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2015 (10) TMI 2354 - CESTAT AHMEDABAD

2015 (10) TMI 2354 - CESTAT AHMEDABAD - TMI - Duty demand - Clandestine removal and manufacture of goods - Allegation based predominantly on the basis of 62 reconstructed copies of delivery challans-cum-proforma invoices - held that:- Reconstructed challans were not recovered from the premises of any of the appellants. First Appellate authority in his order has also observed that nearly 20 of these reconstructed documents are fake or incorrect and accordingly dropped demand of ₹ 10,69,486/ .....

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ents whose origin is not known cannot be relied upon for establishing a case. Once the author of the documents is uncertain or documents are unsigned then the same cannot be put to test and scrutiny of an aggrieved person. Cross examination of the person who created these documents cannot be allowed to the appellants, as the source has no been identified.

It has also not been brought on record as to from where main appellant procured the raw-material for manufacture of clandestinely c .....

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landestine manufacture and clearance of finished goods against the appellants. No variation in the stock of raw-materials/finished goods was noticed in the factory of the main appellant during the search. No finished goods and cash have been seized anywhere in transit or in the premises of the buyers who disowned having received any such goods.

No investigation has been done in order to refute the claim of the main appellant, by recording the statement of transporter or the supplier o .....

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nd recommended as drugs stands unrebutted and overrides an oral evidence to the contra given by any Daehsan functionary or stockist/distributor in cross-examination. It is trite law that documentary evidence would prevail over oral evidence. - Decided in favour of assessee. - Appeal No. : E/1142-1146,1278/2011 - ORDER No. A/11106-11111/2015 - Dated:- 27-7-2015 - Mr. H.K. Thakur, Hon'ble Member (Technical) For the Petitioner : Shri Willingdon C, Advocate For the Respondent : Shri J Nair, Auth .....

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osing penalties. Appeal No. E/1278/ 2011 has been filed by the Revenue against the same OIA passed by the first appellate authority on the ground that first appellate authority has wrongly allowed the appeal of the main appellant partly when confessional statements clearly establish Revenues case and also that penalties were wrongly reduced by the first appellate authority. Revenues appeal, therefore seeks restoration of the order passed by the Adjudicating authority. 2. Shri Willingdon C (Adv .....

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borate the case. That simultaneous search were carried out at the factory premises of the main appellant, trading shop/depot of the main appellant at Surat and Thane, 11 buyers premises at different cities and the concerned, transporters. That during the search operations no discrepancy of raw materials or finished goods was found to exist in the physical stock/recorded inventory at the factory, trading shop and the Bhiwandi godown. That no incriminating documents were found at any of the three .....

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appellant and source of these documents is unknown, undisclosed and unidentified. That statements recorded during the investigation cannot be relied upon against his client as the witnesses and officers of DGCEI were not allowed to be cross examined by the Adjudicating authority. That as per provisions of Sec. 9D of the Central Excise Act 1944, such statements recorded loose its relevance and evidentiary value if cross examination is not allowed. He relied upon the following case laws in support .....

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challans-cum-proforma invoices cannot be made the grounds of demand as not a single buyer whose name exist in these document has ever accepted the receipt of the goods mentioned therein. That even first appellate authority has dropped demand of ₹ 10,69,486/- out of the total demand of ₹ 31,78,476/- holding that nearly 20 reconstructed challans were fake, incorrect or duplicate. That first appellate authority in Para 4.2 (Page 58 of the Appeal) has rightly recorded that standing alo .....

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, based on two delivery Challan Nos. 2 & 3 both dt 23/4/2007, is not sustainable as these goods were received in the factory of the main appellant from one of their traders company M/s Jai Bhavani Metal Company (JBMC) as major renovation work was in progress at JBMC. That JBMC under letter No JBMCJ/DGCEI/03/07/08 dt 5.9.2007, addressed to Supdt., DGCEI, Zonal Unit Mumbai; clarified the quantity of goods received and that the same were purchased from M/s Mahalaxmi Metal, Ahmedabad, who import .....

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ments. (a) Progressive Thermal Controls Pvt Ltd vs CCE [2003(157)ELT.44(T)] (b) DXN Herbal Mfg (I) Pvt Ltd Vs CCE [2006(199)ELT.533(T)] (c) Market chase Advertising vs CCE [2008(85)RLT.888(Cestat)] (d) IRP India vs CC [1995(10)RTL.669(Cestat)] 2.4 That in view of the above factual matrix case of clandestine removal is not established against the appellants and appeals filed by his clients are required to be allowed with consequential relief. That main appellant had an accumulated cenvat credit o .....

