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2018 (6) TMI 764 - AT - Central ExciseClandestine removal - Hank Yarn - it was alleged that appellant (ETM) had no facility for manufacture of hank yarn during the disputed period - it was also alleged that cleared cone yarn in the guise of hank yarn and thus evaded payment of duty - further allegations are that they did not account the entire production of cone yarn and cleared cone yarn clandestinely without payment of duty - Held that:- Though it is shown that hank yarn is cleared, it is pertinent to note that the quantity of hank yarn in stock noted in the report at the time of last stock taking and current stock taking is nil. This would only prove that stock taking was conducted there was no hank yarn at all. Appellants have merely showed in their accounts that hank yarn was cleared and these figures have been adopted in the report which was endorsed by the officer. The report certifies that it is based on figures in stock register - these document will not support the appellant in any manner, especially when the stock of hank yarn on both dates of stock taking is shown to be ‘nil’. All these evidences leads to the strong inference that appellant company was not manufacturing hank yarn during the period of dispute. Though in RG-1 the appellant accounted production in respect of cone yarn and hank yarn, the diary showed details of production of cone yarn only. Again, there were no packing labels or materials purchased by appellant for packing hank yarn. The purchase of packing materials showed purchase of labels for cone yarn only. The appellants have not been able to counter these evidences, with satisfactory explanation. The evidence unearthed by department being voluminous, it is not possible to detail each and every piece of evidence in this order. From the records, it is found that the strong probability is that appellants have indulged in clandestine clearance of yarn without payment of duty. Department has been able to establish with both documentary and oral evidence that appellant company was not manufacturing or clearing any hank yarn and was clearing cone yarn clandestinely. The appellant has not put forward even slightest evidence to establish that they have not indulged in clandestine removal of cone yarn. Extended period of limitation - penalty u/s 11AC - Held that:- the invocation of extended period is legal and proper - Department has been able to establish case laws a strong case in their favour. We therefore find no grounds to interfere with the duty demand, confiscation or the penalty imposed under 11AC of Central Excise Act, 1944 - Since equal penalty under 11AC is imposed, a further penalty of ₹ 50 Lakhs on the appellant company, each under Rule 25 and Rule 173Q is unwarranted and requires to be set aside. Appeal disposed off.
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