Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2018 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (12) TMI 1106 - AT - Central ExciseClandestine manufcature and removal - Zarda - findings are based upon the result of investigations made by DGCEI during the course of search in the appellant’s factory premises, residence as also in the premises of one of the distributor of the appellant - Held that:- It is a fact on record that during the search of the factory premises, no discrepancies were found in the stock of either the raw material or the final product of the appellant. Further the search of the residential premises of the Director resulted in recovery of one invoice of M/s Sanjay & Co. being Invoice No.155 dated 20.08.2011 indicating sale of 2,600 kg of aromatic material. Further, a meager quantity of the final product was also recovered from the distributor’s premises. The Revenue’s entire case is based upon the recovery of the said excess material from the business premises of M/s Shantilal J. Sopariwala, which the appellant have admitted having been cleared without payment of duty either as samples or as replacements for the damaged goods and have already discharged duty of ₹ 34 thousand (approx.) on the same. Whether such recovery of small quantity of appellant’s final product from the business premises of their distributor, lead to allegation of huge quantity of clandestine removal by appellant, thus leading to confirmation of demand to the extent of around ₹ 4.6 crores? - Held that:- It is well established law that allegations of clandestine removal are required to be made on the production of sufficient and positive evidences, thus leading confidence to the Revenue’s stand. Even for applying the theory of preponderance of proportionality there has to be evidences on record so as to inspire confidence in the Revenue’s theory of clandestine removal. The said findings cannot be arrived at on the basis of assumptions & presumptions. However, merely because some excess quantity of final product was recovered from the appellant’s distributor premises will not lead to the inevitable conclusion of removal of 1,39,307.14 Kg of the appellants final product zarda in a clandestine manner - Even, as per the settled law, the goods found in the open market are to be considered as duty paid unless there is sufficient evidences to prove to the contrary. Revenue has not referred to any evidence to show that the said goods were cleared in a clandestine manner. However, as the appellant has not contested duty involved in the said excesses, the same is upheld. There is virtually no evidence of the identification of the buyers to whom the said goods have been sold. Further the Revenue has not made any efforts to identify the transporters through whom the said goods were cleared. The value of such clandestinely cleared goods is huge and their needs to be some evidences of receipt of consideration of the same from the buyers. There is nothing on the record to reflect upon the receipt of any consideration. The clandestine removal findings cannot be solely based upon either the statements or recovery of documents issued by third party and there has to be clinching evidences on record to establish such removals. No doubt that such evidences cannot be expected to be upto last degree but the same should be in the nature of evidence so as to inspire confidence in the Revenue’s allegations and to tilt the weight of the evidences in favour of the Revenue. In the present case, having already observed that the invoice of M/s Sanjay & Co. showing doubtful removal of one of the raw material cannot be held to be a sufficient evidence so as to inevitably lead to the findings of clandestine removal in the absence of any other evidences corroborating the above stand of the Revenue, the impugned order is unsustainable. Appeal allowed - decided in favor of appellant.
|