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2018 (11) TMI 912 - AT - Central ExciseClandestine removal - whether huge duty demand can be confirmed merely on the basis of information provided by the Railways and as to whether the duty demand can be confirmed without examining and relying on the original copies of the RRs? - demand also on the basis of the charts relied upon by the Revenue which has been stated to be prepared on the basis of the records seized from the transporters. Held that:- The allegation of clandestine removal of finished goods is a very serious charge and required to be proved with independent, corroborative, tangible and affirmative evidence. In all these appeals, it has been presumed by the department that all the six manufactures had received unaccounted quantity of Iron Ore through Railway Sliding at Uslapur. The Sr. Divisional Commercial Manager of South East Central Railway vide his covering letter dated 5-03-2008 had given a list of 156 consignments, which has been made relied upon Documents as evident from the SCN and paper book submitted by the Appellant. In the case of M/s. SPIPL the said chart appears to have been prepared by the Revenue itself. And not by the Railway Authority. In absence of original RRs the Revenue cannot allege it could not be as to which of the Appellants had actually lifted the Iron Ore. It was, therefore, absolutely necessary that the department should have obtained original copies of RRs and examined the same to arrive at a definite conclusion regarding the party which actually lifted the Iron Ore from the endorsements carried out in the said RRs and should have examined as to whether a particular manufacturer/ Appellants had entered the said quantity in their statutory records or not. Further, no reliance can be placed on the said chart as in respect of 98 RRs out of total 156 RRs, there is no entry under the column “endorsement” as this column has been left blank. Regarding the allegation and finding about the receipt of unaccounted quantity of Iron Ore on the basis of records of M/s. Gyan Singh, no basis whatsoever has been given in the show cause notice. It has merely been alleged that certain entries as shown in the chart were regarding receipt of Iron Ore by the respective parties on the basis of records seized from M/s. Gyan Singh and not accounted for in the statutory records. It has already been noted hereinabove that records of M/s. Gyan Singh have not been relied upon in the show cause notice. The records of the transportation is sufficient enough to fasten the appellant with the aforestated demands, unless corroborated with the other evidence, which Revenue has not been successful in doing so. There are plethora of judgments wherein it has been held that duty cannot be demanded on theoretical calculation. It has been held that in order to prove clandestine removal the department has to bring on record independent and corroborative evidence - the cases of clandestine removal cannot be made out merely on the basis of receipt of one raw material when in order to manufacture final product several other raw materials are also required. Demand of ₹ 16,89,789/- from M/s. PIPL on a quantity of 1367.62 MT of Sponge Iron. It has been contended by the learned Counsel that the said demand is based upon certain private records. They had requested for the cross-examination of Shri Shailendra Kumar Thawait, Manger (Accounts), M/s. Phil Ispat P. Ltd. Bilaspur, Shri P.S. Rao, General Manager (Plant), M/s. Phil Ispat P. Ltd., Bilaspur, Shri Amit Patel, Laboratory Assistant, M/s. Phil Ispat P. Ltd., Bilaspur, Shri Niveet Mittal, Ex-Director, M/s. Phil Ispat P. Ltd., Bilaspur, Shri Pradeep Jha, Ex-Director M/s. Phil Ispat P. Ltd., Bilaspur, and Shri Manoj Sharma, General Manager (Commercial), M/s. Phil Ispat P. Ltd. - It is noted that there is no independent finding by the Adjudicating Authority on this part of the duty demand - the matter requires to be remanded back to the Adjudicating Authority. Clandestine removal - sponge iron - Held that:- Since in these appeals there is no evidence of clearance of finished goods duty demand on the Sponge Iron cannot be sustained. Appeal disposed off.
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