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2018 (1) TMI 49 - AT - Central ExciseClandestine removal - the demand has been mainly raised on the basis of statements of the employees of the Appellant concern and statement of dealers - Held that: - the statements of the employees who were not connected with the manufacturing of Coumarin, it cannot be said that the manufacturing process shown by the Appellant firm is false. We find that apart from the statements of above persons there is no records or documents which can show that the production of Coumarin was much more than shown or recorded by the Appellant firm. We find that the revenue after the issue of first show cause notice dt. 16.09.2004 issued five more show cause notice for the subsequent periods by relying upon same investigation but did not conduct any physical test to see as to what is the percentage of production of finished goods. The Hon’ble High Court and Tribunal in number of judgments has held that only on the basis of statements which stands resiled in cross examination and in absence of corroborative evidence the demands cannot be confirmed. In absence of any evidence of diversion of good and any other contrary evidence, credit cannot be denied to the Appellant. In case of alleged shortages we find that Ms Hema Lakhpatwala in her statement dt. 27.05.2004 had explained the shortages found during physical verification and the reconciled stock account were also produced before the adjudicating authority which was not denied by him. Further no evidence of non receipt of such alleged short found inputs or their diversion/ clandestine clearance has been brought on record - the allegation of shortages against Appellant is not sustainable and the demands are not sustainable. In case of seizure of 500 kgs of Coumarin the submission of the Appellant is that the same were cleared mistakenly but duty liability , interest, penalty and confiscation on such clearance is sustainable. Appeal allowed - decided in favor of appellant.
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