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2016 (1) TMI 12 - AT - Central ExciseClandestine manufacture and clearance of various articles of copper and copper alloys - Finished goods daily stock register (RG-1) was not complete - the officers found copper winding wire scrap lying in gunny bags as also in loose and lump condition in the factory. As the appellant could not explain the source of procurement of the said scrap, which is raw material for the appellant, the same was seized under panchnama - Held that:- The entire case of the Revenue is based upon the initial statements recorded at the time of visit of the officers. It is well settled law that such statements, though, form part of the evidence, have to be taken with a pinch of salt and require further corroboration. The Revenue cannot rest its case on the sole basis of the statements without taking into account the surrounding circumstances. As such in the absence of any reference by the said deponents, to the fact of passing of quality control test about a week ago and in the absence of any admission that the same were not entered with any malafide intention to remove them clandestinely. Regarding source of scrap - the assessee have produced invoices of two persons showing the sale of the scrap on the previous night of the visit of the officers. No enquiries stand made by the Revenue from the said two suppliers of scrap. If the scrap has been received in the factory on the previous day, late night, it cannot be expected to be entered in the records by the next day early morning. Confiscation of the final products and imposition of penalties upon the assessee is neither justified nor warranted - Decided in favor of assessee.
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