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2018 (2) TMI 1557 - AT - Central ExciseClandestine manufacture and removal - shortage of raw material and finished goods - allegation on the basis of entries made in the records maintained by M/s. Amit Steels - whether charges of clandestine clearance can be upheld based upon the said unverified statement of Shri Narendra Agarwal? Held that: - Admittedly, his cross examination has not been done and the appellant has not been able to verify the correctness of the same. The name of the company as reflected in the records of M/s. Amit Steels was ‘Shree Balaji Maharaj’ and not the present appellant. It is only the basis of said statement of Shri Narendra Agarwal that the Revenue has proceeded against the appellant. It is well settled law that allegation of clandestine removal are required to be discharged by the Revenue by producing sufficient, positive and cogent evidence. There is nothing in the present impugned order of the lower authorities indicating any procurement of excess raw material, conversion of the same into final product and clearance of the same without payment of duty. The statement of the transporter recorded by the officers has also not given any details of the clearances made from the assessee factory except to state in a wide manner that he was engaged in transportation of goods. No customers have been identified and there is no evidence of payment of any consideration for such clearances. Hon’ble Allahabad High Court in the case of CCE vs Meenakshi Castings [2011 (8) TMI 896 - ALLAHABAD HIGH COURT] has held that shortages of finished stock, without evidence of clandestine removal could not lead to inference of evasion of duty, and no penalty is imposable. Appeal allowed - decided in favor of appellant.
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