TMI Blog2018 (3) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... ings nor offered its witness for cross examination, more so inspite of application made by the appellants for the same. Suspicions howsoever strong cannot form evidence for confirming allegation of clandestine removal - The allegation of clandestine production and removal is not established - appeal allowed - decided in favor of appellant. - E/2626-2628/2007-EX[SM] - A/71965-71967/2017-SM[BR] - Dated:- 15-12-2017 - Mr. Anil Choudhary, Member (Judicial) Shri Bipin Garg, Advocate - for Appellant Shri Pawan Kumar Singh, Supdt (AR) - for Respondent ORDER Per: Anil Choudhary The issue in these appeals filed by the appellants is whether duty of ₹ 11,01,483/- have been rightly confirmed on alleged clandestine clearance of 724.66MT of M.S. Ingots/risers. During the period 30 th May, 2002 to 15 th July, 2002 Cenvat credit of ₹ 5,37,600/- have been rightly disallowed on alleged shortage of Sponge Iron at the time of physical verification and further confirmation of penalty on the appellants. 2. The first issue of clandestine clearance of 724.66MT of M.S. Ingots/Risers is based on 39 loose slips, which were recovered from the residence of one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence to prove how ingots were allegedly cleared clandestinely, or were manufactured without bringing any material on record, as to use of any excessive raw material procured clandestinely or use of excessive electricity, etc. Further, with the slips in question, weight receipt of M/s Kartik Dharm Kanta, Dada Nagar, Kanpur, have been found annexed. The said Dharmakata/weighbridge is situated about 75 Kms away from the factory of the appellants. Thus, the authenticity of slips is doubtful. It is highly impractical that the alleged goods cleared clandestinely from the factory of the appellants, were weighed about 75 kms away, when several weighbridges are available in the near vicinity of the factory of the appellant. Further, two weighbridge challans/slips issued by Shri Zeen Avery Electronic Kanta, do not mention the name and the address of the weighbridge and these documents are nowhere related to the appellants. The said Shri Zeen Avery Electronic Kanta, is also located about 100kms away from the factory of the appellants. Further, the statement of Shri Sanjay Agarwal, Director of M/s V.V.S. Alloys and Shri Deepak Handa, Director of M/s Sarda Steel Ltd. were recorded behind th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut of the same signed the same in token of certifying that this chart is prepared on the basis of the said slips, the total quantity of MS Ingots/Risers so cleared, comes out to 687.710MT. 5. The learned Counsel also states that the entire proceedings are vitiated for none joinder of necessary parties being Shri Sanjay Agarwal, director of M/s VVS Alloys Ltd., Deepak Handa, director of M/s Sarda Steels Ltd. and Shri Kulbhushan Jain, on the statements of whom the entire allegation is made against the appellants. The appellants have sought cross examination of all these aforementioned parties along with Shri Kulbhushan Jain but the same was not granted without any ostensible reason. The courts below have ignored the prayer for cross examination and it have been observed in the adjudication order that there is acceptance of clandestine removal by Shri Kulbhushan Jain, Ajay Jain and Shri Navin Jain, ignoring the retractions filed by Shri Kulbhushan Jain from time to time. The appellants have also assailed the veracity of the weighment slips of certain weighbridge at Kanpur, which is the relied upon documents. The proposed demand was confirmed without bringing any corroborative ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-facto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have same positive evidence of clandestine production and removal of goods, deciding the issue against the revenue. Accordingly, learned Counsel prays for allowing the appeal with consequential benefits. 8. Heard the learned A.R. for Revenue who relies on the impugned order and further states that Mr. Kulbhushan Jain, who was the employee of one of the group companies namely M/s Premier Ispat Ltd. had admitted that the loose slips were related to clandestine clearance, though he later on retracted. This retraction is definitely made under pressure of the directors of the appellant s company. He further states that it have been held by the Hon ble Supreme Court in the case of D. Bhoormull that in such clandestine clearance/activity, revenue is not required to prove its case with mathematical precision, only a case of preponderance of probability has to be made out. Accordingly, he prays for dismissing the appeals. 9. Having considered the rival contentions, I find that it is evident on the face of record that the alleged shortage of Sponge Iron (raw material) is a matter of wild guess based on eye estimation. There is no calculation sheet or weighment detail on record an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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