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2015 (3) TMI 867 - CESTAT AHMEDABAD

2015 (3) TMI 867 - CESTAT AHMEDABAD - 2016 (343) E.L.T. 583 (Tri. - Ahmd.) - Clandestine removal of goods - Shortage of goods found - Charges framed on the basis of statement of appellant no. 2 - Held that:- appellant No.1 had taken stand that Shri Hakim Thanawala is not concerned with the appellant firm. It seen from the show cause notice that Central Excise officers visited the appellant s premises on the basis of intelligence and thereafter how they accepted Shri Hakim Thanawala as Director o .....

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g the statement. It is seen that no statement of any employee of the appellant firm was recorded. The Central Excise officers visited the premises of the appellant firm on 06.3.2007 and show cause notice was issued on 02.6.2009 and no verification was conducted or otherwise. Thus, the demand of duty on the basis of the stock statement and statement of a person, who has no relation with the Appellant firm, can not be sustained. - However, reduced penalty on the 2nd appellant is sustained. - Decid .....

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in the manufacture of Toothpaste, Shampoo and Shaving Cream etc., classifiable under Chapter 33 of the schedule to the Central Excise Tariff Act, 1985. On 6th/ 7th March 2007, the Central Excise officer of HQrs (Preventive) visited the factory premises of the Appellant No.1 and prepared a stock verification report in the presence of two independent panchas and Appellant No.2, claimed as Director of Appellant No.1. It was recorded shortage of finished goods involving Central Excise duty of ͅ .....

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7; 2,50,000/- on the Appellant No.2, as Director of the Appellant No.1, under Rule 26 of the Central Excise Rules, 2002. It has also confiscated the goods removed clandestinely and imposed Redemption Fine of ₹ 50,000/- on the Appellant No.1. The Commissioner (Appeals) modified the adjudication order to the extent the redemption fine was set-aside. 4. Learned Advocate for the appellants submits that there was no shortage of finished goods and no stock verification was conducted. He submits .....

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tatement was recorded of the partner and the employees of the appellant firm. He drew attention to the relevant portion of the Panchnama, partnership deed and reply to the show cause notice. 5. On the other hand, the learned Authorised Representative for the Revenue reiterated the findings of the Commissioner (Appeals). He submits that the stock verification was conducted on 07th March 2007 in the presence of the production Incharge of the appellant firm and Appellant No.2 who claimed as Directo .....

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Excise authorities being registration No. AADFP 7217 RXM 001. It is seen from the Panchnama dated 07.02.2007 that the Central Excise officers of the HQrs (Preventive) unit, on 06.2.2007, at around 1430Hrs entered into the premises of Appellant No.1 and requested the panchas to witness the proceedings which they agreed to. The Panchas along with Central Excise officers came to the main gate of the appellant firm and asked the security person posted at the main gate of the said unit to call the r .....

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oved from the factory. Copy of the Panchnama was handed over to Shri Hakim Thanawala. 7. A show cause notice dated 02.6.2009 was issued proposing demand of Central Excise duty of ₹ 7,63,190/- alongwith interest leviable on the clandestine removal of finished excisable goods i.e. Toothpaste. It has also proposed imposition of penalty on the appellants. In reply to the show cause notice, by letter dated 23.2.2010 the appellant stated that Shri Hakim Thanawala has not concern with the Appella .....

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f the Appellant No.1 and in a partnership firm, there cannot be any Director, as it is governed by the partners. Therefore, the entire demand of duty on the shortage of the finished goods, based on the statement of Shri Hakim Thanawala, cannot be sustained. It is further contended that there was no stock taking conducted in their factory as evident in the alleged stock taking report, insofar as the concerned Central Excise officers had not given the details of the stock verification in the repor .....

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irector of the unit but he was looking after the affairs of the unit and the Panchnama was drawn in his presence and therefore, the Panchnama as well as his statement is a valid document for the instant proceeding. It is also observed that Shri Hakim Thanawala as well as Shri Mihir Aruka, production Incharge of the appellant firm were present at the time of physical verification on 06.3.2007. Neither the appellant unit nor the partner of the appellant firm has filed any objection against the Pan .....

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ompany when the appellant firm is registered with the Central Excise authorities as partnership firm. It is strange that the Central Excise officers visited the premises of the assessee and conducted stock verification and recorded the statement without verifying the identity of a person. There is no material available on record to establish that Shri Hakim Thanawala has any connection with the appellant firm. It is well settled by a series of decisions of the Tribunal that onus lies with the Re .....

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ement of a person, who has no relation with the Appellant firm, can not be sustained. 10. The Tribunal in the case of Vikram Cement (P) Limited vs. CCE, Kanpur 2012 (286) ELT 615 (Tri. Del.) held that in the absence of any other evidence, the sole statement of the Director cannot establish the case of clandestine removal of the goods and burden to prove is on Revenue and it is required to be discharged effectively. The decision of the Tribunal in the case of Vikram Cement (P) Limited was upheld .....

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Authorised Representative for the Revenue relied upon various decisions which are not applicable in the facts and circumstances of this case, are as under:- (i) Ureka Polymers Limited vs. CCE, New Delhi 2001 (127) ELT 618 (Tri. Del.) : It was found that production slips maintained for 15 days showing higher production on some dates than those recorded in RG-1 register and vice-versa, evidenced by statement of their suppliers and entries in their registers, note book and ledgers. Statements were .....

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