TMI Blog2015 (8) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... tions the fact of manufacture of Hydraulic Jacks and quantification of clandestine clearances by the main appellant fails miserably. Secondly, it is now a well established law that cases of clandestine removal can not be established only on the basis of few statements, especially in this case where the first recorded statement is held to be incorrect and given by a person who is not the author of the diary. Appeal filed by the main appellant is, therefore, required to be allowed as the case of clandestine manufacture and clearance by the main appellant is not established and corresponding penalties are also required to be set-aside. - Decided in favour of assessee. - Appeal No. : E/687-693,740-742/2010 - ORDER No. A/11058-11067/2015 - Dated:- 22-7-2015 - Mr. H.K. Thakur, J. For Appellant The : Shri Hardik Modh, Advocate For Respondent The : Shri T.K. Sikdar, Authorised Representative Per : Mr. H.K. Thakur; These appeals have been filed by the appellants against Orders-in-Appeal No. 55 to 67/2010/Commr(A)/Raj dated 19.02.2010 passed by Commissioner (Appeals) Rajkot under which demand of ₹ 34,89,818/-, alongwith interest and equivalent penalty imposed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r authorities main appellant gave details of machineries available with sister concerns of the main appellant alongwith details of processes undertaken in each of the sister concerns. Photocopies of bills raised by job workers were also furnished. That request was made before the lower authorities to the effect the processing capabilities on the machines/ equipments available on the date of Panchnama may be got verified as the same are still operational with the main appellant. However the same was not entertained by the lower authorities. It was also argued that cross-examination of the crucial witnesses were not allowed who maintained the diary from which duty is calculated. That when the manufacture of goods is not established then there can be no cause for demanding duty. That details of finished goods manufactured and shown in the diary were not segregated as to how much of the goods entered therein were presumed to have been manufactured and cleared clandestinely by main appellant. That how much raw materials procured was used for making finished goods by the main appellant is also not coming forward from the statements of the proprietor of the main appellant. Learned Advocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . That raw materials for all four units within Gujarat were purchased by Shri Nitin G. Vekaria. That all the raw materials for the four units were procured from outside Gujarat by Shri Rameshbhai Partner of M/s. Patel Plastics Products, as per his statement. That Shri Suresh G. Vekaria, Proprietor of M/s. Maruti Agro Industries, the elder brother of Shri Nitin G. Vekaria of M/s. Radhika Hydraulic, in his statement dated 26.4.2006 confessed that he was keeping record about the clandestine clearance of all the four units. Learned AR, therefore, strongly defended the order passed by the first appellate authority. For this purpose, Shri T.K. Sikdar (AR) made the Bench go through paras 12.3 to 12.7 of the Order-in-Appeal dated 19.02.2010. 4. Heard both sides and perused the case records. The issue involved in the present proceedings is whether main appellant has manufactured and cleared Hydraulic Jacks clandestinely as per the investigation carried out by officers of Central Excise (AE), Rajkot. The first argument taken by the main appellant is that there are inadequate manufacturing facilities to manufacture complete Hydraulic Jacks and that only certain parts of the Hydraulic Jack ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hydraulic Jacks in the same factory. Further, clubbing of clearances of al the three sister units with the main appellant have not been proposed by the investigation to hold that all activities are undertaken as one unit. Revenue has thus, failed to factually establish that all activities relating to manufacture of Hydraulic Jacks are done by the main appellant in his factory. 5. Revenue has based its case on the admission statements of persons managing the main appellant and other three sister concerns. Statement dated 26.04.2006 of Shri Nitin G. Vekaria, Proprietor of Radhika Hydraulics was the first to be recorded in which he admits clandestine manufacture and clearance of Hydraulic Jacks. But in this statement, he also said that record of clandestine clearances are kept by his elder brother Shri Suresh G. Vekaria, Proprietor of M/s. Maruti Udyog. The duty quantification has been got confirmed from Shri Nitin G. Vekaria on the basis of a record maintained by Suresh G. Vekaria. Interestingly statement of Shri Suresh G. Vekaria (mentioned in Para-4 of the show cause notice dated 17.10.2006) does not get the clandestine clearances quantified to have been manufactured by M/s. Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said by Proprietor of main appellant earlier in statement dated 26.4.2006 is not reliable when Para 7 statement of investigation in show cause notice dated 17.10.2008 say that party s plea may be correct. In view of the above observations the fact of manufacture of Hydraulic Jacks and quantification of clandestine clearances by the main appellant fails miserably. Secondly, it is now a well established law that cases of clandestine removal can not be established only on the basis of few statements, especially in this case where the first recorded statement is held to be incorrect and given by a person who is not the author of the diary. Appeal filed by the main appellant is, therefore, required to be allowed as the case of clandestine manufacture and clearance by the main appellant is not established and corresponding penalties are also required to be set-aside. 6. So far as penalties imposed upon the other appellants is concerned, it is held that no penalties are imposable on these appellants once issue on merits has been decided in favour of the main appellant. 7. This Bench has not gone into the aspect of cum-duty-benefit and option of 25% reduced penalty not given, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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