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M/s. Shree Nakoda Ispat Ltd., Sh. Sanjay Goel, Director And Sh. Anant Dave. Director Versus C.C.E. Raipur

Clandestine removal of goods - Department has recovered photocopies of four invoices from some sources - recovery of loose sheets of papers - 26 nos. of Gate Pass Books were recovered by the Department - Held that:- it is imperative that the contents of photocopies should be compared with the contents of their respective originals. In absence of the original documents, the photocopies, not being even secondary evidence, are not admissible in evidence. No enquiries have been conducted by the Depa .....

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Revenue is not relieved altogether of burden of producing some credible evidence in respect of the facts in issue. In the case in hand, admittedly the Revenue has not brought any tangible evidence to discharge its burden of proof of clandestine removal of goods. - It is an admitted fact on record that the Department has not carried out any physical verification of alleged shortage in stock and the same was based on eye estimation only. Thus, in absence of actual physical weighment of stock .....

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ommissioner of Central Excise, Raipur whereby a demand of Central Excise duty of ₹ 49,33,696/- has been confirmed and equal amount of penalty has been imposed on M/s Shree Nakoda Ispat Ltd. (for short, referred to as the appellant company). Besides, personal penalty of ₹ 5,00,000/- and ₹ 6,00,000/- have also been imposed on the Directors Shri Sanjay Goel and Shri Anant Dave respectively. 2. Central Excise duty demand and penalty have been confirmed in the impugned order mainl .....

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ber and date were issued by appellant to M/s. Ram Dayal Verma and M/s. Ajaya Shanker Verma for sale of Dolachar, duly entering such sale particulars in the books of accounts. Further, it has been alleged that both these firms are not traceable in the address indicated in the invoices. (ii) The Department has recovered three loose sheets of papers pertaining to the month of July -2011, showing removal of sponge iron fines, sponge iron lumps and M.S. Ingots wherein the names of the buyers are ment .....

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fines have been mentioned. (iv) On the basis of the entries made on the reverse side of gate passes for the period March' 2010 and April to June' 2011, Central Excise duty demand has been raised, for which no loose papers were referred to by the Department. 3. The appellant has assailed the impugned order inter alia, on the following grounds:- 3.1 The Department has not disclosed the source from which the photocopies of invoices were recovered, showing alleged sale of sponge iron fines b .....

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r photocopies of invoices were not produced for verification/comparison to ascertain whether photocopies were genuine and true copies of the originals. To support its submission that photocopies are not admissible as evidence in the absence of originals thereof, the appellant has relied on the following decisions rendered by the judicial forums:- (a) J. Yashoda Vs. K. Shobha Rani - 2007 (212) ELT 458 (SC) (b) Collector Vs. East Punjab Traders - 1997 (87) ELT 11 (SC) (c) Truwoods Pvt. Ltd. Vs. CC .....

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2009 (92) RLT 731 (CESTAT) (c) Raj Sandeep Vs. Collector - 2013 (102) ELT 1028 (CESTAT) (d) Commr. Vs. Rexin Sea India Ltd. - 2003 (156) ELT 147 (CESTAT) (e) Rama Shyama Papers Ltd. Vs. CCE - 2004 (168) ELT 494 (CESTAT) 3.3 With regard to recovery of three loose sheets of papers pertaining to the period July' 2011, showing alleged removal of sponge iron fines, lumps and M.S. ingots, the submissions of the appellant are that those papers are photocopies only and in absence of the originals t .....

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n obtained from them regarding the clearances of alleged excisable goods by the appellant. That the statements of Shri Ajay Kumar Dewangan, Dispatch Clerk and Shri Anant Dave, Director of the appellant company are neither voluntary nor true and were written as per the wishes of the Departmental investigating officers. That the Department has not obtained any confirmation from the transporters that the excisable goods were transported from the unit of the appellant to the premises of the alleged .....

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t contended that in absence of any corroborative evidence, the charges of clandestine removal cannot be sustained based on the alleged loose sheet of papers. 3.4 As regards the findings in the impugned order on 26 nos. of gate pass books resumed by the Department officers, the submissions of the appellant are that the gate passes are for clearance of Dolachar only. That the handwriting on the reverse of those gate passes is not of any employees of the appellant's company. The person who has .....

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tice that the appellant has shown higher percentage of production of Dolachar vis-vis other finished goods. In the absence of these evidences, the allegation that the appellant has removed sponge iron fines, sponge iron lumps and M.S. Ingots on those gate passes is not sustainable. 3.5 In addition to the above grounds, the appellant has also stated that the transporters namely, Shri Shiv Shankar Tiwari and Shri Ram Dayal Yadav in their affidavits have deposed that they have transported Dolachar .....

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ect the actual production and that the person who has prepared those slips has not been identified and questioned by the Department as to the authenticity of the contents of those slips. Regarding shortage in stock of goods, the submission is that the visiting officers conducted physical verification by eye estimation only, without undertaking the actual weighment of goods. 4. Heard Shri Kamal Jeet Singh, ld. Advocate for the appellant and Shri Vaibhav Bhatnagar, ld. D.R. for the Revenue and exa .....

