TMI Blog2019 (5) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... acture and clearance of the goods, therefore, the impugned demand is not sustainable in the absence of any evidence. Demand set aside - penalty also set aside - appeal allowed - decided in favor of appellant. - Excise Appeal No. 60344-60347 of 2019 - Final Order No. 60477-60480/2019 - Dated:- 15-5-2019 - Shri Ashok Jindal, Member (Judicial) And Shri C.L. Mahar, Member (Technical) Dr. Seema Jain, Shri A. Kumar, Advocates and Shri R.K. Yadav, Consultant for the appellants. Shri Tarun Kumar, Authorized Representative (DR) for the Respondent. C L MAHAR :- The appellants are in appeal against the impugned order. 2. The facts of the case are that an intelligence was received that M/s Som Sugandh Industries Ltd. (hereinafter referred to as M/s Som) was evading Central Excise duty by way of suppression of production and clandestine removal of their finished goods. The information also indicated that the documents evidencing suppressed production and clandestine clearances were secreted at the residence of one Shri Manoj Rajouria located at 525, village, Kundli, Sonepat. Searches were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Masala Packing Machines (Capacity Determination Collection of Duty) Rules, 2008. Accordingly, he confirmed demand the demand of duty of ₹ 8,25,00,000/- against M/s Som which was to be paid alongwith interest and imposed penalty of ₹ 8,28,45,474/- under Rule 25 and various penalties on the co-appellants. Aggrieved with the said order, M/s Som and its directors and authorized signatory filed appeal before this Tribunal. The said matter was remanded back by this Tribunal vide order dated 08/11/2016 with certain directions. In remand proceedings, impugned order has been passed as under :- 1. I confirm the demand for Central Excise duty of ₹ 13,41,65,685/- (Rupees Thirteen Crore Forty One Lakhs Sixty Five Thousand Six Hundred Eighty Five only) under first proviso to Section 11A (1) of the Central Excise Act, 1944, readwith Section 174 (2) of CGST Act, 2017 against M/s Som Sugandh Industries Limited, Sonepat. I order for appropriation and adjustment of an amount of ₹ 8.00 crores already voluntarily paid by them against this demand of duty. 2. I confirm the recovery of interest on (1) above payable from due date of payment to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting Authority has relied upon the statement dated 16/01/2008 of Shri Pitamber Sharma, a transporter who stated that his driver transported supari to M/s Som on 6-7 occasions, but he does not remember the dates, that in October 2007 itself, his driver had transported supari on 08/10/2007, 12/10/2007 and 15/10/2007 and each time 4 to 4.5 tonnes of supari was transported. He stated that Shri Gyan Chand Sharma used to book vehicle telephonically wherein he stated that he did not issue any transport document and he received payment in cash and he does not maintain any record. On being asked, he specified the dates on which supari was transported by him. He is stated on the basis of money which driver gave him after delivery of goods he also stated that he did not know anyone from M/s Som, therefore, the statement of Shri Pitamber Sharma cannot be relied upon and he is only the owner of the vehicle, the vehicles were driven by the drivers, and no statement of driver who allegedly transported the supari to M/s Som was recorded. Also no employee/director of appellant was confronted with the statement of Shri Pitamber Sharma. It is her submission that to manufacture Gutkha/pan masala apart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Authorized Representative relied on the impugned order and submits that apart from the documents received from Shri Manoj Rajouria and his statement, there are ample evidence which has been discussed by the Adjudicating Authority in the impugned order, therefore, the demand has rightly been confirmed against the appellants. He further submits that the statement of Shri Satish Seth, transporters were also relied upon by the Adjudicating Authority in the impugned order and the same are the basis of confirmation of demand against the appellants, therefore, demand has rightly was confirmed against the appellants, penalties were also correctly imposed on the appellants. 9. Heard the parties, considered the submissions. 10. On careful consideration submissions made by both sides, we find that in this case, the impugned order has been passed in the remand proceedings on the directions of this Tribunal vide final order No. 61619-61623 of 2016 dated 08/11/2016. 