TMI Blog1999 (7) TMI 264X X X X Extracts X X X X X X X X Extracts X X X X ..... stock and that the appellants had on the previous day cancelled an invoice being Invoice No. 143, dated 28-3-1995 for the supply of 2000 litres to M/s. Growel Chromatex Pvt. Ltd., Noida. The impugned order has held that the goods covered by Invoice No. 143 were, in fact, sent to the buyer, the buyer and the appellant are group companies located in the same neighbourhood and the appellants explanation regarding cancellation of the invoice was not genuine and the goods had, in fact, been clandestinely removed. 2. As against the aforesaid allegation and finding, the explanation of the appellant all through was that they had prepared invoice No. 143 proposing to clear 200 litres, but on checking the balance in the PLA and RG 23A, they found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey have, therefore, submitted that the finding that the explanation was not genuine cannot stand in these facts and circumstances. Shri Sharma also submitted that finding regarding shortage on stock taking is the result of gross misunderstanding of the method of accounting. The appellants were treating the goods as manufactured once the manufacturing process is completed in the reactor and the goods are thereafter stored in filteration tanks. Manufacture is completed in the reactor itself and, therefore, the method of production accounting adopted by the appellants is correct. The goods in question were available in the filteration tanks. The finding is on the basis that manufacture is not completed unless chemical is filtered and particle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.C.) and Kanungo Co. v. Collector of Customs, Calcutta and Others, 1983 (13) E.L.T. 1486 (SC). 5. In his reply, learned Consultant Shri J.M. Sharma submitted that the pronouncements of the Supreme Court in the case of D. Bhoormull and Kanungo Co. are not at all appropriate or applicable to the present case, as they were made with reference to smuggling of goods. In the instant case, no evidence at all has been adduced by the Revenue to support an allegation of clandestine removal. He referred to the decision of the CEGAT in the case of K. Harinath Gupta v. Collector of Central Excise, Hyderabad, 1994 (71) E.L.T. 980 (Tribunal) wherein the Tribunal held that clandestine removal is to be proved by the department and that entries in all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned in invoice No. 143 had been cleared to the consignee mentioned in the invoice. Finding of clandestine removal has been rendered mostly on account of the circumstances that the appellants and their consignees are group companies, that they are located close by and that an invoice could be cancelled within a short time after its issue once the goods have reached the destination and that the appellants should have entered manufacture only after filteration and settling of the goods. These circumstances in themselves cannot establish a case of clandestine production and removal. It has been pointed out with the help of several judgments that more positive evidence is required to sustain a charge of clandestine production and removal. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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