TMI Blog2018 (1) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... facture of starter motors as in the absence of these essential raw-materials, it was thus not possible for the assessee to manufacture their final product with just Armature Assemblies. The department it may be stated here in the present case has not been able to discharge the burden of proof by way of any real evidence of any kind of clandestine removal. It has not even made an attempt to make a search and investigation in the matter. The Tribunal has rightly come to the conclusion that there was no case of clandestine removal - appeal dismissed - decided against Revenue. - Central Excise Appeal No. 194 of 2014 - - - Dated:- 2-1-2018 - Hon'ble Bharati Sapru And Hon'ble Neeraj Tiwari, JJ. For the Appellant : Praveen Ku ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants' factory premises on 25.09.2003 and physically verified the stocks of finished goods and inputs. On comparison of the stocks with the recorded balance, 360 Nos. of Armature Assembly (intermediate product) in packed condition and 115 kgs. of copper-wire waste, of a total value of ₹ 1,12,650.00, were found unaccounted. The same were seized on the spot. It, therefore, appeared that the appellants had been indulging in clandestine manufacture and removal of Starter Motors at intermediate stage in the form of Armature Assemblies. Books of production slips resumed from the factory premises were examined and a daily-production chart was prepared on the basis of the same. On comparing the production shown in the slips with that re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt no.2 in token of acknowledgement and issue of goods from the stores. Appellant no.3, in his statements dated 11.11.2003 and 12.11.2003 admitted that there had been instances when Starter Motors were cleared under cover of non-returnable gate passes or supplied against warranty rejections without payment of duty. Further, he could not explain the source of miscellaneous income of ₹ 26,98,325/- in the company's balance sheet. The Starter Motors bearing the branch name of original-equipement (O.E.) manufacturers were supposed to be sold by the appellant unit to O.E. manufacturers and their authorized dealers only and not in the open market. It is alleged that the appellant unit appeared to be engaged in clandestine manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of clandestine removal. The only thing, the revenue produced was a rough work progress register, which was admittedly not a statutory register. The revenue failed to produce any cogent evidence in respect of raw-materials, which was required for production of Starter Motors. Also, the revenue did not allege anywhere that the assessee was buying any unaccounted for copper wire, yolk, bearings, brakes, slot insulators, laminations and commutators, which are also required for the manufacture of starter motors as in the absence of these essential raw-materials, it was thus not possible for the assessee to manufacture their final product with just Armature Assemblies. The Tribunal records that I agree with the contentions of the Ld. Advoca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal product. The Tribunal categorically records that the department failed to establish its allegation and charges made against the appellant for clandestine removal specially in view of the fact that the appellant was able to give an explanation for each and every Armature Assembly/shaft that is finally produced and supplied to the industry using them which was all accounted for. Learned Counsel for the respondent has relied on a decision of this Court in the case of Continental Cement Company vs. Union of India reported in 2014 (309) E.L.T. 411 (All.) to state that unless there is clinching evidence of the nature of purchase of raw-materials used in the manufacture of the final product clandestine removal cannot be presumed against ..... X X X X Extracts X X X X X X X X Extracts X X X X
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