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2019 (4) TMI 1334 - AT - Central ExciseClandestine manufacture and removal - discrepancy of stock - corroborative evidence or not - whether the evidences, other than the retracted oral evidences, are capable of being used as corroborative evidence? - HELD THAT:- In the entire records of proceedings, there is no evidence to indicate that there was clandestine manufacturing. There is no independent tangible evidence on record of any clandestine purchases or receipt of the raw materials required for the manufacturing of the alleged quantity of finished goods for its clandestine removal from the factory. In the entire notice and the order, there is no satisfactory and reliable independent evidence as regards the unaccounted manufacture and/or receipt of the huge quantities of raw materials. The quantities of the alleged bags dispatched from the factory would require some transportation arrangement for delivery from the factory. However, any reliable evidence about any vehicle coming in or going out of the factory without proper entries is not forthcoming. There is also no cogent evidence about any freight payment for any such movement. There is no cogent evidence of disproportionate and unaccounted receipt and consumption of the basic raw materials and packing material, required for manufacturing alleged quantity of unaccounted finished goods - also, unaccounted production in the factory of the appellant-company has not been established. There is no dispute on the fact that in adjudication proceedings, the charge of clandestine removal and undervaluation is definitely to be established on the basis of preponderance of probabilities. However, it cannot be merely on the basis of presumptions and assumptions - Revenue failed to substantiate the findings recorded in the impugned Order regarding production capacity to persuade us to reject the contention of the appellant that there is failure on the part of respondent to collect any evidence in relation to either procurement of raw materials by the appellant or production of huge quantity of final goods alleged as removed clandestinely to sustain the charge of clandestine removal. Once unaccounted production is not established, even otherwise, there can be no clandestine removal thereof. Unaccounted removals have in any case not been established on the basis of the evidence available on record. The ratio laid down by the Hon’ble Apex Court in OUDH SUGAR MILLS LTD. VERSUS UNION OF INDIA [1962 (3) TMI 75 - SUPREME COURT OF INDIA], is clearly applicable in the peculiar facts of the instant case inasmuch as the demand cannot be sustained without any tangible evidence, based only on inferences involving unwarranted assumptions. Appeal allowed - decided in favor of appellant.
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