TMI Blog2018 (12) TMI 1101X X X X Extracts X X X X X X X X Extracts X X X X ..... nus to prove so lies upon them. Recovery of the registers/documents/lose papers maintained in the assessee’s factory for internal movement of the goods from one section to another, by itself, are not sufficient to establish the clandestine activities - further, Revenue has made no further efforts to find out the source of the procurement of raw material, the actual production in the appellant’s factory or transportation of the same or the identity of the buyers and the cash receipt of the consideration for the goods in question. In the absence of these evidences, it is not justifiable to uphold the clandestine removal charges. Benefit of exemption - Basil and Parsley soap with the aid of power - Held that:- Inasmuch as the appellant have not rebutted the use of power at various stages of manufacture of the said soaps, they were not entitled to exemption and were required to pay duty. Time limitation - Held that:- The use of power was found by the Revenue only subsequently, during the visit of the factory and subsequent investigations. As such filing of declarations, by itself, when the facts have been mis-stated in said declarations cannot come to the aid of the appellant jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire production to the said godown located in Delhi, whereas Noida factory of the appellant was also indulging in direct sales as also transfer of the part of goods to their Delhi godown and further use to sell a part of the goods produced in their factory to Guwahati and Paonta Sahib for further processing. The Head Office of the group companies was located at Jungpura Extension, New Delhi. Smt. Vineeta Jain is one of the Directors in all the three companies. 5. On 30.09.2004, all the three factories including the Delhi godown and Delhi Head Office was put to search by the Officers of DGCEI resulting in recovery of allegedly incriminating documents and records as also resulting in seizure of the goods. In respect of the seizure of the goods, the proceedings stands initiated by way of issuance of a separate show cause notice which is not a part of the present proceedings. 6. Based upon the recovery of the documents from various places, further investigations were carried out by the officers resulting in recording of statements of various persons. Based upon the result of the investigations, Revenue entertained a view that the appellant was indulging into clandestine remova ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Officers during search operations, which documents stands tabulated by him in Para 4 of the impugned order. The said table is being reproduced below:- S. No. Evidences, in brief/minor heading Assessable value (in Rs.) Amount of duty demanded (in Rs.) 1. Bulk issue registers, packing material issue registers, material issue registers, Direct Marketing Register, Statements etc. 34,97,019/- + 72,88,344/- 5,59,532/- + 11,66,136/- 2. Outward Register, loose papers, Statements etc. 5,39,475/- 86,316.00/- 3. Inward Register, parallel invoices, Statements etc. 19,64,035/- 3,14,246.00/- 4. MRNs, Statements etc 7,79,169/- 1,27,547.00/- 5. Bin Card Register, Statements etc. 75,02,945/- 12,00,471/- 6. Non returnable gate passes, hand written notes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and Direct Marketing Register found from Delhi godown are not sustainable as the said godown received the goods manufactured in all the three factories and any mis-matching in the register maintained at Delhi godown cannot be solely attributed to their Noida factory. Similarly parallel invoices found in Delhi godown cannot be attributed to the unaccounted clearances from the appellant s Noida factory. The Adjudicating Authority has confirmed demands on the basis of the entries made in separate registers separately without appreciating the fact that even if clandestine removal is upheld against them, it is the same very goods which would be unaccounted in all the registers. They have strongly contested that the clandestine clearances have to be established on the basis of clinching evidences and not on the basis of some private records read with the statements. Revenue has not identified any buyer of the goods alleged to have received the goods clandestinely cleared and no enquiries or investigations stands made as regards unaccounted procurement of raw material, no transporters or drivers stands identified by the Revenue and there is no attempt to find out as to whether the No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, though it is not possible to refer to all of them as there are plethora of such decisions laying down that clandestine removal activities have to be upheld by production of positive evidence. Reference can be made to Tribunal s decisions in the case of Sakeen Alloys Pvt. Ltd. vs. Commissioner of Central Excise, Ahmedabad reported at 2013 (296) E.L.T. 392 (Tri.-Ahmd.), Commissioner of Central Excise vs. Saakkeen Alloys Pvt. Ltd. reported at 2014 (308) E.L.T. 655 (Guj.), which stands upheld by the Hon ble Supreme Court in the case of Commissioner vs. Saakeen Alloys Pvt. Ltd. reported as 2015 (319) E.L.T. A117 (S.C.). Reference can also be made to Hon ble Allahabad High Court s decision in the case of Continental Cement Company vs. Union of India reported as 2014 (309) E.L.T. 411 (All.) and Triveni Engineering Industries Ltd. vs. Commissioner of Central Excise, Allahabad reported as 2016 (334) E.L.T. 595 (All.). Tribunal in the case of M/s Popular Paint Chemicals Others vide its Final Order No. A/52716-52718/2018-EX[DB] dated 06.08.2018 and in the case of M/s Shiva Polyplast Pvt Ltd. Others vide its Final Order No. A/71931-71938/2018-EX[DB] dated 01.08.2018 have taken into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration. 17. We find that there is a clear cut finding by the Adjudicating Authority as regards use of power at different manufacturing stages. The appellant have not strongly rebutted the same and has not also detailed the process of manufacture adopted by them for the manufacture of the said type of soaps. In their written submissions they have simplicitor submitted that the fans were being used for the benefit of labourers/workers as required under the Factories Act, 1948. However, we note that it is not only the use of fans or air conditioner for the process of drying the soap cakes but there is reference to use of packing machines operated with the aid of power. Admittedly the packing of the soap is a process resulting in the final manufacture of the soap inasmuch as the soap cakes, without packing cannot be marketed. In fact the appellants have themselves taken a stand, while arguing on clandestine activities that the Bulk Register entries were for unfinished goods sent further for packing. Inasmuch as packing is an essential process leading to complete manufacture of the soaps, use of power in packing machines would admittedly amount to use of power in the manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant s claims that they had declared the goods as having not been manufactured with the aid the power and have filed monthly returns showing the same to be as falling under Heading 3401.12 is accepted, the question is as to whether the said fact would be sufficient to limit the demand within the normal period of limitation. As already held, the appellants were using the power for the manufacture of the said soaps. The fact of use of power at the boiling sugar stage or packing stage was not being disclosed to the Revenue and the claim of classification under Heading 3401.12 was being made without disclosing the above fact. As such the declarations have to be treated as mis-statement with an intent to evade payment of duty. The use of power was found by the Revenue only subsequently, during the visit of the factory and subsequent investigations. As such filing of declarations, by itself, when the facts have been mis-stated in said declarations cannot come to the aid of the appellant justifying to limit the demand to the normal period of time. 21. Accordingly, by rejecting the pleas on merits as also on limitation, we uphold the demand of ₹ 36,86,531/- on the said count along ..... X X X X Extracts X X X X X X X X Extracts X X X X
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