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2015 (4) TMI 992 - AT - Central ExciseClandestine removal of goods - imposition of penalty u/s 11AC - Held that:- Excess stock of 259.50 KG of Supari, 690.20 KG of Gutkha and 4039 KG of Packing material by itself cannot be treated as an evidence of unaccounted manufacture of clearance of Kimti Brand Gutkha by RPPL during the period to which the entries in the notebook recovered from Shri Manoj Gupta pertaining for that period, there is no evidence of unaccounted purchase of principal raw material like Supari etc. As regards, the recovery of cash of ₹ 17,64,870/- from the residential premises of Shri Babu Lal Maqkhija and Shri Hira Lal Makhija and recovery of cash of ₹ 19 lakh from the residential premises of Shri Harish Makhija, in both the cases the stand of the appellant has been that this cash was meant for purchase of some property and was not for the sale proceeds of unaccounted Gutkha. In any case, in view of the judgment of the Apex Court in the case of Commissioner vs. Pandit DP Sharma reported in [2003 (5) TMI 507 - SUPREME COURT] the onus to prove that the currency represented sale proceeds of the clandestinely removed goods in on the department and it is the department which has to lead cogent evidence in this regard. But there is no such evidence. Therefore, the currencies recovered from the residential premises of Shri Babu Lal Makhija/Hira Lal Makhija Delhi and from the residential premises of Shri Harish Kumar Makhija -Kanpur cannot be held to be sale proceeds towards the clandestinely cleared goods. Merely on the basis of the entries in the notebook recovered from Shri Manoj Gupta under the heading of Kimti coupled with his statement, it cannot be concluded that those entries represent clandestine clearances of the consignments of Kimti Brand Gutkha by RPPL and on this basis duty demand of ₹ 57,51,000/- cannot be confirmed against RPPL. In this regard, we are supported by the judgements of the Tribunal in the cases of Charriot Cement Company vs. CCE (2003 (1) TMI 213 - CEGAT, KOLKATA) and Hira Enterprises and others vs. CCE Belgaon (2011 (5) TMI 896 - CESTAT BANGALORE), wherein it has been held that merely on the basis of the Railway receipts without being corroborated by other independent evidence like unaccounted procurement of raw material, unaccounted manufacture, the duty demand cannot be confirmed against the assessee. In this case, even the railway receipts under which the consignments of Kimti Brand Gutkha are alleged to have been clandestinely cleared, had been booked are also not on record and it is not known as to whether the RR numbers mentioned in the notebook of Shri Manoj Gupta under the heading Kimti represent the actual railway receipt or not. Therefore, the duty demand of Rs, 57,51,000/- against the RPPL is not sustainable. Since, the duty demand is not sustainable against RPPL, there is no question of imposition of penalty on Shri Hira Lal Makhija and Shri Harish Kumar Makhija under Rule 26 of the Central Excise Rule 2002 - Decided in favour of assessee.
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