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2013 (6) TMI 3 - HC - Central ExciseSSI Exemption - requirement of registration and maintenance of the accounts for the purpose of central excise - clandestine removal - reliance upon the statement - held that - the statement in question was too weak to be relied on as evidence on law, in absence of any corroboration thereof by cogent evidence. - The solitary statement could not be said to be a cogent and convincing piece of evidence which validly corroborate the confessional statement in the statement of the Director, more particularly when the said statement of M/s. Harish Metals was not referred to and discussed in the show cause. - Moreover, the confessional statement was retracted within reasonable time. Therefore also, the said confession could not have been used as a piece of evidence and there was no basis for inference and conclusion about clandestine removal of goods thereof. Regarding maintenance of records - held that:- The regular accounts under the excise law were not maintained by the assessee considering that since the exemption limit in the said Notification applied to it, maintaining of accounts for the excise purpose was not required. It is not disputed that the assessee was otherwise maintaining the accounts for the purpose of other laws like Sales Tax Act, Sales Tax Registration and its accounts were audited in accordance with the provisions of the Companies Act, 1956. In the Order-in-Original dated 17-6-2009, the adjudicating authority itself observed that there were no statutory records or excise records as they were dispensed with by the department since 2000 as a measure of simplification and the every manufacturer was required to maintain his own records and to device to his own record keeping method depending upon the accounting requirements. In this view and given the facts and circumstances of the case, the conclusion that the assessee had deliberately not maintained the accounts under the excise law could not stand and such a finding could be said to be baseless. Value of clearance - held that:- Even if the case of the department is taken at its best value, admittedly the total clandestine clearance was below the limit of 1.5 crores specified in the notification dated 1-3-2003. The approach of the Central Excise Authority was erroneous and the findings arrived at by the learned Tribunal were not tenable at law. Once the sole basis of confessional statement adopted by the Authority in basing the case against the assessee was found to be an unreliable piece of evidence, inferences and conclusions about clandestine removal of goods fail to sustain. - Demand and penalty set aside - decided in favor of assessee.
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