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2018 (10) TMI 1152 - AT - Central ExciseClandestine production and removal - no corroborative evidences - case of appellant is that demand raised on the basis of the discrepancies noticed between the private records and the daily stock Register - whether they have been rightly fastened with duty of ₹ 1,09,39,523/- along with equal amount of penalty for alleged suppression of production and clandestine clearance of the finished goods? - penalties on directors. Held that:- As per Panchanama, during search, on physical verification of goods by the officers of central excise, no excess or shortage of either finished goods or raw materials were found. Further, on some of the occasions the production of sponge iron is more recorded in daily stock account (RG-1) as compared to the private records, relied upon by the department. This raises serious doubt about the actual production of sponge iron mentioned in private record - the private record does not show actual figure of production. With respect to demand of ₹ 85,77,991/- - Held that:- There is neither allegation nor evidence of removal of goods, without payment of duty. It is well settled law that duty of excise is to be paid at the time of removal of goods as held by the Hon’ble High Court of Gujarat in the case of Asstt. ACIT Vs. Narmada Chematurpetrochem Ltd., [2010 (8) TMI 263 - GUJARAT HIGH COURT], wherein it was held that mere production or manufacturing of goods by itself is not sufficient to demand duty of excise. The Hon’ble Court has held that liability to pay excise duty arise only when both events namely manufacturing of excisable goods and removal of such goods, takes place. With respect to demand of ₹ 23,61,452/- - Held that:- There is no corroborative evidence relied upon by the department. Despite the name of the customers, truck no. & other details mentioned in the private records, no attempt has been made to investigate the matter at the end of the buyers, transporters, etc. In the present case, there is no evidence of excess purchase of raw material, transportation thereof, sale of finished goods, realization of sale proceeds, excess power consumption, transportation of finished goods - during search no goods were found in excess or short - Hon’ble High Court of Patna in the case of CCE Vs Brims Products [2008 (9) TMI 603 - PATNA HIGH COURT] relied upon, where the Hon’ble High Court held that assumptions and presumptions cannot take place of positive legal evidence which is required for proving the charge. The allegation of clandestine manufacture and removal are vague and liable to be set aside - appeal allowed - decided in favor of appellant.
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