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2020 (1) TMI 479 - AT - Central ExciseClandestine removal - undervaluation of Silico Manganese - charges merely on the basis of entries in private diary without other corroborative evidence of flow back of fund etc. - HELD THAT:- The Ld. Commissioner in the Impugned Order clearly held that there is no evidence available on record to substantiate charges of undervaluation in respect of duty demand of ₹ 2,34,62,483/-. In absence of evidence of flow back of funds over and above the invoice price, which are missing in the instant case, the charge of undervaluation cannot be sustained. There is no material on record to prove that the material supplied by the assessee were not of inferior quality but were prime material. The Department failed to cull out evidence in investigation with the buyers in support of the charge as none of the buyers have accepted payment of any amount over and above the invoice price nor receipt of prime quality materials in the guise of inferior quality material. Further, the entries found in the private diaries were only for the period Jan’ 2001 to Sep’ 2001 i.e. eight months - On facts as stated and under the circumstances, there are no hesitation to hold that the order of the Ld. Commissioner is in accordance with law and is upheld and hence the Department Appeal is devoid of any merits. In the case of Good Kare Medico Pvt. Ltd. Vs. CCE [2018 (10) TMI 1199 - CESTAT ALLAHABAD], it is held that order based on rough entries made in two sheets recovered from Director’s residence in his own handwriting, when there is no other corroborative evidence, hence merely on the basis of such rough entries without corroborative evidence, clandestine activities cannot be alleged. Since in the instant case the duty demand of ₹ 13,36,476/- is upheld by Ld. Commissioner merely on the basis of entries in the private diary maintained by the Managing Director who never confessed the guilt and whose statement is not tested in accordance with Section 9D of the Central Excise Act, 1944. The Appeal filed by Sri Hari Krishna Budhia, Managing Director and Sri A.D. Singh, Authorised Signatory challenging imposition of penalty under Rule 209A of the Central Excise Rules, 1944/ Rule 26 of Central Excise Rules, 2001 are allowed and the penalty is set aside - Appeal allowed in part.
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