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2016 (10) TMI 567 - CESTAT KOLKATAClandestine removal of excisable goods - demand of duty with interest - imposition of penalty - whether appellants are indulged in clandestine manufacture and clearance of Iron and Steel finished goods falling under Chapter-75 of the Central Excise Tariff Act, 1985? - A daily performance report of H R Strips prepared by the Quality Control in charge of GSCL - Held that: - clandestine removal is a serious charge and cannot be held on the basis of presumption, assumption and surmises. It is observed that daily performance report recovered from the factory premises of GSCL only indicate the quantities tested by the Quality Control In-charge of the appellant and does not convey the daily manufacturing quantity of GSCL. Statement of Shri Pradip Chatterjee dated 07.03.2006 also indicate that this report is not maintained regularly. There is no correlation brought out by the Adjudicating authority that the quantities mentioned in this report are not reflected in the statutory records of Appellant GSCL. Appellant also requested for the cross examination of Shri Pradip Chatterjee but the same has not been entertained by the Adjudicating authority. It is now a well accepted legal proposition that by virtue of Section 9D of the Central Excise Act, 1944 cross examination of the relied upon witness has to be extended when the same is sought for by the aggrieved party. If for any reasons the request cannot be entertained then the same has to be rejected and informed to the concerned party separately for redressal if he intends to appeal against such rejection. In the absence of cross examination of the concerned witness the evidentiary value of that statement is lost. Alleged shortage of finished goods as per a joint stock taking held on 07.09.2005 - Held that: - When on the date of stock taking itself appellant was reluctant to sign the stock taking made by the department and the authorized representatives then it cannot be said that GSCL has extended any concessions to the department in stock taking in whatever manner they want. Stock was required to be verified on actual weighment basis as per relied upon case laws and not on the basis adopted by the department while calculating shortages in stock of the appellant. Charge of the department regarding clandestine removal and demand on this ground is not sustainable and is required to be rejected. Weighment slips of the Golden Weighbridge under the control of appellant GSCL - Held that: - The statements of relied upon witnesses are the only evidences on record as they are only authenticating the documents recovered from the factory/official premises of the appellants. There is no evidence of extra raw materials purchased/procured by the appellant GSCL and extra power consumption. During Stock taking no excess/shortage in raw materials were found. Appellant GSCL and his employees did not admit to clandestine removal. No doubt the investigation conducted do suggest a strong suspicion about clandestine activities but a suspicion howsoever grave cannot take the place of proof of clandestine clearance like seizure of clandestinely removed goods, seizure of cash admitted by the concerned persons to be sale proceeds of the illicitly removed goods, excess procurement of raw materials, excess power utilization, confirmation by some of the transporters and recipients to indicate that such clandestined cleared goods have been transported/received by them - clandestine removal of goods cannot be proved. Imposition of penalties - Held that: - once on merit case is decided in favour of the appellants then penalties cannot be imposed upon them under various provisions of the Central Excise Act, 1944 and the rules made thereunder. Appeal allowed - decided in favor of appellant.
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