TMI Blog2018 (6) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... was maintaining any record. Further except these photocopies no record was found. The photocopies are not corroborated with any evidence in the form of accounting records or any independent corroborative evidence from the Appellant’s premises or from any other place. Even the show cause notice does not bring out any statement of drivers/ truck owners/ who allegedly consigned such goods. It is not even appearing as to how they have received freight for such transportation and from whom. The above assertions made by the Appellant gives credence to the arguments of the Appellant that merely based upon uncorroborated photocopies of invoices whose veracity itself is highly doubtful, the demand against the Appellant would not sustain. As regard allegation that the Appellant cleared Low carbon Ferro Manganese under the cover of invoice of High Carbon Ferro Manganee, we find that the allegation is based upon the goods seized during transportation and statement of some of the buyers who allegedly stated that High Carbon Ferro Manganese cannot be used to manufacture welding electrodes - the Appellant has challenged the test report on the ground that it is not known as to from where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... landestine removals made by the Appellant from their factory. Shri Rakhunde in his statement admitted that the photocopies of the invoices seized from his premises pertained to clearances of goods from the Appellant Unit. He also stated that there is no production of High Carbon Ferro Manganese in the factory and that the Low Carbon Ferro Manganese and Medium Carbon Ferro Manganese manufactured in the factory were cleared under the garb of High Carbon Ferro manganese/ Manganese Powder/ Black Oxide Powder. The samples of goods found in the vehicle were also sent for testing showed that the samples contained less than 2% Carbon which indicated that the goods were Low Carbon Ferro Manganese. The actual value of goods was thus ₹ 1,07,400/- instead of ₹ 75,900/- and applicable duty was ₹ 6,072/-. Investigation from transporters based on their records/ lorry receipts showed that the Appellant unit had cleared goods without preparation of invoices and without accounting the same in their records. It was also found that some of the consignments were cleared using duplicate/ multiple set of invoices and were not accounted. The Proprietor of Unit Shri Ravi Mittal in his sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Products Ltd. 2013 (290) ELT 545 (TRI) as upheld by Hon ble Supreme Court reported in 2015 (317) ELT A159 SC. That neither the copies of documents seized from residence of Shri Suresh nor the documents seized from the premises of transporters were provided to them. Even the verification report of different jurisdictional Commissionerate of 6 buyers was not provided to them. Hence the demand is not sustainable. That in absence of any evidence of other material/ tangible evidence, the statement of Shri Ravi Mittal cannot be relied upon. The invoices seized from Shri Suresh Rakhunde were photocopies of invoices as per his statement and not original. No parallel set of invoices was seized. He further submitted that only on the basis of third party records and photocopies of invoices seized from the premises of their ex-employee, no demand can be made. In this context he relied upon the judgment of this tribunal in the case of Shree Sidhbali Ispat Ltd. Vs CCE, Nagpur (2017(357) E.L.T 724)(Tri-Mum). He submits that the statement of the proprietor was given under the coercion and threat of the visiting officers and thus not sustainable. He therefore submits that the demand of duty and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cated and fake. We find that no reason has been given as to why Shri Rakhunde has stored the photocopies of such parallel/ multiple invoices and for what purpose. He was neither instructed by the owner of the unit nor he was maintaining any record. Further except these photocopies no record was found. We find that the photocopies are not corroborated with any evidence in the form of accounting records or any independent corroborative evidence from the Appellant s premises or from any other place. The revenue has relied upon the records of the transporters which are third party records and thus unless corroborated by affirmation of the alleged buyers the demand cannot be made only on the basis of transporters. Even in case of demand based upon photocopies of invoices seized from Shri Suresh Rakundhe, we find that no single original invoice has been seized from the buyers of the goods or any other place or premises. It is not known as to how the said photocopies reached under the possession of Shri Rakundhe who is ex-employee and why he was preserving such photocopies. There is no enquiry from Shri Suresh Rakhunde as to where are the original copies of such invoices and whether avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled parallel invoices and statements. The so-called parallel invoices were admittedly obtained from the ex-employee and has never been recovered from any of the premises of the respondent. The impugned order questioned the circumstances of recovery of such invoices as there is no Panchnama for the same. The assertion made by Shri J.B. Singh that the said invoices were handed over by various drivers could not be corroborated as none of the drivers were identified. It is seen that the impugned order examined in detail the contents and the bona fide nature of these invoices and came to the conclusion that the alleged parallel invoices could not be relied upon in the absence of support for their authenticity. Similarly, the impugned order dealt with in detail all the evidences examined by the Original Authority before arriving at the finding. Regarding job work challans issued under Rule 57F the findings in the impugned order cannot be faulted. The statement of Shri Jimruddin is general and uncorroborated. No enquiry was conducted at the job workers end. 7. On careful consideration of the analysis and finding as recorded in the impugned order, I find no reason to interfere with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant has contended that only on the basis of statements of buyers demand cannot be confirmed against Appellant. No evidence of receiving the goods under fake/ parallel invoice or of LCMF in place of HCMF except statement has been adduced. If such would have been the case the Appellant would have received differential amount since as per show cause notice there is huge difference between the value of both the goods. But it is not forthcoming from the statements as how the differential amount was paid by the buyers to the Appellant. The Appellant also submitted that some of the buyers were themselves manufacturer of Ferro manganese and therefore the question of selling Ferro manganese by Appellant to them does not arise. That some of the buyers did not even exist and some have closed down their business longtime back. We find that no rebuttal to such contention of the Appellant has been made in impugned order. Thus only on the basis of uncorroborated statements of such buyers, demand cannot be confirmed. In case of R. P. Industries Vs. Collector 1996 (82) ELT 129, the tribunal has held that documentary evidence would prevail over oral evidence. The Tribunal held as under : 4. