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2019 (8) TMI 1022 - AT - Central ExciseSearch and Seizure - Clandestine removal - admissible evidence in according to the provisions of Section 36(B) of the Central Excise Act,1944 - cross-examination of witnesses - HELD THAT:- It is evident from the panchnama dated 07.08.2012 that the shortage was detected on the basis of eye estimation and also on average weight without physical weighment. The department failed to gather any of documents from the factory of the appellant and also from the residential premises of the Director of the appellant. Further the loose documents which were recovered from the car of the accountant were not put to test for ascertaining to the authorship of these documents. Moreover, these documents could not be corrected with the corroborative evidence. The investigating authority failed to elucidate the system adopted for the preparation of the relied upon documents which were allegedly based on these documents. The details contained on the loose sheets and third party documents are actually not comprehensible and, therefore, cannot be accepted as admissible piece of evidence. Moreover, the Panchnama proceedings have been challenged on the ground of that the Panch-witnesses were not present at the time of the resumption of the evidence. Also, during the cross-examination the Accountant has categorically stated that he has already retracted his earlier statements and he has never stated that the said document pertains to production and clandestine removal of the goods from the appellant factory. The learned Commissioner not only denied the cross- examination of officers who has conducted the raid, but also of other persons whose cross-examination was sought by the appellant. We have also seen that the contents of cross-examination were not at all considered by the learned Commissioner while adjudicating the case. We have also seen from the record that the statements were relied upon by the adjudicating authority without conducting examination in chief of the matter which is the basic requirement of provision of Section 9D. The charges of clandestine removal of the goods cannot be upheld merely on assumptions and presumptions, but has to be proved with positive evidence such as purchase of excess raw materials, consumption of excess electricity, employment of extra labour, seizure of cash, transportation of clandestinely removed goods etc. It has also been held that onus of proof of bringing clinching evidence is on the Revenue. It has been held that the clandestine manufacturing and removal of excisable goods is to be proved by tangible, direct affirmative and incontrovertible evidence relating to receipts of raw materials inside the factory premises, and non-accountal thereof in the statutory records, utilization of such raw materials for clandestinely manufacture of finished goods. manufactured of finished goods with reference to installed capacity, consumption of electricity, labour employed and payment made to them, amount received by the consignees, statement of the consignees, receipts of sale proceeds by the consignor and its disposal - All these material evidence are missing in the present case and the evidences brought into the record by the department are incomplete, inconsistent and not a reliable piece of evidence to prove charges of clandestine removal. The shortage which was detected by the officers is the on average weight method basis and, therefore, mere admission by the directors, who deposited the duty for the shortage, is not enough to proof that the goods were clandestinely cleared from the appellant factory. Thus, the shortage was detected on average basis is not sustainable. No material evidence except few statements was brought on record to prove the charges against them. Most of the raw material supplier have enclosed their invoices on the basis of which the goods were cleared by them to the appellant after payment of Central Excise duty. Appeal allowed - decided in favor of appellant.
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