TMI Blog2003 (12) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... and further imposed penalty of Rs. 3,00,000/- on firm appellant No. 2 and also of this much amount on Bishan Sharma the appellant No. 3, partner of the firm appellant No. 1 and Lalit Sharma, partner of the firm appellant No. 2, as detailed therein. 2. The duty has been confirmed on the firm appellant No. 1 M/s. Jangra Engineering Works (in short JEW) for having manufactured and cleared the excisable goods (fire extinguishers) during the period 1-4-96 to 5-5-98 under the invoices of the firm appellant No. 2 M/s. Lalit Engineering Works (in short LEW) at their premises No. 4/1, New Rohtak Road, New Delhi, without payment of duty on those goods and availed the benefit of SSI exemption notification No. 1/93 illegally. The penalty of the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the year 1992 and is manufacturing the goods since then and supplying the same to the Ministry of Defence. According to the Counsel, the impugned order deserves to be set aside being based on conjuctures and assumptions without corroboration from the reliable evidence. 4. On the other hand, the learned SDR has reiterated the correctness of the impugned order and maintained that facts and circumstances, detailed above, had been rightly relied upon by the adjudicating authority for saddling all the appellants with duty and penalty respectively, as detailed therein. 5. We have heard both sides and gone through the record. 6. We find from the record that the firm JEW came into existence in the year 1965, while the other firm LEW in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the land was sealed by the SDM, as is clear from the copy of the letter dated 7-8-1997 sent by BDO, to appellant No. 4 partner of the firm LEW. But from this fact, no presumption that the firm LEW stopped their manufacturing unit especially when they had alleged that their manufacturing work continued in the open area adjoining godown. They had been manufacturing and supplying the goods to the Ministry of Defence without any interruption. The fact that raw material used to be received by them at their office on the first floor of premises No. 4/1, New Rohtak Road, New Delhi and had been also clearing the goods to the Ministry of Defence from that office, did not lead to an irresistable conclusion that not they but the firm JEW located o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts from that address, could not be made basis for saddling the firm JEW with the duty liability, by raising presumption that the said raw material was in fact received by the firm JEW and the goods were also manufactured out of that raw material by that firm for supply to the Ministry of Defence, as has been done by the adjudicating authority. None of the inspection notes, as referred in the impugned order, which were supplied by the Ministry of Defence to the department, indicated that the inspection of the goods supplied by the firm LEW during the period in question, was done at the factory premises not of that firm, but at the premises of firm JEW. Mere inability of the partner of the firm LEW to explain how the raw material was transpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m LEW was also used by the firm JEW on their products supplied to the Ministry of Defence and as such, it could be presumed that the supply of the goods was made by them to the Ministry on behalf of that firm after manufacturing the same in their factory, in order to evade payment of duty on the belief that they will be otherwise crossing the SSI exemption limitation, cannot be accepted for the simple reason that SSI exemption benefit had not been denied to the firm JEW for having used the brand name of another person. Even in the present show cause notice, the duty demand has not been raised on that account. Rather, it has been raised solely on the ground that they in fact manufactured the goods and supplied the same to the Ministry of Def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods were actually manufactured by the firm JEW but were supplied under the invoices of LEW. 11. There is no evidence on record to prove that the firm LEW was a dummy firm flouted by the firm JEW and there was any flow back of money from one firm to another. The central excise registration of the firm LEW had never been revoked at any time during the period in dispute for having become non-existent. 12. It is well settled that conjuctures and surmises cannot take place of legal proof. The allegations of clandestine manufacture and removal of the goods have to be established by the department by cogent and convincing evidence. The duty demand on such allegations cannot be based on assumptions and presumptions drawn from stray facts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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