TMI Blog2019 (1) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor allegedly being an admission are sufficient for proving the alleged clandestine removal? - Held that:- Though mere irregularity and even illegality in case of search and seizure cannot by itself render the documents seized in the case of such search or seizure to be inadmissible in evidence but the fact of the present case is that the Panchnama merely records that the officers on search found certain records which does not give the description of so called record except saying that the same are described in the annexure to SCN. All this information was absolutely necessary to give credibility to the Panchnama particularly when the entire proceedings in that record are sought to be challenged and disputed and also particularly when the permission to cross examine the witnesses of Panchnama was sought however was not granted for. Further basis of confirming the confiscation has been the evidence as that of eye estimation for determination of stock but it has been a settled principle that the allegations of clandestine removal of eye estimation is not correct. The alleged admission of the Director of appellant - Held that:- The allegations of clandestine removal are serious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 1702.235 MT 2456.000 MT 753.765 MT Rs.1,95,22,513.50 2 Mis-rolls 87.005 MT 98.000 MT 10.995 MT Rs.1,99,009.50 Resultantly, a SCN No. 3718 dated 28.11.2016 was served alleging the clandestine clearance of goods during the month of February to May 2016 and proposing the aforesaid seized stock to be confiscated under provisions of Rule 25 of Central excise Rules 2002 with the imposition of redemption fine in view of the said confiscation and the penalty under Rule 25 of Central Excise Rules, 2002 was also proposed. The said SCN was initially adjudicated by Assistant Commissioner vide Order No. 11 dated 29.09.2017. Being aggrieved an Appeal before Commissioner (Appeals) was filed who vide Order under challenge i.e. one bearing No. 427 dated 22.01.2018 has upheld the demand thereby rejecting the Appeal. Resultantly, the Appeals are before this Tribunal. 2. I have heard Mr. Anil Mishra, Ld. Advocate for the appellant and Mr. S. Nunthuk, Ld. DR for the Department. 3. IT is submitted that the adjudicating auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that there were parallel invoices of same number but different consignees as seized alongwith the goods. It was also held that mensrea is not at all required to invoke Rule 25 and Rule 26 of Central Excise Rules. To adjudicate as to whether these findings are reasonable, the impugned Rules have to be looked into: Rule 25 of Central Excise Rules 2002 defines as under: (1) Subject to the provisions of section 11AC of the Act, if any producer, manufacturer, registered person of a warehouse or a registered dealer, - (a) Removes any excisable goods in contravention of any of the provisions of these rules or the notification issued under these rules; or (b) Does not account for any excisable goods produced or manufactured or stored by him; or (c) Engages in the manufacture, production or storage of any excisable goods without having applied for the registration certificate required under Section 6 of the Act; or (d) Contravenes any of the provisions of these rules or the notifications issued under these rules with intent to evade payment of duty, Then, all such goods shall be liable to confiscation and the producer or manufacturer or regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which they are made. Where Rule 25(1) expressly begins with Subject to the provisions of section 11ac of the ce act , obviously the requirements of Section 11AC will have to constitute a condition subject to which the power under Rule 25 can be exercised. Rule 25 of the CE Rules itself came up for interpretation before the Gujarat High Court in Saurashtra Cement Ltd. (supra) wherein para 17 it was observed as under: 17. It is also to be borne in mind that Rule 25 starts with the word Subject to the provisions of Section 11AC .. . Section 11AC of the Central Excise Act deals with penalty for short levy or non-levy of duty in certain cases. It says that where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded by reasons of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the Rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (2) of section 11ac, shall also be liable to pay a penalty equal to the duty so determined. For the purpose of invoking Section 11AC of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or inference in any manner with such documents and contents thereof. It was also necessary to record as to what steps were taken to safeguard the documents and to avoid possibility of any stranger interference with the seized materials. In other words, when any document is seized, it necessary to enclose the same in a cover and to seal such cover so that no other person gets opportunity to interfere with such document. All these things can of course be recorded briefly, but precisely. This aspect gains more importance once there is objection regarding veracity of the panchanama and the contents of the documents stated to have been seized in the course of such panchanama. A Panchnama should disclose proper description of the premises and the things found in the premises. The information in this regard assumes more importance when there is serious dispute about the articles alleged to have been recovered and seized from such premises and such articles are sought to be linked with the activities of the concerned party. The Panchnama and the proceedings in relation thereto should not leave any room to entertain any doubt as such and for the possibility of planting any article and/or do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation for determination of stock but it has been a settled principle that the allegations of clandestine removal of eye estimation is not correct. I draw my support from the decision of Tribunal Mumbai in the case of Nilesh Steel and Alloys Pvt. Ltd. Vs. CCE, Aurangabad 2008 (229) ELT 399. This Tribunal also in the case of Shri Ganesh Alloys Vs. Chandigarh 2016 (337) ELT 595 wherein it was held that since the excess of stock was found merely on eye estimation and no physical stock taking or done the allegation of excess stock found and that the same has not been recorded in the statutory record were held not sustainable. 8. Finally, qua the alleged admission of the Director of appellant, I am of the opinion that allegations of clandestine removal are serious in nature and the clandestine activities are quasi criminal hence the revenue alleging the same is required to prove it by sufficient corroborative evidences. The Principle Bench, CESTAT in the case of Raj Ratan Industries Vs. CCE Kanpur 2013 (298) ELT 111 has held that the shortage detected at the time of visit of officers cannot admittedly lead to the findings of clandestine removal in absence of the evidences. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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