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M/s Universal Polychem India Pvt. Ltd., Shri Lalit Bansal, Shri Sanjay Bansal and M/s AVSL Industries Pvt. Ltd. Versus CCE, Delhi I

2018 (1) TMI 477 - CESTAT NEW DELHI

Clandestine removal - variation with the actual sale - excess/shortage of finished goods and excess of raw material was found - Held that: - No evidence has been brought on record to ascertain the fact that how the goods have been produced by way of consumption of electricity, number of work hours, production capacity of the machines and no efforts has been made to ascertain the fact that how the goods were transported and where the goods were sold. - Also, there are certain calculation erro .....

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RDER The appellants are in appeal against the impugned orders wherein demand has been confirmed on account of clandestine removal of goods. As all the appeals arising out of a common order, therefore, all the appeals are dealt with a common order. 2. The brief facts of the case are that an investigation was conducted at the end of all the appellants, wherein certain excess raw material was found and finished goods found short and/or excess at the time of verification thereof. Thereafter, on the .....

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appellants are before me. 3. The learned Counsel appeared for the appellants submits that in this case the demands have been made against the appellants on the basis of assumptions and presumptions. It was observed by the authorities below that out of how much raw material, how much quantity of finished goods can be manufactured, it was done all theoretical but no actual has been ascertained to find out from the factory of the appellant how much raw material and how much quantity has been produc .....

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-date, if the same are taken into account, there will be no variations. He further submitted that in the show cause notice there are calculation errors, the same are not be considered in the order of authorities below. Therefore, the impugned orders deserves no merits. He also submits that the charge against the appellant is that they are involved in manufacturing and clearing goods clandestinely but no evidence to that effect to ascertain the evidence for excess raw material, electricity consum .....

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he basis of the investigation conducted in their factories wherein certain excess/shortage of finished goods and excess of raw material was found and a formula was derived on the basis of input/output norms and it has been alleged that they have manufactured goods clandestinely and cleared thereof without payment of duty. No evidence has been brought on record to ascertain the fact that how the goods have been produced by way of consumption of electricity, number of work hours, production capaci .....

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the submissions made before us, it is clear that the law is well-settled that, in cases of clandestine manufacture and clearances, certain fundamental criteria have to be established by Revenue which mainly are the following : (i) There should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions; (ii) Evidence in support thereof should be of : (a) raw materials, in excess of that contained as per the statutory records; (b) instances .....

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duty; (g) statements of buyers with some details of illicit manufacture and clearance; (h) proof of actual transportation of goods, cleared without payment of duty; (i) links between the documents recovered during the search and activities being carried on in the factory of production; etc. Needless to say, a precise enumeration of all situations in which one could hold with activity that there have been clandestine manufacture and clearances, would not be possible. As held by this Tribunal and .....

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t. In fact, this Bench has considered some of the case-law on the subject in Centurian Laboratories v. CCE, Vadodara [2013 (293) E.L.T. 689]. It would appear that the decision, though rendered on 3-5-2013, was reported in the issue of the E.L.T., dated 29-7-2013, when the present case was being argued before us, perhaps, not available to the parties. However, we have, in that decision, applied the law, as laid down in the earlier cases, some of which now have been placed before us. The crux of t .....

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once again reiterated the same principles, after considering the entire case-law on the subject [Hindustan Machines v. CCE [2013 (294) E.L.T. 43]. Members of Bench having hearing initially differed, the matter was referred to a third Member, who held that clandestine manufacture and clearances were not established by the Revenue. We are not going into it in detail, since the learned Counsels on either side may not have had the opportunity of examining the decision in the light of the facts of th .....

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