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TMI Blog2017 (3) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... inspection on 24.06.2005 to the factory premises and conducted physical stock verification. Whereas during the course of physical stock verification (RUD NO.1) all the varieties of finished goods were found tallying with the recorded balance of RG-1, except shortage of 75 pairs of domestic leather sandals. The shortage of said 75 pairs of domestic leather sandals was accepted by the app0ellant and Central Excise duty amounting to Rs. 11,346/- [Rs.4,404/- vide PLA entry No.4 (RUD No.2) and Rs. 6,720/- vide RG-23A Pt.II entry No.14 (RUD No.3) both dated 24.06.2005] and Education Cess of Rs. 222/- deposited vide PLA entry No.5 dated 24.06.2005 on the spot. (as detailed in physical stock verification report annexed to panchnama dated 24.06.2005 (RUD No.4) drawn on the sport. Whereas during the scrutiny of records of the appellant the officers found daily production report file containing four leaves of sandal stock report said to be prepared for and faxed to Shri Laiq Ahmad of M/s Mirza Tanners (Marketing division), New Delhi. The officers compared the figures given in the sandal stock report with the recorded balance of RG-1 (RUD No.5) and asked the appellant why the quantity shown i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.2005 and why not the same be appropriated from the amount already deposited by debit to PLA on 24.06.2005. 3. The SCN was adjudicated on contest. the Joint Commissioner vide Order-in-Original dated 22.08.2006 was pleased to confirm the proposed demand with equal amount of penalty under Section 11AC of the Act along with interest. Further, the duty amount of Rs. 11,346/- on 75 pairs found short at the time of inspection was also confirmed and appropriated from the pre-deposit already made. Being aggrieved, the appellant had preferred appeal before Ld. Commissioner (Appeals) who vide the impugned order was pleased to dismiss the appeal upholding the Order-in-Original. The learned Commissioner (Appeals) observed that Revenue found at the time of inspection, daily production report file containing four leaves of sandal stock report, said to be faxed to Shri Laiq Ahmed of Mirza Tanners (Marketing Division), New Delhi. It was found that lesser quantity was shown in the statutory RG-1 register and the appellant assessee on being asked to produce the stock report for last five years, failed to produce the same. The Adjudicating Authority observed that the said Sandal stock report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders from M/s Mirza Tanners, with the financial records of the appellant and those of Mirza Tanners. It is further urged that in absence of cross-examination, the persons from whom alleged statements have been taken and used against the appellant to raise the impugned demand, vitiates entire case of Revenue, making the demand unsustainable for violation of the Rules of Natural Justice as held in Andaman Timbers Vs. CCE (2015) 324 ELT 641(SC) by Hon'ble Supreme Court and in the case of Basudev Garg Vs. CC (2013) 294 ELT 353 (Delhi). He further states that the impugned order is bad as the same is in gross violation of the mandate of Section 9D of the Act. The allegation of clandestine removal cannot be sustained merely on assumptions and presumptions and/or surmises. Such allegations of clandestine removal of excisable goods must be based on tangible evidence, by discharge of onus of proof by the Revenue. Allegation of clandestine removal cannot be based on private records or diary or notebook or slips, in the absence of positive corroborative evidence to substantiate the allegation raised by Revenue. The impugned order is in the teeth of the ruling of Hon'ble Gujarat High Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e report of the adjudicating authority on 04.06.2014, for which the matter was adjourned at requested by Revenue from time to time. On 14th of May, 2015 the report of Assistant Commissioner dated 28.05.2014 was given to the appellant which contains no verification, correlation or reconciliation, as directed by the Tribunal. In the so-called report, the Assistant Commissioner has chosen to disregard the purchase orders from Mirza Tanners and the goods manufactured and supplied pursuant thereto which can only be done after the Purchase orders are accepted and the goods manufactured in the factory of the assessee/appellant are inspected, approved and only then sale is executed. This vital aspect had been totally disregarded even after directions of the Tribunal. The report of the Assistant Commissioner in para-3 also states that the authorised Signatory of the appellant appeared and assisted in showing the original documents. These were tallied and verified with the photocopies as provided with the letter. Shri Siddiqui also put his dated signature along with the appellants stamp on each document by way of authentication. Thus, even after verifying and tallying the records and docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce thereof by the buyer before delivery, to be totally disregarded for the purpose of making unsustainable case by the Revenue. The Sandals with brand name and specifications given by Mirza Tanners can only be supplied to them. The appellant/assessee has no marketing or distribution agency/outlet nor does it manufacture goods (footwear) without specifications and Purchase orders from buyers. Therefore, there is no question of goods being produced clandestinely and removed. Thus, the allegation of Revenue is un-substantiated based only on presumption and assumptions. Failure to make proper verification, correlation or reconciliation at the initial stage has necessitated this Tribunal to get such verification done having regard to the nature of the business and product involved which cannot be manufactured or supplied without prior orders and specifications of the buyers. There is no case of Revenue that the appellant/assessee had got its own sales outlets and has produced or sold goods without any brand name to anyone other than M/s Mirza Tanners Ltd. Supply to Mirza Tanners is possible only after manufacture according to the specifications already received from them and after manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfied that the stock records found in the four slips of different dates at the time of inspection also include incomplete and/or projected production of the appellant. This fact has been stated by Mr. Satyendar Singh, who prepares and dispatches the report to Mr. Laiq Ahmad of Mirza Tanners. I also find that the appellant's industry is doing the work in the nature of job work for one particular buyer (Mirza Tanners). Under the agreement with the sole buyer, they manufactured the goods under the brand name 'Red Tape', that belongs to the buyer, and they cannot normally clear the goods to anybody else for home consumption without the purchase order and/or directions of the buyers subject to pre-delivery inspection. Even the goods rejected by the buyer have either to be dismantled or retained and the same have to be cleared as per directions and discretion of the buyers namely Mirza Tanners. Further, no instance of any excess stock of raw material have been found nor any instance of any goods cleared without proper documents and/or without payment of duty have been detected. I also find that impugned order is also vitiated for denial of opportunity to cross-examine the witness of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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