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2016 (7) TMI 151 - CESTAT CHENNAI

2016 (7) TMI 151 - CESTAT CHENNAI - TMI - Clandestine removal of goods - manufacture of Cotton yarn falling under Chapter 52 - for the period from 01.01.1999 to 17.09.1999 - whether the appellant herein had indulged in the manufacture of dutiable cotton yarn in cones without accounting the same in the statutory records and clearing the said cotton yarn in cones clandestinely without payment of duty and without recording the said transactions in the statutory records. - Held that:- This is no .....

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ent is just based on the retracted statements, the appellant could possibly have a reasonable case to contest but in the instant case, there have been confessional statements, private registers and those private registers also substantially matched with the shortages. - All these factors cumulatively would show that the conclusion arrived at by the authorities cannot be faulted with. While it is true that the burden to prove clandestine removal is on the department, it cannot be expected of .....

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rselvam, A.C (A.R) : For the Respondent ORDER These appeals have been preferred by the appellant against the Impugned Order-in-Appeal dt. 30.04.2004 passed by the Commissioner of Central Excise (Appeals), Salem vide which he had confirmed the Order in Original dt. 27.09.2002 of the Joint Commissioner of Central Excise, Coimbatore. 2. The brief facts of the case are that the appellant is engaged in the manufacture of Cotton yarn falling under Chapter 52 of schedule of CETA,1985. The officers of t .....

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27.09.2002 confirmed the demand of ₹ 9,28,805/- being the excise duty involved on the said cotton yarn for the period from 01.01.1999 to 17.09.1999 and also ordered for confiscation of 2295 kgs of 30s Cotton yarn (Cones) for the value of ₹ 1,97,370/- and imposed redemption fine apart from interest and imposed penalties on the appellant-company [Appellant No.1] and imposed a penalty of ₹ 10,000/- on Shri. C. Sundaramurthy [appellant No.2], the Commission agent. The Commissioner .....

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arious grounds relying on the various decisions in support thereof. 3.1. The Ld. Counsel submits that the statement dt. 18.09.1999 of the Factory Manager and statement dt. 30.09.1999 of the Managing Director was obtained under coercion and both the statements were retracted immediately on 20.09.1999 and 01.10.1999 respectively. He drew my attention to findings in the orders that these retractions were acknowledged by both the Original Authority and the Lower Appellate Authority and referred the .....

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h the original authority and the Lower Appellate Authority. Though this issue was referred in Page 16, Para 25 of the Order in Original and it was referred in Page.9 , Para 5.7.1 of the Order in Appeal. Non-consideration of the request of the Appellant is in violation of principles of natural justice. He relied on the decisions of Tribunals in the case of Syed Saleem Vs CC, Bangalore - 2001 (128) ELT 276 (Tri. Chennai.) & the decision of the Tribunal in the case of Braco Electricals Vs CCE, .....

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55) ELT 161 (Tri.-Del.) wherein the Bench has observed that without actual weighment, neither the duty demand could be confirmed nor the penalty could be imposed on the assessee. He also relied upon the Tribunal's decision in the case of Dhebar Steel Rerollers s CCE Raipur - 2002 (142) ELT 194 (Tri-Del.) on this issue. 3.4. He also explained in detail about the various discrepancies in quantification of demand by the authorities. In particular, for a sample he has produced the copy of RG1 fo .....

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hat the entire demand is based upon the private diary maintained by the Factory Manager and his statement but it was retracted. He further argued that other than the retracted statements, the allegation was not corroborated with any other tangible evidences like Transportation, supplier details, purchaser details, transporter details , power consumption etc., Particularly, in clandestine removal cases the onus is on the department only to prove beyond all reasonable doubts with other corroborati .....

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Ltd. 2004 (163) ELT 472 (Tri.-Che) He also relied on the latest decision of this Bench of the Tribunal in the case of A.R. Shanmugasundaram - Vs CCE, Salem in 2016 (333) ELT 158 (Tri. Chennai.) and drew my attention to the findings of the Tribunal at paras 16 & 17 holding that mere statements and private records cannot be relied upon for establishing the clandestine removal without material evidence corroborating the statements. Ld. counsel submits that this case law would squarely apply to .....

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landestine removal of goods and the demand was based only on assumptions, retracted statements and also barred by limitation . 4. The Ld. AR on behalf of the Revenue reiterated the findings of OIO as well as Order-in-Appeal. He explained the sequences of statements and argued that it has been corroborated with the shortages noticed in the account registers. He further stated that parallel set of invoices were found at the time of investigation. He also stated that the retracted statements and cr .....

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e present case, since in the referred case, the statements were not retracted, there was no denial of cross examination, no violation of principles of natural justice and there is also no dispute in quantification of demand, no other corroborated/tangible/positive evidences to prove the clandestine removal of the finished products. 6. Heard both sides and perused the records and examined the written submission & citations submitted by the appellant as well as the Ld. AR. 7. The issue for con .....

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and cleared illicitly without payment of duty based on recovery of private records such as diaries, daily production reports containing the data of annual production as against the production shown by them in the statutory register. The authorities have confirmed the demand for the reason that the appellant had manufactured and cleared cotton yarn clandestinely without accounting for the same in the statutory records and thereby not following the procedures elaborately set out in law. In the ins .....

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has been a retraction of the said statements. It is to be noted that retractions, as rightly observed by the lower authorities were merely an after-thought and if the case of the department is just based on the retracted statements, the appellant could possibly have a reasonable case to contest but in the instant case, there have been confessional statements, private registers and those private registers also substantially matched with the shortages. The Ld. Commissioner (Appeals) has also obser .....

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(Appeals) to the effect that the material evidences in the form of seized goods, the evidences for non-accountal of raw materials stand further corroborated with the Managers Diary cannot be faulted with for the reason that if cross-examination is granted, the same would serve no purpose as the facts in the instant case are very much clear and the denial of cross-examination would not result in the violation of principles of natural justice in the facts of the present case. 9. With regard to ca .....

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true that the burden to prove clandestine removal is on the department, it cannot be expected of the department to prove the same with mathematical accuracy and precision as clandestine removal is a suruptious activity and in such type of cases, direct evidence would very rarely be forthcoming which would prove a case beyond all reasonable doubts. As stated above, in the facts of the present case, the clandestine manufacture and removal stands proved. 10. Accordingly, I find that there is no re .....

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in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding three times of value of such goods or five thousand rupees, whichever is greater." From the above, the said rule makes it clear that the said penalty can be imposed only when the person has acquired the excisable good .....

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