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, 1998 and clandestinely removed the same without payment of duty to M/s. Kurele Chemicals Indus., but from the above referred documentary evidence, the Commissioner (Appeals) has recorded definite findings that respondents had no machinery even during that period for the manufacture of Laminated Pouches. They started manufacturing of such pouches only after 8-10-1998. He has also observed that even otherwise the manufacture of 8,000 kgs. of laminated pouches during the disputed period could not take place. No evidence has been also brought on record to prove the purchase of extra raw material or consumption of extra electricity by the respondents. Therefore, I do not find any sufficient ground to disagree with the findings of the Commissioner (Appeals) that there is no evidence on the record to prove the clandestine manufacture/removal of the goods during the period in dispute by the respondents. He has rightly set aside the duty demand and penalties, as imposed by the adjudicating authority on the respondents. Therefore, the impugned order passed by the Commissioner (Appeals) is upheld and the appeals of the Revenue are dismissed. 8. The ld. Counsel has also contended that e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outs are sufficient to charge the appellants with the clandestine receipt of the raw material and the manufacture and removal of the finished goods without payment of duty, cannot be accepted. The testimony of Ms. Aarti Srivastava that she was given the responsibility to do the work related to the designs in the computer, preparation and generation of the bills through the computer, making entries from certain slips made available to her by Shri Ajay Jain, Director of the appellants company, and misc. typing work relating to the computer, did not in any manner prove the clandestine receipt of the raw material and manufacture and removal of the finished goods by the appellants in a clandestine manner. No details of the entries and the bills prepared and generated from the computer had been furnished by her. Similarly, the bald statement of Shri Vipul Jain, Director of the appellants company, that the computer print outs contained entries regarding the receipt of the raw material from various suppliers and manufacture and clearance of the finished goods to various buyers during the period in dispute by the appellants, also could not be taken as a conclusive proof, for want of corro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , did not hold good in the circumstances. He, however, reduced the redemption fine for the release of the goods and the penalty. 7. In the absence of any tangible evidence regarding the clandestine receipt of the raw material by the appellants from the suppliers and the manufacture of the finished goods out of that material and clandestine removal of the same to the buyers, without payment of duty, the uncorroborated statement of Shri Vipul Jain, Director of the appellants company, could not be made sole basis by holding the appellants guilty of the manufacture and removal of the finished goods without payment of duty during the disputed period. The appellants have rather produced affidavits of some raw material suppliers wherein they had denied of having supplied the raw material to them without the cover of duty paid documents. The evidence of Shri R.D. Gupta, Director of a transport company, M/s. Vindhvasni Carriers Pvt. Ltd., did not advance the case of the Department to any logical end. No details of the consignees to whom the goods were delivered, at the behest of the appellants, without the cover of the invoices, has been disclosed by them and no statement of any such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those companies had admitted that the advancement of loan was a sham transaction and that it was the money of the appellants which they collected by evasion of the Central Excise Duty by clandestine sale of the excisable goods. Similarly, the statements filed with the bank by the appellants for the purpose of financial accommodation, loan, payment schedules, overdrafts etc., also did not furnish any tangible proof of clandestine receipt of the raw material and manufacturer and removal of the finished goods in a clandestine manner by them. Those statements were given by the appellants for procuring more finances from the bank. It is well settled that the record maintained by an assessee for arranging finance, would not be sufficient for proving the clandestine removal of the finished goods by them as laid down by the Tribunal in the case of M/s. T.M. Industries v. CCE - 1993 (68) E.L.T. 807. The flaws in the investigation and imperfectness of the evidence has been even acknowledged by the adjudicating authority in the Impugned order itself. He has, however, still accepted the incomplete and inconclusive evidence for saddling the appellants with the duty liability and the penalty for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) E.L.T. 600 (Tribunal) = 2004 (65) RLT 70; (22) Superior Steel Products v. CCE, Delhi - 1999 (109) E.L.T. 712; (23) Mangat Ram v. CC, New Delhi - 2001 (129) E.L.T. 771; and (24) Karupasamy Anr. v. State by Superintendent, Customs Tuticorin - 2004 (94) ECC 306 (Mad.). But the law laid down in none of these cases, regarding the proof of clandestine removal of the goods by an assessee and the evidential value of the retracted statements of the witnesses is not attracted, in the light of the facts and circumstances, detailed above, to the present case. It is a question of fact to be decided, keeping in view the facts and evidence of each case, as to whether the change of clandestine removal of the goods without payment of duty, stands proved as against the assessee or not. The findings of the Tribunal/Court in a particular case in favour of the Department regarding clandestine removal of goods by the assessee based on the evidence brought on record therein cannot be made applicable to another case, wherein tangible evidence is missing for proving such a change against the assessee. 11. In view of what has been discussed above, in our view, the charge of clan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of invoice of High Carbon Ferro Manganee, we find that the allegation is based upon the goods seized during transportation and statement of some of the buyers who allegedly stated that High Carbon Ferro Manganese cannot be used to manufacture welding electrodes. However we find that the Appellant has challenged the test report on the ground that it is not known as to from where the samples were drawn and what were the goods sent for testing. We find that there is no reason to deny the claim of the Appellant as it is not forthcoming as to from where the samples were withdrawn and whether the samples were withdrawn in presence of Appellant. We are therefore of the view that the test report cannot be relied upon. We also find that on a reference being made by the Deputy Commissioner (Preventive), the Technical Authority, Visveswaraya National Institute of Technology, Nagpur by letter No. IV (16)08/2004/Prev./1876 dt. 15.10.2004 as to whether the Manganese ore and Manganese Di oxide Powder can be used as raw material for the manufacture of welding electrodes, the said institute replied that these can be used as raw material for manufacture of Welding electrodes. Thus the contention of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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