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2018 (4) TMI 106 - AT - Central ExciseClandestine removal - Revenue entertained a view that the manufacturing units engaged in the manufacture of Footwear Soles were clearing their final product in a clandestine manner - the entire case of the Revenue is based upon the print outs taken from the Pen drives seized and recovered from the premises of one M/S. BES Traders Agara. Held that: - Admittedly the factories of TFEPL and RCI were also visited by the central excise officers on the same very day and searches were conducted. No discrepancy either in the stock of the raw material/inputs/packing goods or in the final product was detected by the visiting officers. The entire case of the Revenue is based upon the prints outs seized from the premises ofM/s.BES, which is a third party premises - It is well settled law that the documents recovered from the premises of the third parties are required to be dealt with, with a caution and requires further corroboration in the shape of the evidences directly related to the manufacturing units in question. The pen drives recovered from the premises of an independent trader cannot be held to be proper evidence for arriving at the findings of clandestine removal Revenue has not made any efforts to establish the factum of clandestine manufacture of the goods by the appellants. No investigations stand made by the Revenue as regards procurement of the huge raw material, as also the packaging material and their actual manufacture in the appellant's factory. Statement of neither of their employees or production manager stand recorded. Apart from the fact that the Revenue has failed to establish the allegation of clandestine removal, it is also noted that the appellant have produced on record the Chartered Accountant certificate submitting that the production capacity of both the factories was incapable of producing such huge quantum of excisable goods as alleged by the Revenue. It is well settled law that the onus to prove clandestine activities is on the Revenue and is required to be discharged by producing positive, cogent and justifiable evidences - In the present case, no such evidence being available, the findings of clandestine removal cannot be upheld against the two manufacturing units. Penalty on Directors - Held that: - having held that the clandestine removal findings are unsustainable, penalties imposed on the Directors are also set aside. Appeal allowed - decided in favor of appellant.
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