TMI Blog2018 (3) TMI 1479X X X X Extracts X X X X X X X X Extracts X X X X ..... - Appeal No.E/558/2011 - ORDER NO.FO/78688/2017 - Dated:- 27-12-2017 - Shri P.K.Choudhary, Member (Judicial) Shri V.K.Puri, Advocate for the Appellant Shri H.S.Abadin, AC(AR) for the Respondent ORDER Per Shri P.K.Choudhary 1. Briefly stated the facts of the case are that the appellants are engaged in the manufacture of TMT Bar, Angle, Channel etc. out of articles of Steel and Iron classifiable under Chapter 72 of the Central Excise Tariff Act, 1985. On 19.12.2007 the Central Excise Officers of Bolpur Commissionerate conducted a search operation in the Factory premises of the appellant company, recovered and seized various documents and also recorded the statements of various persons. A Show Cause Notice dated 09.04.2010 was issued to the appellant company and Shri Hari Mohan Beriwal, Managing Director of the appellant company proposing demand of duty of ₹ 1,57,91,305.00 along with interest and to impose penalty on the appellant company and its Director. It has been alleged that the appellant company had cleared the goods using Tax Invoice of M/s. V. S. Ispat. It has further alleged that they have cleared the finished goods using the Tax Invoice and Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ni Godown. 4. Heard both sides and perused the appeal records. 5. I find that the Central Excise Officers obtained a Report from Palsit Toll Plaza in respect of 144 Invoices that the Trucks confirmed having crossed Toll Plaza towards Kolkata on the very next day of the Invoice date. In the instant case, the Learned Commissioner confirmed the demand of duty of ₹ 26,79,718.00 in respect of 34 Invoices without payment of duty to M/s. Rosedale Developers. The appellant took a stand that the goods were removed from their Dankuni Godown. In this context, the appellant produced Tax Invoices/Challans. The Transporter also certified that they supplied the goods from Dankuni. They have given the clarification about crossing the vehicle at Palsit Toll Plaza on the day of loading. The appellant produced a letter from M/s. Rosedale Developers that the goods were received from the Dankuni Godown. The appellant also placed the Sales Tax Return to establish that the goods were cleared on payment of Sales Tax from their Godown. 6. I find that the Adjudicating authority mainly proceeded on the basis of the clarification of the Palsit Toll Plaza. It is seen that the Investigating Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Tax Return. The Adjudicating authority observed that as the notes aroused suspicious and that there is every chance of clearance of goods without payment of duty and the same has been dispatched to M/s. Saha Industries as shown in the Annexure-C-3 of the Show Cause Notice. It is seen from the Adjudication Order that those were just rough notes and had no nexus with dispatch of goods and also the author of the noteings, the authorized signatories, in its statement, confirmed that these entries were rough work. The Adjudicating authority emphasized that all the vehicles as shown in Annexure-C-3 were used for dispatch of goods either from the factory or from Godown. The appellant clarified that the author of the said noting may have explained the issue. In any event, I find no enquiry was conducted from the Transporters. The Adjudicating authority confirmed the demand of duty as there is no concrete evidence in the submission of the appellant. It is well settled that the onus lies with the department to establish the charge of clandestine removal of goods. But the Adjudicating authority had confirmed the duty merely on the basis of surmise and conjecture. 7. There are demand of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Switch Gear Ltd Vs. Commissioner of Central Excise, Delhi 2014 (310) ELT 609 (Tri-Del) held that the charge of clandestine removal is a serious allegation. Thus, it has to be established by some positive and cogent evidences. The relevant portion of the said decisions are as under : 9. As is clear from the above report that as per the allegation made by the Revenue, the scrap generated by the appellant would be to the tune of 57% to 88%. In a unit manufacturing electrical goods, generation of scrap to the extent of 86% is not only difficult but is an impracticable approach of business. If the said allegation is accepted, the same would lead to the emergence of finished goods to the tune of 14% only, which no businessmen can afford to do. 10. Appeal from the above, I find that the entire case of the Revenue is based upon the loose slips recovered during the search. Admittedly the clandestine removal charge is a serious allegation and has to be established by adducing some positive and cogent evidence, corroborating the same. In the absence of any other evidence, allegation of clandestine removal cannot be upheld. 