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2017 (5) TMI 949 - CESTAT CHANDIGARH

2017 (5) TMI 949 - CESTAT CHANDIGARH - TMI - Clandestine removal of goods - Held that: - No corroborative evidence has been produced by the Revenue to substantiate their charge - the evidences revealed by the Revenue are in the shape of entries in diaries of Sh. Apreash Ghosh and transporters register. These documents were never controverter with the respondents and these entries were never supported by any positive evidence, therefore, the Ld. Commissioner (Appeals) has rightly observed that th .....

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on the information that respondent is evading the payment of duty by clandestine removal of the goods manufactured by them. During the course of search, one small diary named as ledger book was recovered from Sh. Apreash Ghosh, an employee of the firm. In the follow up action an inquiry was caused with the transporters and resumed two registers maintained by them. The statement of transporter was recorded. On the basis of entries recorded in the transporter register and diary recovered from Sh. .....

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Revenue is before me. 3. The Ld. AR submits that Sh. Jagdish Dogra has admitted that on the direction of the director, they have cleared the goods on the strength of parallel invoices and the transporter Sh. Munish Verma has confirmed the existence the chain of action resulting in clandestine removals of the goods. Further Sh. Munish Verma put his signature having seen read and admitted the removal of goods on parallel invoices. He further submitted that the Revenue is not required to complete t .....

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cause notice which was issued which is not before me for consideration. Thereafter, follow up action was taken and in follow up action, the statement of the transporters has been recorded and some records have been seized from the transporters. On the basis of those documents as well as the private records recovered from Sh. Apreash Ghosh, it was alleged that the respondent was engaged in the activity of clandestine of removal of goods. No corroborative evidence has been produced by the Revenue .....

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actory. As per the imputations, the appellants had removed 96.620 MT + 12. 040 MT of the finished goods as shown in the transporter s registers (9 entries) and 277.950 MTs of the finished goods as shown in the diary/ledger book (27 entries) clandestinely without payment of Central Excise duty. The appellants have denied the charge of clandestine removals. They are contesting that the charge of clandestine removal is not proved by any positive corroborative evidence and the demand of duty could n .....

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d statements of any buyers to whom the clandestinely removed goods were sold. They submit that the transport s registers only mention the address of the appellant s factory and not the quantity of the goods removed. They also point out that they have submitted a reconciliation statement in respect of the alleged clandestine removals as detailed in annexure A and B to the show cause notice, before the adjudicating authority who had not considered the same on the ground of the dubious nature of wo .....

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s per facts of the case there was no admission by any person that the quantities relating to the 27 entries had been removed without payment of duty. Similarly of quantity of 96.620 MT + 12.040 MT of the finished goods as per 9 entries figuring in the transport register of the transport company has been alleged to have been clandestinely removed. The transporters while explaining the entries contained in the said registers have not admitted that they have transported the goods from the appellant .....

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passed the following judgment in this case: Demand Clandestine removal Private note book maintained by a part time employee containing unauthenticated entries and over-writings not to be relied on the establishing clandestine removal in absence of any corroboration in the form of seizure of goods or invoice or purchase of raw materials etc. Section 11A of Central Excise Act, 1944 read with Rule 9(2) of Central Excise Rules, 1944. [1992 (60) E.L.T. 451 (Tribunal); 1991 (51) E.LT.. 377 (Tribunal); .....

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d entries and over-writings has been held to be not a dependable record to establish clandestine removal unless the same supported by other evidence such as raw material consumed, goods actually manufactured and packed, etc. In the present case, the only piece of evidence is only the private note book maintained by Ram Subbu, a part time employee working for several other units. There is not other evidence in the form of seizure of clandestinely removed goods or invoice or purchase of raw materi .....

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the issue of clubbing of 8 match industries situated in the same compound and having a common trading agent. On a detailed examination of the evidences, the Tribunal set aside the order of the Commissioner, Central Excise by applying the ratio of earlier judgment rendered in similar match work cases as in the case of Premier Matches v. CCE [1991 (51) E.L.T. 377; Vasuki Match works v. CCE (1990 (49) E.L.T. 415]; and Sekhar Match Industries v. CCE [1990 (48) E.L.T. 599]. There are a number of simi .....

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n the case of Bharat Containers (Nagpur) Pvt. Ltd.v. CCE[1999 (113) E.L.T. 992] that entries made in the different material register maintained by the security staff at the factory gate is not conclusive evidence to sustain the charge of clandestine removal under Rule 9 of Central Excise Rules. In the case of Varun Processors Pvt. Ltd.v. CCE Chandigarh [1999 (30)RLT 533] it has been held that allegation based on packing slips recovered from factory and statement of their scribe is not sufficient .....

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oned in the Rule are present simultaneously. It has been held that Rule does not say so nor is it capable of being so interpreted. It has been held that in a case like the one in question, where the accounts are found fabricated and untrue, the figures of raw material utilised or the particulars of labour employed may not be available. It is not the case of the appellant that even though acceptable material with respect to these factors was available, it was not considered. On that plea, the Ape .....

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that entries made in the different material register maintained by the security staff at the factory gate is not conclusive evidence to sustain the charge of clandestine removal unless the same is supported by other evidence such as raw material consumed, goods actually manufactured and packed, etc. 7. I have also perused the other case laws relied upon by the appellant in support of their contention that the charge of clandestine removal made out against them was not proved on the basis of entr .....

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dverse conclusion can be drawn based upon the sole entries made in the said issue notes Rules 9(2) and 173Q of Central Excise Rules, 1944. [para 15} Clandestine removal Motive Raw material purchased on payment of duty and modvat claimed Buyer of final product, majority of being Government of India Undertakings, insisting on payment of duty so as to claim Modvat credit No motive for assessee to indulge in clandestine removal Rules 9(2) and 173Q of Central Excise Rules, 1944. [para 15] Clandestine .....

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CESTAT in the case of Gurusamy Vs. Commissioner of Central Excise Madurai 2002 (145) ELT 616 (Tri. Chennai) passed the following judgment on the allegation of clandestine removal: Demand - Clandestine removal Proof Private not book in English allegedly showing clearance Scribe not examined Person maintaining records knowing only Tamil not admitting to contents of note book Cross-examination of partner of assessee firm and their submissions indicating that note book and entries therein did not p .....

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idence such as receipt of raw materials, manufacturing details, use of electricity, sale of goods and receipt of money has to be produced by Revenue Erstwhile Rules 9(2) and 173Q of Central Excise Rules, 1944. [para 9] 9. In the above judgment, the Hon ble Appellate Tribunal has held that Corroborative from evidence such as receipt of raw materials, manufacturing details, use of electricity, sale of goods and receipt of money were the essential evidence required to establish the case of clandest .....

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ate note book are not sufficient to hold the charge of clandestine removal. In the present case, the Commissioner has scrutinized the entries made in the note book and found that in the note book there are entries made with regard to goods cleared under the invoices and also with regard to amounts received from them. He has also noted that there is no deletion made in the note book in respect of goods despatched under proper invoices.[para 6] Clandestine removal Accounts, Records and Returns Pri .....

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A of Central Excise Act, 1944 and Rule 173Q of erstwhile Central Excise Rules, 1944. In a circumstances like this, it is not possible to hold that Revenue has produced sufficient evidence with regard to manufacture and clearance of goods clandestinely. Revenue ought to have produced the evidence of purchase of raw material, manufacture and clearance of goods clandestinely by examining the workers and also those who have received the goods without payment of duty. [para 6] 10. In the above case, .....

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