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2019 (8) TMI 1682 - AT - Central ExciseClandestine manufacture and clearance - allegation of suppressed sales by the Income tax department - suppression of sales - presence of corroborative evidence or not - HELD THAT:- The provisions of the Central Excise law and the Income tax law are radically different and taxability under the income tax law does not ipso facto attract taxability under the central excise law in as much as an income may or may not be the result of manufacture, which has to ascertained by undertaking an independent enquiry to this effect. However, the follow-up enquiry conducted by the Central Excise Department to corelate such unnamed loose sheets in the instant case is entirely half-hearted and incomplete inasmuch as no efforts were made to adduce any evidence what-so-ever to support the charge of clandestine manufacture (in the form of purchase of un-accounted raw materials, manufacture of finished goods, consumption of electricity, production capacity etc.) and neither is there any independent evidence to support the charge of clandestine clearance against Appellant No. 1. Even the statement of the buyers, named in the loose sheets have not been recorded - no basis has been disclosed in the Notice or the impugned order passed thereunder as to how the alleged suppressed sale of ₹ 30.97 Crores has been worked out from the loose sheets when the audited turnover of the Appellant Mo. 1 during the relevant period was in excess of the year-wise amount reflected in the loose sheets. Therefore, the entire proceedings are completely motivated and confined to the findings of the income tax survey. The decision of the Tribunal in M/S. RAVI FOODS PVT. LTD. & OTHERS VERSUS CCE, HYDERABAD [2010 (12) TMI 290 - CESTAT, BANGALORE] fully supports the view that in the absence of any corroborative evidence of clandestine manufacture of final product, it cannot be said that there was clandestine removal of goods for the purposes of Central Excise Law merely based on information received from the income tax department regarding admission by the assessee of any undisclosed income/suppressed sales. The assessment orders passed by the Income Tax Department consequent to the survey, that the alleged suppressed sale was not included in the income of the Appellant No. 1 but in framing the assessment of M/s Swagath Plastic Pvt. Ltd. in accordance with the disclosure statement dated 20 October 2014 made by the Uma Group. Further, the loose sheets identified as Page 58 to 60/UPL-4 on the basis of which the charges have been framed in the present proceedings are duly referred in the Income Tax Assessment Orders of M/s Swagath Plastic Pvt. Ltd. for the year 2011-12 to 2014-15. Therefore, the whole edifice of the present central excise demand on Appellant No. 1 is flawed and cannot survive. Appeal allowed - decided in favor of appellant.
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