TMI Blog2016 (10) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... h, of such goods by the manufacturers or persons authorized by him; (f) Use of electricity far in excess of what is necessary for manufacture of goods otherwise manufactured and validly cleared on payment of duty; (g) Statements of buyers with some details of illicit manufacture and clearance; (h) Proof of actual transportation of goods, cleared without payment of duty; (i) Links between the documents recovered during the search and activities being carried on in the factory of production; etc - nothing has been brought on record with corroborative evidence to allege clandestine removal against the appellant. Confiscation of currency - The seized currency during the course of investigation cannot be confiscated without proving that the said seized currency is the sale proceeds of excisable goods cleared clandestinely. Therefore, we hold that absolute confiscation of the seized currency of ₹ 47,00,000/- is not sustainable accordingly, the confiscation is set aside and the Adjudicating Authority is directed to release the said amount immediately to the appellants. The demands against the appellants not sustainable - penalty on all the appellants not sustainable - appeal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii. I also imposed a penalty of ₹ 5,89,915rupees five lakh eighty nine thousand nine hundred and fifteen onlyon the noticee in terms of Section 11AC of the Act readwith Rule 25 of the Central Excise Rules, 2002 3. SSIL i. I confirm the demand of Central Excise duty amounting to ₹ 45,865RsForty five thousand eight hundred and sixty five only on account shortage of alloy Steel Ingots and Central Excise duty amounting to ₹ 44,503RsForty four thousand five hundred and three only on account of shortage of Alloy Steel detected on 211005 under proviso to sub Section 1of Section 11A of the Act ii. I confiscate excess stock of 1915 MT of non alloy steel Ingots valued at ₹ 36,691, 0865 MT of Non alloy Steel Flats valued at ₹ 18,598and 17099 MT of Alloy Steel Flats valued at ₹ 15,44,296being the stock of goods found in excess of the recorded balances on 211005However I allow the same to be redeemed to the noticees on payment of redemption fine of ₹ 2,40,000Rupees two lakh forty thousand only. After the redemption, the noticees shall account for the said goods in their production records iii.I also demand interest at appropriate rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty of ₹ 2500000Rupees Twenty Five lakh onlyon Shri Suresh Aggarwal, Proprietor of RE, in terms of Rule 26 of the Central Excise Rules, 2002 for facilitating clandestine manufacture by providing unaccounted melting scrap to the manufacturing units of noticees and clandestine clearance of excisable goods without payment of duty by marketing the same This order is being passed without prejudice to any other, or any further, action that may be taken against the noticees under the Central Excise Act, 1944 and Rules made there under andor any other law for the time being in force 2. The brief facts of the case are that the appellants namely M/s Sada Shiv Steel Mills SSSM, M/s Sada Shiv Castings LtdSSCL, M/s Sada Shiv Ispat Ltd SSI Lare the manufacturer of excisable goods and M/s Raghav Enterprises is a trading firm owned by Shri Suresh Aggarwal Shri Sunny Garg and Shri Kewal Garg are the Director Proprietor of manufacturing firm On 2110205, the DGCEI conducted a raid at the business residental premises of all the appellants who were engaged in manufacturing of alloy and nonalloy steel ingots flats, rounds, ERW pipes etcIt was alleged that there was a shortage of nonalloy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Shri Suresh Aggarwal, PropOf M/s Raghav Enterprises under Rule 26 of Central Excise Rules, 2002The seized goods were allowed to be redeemed on payment of redemption fine of ₹ 7,40,000The cash recovered from the premises of Shri Sunny Garg and Shri Kewal Garg of ₹ 47,00,000was absolutely confiscated. Aggrieved from the said order, appellants are in appeal before us 3. The learned counsel for the appellants submits that the verification of stock was done on the basis of average and not on actual. He drew our attention to Annexure B to the Panchnama which reveals that M/s SSCL was having stock of 302340 Mt as per statutory records at the time of visit of the staff on 211005 the stock of scrap was allegedly physically verified as 252200 MT as per waivement slip 1 to 7 but no weighment slip were prepared and supplied to the appellant and the same has not been find and mentioned in Annexure to the show cause noticeHe further submits that the trucks are invariable have the capacity of 10 Mt and it's not physically to weigh 252200 Mt in 7 trucks during 1130 am to 800 pm in a single day, therefore the shortage has been alleged arbitrarilyHe further submits that the shor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The