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2015 (11) TMI 1239 - CESTAT AHMEDABAD

2015 (11) TMI 1239 - CESTAT AHMEDABAD - TMI - Duty demand - Clandestine clearances of the goods - Held that:- The statement of the buyer is corroborative with the records maintained by the buyer in their factory. The Central Excise officers seized a note book from the premises of the buyer maintained by their accountant. They have also seized daily reports from the premises of the buyer. The entire demand of duty was calculated on the basis of the seized records recovered from the premises of th .....

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s of assessee, which was not seriously disputed by the assessee. In this contest, the Tribunal observed that the value of documents could not be lost in absence of cross examination of the employee. The said case law could not be applicable in the present case. - impugned order cannot be sustained and it is set aside - Decided in favour of assessee. - Appeal No. : E/31,32/2011 - ORDER No. A/11636-11637/2015 - Dated:- 16-10-2015 - Mr. P.K. Das, Hon'ble Member (Judicial) For the Petitioner : S .....

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cture of steel products, who was purchasing the materials from the Appellant Company. The Central Excise Officers recovered documents from the premises of M/s Vishnu Steel and also recorded various statements. As per the follow-up action, the statement of one broker viz., Shri Shivgopal Damani was recorded. Thereafter, a statement of M/s Manish R Agarwal, Director of the Appellant Company (Appellant No.2) was recorded on 14.5.2009. 3. A show cause notice dtd 4.9.2009 was issued to the Appellant .....

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ned order, the Commissioner (Appeals) rejected the appeals of both the appellants. 4. The Learned Advocate on behalf of the appellant submits that the entire case was made out on the basis of the statements of the buyer and one broker and the documents recovered from their premises. He further submits that no search was conducted at the appellants premises. It is further submitted that the only one statement of the Appellant No 2 was recorded which was retracted within a few months in reply to .....

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as retracted in reply to the show cause notice, which cannot be accepted. It is also submitted that the appellant had not countered the statements of the buyer and the broker. Regarding the rejection of the cross examination, the Learned Authorised Representative relied upon decision of the Tribunal. He submits that the Director of the Appellant Company had accepted the clandestine removal and there is no requirement of the cross examination of the buyer and broker. He further submitted evidenti .....

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ise officers seized a note book from the premises of the buyer maintained by their accountant. They have also seized daily reports from the premises of the buyer. The entire demand of duty was calculated on the basis of the seized records recovered from the premises of the buyer. 7. The Commissioner (Appeals) observed that Appellant No 2, in his statement dtd 14.5.2009 accepted the statement of the buyer and broker. The appellant in their reply to show cause notice dtd 3.10.2009 retracted the st .....

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is seen that the retraction of the statement of the Appellant No 2 was rejected on the ground that it is a brain child of the Learned Advocate and not Shri Manish R Agarwal. It is difficult to accept the findings of the Commissioner (Appeals) for the reason that the allegation against the Learned Advocate is without any inquiry and merely on the basis of assumption and presumption. In my considered view, the retraction of the statement cannot be brushed aside, only alleging to the Learned Advoc .....

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at the documents recovered from the premises of are corroborating with any material of the appellant company. It is third party corroborative evidence, which cannot be accepted. I find force in the submission of the Learned Advocate that no search was conducted at the premises of the appellant company. It is well settled that the charge of clandestine removal cannot be proved merely on the basis of the documents recovered from the outsider without any corroboration of evidence at the premises of .....

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ative evidence like purchase of extra raw material, actual removal of clandestine goods, receipt of sale proceeds, etc. not produced. The Hon ble Delhi High Court in the case of Flevel International Vs CCE vide judgment dtd 17.9.2015 in CEAC 6/2013 approved the decision of the Tribunal in the case of Aarya Fibre Pvt Ltd (supra) as under: 55. Mr. Hari Shanker, learned Senior counsel for the Appellant, has also drawn the attention of the Court to a decision of the CESTAT in Arya Fibres Pvt. Ltd. V .....

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rential or assumed) from the factory without payment of duty; c) discovery of such finished goods outside the factory; d) instances of sale of such goods to identified parties; e) receipt of sale proceeds, whether by cheque or by cash, of such goods by the manufacturers or persons authorized by him; f) use of electricity far in excess of what is necessary for manufacture of goods otherwise manufactured and validly cleared on payment of duty; g) statements of buyers with some details of illicit m .....

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was procured by the Appellant. 57. For all of the aforementioned reasons, the Court is satisfied that the impugned majority order of the CESTAT on the issue of clandestine removal of 606 ACs by the Appellant without payment of duty suffers from serious errors and, therefore, cannot be sustained in law. 58. The Court is not inclined to consider the plea of the Respondent that the matter should be remanded for a fresh consideration by the CESTAT. In the first place, it must be remembered that the .....

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rrant a re-look. The Court is satisfied that the existing material is insufficient to sustain the adjudication order of the CCE on the issue. 9. In the case of Shalini Steel Pvt Ltd vs CCE - 2010(258) ELT. 54 (T) upheld by the Hon ble Andhra Pradesh High Court as reported in 2015(317)ELT.A123 (AP) it has been held that the statement of the broker and documents recovered from the him had no evidentiary value to establish clandestine removal. The Learned Advocate relied upon the various case laws .....

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