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r the sale particulars in the Central Excise records. The case of the Department is that other set of invoices (4 nos.) bearing same serial number were also issued by the appellant for clearance of Dolachar in favour of M/s Ramdayal Verma and Ajay Sankar Verma. Thus, it was alleged by the Department that Sponge Iron Fines were removed by the appellant in clandestine manner, without discharging Central Excise Duty liability. There is no reference either in the SCN or in the impugned order as to t .....

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cation/comparison to ascertain whether photocopies were genuine and true copies of the originals, in my opinion, a photocopy, merely as a piece of paper, cannot be considered as having any evidentiary value. In this context, Section 63 of the Evidence Act, 1872 provides that secondary evidence is not admissible until the non-production of primary evidence is satisfactorily explained. The Hon'ble Supreme Court in the case of J. Yashoda - Vs. - K. Shobha Rani, reported in 2007 (212) ELT 458 (S .....

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d photocopy of invoices from the appellant. Therefore, demand of duty in such an eventuality will not sustain, as held by this Tribunal in the case of Sakeen Aloys Pvt. Ltd. - Vs. - CCE, Ahmedabad, reported in 2013 (296) ELT 392 (Tri.-Ahmd.). 6. The genuineness of the invoices issued by the appellant against supply of Dolachar was disputed by the Department on the ground that it is not feasible to trace out the buyers on the basis of vague address furnished by the appellant. In arriving at such .....

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he disputed invoices were purchased by them from the appellant company. I also find from the appeal paper book that the drivers of the vehicles used for transportation of Dolachar have confirmed through affidavits that they have delivered the appellant's goods at the site of above named buyers. The above stated affidavits together with their enclosures irrefutably establish the existence of the buyers of Dolachar in the address indicated in the invoices and that the goods were purchased by t .....

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clandestine activity with the intent to evade payment of duty has not been satisfactorily discharged by the Revenue, justifying confirmation of the duty demand. 7. The impugned order has confirmed the duty demand on the basis of loose sheet of papers pertaining to the month July' 2011 recovered from the premises of the appellant company, wherein Sponge Iron Fines, Sponge Iron Lumps and MS Ingots were allegedly shown as removed to various buyers namely M/s Hanuman Ispat Pvt. Ltd., Raipur, M/ .....

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at the appellant had supplied the goods as per information contained in those loose sheet of papers. Further, there is no evidence available on record that the goods as per those sheets were seized/detained by the Central Excise Department or any other Government agencies. Thus, in absence of any cogent evidence of clearance of excisable goods as reflected in the alleged loose sheets, the charges of clandestine removal with intent to evade payment of duty, in my opinion, cannot be leveled, justi .....

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t the Revenue is not relieved altogether of burden of producing some credible evidence in respect of the facts in issue. In the case in hand, admittedly the Revenue has not brought any tangible evidence to discharge its burden of proof of clandestine removal of goods. 8. I find that based on Annexure F-1 and Annexure F-2 of the SCN, the impugned order has confirmed the duty demand on the alleged ground that during the period March' 2010 and April to July' 2011, the appellant had purporte .....

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have also confirmed that they have transported Dolachar from the factory of the appellant to the buyers premises and not the alleged goods namely, sponge iron fines, sponge iron lumps and ingots. I also find that in the reply to the SCN, the appellant had undertaken to produce those transporters and alleged buyers for cross-examination, if needed by the Department. However, the adjudicating authority did not call those persons for cross-examination. Thus, in such situation, the affidavits, in m .....

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gots on the dates mentioned therein from the unit of the appellant to the premises of the named consignees. Hence, in my considered view, no reliance can be placed on these loose papers to confirm the duty demand. 10. As regards the alleged production reports referred to in the impugned order, I find that the adjudicating authority has not taken into consideration the facts stated by Shri Anant Dave in his statement dated 15.02.2013, wherein he has stated that the production slips are not the of .....

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andestine manufacture and removal of the finished goods cannot be leveled against the appellant. In this context, this Tribunal in the case of Hindustan Machines -Vs. - CCE, 2013 (294) ELT 43 (CESTAT), K.V. Textiles Pvt. Ltd. -Vs. -CCE, 2009 (240) ELT 397 (CESTAT) and Deccan Granites - Vs. - Commissioner, 2003 (151) ELT 582 (CESTAT) has held that demand of duty cannot be confirmed on the basis of private/internal records and production slips. 11. It is an admitted fact on record that the Departm .....

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ise invoices and that he had not voluntarily admitted to pay the duty and the statement to that effect was written by the Officers of Central Excise Department. Further, Shri Anant Dave, Director of the company has retracted from his statement through the reply to the SCN that duty payment was made voluntarily towards alleged clandestine removal of goods. The ld. Commissioner of Central Excise has not considered such statements in proper prospective and discarded the same on the ground that the .....

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leged could be sustained. The facts and circumstances in this case did not bring out such set of evidence to conclude in favour of Revenue the allegation of clandestine removal. In this context, the principles decided by the Hon'ble Delhi High Court in the case of CCE, Delhi-I - Vs. - Vishnu & Co. Pvt. Ltd., reported in 2016 (332) ELT 793 is to the effect that even if the statement is retracted afterward, the same retracted statement along with other documents produced in defense cannot .....

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