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M/s Jagdamba Sponge P. Ltd., Shri Satish Singh, Shri Harbilas Agarwal and M/s Shree Banke Bihari Ispat P. Ltd. Versus CCE & ST, Raipur

2018 (1) TMI 475 - CESTAT NEW DELHI

Clandestine removal - It is alleged that the same has been used in manufacturing of final goods, which has been cleared clandestinely - Held that: - The whole case has been made out against the appellants on the basis of third party evidence which cannot be relied upon as held by this Tribunal in the case of Rudra Ventures Pvt. Ltd. [2016 (3) TMI 1173 - CESTAT CHANDIGARH], where reliance was placed in the case of MUSK TOBACCO (INDIA) PVT. LTD. Versus COMMR. OF C. EX., LUCKNOW [2011 (11) TMI 570 .....

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50806 of 2017 (SM) - Final Order No. 58531-58534/2017 - Dated:- 19-12-2017 - Shri Ashok Jindal, Member (Judicial) Shri R.K. Ranjan and R.P. Singh, Advocates - for the Appellants. Shri G.R. Singh, Authorized Representative (DR) - for the Respondent. ORDER The appellants are in appeal against the impugned orders wherein demands have been confirmed alleging clandestine removal of goods. 2. The brief facts of the case are that there was a search was conducted in the factory premises of one M/s Ambik .....

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notice was issued on 19/08/2015 to allege clandestine removal of goods. Consequently, the impugned orders have been passed. Against the said orders, the appellants are before me. 3. The learned Counsel appearing on behalf of the appellants submits that the cases have been made out against the appellants on the basis of third party evidence. In fact, no investigation was conducted in the factory premises of the appellants to ascertain the fact whether there is any shortage of raw material or fin .....

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ugned order. 5. Head the parties and perused the record. 6. In this case, the facts are not in dispute i.e. an investigation was conducted at the end of one of supplier M/s Ambika Ispat, Raipur and some documents were recovered from the possession of the peon who was located outside the factory premises. On the basis of that diary statement of the Director of M/s Ambika Ispat were recorded who stated that sometimes, they are clearing goods clandestinely but no investigation was conducted at the .....

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pellant were recovered from one M/s. Shardha Traders but Sh. Ajay Adwani proprietor of Sharddha Traders never named the appellant that they have procured the said goods from the appellant. The statement of Sh. Samay Lal Janghel railway booking agent also did not disclose the name of the appellant. The only statement of M/s. Pankaj Logistics is disclosing the fact that they were transporting the cigarettes manufactured by the IGM Group of companies from Delhi to Raipur but did not disclose the na .....

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removal of goods is not sustainable. The allegation has been made on the basis of assumption and presumption, no statement of the appellant was ever recorded, none of the person whose statement were recorded and relied has implicated the name of the appellant. Merely, as the goods recovered from a trader, it is alleged that the goods have been cleared by the appellant clandestinely. In the absence of evidences namely procurement of raw material, the manufacturing process, flow back of money, mo .....

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d evidence in respect of removal of goods while physical control of factory was with departmental officers. Such evidence is not on record. Even to apply ratio of judgment of Hon ble High Court of Madras in the case of Alagappa Cement Pvt. Ltd. v. CEGAT, Chennai - 2010 (260) E.L.T. 511 (Madras), there is no preponderance of probability of tracing of tobacco after that is alleged to have vanished from factory of the appellant which is stated to have been controlled as above. Where about of tobacc .....

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f molasses by the assessee. Since molasses is a by-product of sugar industry, molasses cannot be produced without producing sugar. In the instant case, there has been no allegation of clandestine production and removal of sugar from the assessee s factory. Therefore, without alleging clandestine production and removal of sugar there cannot be any allegation relating to clandestine production and removal of molasses. In other words, the department s case has no legs to stand on its own. Consequen .....

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y. The least that the department could have done in this case is to cross check with the State excise authorities and the records maintained by them to satisfy, whether, indeed, there has been production and clearance of the molasses to the extent of 12539.300 MTs as made out in the show cause notice which has not been done in the instant case. Further, molasses has to be produced out of crushing of sugarcane. To produce the quantity of molasses alleged to have been clandestinely produced and re .....

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y, other fuels, employment of workers and payment of wages to these workers. None of these aspects has been gone into by the department while making the allegations raised in the show cause notice. In the case of Oudh Sugar Mills Ltd. v. Union of India (Supra) the Hon ble Apex Court has held that show cause notice cannot be issued and duty confirmed based on assumptions and presumptions and the demand of duty cannot be sustained unless there is clear and categorical evidence for removal of goods .....

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