TMI Blog2015 (1) TMI 941X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be proved beyond doubt. It has been held by Courts and the Tribunal that suspicion however strong cannot be a substitute for evidence. Department has not adduced any corroborative evidence to support the charge of clandestine manufacture and removal of goods. The Adjudicating authority has drawn inferences from the recovery of the slips without any independent material that since the slips had been recovered from the factory premises, these relate to cement bags only. The presumption made by the learned Commissioner is not supported by any independent material on record. It has been mentioned in the impugned Order that the sheets were signed by workers of the factory. However, there is no statement of any workers on record to establish the said fact. - Adjudicating authority has himself mentioned in the impugned Order that there are references of truck nos. in the sheets and the investigation with respect to the truck owners/drivers would have been relevant. It is felt that as the investigation has not been conducted from the truck owners/drivers, the said sheets do not establish conclusively that the Appellants had manufactured and removed alleged bags of cement clandest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty of ₹ 2,50,000/- was imposed on Shri S.P. Agrawal, Director of Appellant No.1 and a penalty of ₹ 50,000/- was imposed on Shri B.P. Agrawal, Partner of the Appellant No.2 under Rule 209A of the erstwhile Central Excise Rules, 1944. 2. Since all the four appeals arise out of a Common Adjudication Order, all the appeals are taken simultaneously for the decision. 3. Facts are recapitulated to appreciate the issued. The Central excise Officers Division, Aligarh visited the factory premises of Appellants No.1 and 2 on 21.03.1997 and detained 1210 bags of cement as the same were not accounted for in RG-1 Registers, along with empty bags. The detained bags were finally seized on 22.05.1997. The Central Excise officers had also resumed certain records which included loose papers also. The demand of duty ₹ 1,89,280/- has been confirmed on the basis of some of the loose papers and the duty ₹ 19,77,133/- has been confirmed on the basis of the meter reading of DG sets installed in the factory premises as shown in loose papers. 4. The learned Advocate Shri Bipin Garg submitted that there was no evidence of clandestine clearance of goods by both the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o why the Department did not interrogate these persons so that the case of the Department would have become stronger. The Tribunal has held in CCE Vs Supreme Fire Works Factory, 2004 (163) ELT 510 that mere suspicious cannot take the place of proof and evidence of purchase of raw material, sale of finished goods clandestinely was necessary. The demand of duty was not upheld in absence of corroborative evidence. 6. He has also relied upon the decision in CCE Vs Sangmitra Cotton Mills Ltd., 2004 (163) ELT 472 wherein the Tribunal has held that Private Note Book and file entries in Note Book or details containing in file are not sufficient to prove charge of clandestine manufacture and clearance for want of evidence of use of inputs. The learned Advocate also referred to decision in D.P. Industries Vs CCE, 2007 (218) ELT 242 (T-Del) wherein the Tribunal has held that the suspicion, however strong, cannot take the place of evidence and the clandestine clearance has to be established beyond reasonable doubt. 7. The learned Advocate further submitted that the demand based on meter reading of DG sets installed has been confirmed on the basis of RUD H-2 to H-33 and demand has been wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... labour employed and payment made to them, packing material used, records of security officers, discrepancy in the stock of raw materials and final products; (iv) Clandestine removal of goods with reference to entry of vehicle/truck in the factory premises, loading of goods therein, security gate records, transporters documents, such as L.Rs, statements of lorry drivers, entries at different check posts, forms of the Commercial Tax Department and the receipt by the consignees; (v) Amount received from the consignees, statement of the consignees, receipts of sale proceeds by the consignor and its disposal. He insisted that no such evidences to the above effect have been brought on record. 9. The learned Advocate also submitted that 369 bags in Appellant 1 s factory could not be entered in RG-1 due to absence of dealing clerk for two days. Further 841 bags| found at the premises of M/s Portland Chemicals were the trial production since 17.03.1997 and therefore, question of entering the same in RG-1 did not arise. Further the empty 1962 bags could not be confiscated under Rule 173Q(d) of the erstwhile Central Excise Rules, 1944 on the presumption that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officers. The suspicion, however, strong cannot take the place of evidence. There are several decisions of the Tribunal holding that clandestine clearance has to be established beyond reasonable doubt and not on the basis of preponderance of probability. Merely on the basis of private E records, clandestine clearance cannot be upheld. There should be sufficient corroborative evidences. 13. In the present matter, I observe that the department has not adduced any corroborative evidence to support the charge of clandestine manufacture and removal of goods. The Adjudicating authority has drawn inferences from the recovery of the slips without any independent material that since the slips had been recovered from the factory premises, these relate to cement bags only. The presumption made by the learned Commissioner is not supported by any independent material on record. It has been mentioned in the impugned Order that the sheets were signed by workers of the factory. However, there is no statement of any workers on record to establish the said fact. 14. The Adjudicating authority has himself mentioned in the impugned Order that there are references of truck nos. in the sheets and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er there is no material brought on record to establish the suppliers of raw materials, its transportation to the factory of the Appellants, sale of unaccounted bags of cement to the buyers and receipt of sale proceeds etc. For want of such evidences relating to these aspects, clandestine removal cannot be sustained merely on the basis of the meter readings of the D.G. sets installed in the factory premises. The decision of the Hon ble Tribunal in the case of R.A. Castings Pvt. Ltd., supra which has been upheld by the Hon ble Allahabad High Court in CCE Vs R.A. Castings Pvt. Ltd. as reported in 2011 (269) ELT 337 (All) which, in turn, has been affirmed by the Hon ble Supreme Court reported in 2011 (269) ELT A108 (S.C.), fully fits into the facts of the case and does not support the departments case. Accordingly I find force in the contention of the appellants that department has not been able to conclusively prove the clandestine manufacture and clearance. Once clandestine manufacture and removal is not conclusively proved, even though there are indications in this regard, no case for demand of duty is made and demand of ₹ 19,77,133/- from M/s Portland Cement (I) Ltd (Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X
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