TMI Blog2019 (1) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of shortage found - other than alleging that the goods were found shortage, the Revenue has not produced any evidence to show that the goods have been clandestinely manufactured and cleared. There is no evidence to the effect of purchase of raw-material, consumption of electricity, wages to labour, production, clearance, transportation of sale proceeds etc which could have been used to prove the alleged clandestine removal are not forthcoming. Therefore, this allegation is not substantiated. Non-accountal of goods received from job-worker - Held that:- The appellant's contention regarding receipt of captive consumption do not appear to be a valid at least as far as the goods received from the job-workers are concerned. If it was the case of the appellant that the entire quantity is accounted for in RG-1, the contentions of no evidence being available for evidencing clandestine removal would have been acceptable - In the absence of the same, we find that the appellants are required to discharge duty on this difference quantity. Non-accountal of production and clearance on Sundays or certain dates - Held that:- The ownership and the authenticity of the notebook/re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri. M.S. Nagaraja, Advocate For the Appellant Shri. Pakshirajan, Assistant Commissioner (AR) For the Respondent ORDER Per: P. ANJANI KUMAR The appellants M/s. United Chemicals Industries (UCI) are engaged in the manufacture of HDPE/PP Fabric/Sacks falling under CETH 3923 21 00. On gathering intelligence, the officers of Preventive Bangalore-I Commissionerate have visited the appellants' premises and found that there is a shortage of 12,769 Kg of finished goods. They have also recovered certain records and documents alleged to have been maintained by weavers on the shop floor and the security guard. The officers have also found 1610 Kg of fabrics belonging to the appellants lying in the nearby godown of M/s. Deepak Filaments. On the conclusion of the investigation, the appellants have been issued a show-cause notice demanding duty of ₹ 8,51,792/- (Rupees Eight Lakhs Fifty One Thousand Seven Hundred and Ninety Two only) and seeking to impose penalties thereunder. The Joint Commissioner of Central Excise, Bangalore vide order No. 11/2007 dated 23.07.2007 has confirmed the demand and has imposed equal penalty under Section 11AC of the Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t considered the quantity of defective strips, quantity unfit for weaving, quantity captively consumed as packing materials which were not recorded in RG-1. 6,000 Kg of fabrics were captively consumed as packing material and the same is exempt under Notification 67/95. The Department has not produced any evidence of sale of such HDPE fabric without payment of duty. The burden of proof of clearance of HDPE fabrics without payment of duty by producing cogent and positive material evidence was on the Revenue. 2.2. The learned counsel submitted that show-cause notice has alleged that there was some production on Sundays (11.09.2005, 18.09.2005, 25.09.2005, 29.09.2005 and 02.10.2005) have not been accounted in RG-1. Duty of ₹ 84,553/- (Rupees Eighty Four Thousand Five Hundred and Fifty Three only) was confirmed on the same. This allegation is based on an unauthenticated handwritten notebook containing names and certain numbers which is said to be recovered from the shop floor whereas Mahazar dated 05.10.2005 states that apart from RG-1 Register nothing else was seized. The notebook and the contents have not been shown to have been recovered from the appellant's factory and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge with positive unimpeachable evidence is on the Department. He relied upon the following cases: i. Commissioner Vs. Bihariji Manufacture Co. Pvt. Ltd. - 2015 (323) E.L.T. 106 (Del.) = 2005 (323) E.L.T. A023 (SC) ii. Continental Cement Company Vs. UOI - 2014 (309) E.L.T. 411 (All.) iii. CCE Vs. Motabhai Iron Steel Industries - 2015 (316) E.L.T. 374 (Guj.) iv. CCE, Ahmedabad-II Vs. Chhajusingh S Kanwal - 2011 (272) E.L.T. 202 (Guj.) v. CCE Vs. Swati Polyester - 2015 (321) E.L.T. 423 (Guj.) vi. CCE Vs. Brims Products - 2011 (271) E.L.T. 184 (Pat.) vii. CCE Vs. Laxmi Engineering Works - 2010 (254) E.L.T. 205 (P H) viii. P J Auromatics - 2016 (334) E.L.T. 675 (T-De1.) ix. CCE Vs. Vidya Laminates Pvt. Ltd. - 2007 (211) E.L.T. 382 (Guj.) 2.6. He submitted, regarding the seizure of 1.60 MT of finished goods valued at others adjoining premises, he submitted that due to lack of space in the factory they have stored the same in the premises of sister concern i.e. M/s. Deepak Filaments. There was no shortage as per RG-1 and total goods are accounted for. The only fault on their part was not obtaining permission for storing the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be demanded on the same? C. There was clandestine manufacture on Sundays (on certain dates and clearance without payment of duty). If so, whether duty of ₹ 84,553/- (Rupees Eighty Four Thousand Five Hundred and Fifty Three only) on such clearance maintainable? D. Excisable goods were lying in the sister concern without obtaining any permission and without payment of duty. If so, whether confiscation of such goods is permissible? 4.2. We find that the officers have noticed that there is a shortage on the basis of the weight written on the rolls. On this basis, they concluded that whereas as per RG-1, stock could have been 24,039 Kg and actual stock was 11,270 Kg. The appellant's contention was that the shortage arrived on the basis of estimation is not acceptable and that the stock as per RG-1 has been cleared subsequently on payment of duty and on valid invoices. We find that the appellant's contention is acceptable for two reasons one being that the entire stock of 24,039 Kg has been accounted in the clearance subsequently. Therefore, there is no reason to demand duty again on the stock alleged to have found short. Moreover, as held in a catena of judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of no evidence being available for evidencing clandestine removal would have been acceptable. In the absence of the same, we find that the appellants are required to discharge duty on this difference quantity. 4.4. On the third issue of non-accountal of production and clearance on Sundays or certain dates, we find that as submitted by the appellants that the head note was written as Sunday all the dates cannot be logically Sundays as if 18th 25th of September are Sundays, 29th cannot be a Sunday. Moreover the records seized are said to be unauthenticated, on going through the mahazar, we find that the mahazar does not record the withdrawal/seizure of any such notebooks or records. The ownership and the authenticity of the notebook/record are not established. The appellants contended that the names mentioned therein are not the employees as can be verified by their master or the record submitted to ESIC. Moreover, we find that the Department has not come forth with any further proof of clandestine removal. It was also submitted that the register alleged to have been maintained at the security gate showing transportation of the goods maintained by one Shri. Kannan, Security In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not corroborated, authenticated, owned up. Therefore they cannot by themselves be a basis for making a serious allegation such as clandestine removal. We find that Tribunal in the case of Continental Cement Company Vs. UOI cited supra has held that clinching evidence is required of purchase of raw material, use of extra electricity, sale of final products, clandestine removal, transportation, payment, realization of sale proceeds, mode and flow back of funds to establish clandestine removal. We also find that Tribunal similarly, in the matter of Nova Petrochemicals v. CCE, Ahmedabad-II, in its Final Order Nos. A/11207-11219/2013, dated 26-9-2013 has held as under in Para 40: After having very carefully considered the law laid down by this Tribunal in the matter of clandestine manufacture and clearance, and the submissions made before us, it is clear that the law is well settled that, in cases of clandestine manufacture and clearances, certain fundamental criteria have to be established by Revenues which mainly are the following: (i) There should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions; ..... X X X X Extracts X X X X X X X X Extracts X X X X
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