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2016 (7) TMI 897

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..... ows that in the absence of any perversity in the findings of fact recorded by the Tribunal on an appreciation of the evidence on record, even if on the same set of facts, it was possible for this court to take another view, the same would not give rise to a question of law, much less, a substantial question of law, warranting interference. - Decided against the revenue. - Tax Appeal No. 548, 516, 549 of 2015 - - - Dated:- 1-4-2016 - Harsha Devani And G. R. Udhwani, JJ. For the Appellant : Mr RJ Oza For the Opponent : Mr Devan Parikh, Mr Harshal M Shah ORDER ( Per : Honourable Ms. Justice Harsha Devani ) 1. These appeals at the instance of the revenue have been preferred against the common order dated 9th January, 2015 passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Ahmedabad (hereinafter referred to as the Tribunal ) by proposing the following questions stated to be substantial questions of law:- Tax Appeals No.548/2015 and 549/2015 [a] Whether in the facts and circumstances of the case, the Tribunal has committed substantial error of law to set aside demand of duty, interest and imposition of penalty imposed o .....

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..... igence, simultaneous search operations were carried out on 16th October, 2003 at M/s. Shree Krishna Industries at Jambusar, Bharuch and at another factory of Shree Krishna Industries and other units owned by their relatives having factories at Survey No.326- 328, village Vadu, taluka Kadi. Searches were also conducted at the residential premises of the proprietor of Shree Krishna Industries and transporters and the premises of Shri Hitesh Parekh, its agent at Morbi, premises of units supplying raw materials to Shree Krishna Industries and premises of its buyers. During the course of search, large volumes of incriminating documents were recovered and placed under seizure under various panchnamas. Detailed investigation culminated into issuance of a show-cause notice dated 17th November, 2004 demanding central excise duty amounting to ₹ 35,86,397/- pertaining to the period 2002-03 and 2003-04 (up to 16th October, 2003) under section 11A of the Central Excise Act, 1944 (hereinafter referred to as the Act ) along with interest under section 11AB of the Act and proposing to impose mandatory penalty under section 11AC of the Central Excise Act, 1944 read with rule 25 of the Centra .....

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..... 2004 and the findings on these statements have not been recorded. It was submitted that the Tribunal has considered the statements of three employees of the respondent namely, Ramesh Patel, Supervisor, Vadu, Mukesh Patel, Supervisor, Jambusar and Anil C. Shah, Ex- Supervisor at Vadu and has recorded its findings on the basis of these statements. Referring to the statements of the said employees, it was submitted that the Tribunal has not correctly read such statements. It was further submitted that the Tribunal has considered the evidence of buyers, transporters and suppliers of raw material and statements of agents and has recorded a finding that the invoices have been issued by the respondent for clearance of goods in favour of the buyers and that since invoices have in fact been issued, there is no clandestine removal. It was submitted that the question of clandestine removal has to be considered in the light of clearance of goods, the value whereof is more than ₹ 1,00,00,000/- in a year. Moreover, the Tribunal has not considered the statement of the supplier who has supplied goods and purchased goods namely, Shivam Chemicals and has also not considered the statement of Sh .....

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..... here is no evidence as regards clandestine removal is required to be considered in the light of the fact that this is a case of clandestine removal in which case, the effort which would be made by the parties would be to see that there is no evidence of such production or removal. Referring to the findings recorded by the Tribunal in the impugned order, it was submitted that the Tribunal has failed to consider the fact that the revenue has also in its possession notebooks, registers, invoices, bills, challans and also panchnama which is sufficient positive evidence in support of its case of clandestine removal. It was submitted that Boric Acid is one of the essential ingredients in the manufacture of Ceramic Glaze and the extent of various raw materials is certainly not the criteria to infer that supply of Boric Acid is no evidence to lead to the illicit activity of the respondent. It was submitted that what is adduced as evidence has to be considered positively rather than what could not be adduced as evidence, so as to draw adverse inference against the revenue. Reiterating the submissions advanced by Mr. Oza, Mr. Bhatt submitted that the appeal deserves consideration on the ques .....

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..... in their cross-examination and there is no proof of any purchase of any major raw material. Referring to paragraph 11 of the impugned order, it was submitted that the statements of third parties cannot be relied upon in the absence of any supporting documents and that the Tribunal has considered all the evidence on record in proper perspective while arriving at the conclusion that the Department has failed to establish any clandestine removal on the part of the respondent. 5.1 In support of his submissions, the learned counsel placed reliance upon the decision of this court in the case of Suman Plywood Pvt. Ltd. v. Commissioner of Central Excise, Ahmedabad-II, 2015 (322) E.L.T. 290 (Guj.), for the proposition that unless a question of law arises for determination, the High Court is not to replace its reasoning with that of the Tribunal. Further, the High Court would not interfere unless material evidence on record were disregarded, or if considered, resulted in the Tribunal reaching findings which were ex facie illegal, perverse and such as would give rise to questions of law. It was submitted that the Tribunal has extensively dealt with the evidence on record and, in the absenc .....

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..... or statements which stood nullified in cross-examination, no other corroborative evidence in respect of clearance of goods by M/s. Shree Krishna was appearing on record. Insofar as the investigation conducted at the end of the suppliers of raw material on the basis of notebooks seized from the residence of Shri Mukesh Patel and factory premises is concerned, the Tribunal, after considering the evidence on record found that the allegation of receipt of raw material by the respondent was not sustainable. The Tribunal while recording such findings of fact has considered the statements of various parties and the evidence as collected by the revenue authorities. The Tribunal has also noted that the show-cause notice has relied upon investigation and statements of two transporters, but on an appreciation of the evidence on record, it has found that neither of the transporters owns any truck nor has any records and that only on the basis of some chithis seized from the Vadu factory, it has been stated that transportation has taken place, whereas no investigation has been carried out from the persons to whom the goods were reported to have been transported. The Tribunal was of the view tha .....

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