11. In view of the foregoing, I set aside the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s three stage activities - (a) procurement of raw materials, (b) clandestine manufacture, and (c) clandestine clearance. In the present case, third party evidences are alleged only for the first stage with no evidence for the second and third stage. Inference of clandestine removal has been made. 7. Considering the facts and circumstances of the case as discussed above, the evidences alleged are not sufficient/enough to sustain the case of the Department and accordingly, the impugned orders are not sustainable. The impugned orders are set aside and both the appeals are allowed. 11. In the case of Golden Steel Corporation Limited Vs. Commissioner of Central Excise, Kolkata-II 2017 (347) ELT 570 (Tribunal). It has been held as under : 6.1.1 It is a well accepted legal proposition that clandestine removal is a serious charge and cannot be held on the basis of presumption, assumption and surmises. 6.2 So far as duty demand of ₹ 4,47,064/-, on the basis of shortages, is concerned Revenue has taken the argument that the same was done as per the method suggested by Shri Sahaney of GSCL. It is observed from the statement dated 25-1-2006 of Shri Rajnish Gambhir tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ropositions on the issue. The statements of relied upon witnesses are the only evidences on record as they are only authenticating the documents recovered from the factory/official premises of the appellants. There is no evidence of extra raw materials purchased/procured by the appellant GSCL and extra power consumption. During Stock-taking no excess/shortage in raw materials were found. Appellant GSCL and his employees did not admit to clandestine removal. No doubt the investigation conducted do suggest a strong suspicion about clandestine activities but a suspicion howsoever grave cannot take the place of proof of clandestine clearance like seizure of clandestinely removed goods, seizure of cash admitted by the concerned persons to be sale proceeds of the illicitly removed goods, excess procurement of raw materials, excess power utilization, confirmation by some of the transporters and recipients to indicate that such clandestined cleared goods have been transported/received by them. In the absence of any of these positive evidences and non-extending the opportunity of cross-examination the case of clandestine clearances of Iron and Steel products by GSCL is not established. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 2) that he aided abetted the appellant for clandestine removal of said finished goods from their factory without payment of duty, is also not sustainable and accordingly no penalty is imposable on him. In view of above discussions, order passed by the adjudicating authority deserves to be set aside. I hold accordingly. 6. Revenue is in appeal against the impugned order. 13. In the case of Raipur Forging Pvt Ltd Vs. Commissioner of Central Excise, Raipur 2016 (335) ELT 297 ( Tri-Del) it has been held as under: 7. The point for decision is sustainability of demand of duty on the finished products based on the evidence put forth by the Revenue in the proceedings before the lower authorities. The case originated with the investigation conducted by the officers against M/s. Indian Steel and Power Pvt. Ltd., manufacturer of Sponge Iron. Based on the certain ledger accounts maintained in the pen drive and the statement confirming the contents of the pen drive given by the Director of the said company, further statements were recorded at the appellant s end. On admission by the appellants regarding receipt and further manufacture of unaccounted excisable products, the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ingots to M.S. Angles, etc. and thereafter, their unaccounted clearance to various buyers. No verification was made in the appellant s manufacturing unit or in their records. The admission made by the Director or Partners of the appellant/assessees gives a strong indication of the clandestine activity of the appellant/assessee. However, that by itself cannot be a conclusive evidence especially, as the product on which duty is demanded is M.S. Angles and Channels, etc., which are made from M.S. Ingots, which are in turn made from purported clandestinely received sponge iron. The statements did not provide details of receipts with dates, manufacture or sale to identifiable buyers etc. It is essential to have some piece of corroboration for such a clandestine activity other than the sole evidence of general admission statement of the Director or partner. The contents of the statement itself was contested and denied later. 14. Taking into account the overall facts and circumstances of the case and the ratio of the above Case Laws, I find that the impugned Order, to the extent demand of duty along with interest and imposition of penalty, cannot be sustained and it is set aside. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
