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2016 (2) TMI 104 - CESTAT AHMEDABAD

2016 (2) TMI 104 - CESTAT AHMEDABAD - TMI - Clandestine removal - cross examination of the buyers and brokers - Held that:- The allegation of the clandestine removal cannot be established merely on the basis of the statement of the buyers and brokers and the documents recovered from the buyer without any enquiry of the assessee. It is also noted the statement of the partner of the assessee is un-corroborative nature. In any event, the cross examination of the buyers and brokers were not allowed. .....

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d Representative For the Petitioner : Shri W. Christian, Advocate ORDER Per: P.K. Das The relevant facts of the case, in brief, are that M/s. Shri Khatu Shyam Industries, the assessee herein, was engaged in the manufacture of M.S. Ingots, classifiable under Chapter 72 of the Schedule to the Central Excise Tariff Act, 1985. The Central Excise Officers on the basis of certain intelligence visited the business premises of the assesses buyer, namely M/s. Vishnu Steel. It was found that the name of .....

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of equal amount of duty on the assessee. It has also imposed penalty on Shri Manish Ramavtar agarwal, partner of the assessee and Shri Shiv Gopal Damini, broker. By the impugned order, the Commissioner (Appeals) rejected the appeal filed by the assessee and allowed the appeal of the partner of the assessee firm. Hence, the assessee and Revenue both filed these appeals. 2. The Learned Advocate on behalf of the assessee submits that the entire case was made out on the basis of the statement of M/ .....

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Commissioner of Central Excise 2015 (11) TMI 1239-CESTAT, Ahmedabad. He also submits that in the present case also, the cross examination of the buyers and brokers were not allowed and proceeded on the basis of the statement of the partner of the assessee firm, which is not corroborative with any evidence. 3. On the other hand, the Learned Authorised Representative on behalf of the Revenue reiterates the findings of the Commissioner (Appeals). He submits that the partner of the assessee accepted .....

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of the buyer. No visit was effected to the assessee factory and no enquiry was conducted at the assessee in respect of the clandestine removal of the goods. The entire case was made out on the basis of the statement and records of the third party. The appellants requested for cross examination of the buyer and broker, which were refused on the ground, the partner of the assessee had accepted the statement of the buyer. 5. I find that the Tribunal in the case of M/s Shiv Sakti Ingots Pvt. Ltd. vs .....

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pellant Company is based on the documentary evidence seized from the premises of the buyer M/s Vishnu Steel and the statements from Shri S Damani, the broker. 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 .....

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d cross examination of the buyer and the broker in their reply to show cause notice. The Adjudicating Authority rejected the prayer for cross examination, as the exercise would be futile as the Appellant No 2 in his statement accepted the statements of the buyer and broker. It 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 Co .....

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arned Advocate. Hence, the findings of the Commissioner (Appeals) regarding the rejection of the retraction of the statement cannot be accepted. 8. The entire case was made out on the basis of the documents recovered from the premises of the buyer. There is no iota evidence that 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 .....

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necessary to establish the truth. The Tribunal in the case of Arya Fibres Pvt Ltd vs CCE - 2014(311)ELT.529 (T) held that clandestine manufacture and removal, Reliance on private records seized from buyers premises not to be the sole basis for demand especially when corroborative 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 .....

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tine manufacture and clearance and not merely inferences or unwarranted assumptions ii) Evidence in support thereof should be of: a) raw materials, in excess of that contained as per the statutory records; b) instances of actual removal of unaccounted finished goods (not inferential 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 .....

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. 56. In the present case, there is no attempt made by the Department to substantiate the allegation of manufacture of as many as 606 ACs by the Appellant. No evidence has been produced to show that the basic raw materials required for manufacturing such a large number of ACs 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 .....

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AT for a fresh determination would prolong the case interminably. The question of now producing persons whose statements were recorded 23 years after the event for cross-examination is impractical and not feasible. Secondly, no fresh material has to be brought on record to warrant 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 t .....

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ted by the Commissioner (Appeals) as a brain child of the Learned Advocate. 10. The Hon ble Gujarat High Court in the case of CCE,C&ST,Daman Vs Nissan Thermoware Pvt Ltd -2011(266)ELT.45 (Guj) in the identical situation dismissed the appeal filed by the Revenue. In that case, the Director admitted the shortage of material used in the manufacture of goods and clandestinely removed without payment of duty. It has been observed that there is no evidence to indicate clandestine manufacture and r .....

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