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2019 (5) TMI 1015

e 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 - HELD THAT:- 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 various decision has categorically held that the third party record can be the sole evidence to confirm the evasion of central excise duty - reliance placed in the case of M/S. JAI MATA INDUSTRIES LTD. VERSUS CCE, ROHTAK [2013 (11) TMI 1121 - CESTAT NEW DELHI]. There is no material on record or any documentary admissible evidence to prove that the appellants are engaged in clandestine manufacture 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 - 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, .....

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mposed on the co-appellants. During the investigation, M/s Som paid a sum of ₹ 8,00,00,000/- the same was appropriated. M/s Som has approached to the Settlement Commission for settling the issue but it could not be materialized. Thereafter, the adjudication took place. The Commissioner while adjudicating the matter, has found that the appellant is not having the capacity to produce 50.89 crores of pouches with a short span time of 20 days. He held that only 30.06 crores of pouches could have been manufactured during the said period. Therefore, on the basis of best judgment of the production capacity of M/s Som, he demanded duty as per Pan 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 .....

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) E.L.T. 690 (Bom.), Commissioner of Customs Mangalore vs. Kushalchand & Co. reported in 2015 (325) E.L.T. 813 (S.C.). 4. She further submits that no evidence in relation to unrelated raw material brought on record. It is her submission that the documents recovered from the residence of Shri Manoj Rajouria are third party documents and cannot be relied upon but the Commissioner is relied upon the same documents. It is her further submission that the Adjudicating 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 g .....

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her submitted that Shri Satish Seth s statement is not voluntary. She also submitted that investigation was on the basis of specific information. No investigation was conducted regarding the packing of raw material and no evidence of receipt of case by the appellant had been brought on record, therefore, the impugned order is not sustainable, hence, the same is to be set aside. 8. On the other hand, 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 f .....

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ve, therefore, appeals were taken up for hearing. 13. Now, we come to the merits of the case. We find that while remanding matter back to the Adjudicating Authority, this Tribunal has made the following observations :- 25. The documents recovered from the premises of Shri Manoj Rajouria are the sole basis for issuance 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 en .....

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t notes and other private records are treated in a summary manner while arriving at conclusion. f) M/s Som paid ₹ 8 crores towards admitted duty liability 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 Rajouri .....

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ave been procured by the appellant to manufacture gutkha/pan masala in such a huge quantity. 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 ca .....

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f 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-company. The mere fact that the Appell .....

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