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2013 (6) TMI 395 - AT - Central ExciseClandestine removal and under-valuation of goods - Demand based on statement - corroborative evidence - Majority Decision - Cleaner of films/sheets in the guise of Lay Flat Tubing (LFT) - Held that:- The impugned order of demand has relied upon the statement of Shri Kamlesh Pandey, Production Supervisor, who was associated with the appellant company only for a period of about 8 months and as such, his deposition as regards clearances of sheets under the guise of LFT for the period prior to his joining the factory, cannot be held to be true reflection of factual position. Further, it also stands recorded in the said statement of Shri Pandey that the production program register was being maintained on the instructions of Shri H.K. Singh. However, the Revenue has not bothered to record the statement of Shri H.K. Singh, which would have classified that position. Inasmuch as no production program register was being maintained by the appellant for over-the-counter clearances on cash and carry basis, the statement of Shri Pandey in respect of program register cannot be held to be a relevant statement. Revenue authorities have recorded the statements of the owners of vehicles who were engaged by the appellant for transportation of the goods. The said statements do not indicate that the owners were self-driving the vehicles and they would be in a position to give correct particulars as regards invoices, where the name and city of the consignee is mentioned. In the absence of any such corroborative evidence as to that the transportation were made by the said vehicles and that the material transported was nothing but plastic films and sheets and reliance placed by the Revenue authorities on the statements of the transporters is incorrect and such statements do not instill the confidence that the appellant had removed the plastic films and sheets in the guise of LFT. The adjudicating authority has not recorded any finding that the appellant was receiving excess payment than the amount indicated on 814 invoices in Annexure II to the Show Cause Notice, even after scrutinizing the documents resumed from the head office of the appellant. The appellant had, in their statement, clearly stated that the head office of the appellant was collecting cash as indicated in all the 814 invoices. If that be so, the Revenue has not carried out their investigation any further to show or bring on record that the appellant had received the excess amount than the amount billed as indicated in 814 invoices to Annexure II of the Show Cause Notice. In the absence of any such evidences, it cannot be said that the appellant had cleared plastic films and sheets in the guise of LFT. The provisions of Section 11A of Central Excise Act, 1944 talks about the issuance of Show Cause Notice to the “person” who is “liable” to pay duty. It is undisputed in this case that till 5-3-2005, the clearances for home consumption were effected by M/s. Mayura Industries, which was a partnership firm registered with Central Excise authorities. The business of M/s. Mayura Industries was taken over by the current appellant M/s. Radha Madhav Corporation Ltd. w.e.f. 6-3-2005. Thus the demand of duty for the period prior to 6-3-2005 can be raised only on Mayura Industries and not on M/s. Radha Madhav Corporation Ltd., Public Limited Company having distinct and identifiable entity. There is no dispute on the fact that in adjudication proceedings, the charge of clandestine removal and undervaluation is definitely to be established on the basis of preponderance of probabilities. However, it cannot be merely on the basis of presumptions and assumptions. Suspicion however grave cannot replace the proof. Decision of Oudh Sugar Mills Ltd. v. Union of India [1962 (3) TMI 75 - SUPREME COURT OF INDIA] is clearly applicable to the instant case inasmuch as the demand cannot be sustained without any tangible evidence, based only on inferences involving unwarranted assumptions. In favour of assessee.
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