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2016 (3) TMI 518 - CESTAT AHMEDABAD

2016 (3) TMI 518 - CESTAT AHMEDABAD - TMI - Clandestine manufacture of goods and cleared without payment of duty - duty demand - Held that:- In the present case, the Revenue proceeded on the basis of theoretical calculation of the input-output ratio and alleged the clandestine removal of the goods. The appellant particularly furnished the documents of gas consumption. No attempt was made to verify the physical stocks and the said documents. On perusal of the impugned order, it is seen that the a .....

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- MR. P.K. DAS, MEMBER (JUDICIAL) For the Petitioner : Shri H.D. Dave, Advocate For the Respondent : Shri N. Satwani, A.R. ORDER PER: P.K. DAS The relevant facts of the case, in brief, are that M/s Manav Metal Industries (Appellant No. 1) were engaged in the manufacture of Copper and Brass Rod/Patta Patti/Sheet/Section etc, classifiable under Chapter 74 of the Schedule of Central Excise Tariff Act, 1985. On 15.09.2008, the officers of Central Excise (Preventive) Department) Ahmedabad-I visited t .....

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i Mahendra G. Duggad, Authorised Signatory of M/s Manav Metal Industries. The Adjudicating authority confirmed the demand of duty of ₹ 10,58,795.00 alongwith interest and imposed penalty of equal amount of duty on the Appellant No. I and also imposed penalty of ₹ 3 lakhs on the Authorised Signatory of the Appellant firm, Appellant No. 2 By the impugned order, the Commissioner (Appeals) upheld the Adjudication order. Hence, both the Appellants have filed these appeals. 2. The learned .....

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s raised on the basis of alleged shortage of raw material by theoretical calculation, which was converted with manufacture of goods and clandestinely removed. There is no material available of manufacture and clearance of the goods. It is also submitted that the Appellant had furnished the consumption of gas, which was not considered by the authorities. He relied upon the decision of Hon ble Gujarat High Court in the case of Commissioner,Customs, & Service Tax, Daman Vs Nissan Thermoware P. .....

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e of the goods, it cannot be treated as clandestine removal of the goods. He relied upon the decision of the Tribunal in the case of Mahavir Metals Industries Vs CCE Daman - 2014 (313) ELT 581 (Tri-Ahmd). 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 Appellant could not explain the difference between the consumption of raw materials and finished goods and therefore, there is no requi .....

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Officers of the Central Excise, Preventive Wing, Ahmedabad-I, visited the appellants factory. The Central Excise Officers took a round of the factory premises alongwith appellant No. 2 and panch witnesses and observed that production was going on in the Melting furnance, Extruction Press, Draw Bench, Cutter, Straightening Machine etc., installed in their factory. It has found the records were lying incomplete. After examining the records, the Central Excise Officers found that the total quantit .....

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enerated at all stages were being utilized within the factory for further process. He further stated that they were utilizing gas supplied by M/s. Adani Energy Limited, Ahmedabad for the production and had been no fixeratio between gas consumption vis-vis quantity of final product. The demand of duty of ₹ 10,58,795.00 was determined on the basis of theoretical input-output calculation and presumptive clearance of finished goods. Admittedly, the Central Excise Officers took a round of the f .....

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ine removal of the goods. Hence, allegation of the clandestine removal cannot be sustained in absence of evidence of clandestine manufacturing and clearance of the goods. 5. The Tribunal in the case of Mahavir Metals Industries vs. Commissioner of Central Excise & Customs, Daman, Vapi 2014 (313) E.L.T. 581 (Tri.-Ahmd.) held as under:- 7. I further note that my learned brother has also recorded that in absence of any specific evidence to support the clandestine removal of the quantity, it is .....

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ged that the statement of the authorized signatory as also by the partner do not stand corroborated with sufficient evidence as they are against the record and cannot be made the sole basis for holding against them. I agree that the veracity of the statements has to be gauged from the accompanying circumstances and has to be corroborated by way of same independent evidences, which is fully absent in the present case. As such, I am of the view that in the light of various decisions relied upon by .....

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andestine removal are serious charges and in the absence of any evidence of removal of goods mere shortages cannot be held to be a justifiable ground for confirmation of duty. He relied upon various Tribunal s decision to that effect. 7. I find that apart from the shortages, which are also contested by the assessee, inasmuch as there was no proper stock taking, there is no evidence showing the manufacture of the goods and their clearances without payment of duty. The clandestine removal being a .....

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al. 7. In the case of Vikram Cement (P) Limited vs. Commissioner of Central Excise, Kanpur 2012 (286) E.L.T. 615 (Tri.-Del.) allowed the appeal filed by the appellant. It has held as under:- 13. Plethora of judgments have held that is for the it revenue to establish the case of clandestine removal by production of concrete and tangible evidence. I find that apart from loose papers, which on the face of it cannot be related to the appellants business accounts and the sole statement of director, t .....

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peal and held as under:- 4. I find that as regards the excesses, there is no evidence showing that the appellant was in the process of removing the goods without entering the same in the records. The appellant at the time of seizure itself had taken a categorical stand that the said excess found wire was received by them from their job worker on the date of visit of the officers and the entries in respect of the same was to be made within a period of 24 hours. As such extending the benefit to th .....

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