statements denied - principles of natural justice - Held that:- The impugned Order has been passed in gross violation of the principles of natural justice inasmuch as the cross-examination of Shri Mahipal Yadav, Proprietor of transport firm was not allowed though the statement recorded from him has been relied upon by the learned Adjudicating Authority - demand on this ground also not sustainable. Demand not sustainable - appeal allowed - decided in favor of appellant. - Excise Appeals Nos.53179-53180 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inciples of natural justice as the request for his cross-examination is a ploy to further delay the adjudication proceedings. The learned Commissioner has recorded the finding that the Register resumed from the premises of the transporter has reliability as it contained the details of actual clearances as there is no reason for anyone to scribble entries in their register hypothetically. The Register is trustworthy as it had records of clearances, some of which were also found recorded in the records of the Appellant. 3.1 Shri Bipin Garg, learned Advocate has contended that though the intelligence said to be gathered by the officers indicated evasion of Central Excise duty by the Appellant, the officers have not searched/visited the factory premises of the Appellant on 30.11.2012. He, further, submitted that even after coming to know about alleged evasion of duty by the Appellant from the records resumed from the premises of the transporter, the officers had taken no action to search the premises of the Appellants. In his statement dated 01.03.2013, Appellant No.2 Shri A.K. Malhotra, Director has categorically stated that the Appellant Company had not removed any goods clandesti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i-Del). 4.2 The learned Advocate contended that the mere fact that the documents recovered from transporter s office contain the entries in respect of which Appellants had issued Invoices and which were accounted for in their records does not, rather cannot, lead to the conclusion that all entries in the said records pertained to the Appellants. The onus of proof is on the Department by bringing independent and cogent corroborative evidence linking the said entries with the removal of goods from the Appellants factory. No such link has been adduced by the Department at all. In the case of Shri Laxmi Industries Vs CC CE Hyderabad-IV, 2016 (336) ELT 681 (Tri-Hyd), the case was made against the Appellants on the basis of documents seized from the residence of input supplier and his statement. The Tribunal has allowed the appeal holding that whole case is based upon third party private records and statement of such third party. Tribunal held that In the absence of independent evidence, the charges levelled against the Appellant is not sustainable. 4.3 The learned Advocate also contended that though the learned Commissioner has passed the impugned Order holding that the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Excise duty has been confirmed and the penalties have been imposed on both the Appellants on the basis of records resumed from the premises of transporter and the statement of the proprietor of the transport firm. The main issue involved in the present matter is whether the charge of clandestine removal can be made on the basis of documents resumed from the premises of a third party without independent corroboration. 8. We observe that neither the factory premises of the Appellants has been searched nor any discrepancy in the stocks of finished goods raw materials has been found by the Central Excise Officers. No investigation has been conducted by the officers at the Appellant s end, as to whether they have the capacity to produce the alleged quantity of TMT bars, electricity consumption, purchase of raw materials, its transportation and payment to the suppliers. There is no investigation about the buyers of goods involving duty of more than ₹ 4.53 Crores. The entire case has been made upon the recovery of some documents from the third party premises. It is well settled law that allegations and findings of clandestine removal are required to be made upon cog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue has not been able to adduce any corroborative evidence to show the movement of goods from the premises of the Appellant-company to the premises of M/s. Chitra Traders or the Customers whom the goods were sent directly to as per the direction of Chitra Traders. No inquiry has also been made into these Customers who ultimately received the goods. There is no substance in the reasoning given by the Commissioner in the impugned order to the effect that as the party did not challenge the fact of their business association with M/s. Chitra Traders, Delhi, the enquiry further down the line was not considered necessary. The onus of proof that the goods were removed by the Appellants without payment of duty and without entering the same in their records is upon the Revenue which cannot be discharged merely on the strength of the entries made in the records of a third party without linking the removal of goods from the premises of the Appellant-company. The mere fact that the Appellant-company had business relation with Chitra Traders, does not mean that they will be liable to each and every entry made by Chitra Traders in their books of account. 9.2 The learned Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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