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ore the lower authorities is only an after thought at the instance of proper legal advice. That the entire duty amount and 25% penalty was paid by the main appellants during these proceedings which convey that they have indulged in clandestine manufacture and clearances. That reconstruction of delivery Challan cum pro-forma invoice from torn out papers vouches for the clandestine activities undertaken by the appellants to evade Central Excise duty. That all the statements of the appellants are i .....

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commercial invoices as those goods were not accounted for. It was also strongly argued by the Learned Authorised Representative that option of 25% reduced penalty given was not paid, alongwith interest, within one month from the date of order passed by the Adjudicating authority. He relied upon the case law of Honble Gujarat High Court in the case of CCE, Surat, vs. Rajashree Dyes & Printing Mills Pvt Ltd [2014(305)ELT.442(Guj.)]. Learned authorized Representative thus argued that appeals f .....

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ed. It is the argument of the main appellant that 62 reconstructed challans-cum-invoices cannot be relied as they are neither original nor zerox copies without the identification of the author of these challan. It is not a disputed fact that the reconstructed challans were not recovered from the premises of any of the appellants. First Appellate authority in his order has also observed that nearly 20 of these reconstructed documents are fake or incorrect and accordingly dropped demand of ₹ .....

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ments whose origin is not known cannot be relied upon for establishing a case. Once the author of the documents is uncertain or documents are unsigned then the same cannot be put to test and scrutiny of an aggrieved person. Cross examination of the person who created these documents cannot be allowed to the appellants, as the source has no been identified. 4.1 In the case of CCE Jaipur vs Welcure Drugs & Pharmaceuticals Ltd [2014(303)ELT.236(Tri.Del.)] also it was held that photocopies of so .....

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ices. Further, investigation conducted by the Department did not result in any evidence to reflect upon the clandestine manufacture and clearance of the final product. The various case laws discussed by the Commissioner (Appeals) in his impugned orders are in favour of the respondents. As such, I reject the Revenue appeals on the above ground. 4.2 It is also observed from the case records that these reconstructed challans-cum-proforma invoices indicate either the vehicle number or the name of th .....

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62 reconstructed documents and the supply of finished goods contained therein. All such persons have stated that they have not received any goods against the reconstructed invoices. 4.3 So far as admissibility of oral statements as piece of evidence is concerned, it is a well established law that cross examination of witness has to be allowed as per Sec. 9D of the Central Excise Act 1994 if those statements have to be relied upon as held by Delhi High Court in the case of J&K Cigarettes Ltd .....

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ghtly concluded that in the case of clandestine removal of excisable goods, there needs to be positive evidences for establishing the evasion, though contended by the Revenue. In absence of any material reflecting the purchase of excessive raw material, shortage of finished goods, excess consumption of power like electricity, seizure of cash, etc., the Tribunal noted and held that there was nothing to bank upon except the bare confessional statements of the proprietor and of some of the persons .....

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it to sustain the demand of ₹ 1.85 Crores raised in the Demand notice and confirmed by both the authorities below. 10.All the appeals are based predominantly and essentially on factual matrix. The Tribunal elaborately and very correctly dealt with the details furnished by both the sides and rightly not sustained the demand of ₹ 1.85 Crores, which had no evidences to bank upon. Confessional statements solely in absence of any cogent evidences cannot make the foundation for levying th .....

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on in the stock of raw-materials/finished goods was noticed in the factory of the main appellant during the search. No finished goods and cash have been seized anywhere in transit or in the premises of the buyers who disowned having received any such goods. 5. So far as duty demand of ₹ 3,48,740/-, on the basis of two delivery Challan Nos. 2 & 3 both dt 23.4.2007, is concerned it is the case of main appellant that these goods were purchased by their trading company M/s Jai Bhavani Meta .....

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recording the statement of transporter or the supplier of trader from whom the goods have been claimed to be purchased from JBMC. It is a well established law that documentary evidence will prevail over an oral evidence especially in these proceedings where cross examination of such witness is not provided. On this issue following was observed in Para 8.1 of the case law DXN Herbal Mfg (India) vs CCE, Pondichery (supra), relied upon by the appellants. 8.1The dispute now shifts to the last senten .....

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ction, learned Counsel referred to what was deposed by some stockists/distributors when cross-examined. However, he has not specified any disease or ailment which could be prevented or cured by means of the above products, nor has any of the said witnesses so specified. When one claims a certain product to be a medicament with prophylactic or therapeutic property, one has got to specify the disease or ailment which can be prevented or cured by means of such product and must also prove this claim .....

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