allegation is made only on the basis of the statement of Shri Suresh Aggarwal of M/s Raghav Enterprises that they are purchasing goods from Sada Shiv Group. In fact M/s SSIL one of the group company was supplying goods to M/s Raghav Enterprises against invoices and the records recovered form M/s Raghav Enterprises corroborates the said facts. To allege clandestine removal of goods from SSCL is only on the basis of documents recovered from third party. No other corroborative evidence has been produced by the Revenue for clandestine removal. Therefore, demand is not sustainable in the light of the decision of Raipur forging Pvt. Ltd. Vs. CCE, Raipur I reported in 2016 (335) E.L.T. 297 (tri. Del). He also submits that no corroborative evidence has been produced by the Revenue like purchase of extra raw material, actual removal of goods, transporter statement, receipt of sale proceeds, therefore, demand is not sustainable in the light of decision of arya fibres pvt. Ltd. Vs CCE, Ahmedabad II reported in 2014 (311) E.L.T. 529 (Tri. Ahmd.). He further submitted that the Annexure d relied on chart I, II, III which reveals that there are number of entries in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y on account of shortage of raw material/finished goods in the factory premises of all the three manufacturers ; (b) Demand of duty on account of clandestine removal of goods by M/s SSCL (c) Absolute confiscation of the currency of ₹ 47,00,000/- recovered from the residential premises of Shri Sunny Garg and Shri Kewal Garg and (d) Imposition of penalty on all the appellants. We have seen that during the course of investigation, no incriminating document was found in the premises of manufacturer/appellants and no corroborative evidence has been produced except some statements. 11. On the basis of the records placed before us and arguments advanced by both the sides, we find that in the case of SSCL demand of duty has been confirmed on account of shortage of raw material and finished goods to the tune of ₹ 4,42,243/-. We find that duty has been demanded on shortage of melting scrap of 50.140 MT. and in the impugned order it is not alleged that this raw material has been used in manufacturing of final product which has been cleared without payment of duty. The demand of duty on shortage of raw material cannot be demanded as duty can be demanded only on man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to demand of duty on account of shortage at the premises of M/s SSIL we find that duty has been demanded on both inputs as well as finished goods. With regard to shortage of inputs, it is not held by the Adjudicating Authority that the inputs found short has been used in manufacturing of final product by the appellant, if that would be the case duty would have been demanded on the value of final manufactured goods, that is not the case of the Revenue. Therefore, the duty cannot be demanded on the raw material found short during the course of investigation as same is not manufactured goods by the appellant. We further find that while waivement of finished goods during the course of investigation, it was found that as per statutory records the finished goods are of 110.207 MT whereas on average waivement it was found that 102.465 MT therefore, the shortage attributed to 7.742 MT. The details of actual average waivernent has not been provided, therefore, benefit of doubt goes in favour of the appellant, as the waivement has been done on average basis. In that circumstances, the shortage found of finished goods is of meager quantity and in the absence of any corroborative evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) Discovery of such finished goods outside the factory; (d) Instances of sale of such goods to identified parties; (e) Receipt of sale proceeds, whether by cheque or by cash, of such goods by the manufacturers or persons authorized by him; (f) Use of electricity far in excess of what is necessary for manufacture of goods otherwise manufactured and validly cleared on payment of duty; (g) Statements of buyers with some details of illicit manufacture and clearance; (h) Proof of actual transportation of goods, cleared without payment of duty; (i) Links between the documents recovered during the search and activities being carried on in the factory of production; etc. 17. Admittedly nothing has been brought on record with corroborative evidence to allege clandestine removal against the appellant. Therefore, we hold that demand against M/s SSCL on account of clandestine removal of goods is not sustainable relying on the statement of Shri Suresh Agarwal that they are purchasing the goods from Sada Shiv Group i.e. M/s SSIL against statutory invoices. 18. We have taken note of the fact that during the course of investigation, an amount of ₹ 47.00.000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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