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TMI Blog2022 (9) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... s not been followed. The plain reading of sub section (1) of section 9D of the Act makes it clear that clause (a) and (b) of the said section sets out following circumstances in which a statement made and sanctioned by a person before Central Excise Officer of a gazetted rank during the course of inquiry or proceedings under the Act, shall be relevant for the purpose of proving the truth of the facts contained therein - departmental investigating agencies as well as the adjudicating agencies have not yet started observing compliance of mandatory statutory provisions i.e. section 9D of Central Excise Act, 1944 and section 138 B of Customs Act, 1962 without which the statement recorded at the stage of inquiry / investigation will not be relevant for the purpose of proving the truth of requisite facts during prosecution. It is observed that the documents recovered at the investigation stage are nothing but third party evidence for want of their author not being investigated / examined by the Department. Third party evidence cannot be relied upon to confirm the allegations as that of clandestine removal - Otherwise also there is no corroborative evidence as is required to prove the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f raw-material and finished goods. The appeal against the said order was filed by the Department. Commissioner (Appeals) vide order bearing No.516-18-19 dated 28.02.2019 has allowed the appeal of the Department. Being aggrieved of said order, appellant is before this Tribunal. 2. I have heard Mr. Krishna Mohan Menon Ms. Parul Sachdeva, Advocates for the appellant and Ms. Tamanna Alam, Authorized Representative for the Respondent. 3. Ld. Counsel for the appellant submitted that premises of appellant were searched over a period of four days wherein all that the Revenue Authorities examined was only the comparison between the internal cost sheet maintained and production records alongwith comparison of book stock with physical stock that too on estimate basis. Based on the aforesaid manner that the comparison of cost sheets of all the divisions with the actual production as was found recorded in daily stock account were compared to come to the allegations of clandestine removal despite that neither the daily cost sheets nor the loose sheets were admissible into evidence, their authors not being examined by the Department of Revenue. The same was duly observed by original adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rive at the conclusion of clandestine removal being committed by the appellants and to confirm the consequent duty. The findings of Commissioner (Appeals) are therefore, prayed to be set aside and appeal is prayed to be allowed. 6. To rebut these submissions, ld. Departmental Representative has mentioned that all submissions of the appellant have meticulously being dealt with by Commissioner (Appeals). The evidence on record has also been meticulously discussed. In the light of the said evidence, the Commissioner (Appeals) in para 9.2 of the order under challenge has rightly concluded that there was sufficient admission in the statement of Shri Ramesh Goyal. Shri Ramesh Goyal has accepted that out of total transaction mentioned in the sheets recovered from appellant s premises some of the goods of M/s. Anjani Steel Limited, Raigarh have been transported by them for which either no biltis or blank biltis used to be received. Similarly, Shri P.K. Sahoo, Sr. Manager of Respondent Company is appreciated to have clearly admitted about the shortage detected in the physical stock of sponge iron, coal and TMT bars which is sufficient to prove all alleged clandestine removal by the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se DCS. There is no investigation on the part of the Department from the production division or from production In-charge about the content-writer of those DCS. 9. Further from the perusal of statement of Shri P.K. Sahoo dated 28.02.2014, it is observed that though he has acknowledged that there was difference between the production recorded in the DCS / loose sheets to those as were recorded in daily stock account. However, he clarified that no such cost sheets used to be prepared in their factory. He rather requested time to check the authenticity from the maker of the said documents. With respect to the shortage noticed in the stock based upon the physical examination of the stock/goods, Shri Sahoo has specifically disagreed with the difference in stock worked out by the Department. With respect to the noticed difference in the installed capacity in the ER 7 record, Shri Sahoo requested time to submit the detailed calculation chart showing the computation of the installed capacity. Finally, perusing the statement of transporter Shri Ramesh Goyal, it is observed that he has specifically deposed him to be concerned for transporting Sponge iron, M.S. Billets, MS Rods etc. of v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the statement can be admitted in evidence. Under this procedure, two steps are required to be followed by the adjudicating authority, under clause (b) of Section 9D(1), viz. (i) the person who made the statement has to first be examined as a witness in the case before the adjudicating authority, and (ii) the adjudicating authority has, thereafter, to form the opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. 12. Hon ble High Court of Delhi In J.K. Cigarettes Ltd. vs. CCE reported in 2009 (242) ELT 189 (Del.) has held that if aforesaid procedure which is statutorily prescribed by plenary parliamentary legislation, is not followed, it is to be regarded, that the Revenue has given up the said witness, hence, the reliance on the said statement has to be regarded as the said statement would not be relevant for proving the truth of the contents thereof. Hon ble Supreme Court also in the case of C.C. vs. Bussa Overseas Properties Ltd. reported in 2007 (216) ELT 659 (S.C.) has held that the Adjudicating Authorities are bound by the general principles of evidence since Commissioner (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the charges of clandestine removal. Hon ble High Court of Allahabad in the case of Continental Cement Company vs. Union of India reported in 2014 (309) ELT 411 (All.) has held:- 12 . Further, unless there is clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. On careful examination, it is found that with regard to alleged removals, the department has not investigated the following aspects : (i) To find out the excess production details. (ii) To find out whether the excess raw materials have been purchased. (iii) To find out the dispatch particulars from the regular transporters. (iv) To find out the realization of sale proceeds. (v) To find out finished product receipt details from regular dealers/buyers. (vi) To find out the excess power consumptions. 13. Thus, to prove the allegation of clandestine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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