Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (11) TMI 1469 - CESTAT AHMEDABAD

2015 (11) TMI 1469 - CESTAT AHMEDABAD - TMI - Duty demand - Discrepancy in stock - Clandestine clearances - reliance on retracted statements - Imposition of penalty - Held that:- Respondents were engaged in the manufacture of Man Made Fabrics on job work basis. According to the Revenue, the Respondent cleared clandestinely a quantity of 1107428 L.Mtrs. fabrics within 17/18 dates. The entire case was made out on the basis of one chit recovered from the pocket of Excise Supervisor of the Responden .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sor had retracted his statement. In this situation, it is difficult to accept the clandestine removal of the goods on the basis of the said chit, without any corroborative evidence. The Commissioner (Appeals) has also examined the case in the context of that no statement was recorded of the Dyeing Master or Printing Master. - there was a shortage of goods worth ₹ 1 Crore. - No reason to interfere the order of the Commissioner (Appeals) - Decided against Revenue. - Appeal No.E/633,634/2007- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

The relevant facts of the case, in brief, are that M/s Mahesh Dyeing & Printing Mills (P) Ltd (Respondent Company) were engaged in the processing involving dyeing and printing of Man Made Fabrics (MMF) on job work basis and cleared on payment of duty. On 18.10.2003, the Central Excise officers visited the factory premises of the Respondent Company and conducted stock verification and no discrepancy was found. Thereafter, the Central Excise Officers recovered various records and documents and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pany. It has also imposed a penalty of ₹ 2 lakhs on Shri Radheshyam T. Rathi, Director of the Respondent Company (Respondent No.2). By the impugned order, the Commissioner (Appeals) set aside the Adjudication order. Hence, the Revenue filed these appeals against the Respondent Company and its Chairman-Cum-Director (Respondent No.2). 3. The learned Authorised Representative on behalf of the Revenue reiterates the grounds of appeal and the findings of the Adjudicating authority. He submits t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat the demand was based on the basis of the statement and no further investigation was conducted. It is also erroneously proceeded that there was retraction of the statement. It is further submitted that Respondent has not disputed the Panchnama. The main contention of the learned Authorised Representative for the Revenue is that the Respondent No.2 had admitted the clandestine clearance of the goods and therefore, there is no requirement of further investigation. He relied upon the decision of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

statement and the retraction of the statements and overall facts and circumstances of the case, as there is no material available except one chit recovered from the pocket of the Excise Supervisor. It is submitted that the Central Excise Officers seized 73 files as recorded in the Panchnama and no material was available of clandestine removal of the goods. It is further submitted that there is no discrepancy during the stock verification, which primarily indicate that there is no clandestine re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ELT 243 (Guj.) iv) CCE Vs Omkar Textile Mills Pvt.Ltd.-2010 (259) ELT 687 (Guj.) v) Commissioner Vs Vikram Cement (P) Ltd-2014 (303) ELT A 82 (All.) vi) Arya Fibres Pvt.Ltd Vs CCE Ahmedabad-III-2014 (311) ELT 529 (Tri-Ahmd) vii) Laxmi Engg. Works Vs CCE Delhi-2002 (239) ELT 573 (Tri-Del.) viii) Rawalwasia Ispat Udyog Ltd Vs CCE Delhi-2005 (186) ELT 465 (Tri-Del.) 5. After hearing both the sides and on perusal of the records, I find from the impugned order that the Respondents were engaged in the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

chit. On perusal of the impugned order, it is seen that the Central Excise Supervisor and the Respondent No.2 had retracted the statements. The findings of the Commissioner (Appeals) on this issue are as under:- The Appellants have placed before me the affidavits of retraction of statements from which it appears that statement of Shri Sharma was retracted on 20.10.2003 and the statements of Shri Rathi, recorded on 18.10.2003 was retracted on 20.10.2003 and other dt.15.05.2004 was retracted on th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion of statement raised by the Revenue is only an after-thought and should not have been considered by the Commissioner (Appeals). Revenue had not accepted the retraction of statement as observed by the Commissioner (Appeals) and it is an after-thought. But, it is revealed from the impugned order that statements were not retracted within a short period. The learned Advocate on behalf of the Respondent submitted that they have filed the retraction of statement to the investigating agency. So, I f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t of any of the Dyeing Master of Printing Master were recorded. In my view, the important issue is that charge was framed against the Respondent during the period from 01.10.2003 to 17.10.2003 within 17/18 dates, they have clandestinely removed the MMF to the quantity of 1107428 L.Mtrs. from their factory. It is significant to note that the very next day the Central Excise Officers visited the factory premises and conducted stock verification and no shortage/excess of goods was available from th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or Printing Master. The relevant portion of the findings of the Commissioner (Appeals) are reproduced below:- 16. It is alleged that the details on paper slip reflect that illicit clearances of goods manufactured under the supervision of different Dyeing Masters such as Murali Master, Gupta Master etc., but there is complete silence in the investigation regarding the source of figures, reflected on the paper. It has not been brought out in investigation whether the Dyeing Masters verbally commun .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s manufactured in the supervision of the Dyeing Masters/Printing Masters, then it was essential to enquire from those Dyeing Masters/Printing Masters, to prove the authenticity of the revelations made by Shri Joginder Sharma. It is further noted from the statement of Shri Rathi that the Page No.1 to 23 of the sized file A/I contained various challans showing receipt of grey (unprocessed MMF) from various parties which were received through various Dyeing/Printing Masters. In spite of this revela .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oval. The allegation of clandestine removal in the present case involves a quantity of 1107428 L.Mtrs of MMF (P), which is alleged to have been manufactured and cleared within a short span of 17/18 days. Definitely, it is a case of evasion of serious in nature and should have been investigated properly and at least sources of receipt of raw material, the recipients of the processed fabrics, and the amount of money which flowed into should have been diged out. For want of such an enquiry, the Rev .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arat High Court, observed as under:- 7. As can be noted from the decision of the Tribunal,? it has extensively dealt with the entire factual matrix presented before it. The Tribunal rightly 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 e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ue observing that not permitting the cross-examination of a person in-charge of records of M/s. Sunrise Enterprises and absence of other cogent and positive evidences, would not permit it to sustain the demand of ₹ 1.85 Crores raised in the Demand notice and confirmed by both the authorities below. 8. As could be noticed from the material on record that? for the remaining amount of ₹ 8.25 lakhs from the transporters premises, the parallel invoices were recovered which not only were .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d 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 the Excise duty on the ground of evasion of tax, much less the retracted statements. To the extent there existed substantiating material, Tribunal has sustained the levy. No perversity could be pointed out in the approach and tre .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

observed that on the date of visit of Revenue Official, stock of raw material and finished goods were tallying with the recorded goods. There is no material available to show that unrecorded raw material were purchased or consumed or that the Assessee manufactured or removed the goods clandestinely, on which duty was payable. 8.3 In the case of Omkar Textile Pvt. Ltd (supra), the Hon'ble Gujarat High Court observed that the evidence to support the clandestine removal except statement of Dir .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version