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2016 (6) TMI 270 - CESTAT NEW DELHI

2016 (6) TMI 270 - CESTAT NEW DELHI - 2016 (338) E.L.T. 148 (Tri. - Del.) - Clearance of trade samples without payment of duty - appellant found guilty of willful misstatement and suppression of facts - extended period was invoked and mandatory penalty also imposed - Held that:- We find that at no stage the appellant admitted it had cleared samples during the impugned period without payment of duty. In the letter dated 30.07.2000 it submitted that in its earlier letter dated 16.08.2000 it was me .....

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that was the case, it does not conclusively establish that there were clearances of samples duty free during impugned period which is November 1995 to May, 1997 inasmuch as the statements will not be wrong if the samples were cleared say in the period Oct., 1994 to Oct., 1995 because this period is contained in the period October 1994 to June, 1997. - Assumption has been made that the appellant cleared samples duty free during the impugned period at the same level at which samples were foun .....

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stain such assumption - Decided in favour of assessee. - Excise Appeal No.E/609/2007-EX [DB] - FINAL ORDER NO. 51677/2016 - Dated:- 2-3-2016 - MR. S.K. MOHANTY, MEMBER (JUDICIAL) AND MR. R.K. SINGH, MEMBER (TECHNICAL) For the Appellant : Shri.Prakash Shah, Advocate For the Respondent: Shri.S.Nanthuk, J.C.D.R. ORDER PER: R.K. SINGH Appeal has been filed against Order-in-Original No.04/COMMR/CEX/2007 dated 19.02.2007. This order was issued in pursuance of the CESTAT remand order No.628/06 dated 02 .....

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g that no samples were cleared without payment of duty during the period November, 1995 to May, 1997. 2) It never admitted that it had cleared any samples duty free during the impugned period and vide its letter dated 13.07.2001 it only stated that samples during the impugned period might have been cleared from duty paid stock of goods and it was also submitted that, that may have been the main reason for not keeping records of samples. Subsequently, it clarified after ascertaining from the ledg .....

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of samples cleared during the relevant period for confirming the impugned demand. 4) There was no willful misstatement or suppression of facts. 3. Ld. D.R. on the other hand contended that the officials of the appellant in their statements clearly admitted that between October, 1994 to June, 1997 they have not been paying any duty on the samples and it is also recorded in the show cause notice that during the audit, the assessee assured to discharge duty on such trade samples, which showed that .....

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r dated 30.07.2000 it submitted that in its earlier letter dated 16.08.2000 it was mentioned that samples prior to June 1997 might have been cleared from duty paid stock and that was the reason possibly for absence of any specific records about clearance of samples. We find that the SCN contains no evidence of duty free clearance of samples during the impugned period. As regards the contention of the ld. DR that in their statements the officials of the appellant admitted that they cleared sample .....

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t during the period June 1997 to March 1999, the appellant had cleared samples on payment of duty and samples so cleared worked out to 0.0009% of the quantity of the fabrics cleared and this percentage was adopted to ascertain the samples cleared duty free during the impugned period. This clearly shows that an assumption has been made that the appellant cleared samples duty free during the impugned period at the same level at which samples were found to have been cleared during subsequent period .....

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of judgments which state that demand cannot be sustained on the basis of assumptions and presumptions. In the case of Commissioner of Central Excise vs. Brims Products 2011 (271) E.L.T. 184 (Pat.), it has been held :- 9.In our opinion, since the charge was for clandestine manufacture and surreptitious removal of finished final product, the same is required to be proved beyond doubt by the Revenue. One has to keep in mind that, though being the main ingredient, betel-nut is not the only raw mate .....

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f production and clandestine sale to different parties. Due to lack of positive evidence, benefit of doubt will always go in favour of the assessee. 6. It is also pertinent to mention that the appellant had been paying substantial amount of duty on the fabrics cleared by it and it would require an incredible degree of credulity to believe that it would have indulged in suppression of facts to clear samples duty free which accounted for only 0.0009% of the fabrics cleared. The only paragraph of S .....

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d for the removal of trade samples and further by not furnishing the same to the department on demand appear to have violated the provisions of rule 173Q of the Rules. It also appears that the notice No.1 by withholding required information have suppressed the facts and therefore central excise duty leviable on trade samples cleared during the period November 1995 to May 1997 amounting to ₹ 7,13,528.00 appears to be recoverable from them under proviso to Section 11A (1) of the Central Exci .....

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