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2017 (11) TMI 257 - AT - Central ExciseClandestine manufacture and removal - auto parts for two wheelers and three wheelers - scope of SCN - parties to the SCN - corroborative evidences. Held that: - the documents were recovered from the custody of Shri Naveen Sharma of M/s.Lakhanpal Auto who is also dealer of auto parts and no statement of Shri Naveen Sharma was recorded which shows that the department was having some interest in Shri Naveen Sharma. As he was not the party to the show cause notice. Further Shri Sanjay Sharma, authorized representative of M/s.Vira has admitted that he had prepared all the documents. Interestingly, Shri Sanjay Sharma was not the party to the show cause notice as he was involved in the activity of clandestine removal of the goods on the basis of investigation. Further, M/s.Shanu whose invoices were recovered for the live consignments was not made party to the show cause notice. The department was having lenient view towards M/s.Shanu which shows that the whole of the investigation was conducted by the Revenue was to drag M/s.Vira in litigation to allege clandestine removal of the goods. There is positive observations of the adjudicating authority in favour of the appellants have not been controverted by the Revenue have not been challenged the same in the appeal before us. But the appellant have heavily relied on the observations made by the adjudicating authority in the impugned order and controvered the observations of the adjudicating authority in para 3.16 in the impugned order that the appellants were given many opportunities but never explained the sources of large amount of cash that was recovered in the house. The explanation is coming at a late stage, therefore the same is afterthought - the adjudicating authority has made observations on the basis of documentary evidence, the documentary evidence cannot be denied by merely saying that it is an afterthought. Therefore, the said finding of the adjudicating authority is not tenable. Reliance on private/internal records maintained for internal control cannot be the sole basis for demand. There should be corroborative evidence by way of statements of purchasers, distributors or dealers, record of unaccounted raw material purchased or consumed and not merely the recording of confessional statements. Although the adjudicating authority has touched certain points for consideration of charge of clandestine removal and held that the Revenue has failed to prove the sources of procurement of raw materials, consumption of raw material, consumption of consumables, production capacity and transportation of the goods, etc. Therefore, the charge of clandestine removal of the goods is not sustainable against M/s.Vira and co-noticees. No documents have been recovered from M/s.Vira and a case has been made out on the basis of the statement of Shri Sanjay Sharma and the documents recovered from him and there is inculpatory statement of Shri Ravinder Jain, in the absence of any positive evidence, the charge clandestine removal is not sustainable on the basis of the third party evidence. Appeal allowed - decided in favor of appellant.
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