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2017 (2) TMI 618 - CESTAT MUMBAI

2017 (2) TMI 618 - CESTAT MUMBAI - TMI - Clandestine removal - duty paying invoices - goods not covered by invoices - Held that: - the evidences i.e papers/ records found from the third party i.e M/s Super Trading cannot be a basis for holding clandestine removal by M/s Hira Enterprise in absence of any corroboration from assessee’s side and thus demand cannot be made against M/s Hira Enterprise - in case of goods found at the premises of M/s Super Traders alleged to have been cleared from the f .....

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peal allowed - decided in favor of assessee. - E/252 to 254, 1231/07 - A/85235-85238/17/EB - Dated:- 5-1-2017 - Mr Ramesh Nair, Member (Judicial) And Mr. C.J. Mathew, Member (Technical) Shri. Jaikumar, Advocate with Shri. Kartik Jindal, Advocate and Shri. Ganesh R.S. Iyer, Advocate for the Assessees Shri. Ashutosh Nath, Asstt. Commissioner(A.R.) for the Revenue Per : Ramesh Nair These appeals are directed against Order-in-Original No. 17/CEX/2006 dt. 30.11.2006 passed by the Commissioner of Cent .....

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conducted searches at factory premises of M/s Hira Enterprises. Searches were also conducted at premises of dealer M/s Super Trader at Mumbai and Bhiwandi which led to recovery of sheets alleged to be containing details of quantity purchased from M/s Hira Enterprise. The officers also detained goods from the Bhiwandi premises of M/s Super Trading. Statement of Shri Mohd. Arshad proprietor of M/s Super Trading was recorded on 26.07.2002 wherein he stated that they are receiving goods under cover .....

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f Shri Arshad F Khan, proprietor of M/s Super Trading to sell the products having office at Bhiwandi. Shri Arshad F khan in his statement dt. 27.08.2002 stated that Hira gutka is received in gunny bags containing six bags each of gutka. Similarly Sada Pan Masala was in gunny bag containing 5 bags of pan masala, one gunny bag of mawa used to contain 5 bags of mawa, one gunny bag of BaOba used to contain six bags of BaOba whereas the invoice received by them from M/s Hira Enterprise was only for 1 .....

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r the purpose of its safe transportation. On being asked as to whether the same modus operandi has been applied for clearance of their products to other dealers also he replied that he has to check before responding. Based on the investigation M/s Hira Enterprise were issued show cause notice dt. 28.11.2005 demanding duty of ₹ 1,09,40,463/- and proposing penalty of equivalent amount. It was also proposed to impose penalty on Shri Aslambhai, Partner of M/s Hira Enterprise and Shri Mohd. Ars .....

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the invoices and hence the same are clandestine removal by M/s Hira Enterprise. Further penalty was also imposed upon main assessee. A penalty of ₹ 25000/- was also imposed upon Shri Aslam Hashnbhai Tamboli, Partner of M/s Hira Entrerprise and of ₹ 10,00,000/- upon Shri Mohd. Arshad, Proprietor of M/s Super Trading. Aggrieved by the impugned order M/s Hira Enterprise, Shri Aslam Hashnbhai and Shri Mohd. Arshad has filed Appeal Nos. E/252 to E/54 of 2007 against the demand and penalti .....

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That the adjudicating authority while dropping bulk of demand has already discarded set of documents viz. chits of dealer on the ground that the same do not represent credible and reliable evidence. That once it is held so the same documents cannot be relied upon for confirmation of other demand. That M/s Super Trading in addition to selling of goods of M/s Hira are also selling goods of other manufacturers i.e cigarettes, gutka, matches etc. They are not sole selling agent of M/s Hira and is no .....

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on with any document. The collection shown in the chits is not attributable to sale proceeds of said dealer for sale of assessee s products and can be said to include sale proceeds of various other goods sold by the dealer to its buyers. That the statements do not explain or prove any clandestine removal and are thus empty or vague, assessee s production capacity is in fair commensurate with the raw material receipts, consumed and finished goods manufactured and sold and that the accounts mainta .....

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was no transaction of any goods and hence question of issuing invoice is just otiose and since having charge of surplus removal of goods against the invoiced transactions no room exists for adjudicating authority to confirm demand. He further submits that in case of goods seized during investigation the confiscation of seized goods from premises of M/s Super Trading was proposed and same was confirmed by the adjudicating authority. That the Commissioner (Appeals) set aside the order-in-original .....

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ing of goods in gunny bags for clearances and Shri Aslam Shah had also stated so but it can be seen that he stated that on certain occasion on request of customers, they used to pack the cloth bags in gunny bags for safe transportation. That nowhere there is admittal that in respect of all consignments by M/s Hira they had resorted to packing of 5 - 6 bags in gunny bags. Department has not been able to corroborate this aspect by way of evidence as they have relied only upon the chits found with .....

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st the said order of Commissioner (Appeals) revenue filed appeal before CESTAT who vide Final Order 11.07.2008 rejected the appeal file by the revenue. That in the light of above judgment of CESTAT on the same set of facts, evidence and investigation the department s case does not stands. He also submits that the reliance placed upon the judgment of CCU, Madras Vs. D.Bhoormull [1983 (13) ELT 1546 (SC)] is not applicable as the same is in context of Customs Act and not central excise act. That th .....

