TMI Blog1994 (6) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... e first appellant, are engaged in manufacturing cement at village Bharja Distt. Sirohi (Rajasthan). On receipt of information that the first appellant in collusion with M/s. Ambika Goods (Transport) Co., Saroopganj (Raj.) (the seventh appellant) were engaged in clandestine removal of cement, certain investigations were carried out on the basis of the investigations which resulted in recovery of incriminating documents, it was alleged that M/s. Ambika Goods Transport Co. used to issue separate set of bilties in a manner as to cover tranpsport of non-duty paid cement. Two bilties for instance were issued, one conforming to the Central Excise gate-passes evidencing payment of duty, and another covering transport of non-duty paid cement. M/s. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Excise, Jaipur confirmed the duty to the tune of Rs. 6,99,251.92 and imposed penalty of Rs. 1,25,000/- on the first appellant. Penalty of Rs. 2,000/- was also imposed under Rule 226 of the Central Excise Rules, 1944 on the first appellant and penalties of Rs. 10,000/- on each of the other appellants were imposed. 3. Learned Advocate Shri Kantawala on behalf of the first appellant submitted before us that case has been based merely on assumptions and inferences. The Department has relied upon certain documents issued by third party. Statutory accounts maintained by the appellants do not indicate any clandestine removal. The excess raw material shown in the private accounts was not put to use as it was found defective. Many of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party. No case, according to him, can be made merely on the basis of assumptions and inferences. In any case show cause notice cannot go beyond demanding duty on 3901.196 MT of cement. The advocate cited following cases in support of his arguments : (1) Oudh Sugar Mills v. UOI - reported in 1978 (2) E.L.T. (J 172) (SC) (2) M/s. Ebenezer Rubbers Ltd. v. Collector of Central Excise - reported in 1986 (26) E.L.T. 997 (Tri.) = 1987 (10) E.C.R. 407 4. It was urged by the learned SDR Shri K.N. Gupta that there is irrefutable evidence in the form of seized bilties and the categorical statement of the second appellant. As to know modus operandi involved in clandestine removal of cement, two sets of bilties seized and the statement given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : excess raw materials not accounted was used in manufacturing cement which was removed without payment of duty and the transport of such cement was covered by double set of bilties. In regard to appellants, other than first and seventh appellant, SDR submitted that subsequent retraction from the statement has no value but he conceded that he is not strongly pressing the case against these appellants who were in any case not concerned in producing and removing from the factory non-duty paid cement. 5. We have given careful consideration to the submissions made by both the sides. It is admitted position that private raw materials accounts maintained by the first appellant indicate quantity much in excess of that recorded in statutory accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue in establishing clandestine removal. The statutory accounts themselves coupled with excess and shortages point to clandestine removal particularly in the context of the fact that such discrepancies have not been fully established. There is no error therefore, in the findings of the Collector in regard to non-duty paid cement 3901.196 MT derived from raw material accounts. 5.1. Collector in his order, however, has observed that raw material received pertained to period November, 1986 to March, 1987 and quantity of cement held to have been removed on the basis of bilties and other documents recovered from the second appellant pertained to period November, 1985 to September, 1987. Collector has therefore, deducted the quantity ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents for another period and depend on another set of documents merely because that set is more beneficial particularly when there is no corroborative evidence to support during that period. We therefore, hold that duty can be demanded only on 3901.196 MT of cement. 5.3. In regard to appellants other than first and seventh, we find that there is no direct evidence to attract Rule 229(A) and we are, therefore, not inclined to uphold penalties on them. Accordingly we pass the following order :- 1. Duty demand on 3901.196 MT cement only is confirmed. 2. Penalty on M/s. Shree Nath Cement Industries is reduced to Rs. 65,000/- and penalty of Rs. 2,000/- under Rule 226 is set aside. 3. Penalty on M/s. Ambica Goods Transport Company is reduc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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