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2018 (5) TMI 1054 - AT - Central ExciseClandestine manufacture and removal - Cigarettes - the allegation of the Department is that unaccounted cut tobacco (raw material) was purchased from M/s Deccan Tobacco Processors Ltd. (DTPL), Hyderabad, which was used by M/s Kanpur Cigarettes Ltd. (KCL) to manufacture cigarettes which were clandestinely removed without payment of excise duty - penalty - Held that: - the allegation of clandestine removal of cigarettes from the factory is not sustainable as the cigarettes were manufactured by undertaking, a process involving raw material of different types i.e CTP, cut tobacco etc. procurement of which are fully controlled under the supervision of the Excise Officers who maintains the XT- 1 diary. Further, the clandestine manufacture/removal of the goods requires use of extra machinery, extra consumption of power, employment of extra labour and transporter and/or buyer will also have to be identified. The supply of the extra raw- material will also have to be established to prove the clandestine removal of the cigarettes. But, in the instant case, it appears that the Department has not collected corroborative evidence to substantiate their claim of clandestine removal of cigarettes. Neither any incriminating material was found from franchisee factory at the time of search nor any statement even of single worker of the factory was recorded to prove allegation of clandestine removal. For clandestine removal, which is a serious charge, the strict evidence is required like supply of the raw-material, consumption of extra-electricity, transportation of the confiscated goods and sale of the finished goods. Unfortunately, no evidence has been collected by the Department pertaining to these aspects. Penalty u/r 209A of CER on various persons - Held that: - When there is no clandestine removal, then no penalty can be imposed under Rule 209A. It may also be mentioned that the show cause notice was issued on 30.09.1995 and the impugned adjudication order was passed on 06.03.2014, almost after 19 years. It is the allegation of the assessee-Appellants that no relied upon documents (RUDs) or cross-examination were provided - Held that: - No useful purpose will be served after the lapse of more than two decades to ask the authorities to re-examine the issues especially when the matter was remanded earlier. Appeal allowed - decided in favor of appellant-assessee.
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