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ket Food Products Pvt. Ltd. V/s Commissioner of C. Ex., Aurangabad [2005 (188) E.L.T. 107 (Tri. - Del.)] (f) Jagatpal Prem Chand Ltd. V/s Commissioner of Central Excise, Delhi-I [2004 (178) E.L.T. 792 (Tri. - Del.)] (g) Surya Roshni Ltd V/s Commissioner of Central Excise, Indore [2005 (182) E.L.T. 420 (Tri. - Del.)] (h) Gulabchand Silk Mills Pvt. Ltd. V/s Commissioner of C. Ex., Hyderabad-II [2005 (184) E.L.T. 263 (Tri. - Bang.) (i) Commissioner of Central Excise, Surat-I V/s Umiya Chem Industri .....

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E.L.T. 12 (Bom.)] (o) Sulochana Amma V/s Narayanan Nair [1995 (77) E.L.T. 785 S.C.)] (p) Commissioner of Central Excise, Delhi-I V/s Ishnu & Co. Pvt. Ltd. [2016 (332) E.L.T. 793 (Del.)] (q) Chandan Tobacco Company V/s Commissioner of C. ex., Vapi [2014 (311) E.L.T. 593 (Tri. - Ahmd.)] (r) Nava Petrochemicals Ltd. V/s Commissioner of C. Ex., Ahmedabad [2010 (254) E.L.T. 165 (Tri. - Ahmd.)] (s) commissioner of c. Ex., chandigarh-I V/s Laxmi Engineering Works [2010 (254) E.L.T. 205 (P & H)] .....

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t is apparent that the goods were cleared by M/s Hira Enterprise without payment of duty. He further submits that during physical verification of the stocks on 26.07.2002 at premises of M/s Super Trading, they were not able to provide duty paying documents. That in their statements Shri Aslam proprietor of M/s Hira Enterprise accepted the removal of goods in excess of invoices quantity indicated in gunny bags. That Shri Arshad of M/s Super Traders also accepted that they have received invoice fo .....

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4 (Bom.)] (b) Padmashri V.V. Patil S.S.K. Ltd. V/s Commissioner of Central Excise & Customs [2016 (335) E.L.T. 196 (S.C.)] (c) Haryana Acrylic Manufacturing Company Private Limited V. Commissioner -[2016 (332) E.L.T. A249 (S.C.)] (d) Commissioner of C. Ex. & Cus. V/s Shri Ram Aluminium Pvt. Ltd. [2009 (242) E.L.T. 202 (Bom.)] (e) Nu-Trend Business Machines (P) Ltd. V/s Commr. of C. Ex., Chennai [2002 (141) E.L.T. 119 (Tri. - Chennai)] (f) Hero Plywoods & Boards V/s Commissioner Of C. .....

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f M/s Super Traders are not covered by the invoices of M/s Hira Enterprise and thus details are of goods cleared clandestinely by M/s Hira Enterprises. We also find that in case of demand of ₹ 77,90,388/- dropped by the adjudicating authority the said demand was also based upon the Papers seized from premises of M/s Super Trading and statement of its proprietor Shri Arshad who explained the entries of such papers and also stated that the quantity of Gutka, Sada pan masala and other items w .....

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h during investigation the name of other dealers selling the goods of the assessee firm also cropped up but it is not known as to whether they were also receiving goods more than the invoiced quantity. We also find that Shri Aslam Shah in his statement has stated that the goods were packed in gunny bags i.e 5 or 6 bags of Hira or BaOba Gutka or Pan masala in one gunny bags only if the buyers wanted them to do so. However it is not forthcoming from the investigation as to whether such packing was .....

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find that M/s Super trading being engaged in trading of goods of other manufacturer also and there records cannot be a basis to allege that the goods manufactured by M/s Hira Enterprises were cleared clandestinely. Though the statement of Shri Aslam, Partner of M/s Hira Enterprise has been recorded but the same is not supported by any Independent evidence as nothing incriminating was seized from the premises of M/s Hira Enterprises and hence his statement has to be construed as being in isolatio .....

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vered from the assessee company held that loose chits found from the assessee premises cannot be a basis for demand unless the same is supported by receipt of raw material and its clearances. Similarly in case of Jagatpal Premchand Ltd. Vs. CCE Delhi 2004 (178) E.L.T. 792 (Tri. - Del.) it was held that in absence of any excess stock of Supari/Katha/Tobacco, etc. i.e., main raw materials for manufacture of Panmasala and Gutka found in factory during visit of officers, or anything found during inv .....

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s, its clearance from factory of assessee firm and receipt of any amount towards alleged clandestine clearance. Further no excess stock has been found from the assessee s factory and no incriminating records were seized. Summing up all the above facts we are of the view that the statement of Shri Mohd. Arshad of M/s Super Trading and its acceptance by Shri Aslam Shah, Partner of M/s Hira Enterprise and findings of paper containing some transactions are not conclusive evidence of clandestine remo .....

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