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2018 (3) TMI 1841 - HC - Central ExciseSSI Exemption - clubbing of clearances - Whether the CESTAT is correct in holding that M/s. Vyas Textiles and M/s. Vyas Textiles, B Unit are separate units, individually eligible for the benefit of N/N. 1/1993, as amended when the authorised signatory of both the units and son of the proprietor has clearly admitted that both units are owned by the same person? - HELD THAT:- The CESTAT has erred in not holding that declarations opting under SSI scheme separately for both the units is a gross misdeclaration when they knew pretty well that they are proprietorship firms and owned by one and the same individual. This has been done with an intention to evade payment excise duty by wrongly availing SSI exemption for both the units and suppressed the information from the department with an intention to avail the ineligible exemption - Mr. M.G. Vyas, knowing that both the units are owned by him had filed option to avail SSI benefits for each units as if the both are separate units headed by separate individual. In view of the settled legal position brought out by the above referred decision of the Tribunal, the culpability of Mr. G.M. Vyas is clearly established. As such, the decision given by the Tribunal is erroneous and liable to be set aside. The CESTAT has erred in holding that the statements recorded from customers, workers and transporters cannot be the basis for establishing the misdeclaration that cone yarn/cheese yarn were removed under the guise of Hank yarn. On examination of the statements recorded from customers it is seen that there is a clear admission of the misdeclaration of the description of the goods by the respondent in the invoices which mentions plain reel hanks instead of the cone/cheese yarn dispatched by them. The CESTAT has not appreciated the fact that the usage of plain reel hanks is not required by the customers who manufacture Terry towels and that there is a deliberate misdeclaration regarding the Plain Reel Hanks supplied by the respondent to its customers stands clearly proved in this case - the CESTAT has not correctly reasoned or given any finding as to how these statements cannot be accepted especially when the customers themselves have admitted the receipt of cone yarns which are used by them for the manufacture of Terry Towels which is totally different from the description given in the invoice. Such a decision cannot stand the test of legal scrutiny and liable to be set aside. Clandestine Removal - Demand of Excise duty - cotton yarn in cheese form, cleared in the guise of Plain Reel Hank (PRH) - invocation of proviso to Section 11A of CEA - M/s. Vyas Textiles has not resorted to any clandestine removal when the conclusions drawn from admissions of the customers and the evidences brought on record speak otherwise? - HELD THAT:- The adjudicating authority has not given due cognizance and a clear finding as to how the parallel set of invoices recovered by the investigating agencies from the premises of the respondent is not a valuable evidence for clandestine removal of cotton yarn or at best a corroborative evidence for the removal of cotton yarn in the guise of Plain Reel Hanks. This has also not been examined by the CESTAT as well. This recovery of parallel set of invoices from the premises points out to illegal dealing on the part of the respondents - the finding given by the Hon’ble Tribunal that there is no sufficient corroborative evidence to sustain the case against the respondent lacks merit and hence liable to be set aside. Burden to prove clandestine manufacture and removal is on the revenue. The standard of proof has to be necessarily based on preponderance of probabilities. Conjunctures and surmises cannot be the basis of proof, when clandestine removal is alleged and for establishing the said charge, there should be positive evidence. Therefore, when the department has alleged clandestine production and removal of goods, without due proper accounting in the records and without payment of duty, the burden of establishing the allegation lies heavily on the department. In the case on hand, the department has not discharged the burden. No substantial questions of law, are involved - Appeal dismissed - decided against appellant.
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