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2019 (3) TMI 547 - AT - Central ExciseClandestine removal - Gutkha - 35 rolls of packaging material was found near the main gate of the factory premises, not entered in the records - shortages in stock - Held that:- ‘Gomti’ brand Gutkha was owned by M/s.HMC which is a proprietory unit of one Shri Rajesh Kr.Gupta. The said owner of the brand name was getting the goods manufactured from Shimla Food and Flavours as also from Shimla Chemicals and was buying their entire production himself. He was further selling the goods to various customers either directly from their premises, in which case the customers were booking the goods through the transporters on their own or the said goods were being booked by M/s.HMC through M/s.Lucknow Tulsipur Forwarding Agency for which various GRs/Challans were being issued by the said agency - the goods being transported through the said agency were Gutkha and not Zarda, which was being written in the GRs/invoices - also, such bookings at the Transport Agency were being done by M/s HMC and not by SC or SFF. As such, even if the statement of Shri Indra Bahadhur Singh is accepted to be true, the same would relate to M/s HMC, who was not the manufacturer of Gutka and can no way reflect upon the clearances from SC or SFF. The Revenue has further relied upon the statements of some of the buyers and the discrepancy of the stock at their premises found as a result of searches. However, as we have earlier observed that the entire production manufactured by the appellant was being sold by them to M/s.HMC who was doing trading in various products including the tobacco and Zarda. Though it is well settled law that the statements of the third parties cannot be made the basis for arriving at the conclusion of clandestine removal, without corroborative evidence, but even if presuming that the said statements were correct, it is the HMC who has sold the goods in cash to the buyers - The Revenue is expected to produce evidences showing the manufacture of goods by SC and SFF and its further clearances to HMC in a clandestine manner. The entire case of the Revenue is based on uncorroborated, untested, unexamined and in some case retracted statement which do not inspire confidence in the same. As such the said statements have to be kept out of consideration and cannot be considered to be relevant evidence. If the same are ignored nothing remains as evident to substantiate the Revenue’s allegation of clandestine removal. There is virtually no evidence on record to show that the two manufacturing units M/s Shimla Chemicals & M/s SFF were clearing their goods in a clandestine manner. As already observed the entire case of the Revenue is based upon the statement and if the same are not taken into consideration no other evidence is available on record. The evidence produced by the Revenue do not establish their case even on the principle of preponderance of probability. Demand set aside - appeal allowed - decided in favor of appellant.
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