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TMI Blog2017 (9) TMI 2044X X X X Extracts X X X X X X X X Extracts X X X X ..... r as the goods were still lying in the factory premises, and there is no evidence of clandestine removal. Further, the Department have failed to provide cross-examination of witness even after deciding the issue thrice. Accordingly, penalty imposed were also set aside. 2. The respondent - M/s Bakul Poly Pack Pvt. Ltd. were engaged in manufacturing and clearance of Printed Plastic Article & Flexible Printed Laminated Rolls. They are registered with the Department and availing SSI exemption. On intelligence that one M/s Shyam Traders, Lucknow, manufacturer of 'Shyam Bahar' brand Gutkha, were indulging in large scale evasion of Central Excise duty by suppressing the actual production and clandestine clearance of their products without payment of duty. There was also intelligence that the respondent was associated with the said M/s Shyam Traders, Lucknow, by supplying unaccounted packing material to them. During search at the factory premises of M/s Bakul Poly Pack Pvt. Ltd., and during the physical verification of stock conducted in presence of Panch witnesses as well as Shri Arun Kumar Verma, Accountant & Shri Mohan Mishra, Production In-charge of the Company, one of the raw materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6378 Kg., Co-extruded Poly Film 4229 Kg. & manufactured Flexible Printed Laminated Rolls of various brands weighing 8217.98 Kg. collectively valued at Rs. 22,09,671/- seized under Panchnama on 20/10/2003, under Rule 25 of Central Excise Rules, 2002 and further penalty was proposed under Rule 25 of Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944. Further, penalty was proposed on Shri A. N. Tripathi, Director. The Show Cause Notice was adjudicated on contest vide Order-in-Original dated 14/02/2006, whereby proposed confiscation of seized goods was upheld with option to redeem the confiscated goods on payment of redemption fine of Rs. 11 lakhs and penalty of Rs. 1,08,872 under Rule 25 & Rs. 1 lakh under Rule 26 was imposed on Shri A. N. Tripathi respectively. Being aggrieved, the respondent had preferred appeal before Commissioner (Appeals), Kanpur, who vide OIA dated 19/10/2006 was pleased to set aside the OIO without going into the details of the case and only after considering the legality of the Panch witness and observed that making the outstation persons accompanying the officers create doubt about the genuineness of witnesses and the natural Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nying the Officers. Thus, Panchnamas are not a true piece of evidence. Thus, by the third OIO dated 27th November, 2007, the Additional Commissioner was pleased to confirm the demands along with confiscation and penalty is in past. 5. Being aggrieved the appellant preferred appeal before the ld. Commissioner (Appeals) on the ground among others that the alleged physical verification dated 20/10/2003 was incorrect and on eye estimation basis and there were actually no discrepancies in the stock. Seizure of goods in the factory of the appellants, based on eye estimation and not actual measurements was illegal and thus confiscation was not justified. It was also stated that it is settled law that the entire burden of proving its case lies on the Revenue, who is bound to produce cogent and tangible evidence in support of its case. The Department relied upon the Panchnama dated 20/10/2003 which is highly questionable document and the case is not proved beyond doubt. Further, the Adjudicating Authority have violated the Principles of Natural Justice and has failed to give effect to the orders of the Commissioner (Appeals), wherein the learned Commissioner (Appeals) had remanded the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even assuming that the stock verification was correct as per the Panchnama and, there is no evidence that there was any attempt to clandestinely remove the goods found in excess as the same were lying within the factory premises. Accordingly, the ld. Commissioner (Appeals) further held that the confiscation of seized goods is not proper as the goods are still lying in the factory premises and there is no evidence of clandestine removal as well as on the ground that the Department has failed to provide cross-examination of witnesses. Accordingly, the appeals of the respondents are allowed. 7. Being aggrieved the Revenue is in appeal on the grounds among others that according to Rule 25(1)(b) of Central Excise Rules, 2002, which makes it very clear that even if an assessee does not account for any excisable goods produced or manufactured or stored by him, even without any intention to clear the same clandestinely, the goods in question will be liable to confiscation. Thus, the excess raw material and finished goods found in the factory of the respondents was liable to confiscation and the ld. Commissioner (Appeals) have erred in setting aside the confiscation. The next ground of con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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