11. In this case after remand proceedings, the appellant filed an application for refund of the amount paid during the course of investigation and the said refund claims have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the show cause notice to M/s Som and its directors and the employee. In the cross examination, Shri Manoj Rajouria stated that due to enmity with M/s Som and its directors, he had prepared these documents. By doing this, Shri Manoj Rajouria has taken his revenge from M/s Som and its directors, therefore, the documents recovered from the residence of Shri Manoj Rajouria have lost the evidentiary value as it cannot be said an independent evidence. Therefore, the duty cannot be demanded on the basis of the documents recovered from Shri Manoj Rajouria and the documents recovered from Shri Manoj Rajouria cannot be taken as evidence . 14. Further this Tribunal observed as :- 26. The charts have been prepared for dispatch as per resumed documents and actual production through the railways and various transporters . and on going through those documents, we find that the entries do not correspond with each other as the documents recovered from the premises of Shri Manoj Rajouria has date-wise of dispatch through various railway stations and various transporters. The department procured. PWB s from the railway station during the said per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity and applied before the Settlement Commission to settle the case. This by itself will not establish their guilt. However, considering the overall facts and circumstances of this case, the said development cannot be totally brushed aside as of no material consequence. It is recorded here only to emphasis that whatever evidences gathered during investigation requires objective and close scrutiny before arriving at the final quantification of duty not paid by M/s Som during the impugned period. Such quantification cannot be summarily made, but made rationally with reasons . and remanded matter back to the Adjudicating Authority while remanding the matter by this Tribunal there was a clear cut finding that the duty cannot be demanded on the basis of document recovered from Shri Manoj Rajouria and the statement of Shri Manoj Rajouria recorded under Section 14 of the Act. But in the impugned order, the learned Adjudicating Authority has made basis the documents recovered from Shri Manoj Rajouria and statement of Shri Manoj Rajouria recorded under Section 14 of the Central Excise Act, 1944 was relied but no reliance has been placed by the Adjudicating Authority of cros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. As Revenue has not come with any positive evidence on record to allege such a huge clandestine manufacture and clearance of the goods, therefore, without any evidence, the case of the Revenue is not sustainable. Moreover, more approaching to the Settlement Commission by the appellant cannot be the basis to allege they have clandestinely manufactured and cleared the goods. 19. The sole basis to allege clandestine manufacture and clearance of the goods is the document resumed from Shri Manoj Rajouria and statement of Shri Manoj Rajouria which has already been discarded by this Tribunal while remanding the matter to the Adjudicating Authority on 08/11/2016. The said order of this Tribunal has attained finality as the same has not been challenged by the Revenue before any higher forum. 20. It is settled principal that no demand can be confirmed on the basis of third party evidences as has been the case in the impugned order. This Tribunal in following decision has categorically held that the third party record can be the sole evidence to confirm the evasion of central excise duty. (i) In case of M/s Jai Mata Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. The confirmation of duty in respect of 149 consignments is also based on the records seized from the premises of M/s. Chitra Traders and not on the basis of any record seized from the premises of the Appellant-company. The Revenue has not been able to adduce any corroborative evidence to show the movement of goods from the premises of the Appellant-company to the premises of M/s. Chitra Traders or the Customers whom the goods were sent directly to as per the direction of Chitra Traders. No inquiry has also been made into these Customers who ultimately received the goods. There is no substance in the reasoning given by the Commissioner in the impugned order to the effect that as the party did not challenge the fact of their business association with M/s. Chitra Traders, Delhi, the enquiry further down the line was not considered necessary. The onus of proof that the goods were removed by the Appellants without payment of duty and without entering the same in their records is upon the Revenue which cannot be discharged merely on the strength of the entries made in the records of a third party without linking the removal of goods from the premises of the Appellant-com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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