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2015 (10) TMI 1566

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..... et figure and test report only, but Department has adduced sufficient corroborative evidence but no such evidence has been discussed in the impugned order. Moreover, the statements relied upon by the Adjudicating Authority of various persons, the cross-examination has not been afforded to the appellant for fair trial. The allegation of clandestine manufactured and removal of goods is not a simple allegation, the allegation is to be supported by sufficient and required evidence as held by this Tribunal in the case of Arya Fibres Pvt. Ltd. vs. CCE, Ahmedabad - II reported in [2013 (11) TMI 626 - CESTAT AHMEDABAD], wherein the following principals have been laid down to allege clandestine manufacture/removal - Without establishing the above evidences, the demand on account of clandestine manufacture/removal is not sustainable - Decided in favour of assessee. - Excise Appeal Nos. 1086-1088 of 2008 - - - Dated:- 22-7-2015 - Ashok Jindal, Member (J) And B Ravichandran, Member (T) For the Appellant : Shri Rupesh Kumar, Adv For the Respondent : Shri R K Grover, AR ORDER Per Ashok Jindal The appellant M/s C.A. Chewing Fragrance Pvt. Ltd. (in short CACF) is in appeal .....

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..... d during the period 2001-2002. As there is no change in composition of Gutkha, it is alleged that M/s CACF has manufactured Gutkha out of the tobacco purchased in excess of 7.99% during the impugned period and on that basis of demand is totally untenable as the test report dated 27/3/2006 clearly states that contents of raw tobacco being 7.9% is on dry basis which means the percentage did not take into consideration of the moisture contained in tobacco, therefore the test report cannot be relied to arrive at a decision of quantity of tobacco consumed in Gutkha and to demand duty on the said basis. As the content of tobacco in the manner in which same is purchased and sold in the market includes moisture. To support this contention, he relies on the decision of the Tribunal in the case of Mineral Enterprises Ltd. vs. CC, Mangalore reported in 2010 (253) E.L.T. 241 (Tri. - Bang.). He further submits that there is no dispute to the fact that tobacco contains moisture. To support this, he relied on the report dated 14th February 2007 of Harcourt Butter Technological Institute, Kanpur which confirms moisture contents as 15.38%. The said report was produced before the Adjudicating Author .....

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..... ured of said extra quantity; (b) transportation of said extra quantity; (c) clearance or sale or disposal of the said extra quantity; (d) receipt of price for the said extra quantity; and (e) any buyer having received the said extra quantity. Therefore, the demand is merely on the basis of assumption and presumption without any supporting evidence and the same is not sustainable. To support this contention, he relies on the decision of Oudh Sugar Mills Ltd. vs. Union of India reported in 1978 (2) E.L.T. (J172) (S.C.), Durga Trading Co. vs. CCE, Lucknow reported in 2003 (162) E.L.T. 245 (Tri. - Del.) affirmed by Hon'ble Apex Court reported in 2010 (260) E.L.T. A122 (S.C.). He also submits in absence of evidence relating to raw material or any other corroborative material in that regard, the change of clandestine clearances cannot be upheld. To support this contention, he relied on the decision of Har Singar Gutkha Pvt. Ltd. vs. CCE, Lucknow reported in 2005 (186) E.L.T. 369 (Tri. - Del.), CCE, Indore vs. G.M. Products reported in 2007 (207) E.L.T. 723 (Tri. -Del) and Sanket Food Products Pvt. Ltd. vs. CCE, Aurangabad reported in 2005 (188) E.L.T. 107 (Tri. - Del.). 3. He furt .....

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..... ght on record that the said Indian currency is the part of sale proceeds of clandestinely manufactured and sold Gutkha. He also submits that demanding duty jointly and severally is unjustified. Therefore, he prayed that impugned order be set aside. 4. On the other hand, the learned AR supported the impugned order and submit that in this case on the basis of intelligence, the investigation was conducted and during the course of investigation certain records were seized wherein excess stock of raw material was found, some cash was also seized. The statutory records were not prepared in proper manner by the appellant and tobacco consumption has also been considered and on the basis of the same, the demand has been raised. Apart from the tobacco consumption, the other corroborative evidence by way of statements and other material documents, the demands have been confirmed by the Adjudicating Authority by applying principal of natural justice. Therefore, the impugned order is required to be confirmed. 5. Heard both the parties and considered the submission. 6. On perusal of the impugned order and considering the arguments advanced by both the sides, we find that in this case, t .....

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..... t there is no evidence to show the excess consumption of the other raw materials to be used in manufacture of Gutkha in the show cause notice. As without the usage of other raw materials which forms 92% quantity to manufacture Gutkha the demand is not sustainable. 9. In the impugned order, the Adjudicating Authority has recorded that he is not going by the balance sheet figure and test report only, but Department has adduced sufficient corroborative evidence but no such evidence has been discussed in the impugned order. Moreover, the statements relied upon by the Adjudicating Authority of various persons, the cross-examination has not been afforded to the appellant for fair trial. The allegation of clandestine manufactured and removal of goods is not a simple allegation, the allegation is to be supported by sufficient and required evidence as held by this Tribunal in the case of Arya Fibres Pvt. Ltd. vs. CCE, Ahmedabad - II reported in 2014 (311) E.L.T. 529 (Tri. - Ahmd.), wherein the following principals have been laid down to allege clandestine manufacture/removal:- Certain fundamental criteria have to be established by Revenue which mainly are the following: (i) The .....

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