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2017 (7) TMI 982

Clandestine manufacture and removal - shortage of cenvat inputs - M.S. Ingots - Held that: - the revenue had neither disclosed any material nor described the method of stock taking to counter the case. The only contention is that the small quantity was lying in the factory premises and therefore, the weighment was done easily. I am unable to accept the contention of the revenue without any basis, such as, the details of the weighment etc - The Tribunal consistently observed in various decisions .....

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- Appeal dismissed - decided against Revenue. - Ex/643/2006, CO-12/2007 - FO/A/76239/2017 - Dated:- 18-7-2017 - Shri P. K. Choudhary, Judicial Member Shri. A. K. Biswas, Suptd. (AR) for the Appellant Shri B. N. Chattopadhyay, Consultnat & Shri R. S. Bajaj, C.A. for the Respondent ORDER Per: Shri P. K. Choudhary The Revenue filed this appeal against the order of the Commissioner Haldia Commissnerate. In the Form No. EA-5, it is mentioned that the amount of duty demanded ₹ 1,17,40,607/ .....

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impugned order, the Adjudicating Authority confirmed the demand of duty of ₹ 80,323/- alongwith interest and imposed penalty of equal amount of duty on 55.780 MT of unaccounted M.S. Ingot removed from the respondent's steel melting shop division. Revenue filed this appeal against the impugned order to the extent of the demand of duty of ₹ 45,29,162/- in respect of the goods found short in stock taking. 3. Heard both sides and perused the appeal records. 4. The Ld. A.R. appearing .....

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. 6. For the purpose of proper appreciation of the case, the relevant portion of the finding of the Adjudicating Authority is reproduced below:- On careful examination of the case file, I find that this case has been built around the apparent shortages of inputs and finished goods detected in the noticee's factory premises. I notice that although the shortages have been quantified in the stock verification reports and the case for the demand of duty has been made out on its basis, it appears .....

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arges of demand of duty arising out of shortages of stock the goods ought to be physically weighed. The SCN or the stock verification reports in the instant case are too bereft and devoid of details that go to show that no such physical verification exercise which can be accepted as proper in the eyes of the law, had actually been carried out by the investigation officers at the premises of the noticee's factory premises. In the absence of convincing evidence of physical weighments, it is di .....

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etc. 8. The Tribunal consistently observed in various decisions that stock verification cannot be conducted by a rough estimation. In the case of Raika Ispat Udyog Pvt. Ltd. Vs. Commissioner of Central Excise, Raipur reported in 2016 (340) E.L.T. 598 (Tri.-Del) the Tribunal held as under :- 6. The only point for decision is that correctness of duty demand made against the appellant based on the stock verification of the goods. The admitted facts are that the appellant maintained all records and .....

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ecifically mentioned in question No. 9, which it appears has not been admitted specifically by the Director. In Anand Founders & Engineers - 2016 (331) E.L.T. 340 (P&H), the Hon ble Punjab & Haryana High Court held that mere shortage of finished goods in stock taking is not enough to hold the charge of clandestine removal. In Chandrapur Enterprises Ltd. - 2014 (310) E.L.T. 904 (Tribunal-Delhi), the Tribunal held that when the quantity of finished goods was determined on estimation ba .....

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upto a kilogram level. Further, the whole process of weighing about 250 MTs of M.S. bars is shown to have been completed in two hours. This raises serious question about the correctness and methodology adopted for arriving at physical stock of finished goods. The whole case is built up on such shortage. There is no other corroboration regarding clandestine manufacture or clearance or transportation of goods or receipt of sale proceeds. While such clandestine activities need not be proved stage .....

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an Industries Ltd. - 2013 (292) E.L.T. 123 (Tri.-Del.) held that the allegation of clandestine removal in such type of cases are to be established by production of concrete and tangible evidence. In the said case also, the appellant admitted the stock taking and agreed to pay the excise duty. Later, it was found that the stock taking was not done on actual basis. In the case of Commissioner of Central Excise Vs. Omkar Textile Mills Pvt. Ltd. reported in 2010 (259) E.L.T. 687 (Guj.), the Hon ble .....

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s. In the case of Commissioner of Central Excise, Customs & S. Tax, Daman Vs. Nissan Thermoware Pvt. Ltd. reported in 2011 (266) E.L.T. 45 (Guj.), The Hon ble Gujarat High Court dismissed the revenue's appeal and observed as under :- 7.Thus, on the basis of findings of fact recorded by the Tribunal upon appreciation of the evidence on record, it is apparent that except for the shortage in raw material viz., HD which was disputed by the assessee and the statement of the Director, there wa .....

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the parts in question were used in the Chilling Plant. The Court held that once it is an admitted position by the party itself, that these are parts of a Chilling Plant and the concerned party does not even dispute that they have no independent use there is no need for the Department to prove the same. It is a basic and settled law that what is admitted need not be proved. The said decision would not have any applicability to the facts of the present case as the assessee has disputed that there .....

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those provisions. If a confession is proved by unimpeachable evidence and if it is of voluntary nature, it when retracted, is entitled to high degree of value as its maker is likely to face the consequences of confession by a statement affecting his life, liberty or property. Burden is on the accused to prove that the statement was obtained by threat, duress or promise like any other person as was held in Bhagwan Singh v. State of Punjab - AIR 1952 SC 214, Para 30. If it is established from the .....

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not as high as in the case of an approver or an accomplice in which case corroboration is required on material particulars of the prosecution case. Each case would, therefore, require to be examined in the light of the facts and circumstances in which the confession came to be made and whether or not it was voluntary and true. Thus, the said case deals with a confessional statement of an accused in criminal proceedings, which cannot be put on a par with a statement recorded during preventive ch .....

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