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2016 (7) TMI 897 - GUJARAT HIGH COURT

2016 (7) TMI 897 - GUJARAT HIGH COURT - 2017 (345) E.L.T. 629 (Guj.) - Clandestine removal of goods - tribunal had set aside the demand - Held that:- it is evident that the Tribunal has discussed the evidence on record in detail and has based its conclusions upon findings of fact recorded by it upon appreciation of the evidence on record. Having regard to the evidence which has come on record as discussed hereinabove, in the opinion of this court, it is not possible to state that the findings re .....

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t be said that the findings recorded by the Tribunal are in any manner perverse. It, therefore, follows 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, .....

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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 on the respondent assessee on the ground that charges leveled against him are not proved, in ignorance of relevant material and evidence placed on record in the adjudication while confirming demand and proposal made in the show cause notic .....

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the witnesses, which were never retracted? Since the facts and contentions in all the three appeals are more or less common, the same were taken up for hearing together and are disposed of by this common judgment. For the sake of convenience, reference is made to the facts as stated in Tax Appeal No.548/2015. 2. The respondent - Shree Krishna Industries is engaged in the manufacture of Ceramic Glaze Fritz falling under Chapter 3207.10/90 of the Central Excise Tariff Act, 1985. However, according .....

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r the Central Excise Rules and the law as applicable. In terms of the information, M/s. Shree Krishna Industries had another factory at Survey No.326-328 at village: Vadu, taluka: Kadi, district: Mehsana. The intelligence further pointed out that M/s.Shree Krishna Industries had appointed a person for distribution of such clandestinely cleared goods to be sold inter alia in the areas in and around Morbi where large number of Ceramic Tiles manufacturing units are situated and that such person was .....

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prietor 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 .....

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r the provisions of rule 26 of the Central Excise Rules, 2001 read with Central Excise Rules, 2002 for the acts of omission and commission. 2.2 By an order-in-original dated 31st March, 2008, the show-cause notice came to be adjudicated by the Additional Commissioner of Central Excise, Vadodara-II, whereby he confirmed the demand of duty along with interest and imposed mandatory penalty equivalent to the duty amount on the respondent assessee. The adjudicating authority also imposed personal pen .....

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or standing counsel for the appellant, assailed the impugned order by submitting that the respondent enjoys exemption under Notification No.8/2002-CE and is, therefore, not required to be registered under the provisions of the Central Excise Act. It was pointed out that in terms of clause (v) and (vi) of the above notification, where the manufacturer clears the specified goods from one or more factories, the exemption in his case shall apply to the aggregate value of clearances mentioned against .....

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ce as well as to the impugned order passed by the Tribunal, it was pointed out that the Tribunal has not considered the evidence of the proprietor in the form of statements recorded on 17th October, 2003, 3rd August, 2004 and 5th August, 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, E .....

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nce 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 Shital at Chhota Udepur recorded on 25th December, 2003. It was .....

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e same does not say that goods are not cleared under invoice but it says that the clearances exceed the SSI limit. Referring to the findings recorded by the Tribunal with regard to the suppliers of raw material, it was pointed out that the Tribunal has not made any reference to the statement of M/s. Shivam Chemicals. It was submitted that this is a case of clearance of goods beyond the permissible limit prescribed in the exemption notification and hence, what has to be established is the clearan .....

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roduction of goods. That the employee has explained the details in the documents and has thereby demonstrated production and despatch of goods by the respondent Shree Krishna Industries. It was pointed out that in the facts of the present case, the statements made by the concerned parties during the course of search, have not been retracted. It was, accordingly, urged that the Tribunal has failed to appreciate the evidence on record in proper perspective and that the findings recorded by the Tri .....

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e 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 .....

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deserves consideration on the questions of law as proposed. 5. Vehemently opposing the appeals, Mr. Devan Parikh, Senior Advocate, learned counsel for the respondent supported the impugned order by submitting that the findings recorded by the Tribunal are in consonance with the evidence on record. It was submitted that this is a clear case of appreciation of evidence and that in the absence of any perversity in the findings recorded by the Tribunal, no question of law arises. It was submitted t .....

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ut of sixty to seventy customers named in the notebook, the Department has examined only four such customers, despite the fact that the names of all the other customers are also there in the notebook. It was submitted that out of the four customers examined by the Department, two had made statements in favour of the assessee and the other two in their cross-examination have testified in favour of the assessee. It was submitted that as regards the factor of production of the final goods is concer .....

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the findings recorded by the Tribunal, it was submitted that all the evidence produced by the Department has been considered by the Tribunal. Insofar as the evidence produced by the Department is concerned, all that is produced are statements of suppliers without any proof of transportation or payment of cash. It was submitted that all the witnesses namely, suppliers and transporters have reneged from their original statements in their cross-examination and there is no proof of any purchase of .....

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f 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 .....

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was possible to take a different view, the same would not give rise to a substantial question of law. Reliance was also placed upon the decision of this court in the case of Commissioner of C.Ex., Cus. & Service Tax v. Vishwa Traders P. Ltd., 2013 (287) E.L.T. 243 (Guj.), wherein the court held that it is wellsettled that the findings of the Tribunal can be interfered only if it is perverse or some material evidence is ignored. In such circumstances, only the court may exercise jurisdiction .....

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dvanced by the learned counsel for the respective parties and has perused the orders passed by the authorities below and the record of the case as produced before it. As can be seen from the impugned order, the Tribunal, after considering the submissions advanced by the learned counsel for the respective parties has found that the case was booked on the basis of notebooks mainly seized from the residence of an employee of M/s Shree Krishna and statements of its buyers and suppliers of raw materi .....

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ribunal found that except for 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 t .....

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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 that on the basis of such statement of the transporter, the demand cannot be confirmed against the respondent since there was no consignee of goods who has received any goods through the said transporter. The Tribunal further found that the other witnesses on whose statement .....

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aterial required for manufacture of Fritz was appearing or alleged in the show-cause notice and was accordingly of the view that the allegation of clandestine removal needs to be established by showing receipt of major raw materials, at least of some quantity, use of excess raw material, input - output ratio, transportation of raw materials, use of such goods in manufacture of finished goods, excess utilisation of power fuel, transportation of finished goods, investigation at the buyer s end, re .....

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