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2018 (8) TMI 1390 - AT - Central ExciseClandestine removal - shortages of goods - The entire case of the Revenue is based upon the not so confessional statement of Shri Jagdish Prasad - Held that:- Apart from the fact that the statement of Shri Jagdish Prasad was not confessional, we observe that even if the said statement is held to be confessional statement accepting clandestine removals the same cannot be made the sole basis for upholding the allegations of clandestine activity of the appellant. The deponent of the said statement was never put to Examination-in-Chief or cross examination and as such veracity of his statement has never been tested. Otherwise also it is well settled law that clandestine removal allegations cannot be upheld on the basis of the sole statement of one of the employees, unless the same are corroborated by other independent evidences. The Hon’ble Allahabad High Court in the case of Continental Cement Company V/s Union of India [2014 (9) TMI 243 - ALLAHABAD HIGH COURT] has held that clandestine removal is required to be proved by clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, transportation, the mode and flow back of funds. Such charge is a serious charge required to be proved by Revenue by tangible and sufficient evidences and mere statement of some of the buyers given on the basis of their memories are insufficient without support of any documentary evidences. Te Revenue has failed to produce any evidence to establish clandestine removal on the part of the appellant. The Order of Commissioner (Appeals) lacks merits and is accordingly set aside. Shortages of goods - Held that:- It is well settled that mere shortages cannot lead to the allegation of clandestine removal in the absence of any other evidences to reflect upon the fact that such shortages has occurred on account of clandestine clearances - demand set aside - Inasmuch as demand has been set aside, the penalties imposed upon the appellant is also required to be set aside. Appeal allowed - decided in favor of appellant.
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