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TMI Blog2016 (3) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... ng under Chapter 74 of the schedule to the Central Excise Tariff Act, 1985 and are having the facilities for carrying out processes such as melting, extrusion, drawing, drilling, turning, pickling, straightening, cutting etc. (1.2) On the basis of an information gathered by the DGCEI indicating that the appellants are engaged in large-scale evasion of Central Excise duty and fraudulent availment of Cenvat credit involving huge Government Revenue, a search of the factory and office premises of the appellants were conducted on 5-1-2007 and 6-1-2007. The records and documents which appeared relevant for further investigation of the case were resumed from these premises. (1.3) During the physical verification of the stock of finis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. Cutting (cut to size), sampling, Hydro test, Inspection etc. as per job requirements. We hereby certify that without above operations on Copper bus bars, Flats and Tubes are defined as Goods in Process and not Final Marketable Products. They are also not Finished Goods without above mentioned operations which would vary from job to job and as per Client's requirements for third party inspection etc. Above certificate is issued in best Engg. Practice and without prejudice to anyone." 4. The learned Consultant also submits that there is no other evidence to show any clandestine clearance or any other irregularities. He also submitted that the following Case Laws in his favour : - (i) Supreme Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n fully finished and ready-to-dispatch condition valued at Rs. 99,43,450/- were lying unaccounted in the statutory records. On being asked, Shri Bharatbhai Dahyabhai Gajjar and Shri Shrinik Ashok Morakhia could not give any explanation regarding the unaccounted excess stock. These goods were fully finished and were ready to dispatch. By not accounting for these goods M/s. Morakhia was attempting to remove them without payment of Central Excise duty. Thus, it appears that M/s Morakhia is engaged in large-scale illicit manufacture of goods and is evading Central Excise duty on such goods by not accounting them and hence the said goods were placed under seizure under panchnama dated 5/6-1-2007 under the reasonable belief that the same were man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, except for finding that the goods were lying in the factory, there is neither any material to show that there was intention to evade duty, on the contrary, the evidence that has come on record only indicates that the goods were not subjected to quality control test and they were kept on 'hold', they were to be cleared by the quality control department and only thereafter were to be sent to the packing department after the quality control test was concluded. In such circumstances, the Revenue, in the present case has not acted in a reasonable manner in the matter of enforcing the penal clause against the petitioner. Enforcement of penal clause has to be done subject to strict proof of intention to evade payment of duty. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case, I am of the considered view that the action taken against the petitioners and the impugned orders passed by the assessing authority, Annexure P/7 dated 9th February, 2000, Annexure P/10 dated 8th May, 2000 passed by the appellate authority, Annexure P/11 dated 28th March, 2003 and Annexure P/13 dated 29th April, 2004 passed by the Tribunal are clearly unsustainable and are hereby quashed. 10. Accordingly, petition stands allowed and disposed of without any order so as to cost." 9. This Hon'ble Tribunal has held in the case of M.B. Laminators (supra), that unaccounted goods found packed and ready for dispatch in factory premises does not by itself constitute sufficient evidence to show that the goods are meant f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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