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2016 (3) TMI 98 - CESTAT AHMEDABAD

2016 (3) TMI 98 - CESTAT AHMEDABAD - 2015 (330) E.L.T. 325 (Tri. - Ahmd.) - Clandestine removal of goods - Held 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 for clandestine clearance. The same view has been taken by this Hon’ble Tribunal in the recent judgments in the cases of Karnawat International Pvt. Ltd., and Shubh Metals (2015 (12) TMI 1139 - CESTAT NEW DELHI ). Also see M .....

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eem, Member (T) Shri P.P. Jadeja, Consultant, for the Appellant. Shri L. Patra, Authorised Representative, for the Respondent. ORDER The facts of the case are same in the two appeals before us and hence they are taken up together and disposed of by this common order. The brief facts of the case are as follows : - (1.1) The appellants are engaged in the manufacture of Copper Pipes, Bars, Flats, Sections, Strips etc. falling under Chapter 74 of the schedule to the Central Excise Tariff Act, 1 .....

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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 finished goods lying in the factory premises of the said company under the subject panchnama, it was observed that 29714 kgs. of various types of articles of copper in fully finished and ready-to-dispatch condition valued at ₹ 99,43,450/- were lying unaccounted in the statutory records. By not accounting for these goods th .....

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p;Heard both sides. The learned Consultant for the appellants submits that the goods found in stock by the officers in the factory premises during their visit on 5-1-2006 and 6-1-2007 had not reached the finishing stages and required further operations and testing etc. to reach the finish stage. Further he submits that therefore there was no requirement to enter the stock in RG-1 Register and hence there is no violation of the provisions of Central Excise Act for Rules. He drew attention to the .....

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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 Industries Ltd. v. CESTAT, New Delhi [2007 (214) E.L.T. 187 (M.P.)] (ii) CCE, Lucknow v. B.M.W. Steels Ltd. [2011 (272) .....

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the goods were already finished and ready for export. He further submits that the appellants had not raised the issue of further operations nor testing at the time of investigation and it was only raised at the stage of first Adjudication. He also relied upon the decision of this Hon ble Tribunal in the case of Nissan Copper Pvt. Ltd. v. Commissioner of Central Excise (Appeal) [2014 (313) E.L.T. 449 (Tri.-Ahmd.)]. 6. A perusal of the records show that the DGCEI Officers visited the factory .....

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t 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 rea .....

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issan Copper Pvt. Ltd. relied upon by the learned Authorised Representative cannot be relied upon as the facts of the said case are different from the present matter. In that case, there was no further process or testing required to finish the goods. There were also other irregularities/evidences to support clandestine removal. 8. It is observed that High Court of Madhya Pradesh in the case of Supreme Industries Ltd. v. C.E.S.T.A.T., New Delhi [2007 (214) E.L.T. 187 (M.P.)] has held as foll .....

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to evade duty was apparent. In 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 .....

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quality control test has been totally ignored. Merely because in the statement, the Commercial Manager of the petitioners has stated that the goods were manufactured that by itself cannot be a ground for holding that the goods were ready for despatch to the customer. The learned Tribunal incorrectly applied the principles laid down by the Bombay High Court in the ease of Kirloskar Brothers v. Union of India [1988 (34) E.L.T. 30 (Bom.) = 2002 (83) ECC 497 (Bom.)] as the facts of that case and th .....

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