TMI Blog2019 (7) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... en drive data is said to be record of clandestine clearance and the same has been taken from the office computer, but we find that no computer has been identified from which such data was copied. There is no source computer on which such data/ record of alleged clandestine clearances was being maintained by the Appellant concern M/s KLMPL. It leads to serious doubt about the credibility of such data found in pen drive - There is no findings as to on whose instructions such data was maintained by him. Shri Shri Sukhdev alias Saral Patidar has never clarified as to for what purpose the data was copied by him in his pen drive, nor has he said as to from which computer such data was copied. In such facts, the data found in the pen drive is not a reliable piece of evidence. No evidence in the form of checkpost record has been adduced to show that the goods were transported from Pithampur to Indore. Even, the loading challans of M/s Parnami Transport shows transportation of goods from Indore to Delhi and even in such challans Ritesh has been shown as consignee and other parties as consignors, which allegedly has been clarified by the transporter that in the loading challans consign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arketing. M/s Sunshine Marketing were engaged in anodizing and were undertaking such activity on behalf of other suppliers in addition to M/s KLMPL. Further, even if the data found in the pen drive of Shri Shailesh Yadav is matching with the pen drive data of Shri Sukhdev Patidar, it cannot be a conclusive ground to hold that the goods were clandestinely cleared by M/s KLMPL to M/s KI. It is an accepted fact from the show cause notice that in premises of M/s KI, the goods were also being received from M/s Vimsar, M/s Krishna Profiles as well as other persons. In such case it cannot be alleged that the goods found to be entered in seized records of M/s KI or M/s Sunshine (which was also operating from the same premises) belong to the Appellant - KLMPL. The Pen drive of Shri Shailesh Yadav is his personal pen drive and were not maintained by him under the instruction of Appellant. Nor the same is corroborated with any records of Appellant firm to show that the same were clandestine removed goods. In such case, it cannot be concluded that the clearances by M/s Kuchchal International to M/s H.M. Enterprises were of goods manufactured by the Appellant and cleared clandestinely withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no ground to demand duty. Demand of ₹ 21,24,217/- on the ground that the Appellant had availed credit of duty on the basis of bills of entries of the goods, i.e. Aluminum Scrap, shown to have been purchased on high sea sale basis from M/s Moongad Aluminium and also on the basis of invoices issued by M/s Satya Sales Corporation, Mumbai - HELD THAT:- The allegation of clandestine production vis- -vis allegation of non-receipt of raw material is contrary to each other. The payment against the purchase of imported scrap has been legally made against valid documents for availing credit and even if the goods have first reached Indore and then brought to Appellant s factory, it does not cast a doubt on non-receipt of imported goods. In such view of the facts, we find that the credit availed by the Appellant on imported scrap cannot be denied - In case of credit of ₹ 2,41,739/-, the adjudicating authority has denied the same on the invoice issued by M/s Satya Sales, Belapur. It is alleged that as the invoices do not show mode of transportation and vehicle registration numbers and therefore, it cannot be presumed that the goods were delivered to the Appellant. The invoic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L) APPEARANCE: Shri Manish Saharan and Shri Rohit Choudhary, Advocates for the appellants. Shri R.K. Mishra, Authorised Representative for the respondent. ANIL CHOUDHARY: The present appeals has been filed by M/s Kuchhal Light Metals Pvt. Ltd, (KLMPL) M/s H.M. Enterprises, Shri Manohar Sharma, Shri Sukhdev alias Saral Patidar, Shri Ritesh Gupta (M.D) and M/s Kuchhal International (KI) against Order-in-Original No. 65-66/COMMR/CEX/IND/2017 dated 23.01.2017 passed by the Commissioner of Central Excise, Indore. 2. The brief facts of the case are that the Appellant - M/s KLMPL is engaged in the manufacture of Aluminum profiles/billets/ logs etc. falling under chapter 76 of Central Excise Tariff Act. They are also availing facility of cenvat credit of central excise duty paid on inputs. Based upon the investigation, they were issued show cause notice dated 16.12.2014 demanding duty of ₹ 2,22,62,157/- alleging that they have removed finished goods without payment of duty. A cenvat credit of ₹ 21,24,217/- was also proposed to be denied and recovered on the ground that, they have availed cenvat credit without receip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vii) Demand of ₹ 80,9315/- was confirmed on the ground that they have cleared aluminum logs and chips without payment of duty. (viii) Demand of ₹ 21,24,217/- was made on ground of availment of cenvat credit on the basis of Bills of Entry and invoices, without receipt of goods in factory. Further, demand of ₹ 1,53,163/- pertaining to show cause notice dt 31.05.2013 was also confirmed on the ground that M/s KLMPL has cleared goods involving duty of ₹ 1,06,164/- to M/s. KI, goods involving duty of ₹ 23,606/- to M/s Sunshine Marketing and goods involving duty of ₹ 23,393/- to M/s Baser Sales. Also goods seized from premises of M/s KI and M/s Sanmati Fabricators were ordered to be confiscated. Penalty was also imposed upon M/s KLMPL and Others. Hence the present appeals. 2. The appellant M/s Kuchchal Light Metals Pvt. Ltd., (KLMPL) are manufacturer of aluminium profiles and aluminium billets. The unit is situated at Pithampur. Mr. Ritesh Gupta is the Managing Director of the company. 3. M/s Kuchchal International (KI) is the Proprietorship concern of Mrs. Yogita Gupta w/o Mr. Ritesh Gupta engaged in the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same with the loading challans of M/s Parnami Transport and few entries in the diary of Shri Ritesh Gupta is not sustainable for the reason that the data found in pen drive seized from Shri Patidar is not a reliable piece of evidence. For relying upon the alleged decoded data of pen drive, the procedures for retrieval of data from electronic device was not followed. In terms of Section 36 B of the Central Excise Act, sub-section (2) for admissibility of a document reproduced from computer, the conditions to be followed are: (a) Identifying the document containing the statement and describing the manner in which it was produced; (b) Giving such particulars of any device involved in the documents as may be appropriate for the purpose of showing that the document was produced by a computer; (c) Dealing with any of the matters to which the conditions mentioned in sub-section (2) relate ; and this should be signed by a person occupying a responsible official position in relation to the operation of the relevant device or the management of the relevant activities should be there. 8. He submits that in the present case, no such required c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber of bundles, vehicle number, transporter name, raw material inward and details of Aluminium dross respectively. However it is not known as to how the investigating officer deciphered the terms unless and until somebody gave tips to him. The show cause notice does not spell out as to how the so-called codes in pen drive were decoded by the officer, because it is apparent that without someone s involvement, the abbreviations /code cannot be easily decoded, as has been mentioned in the notice. Clearly, the person in whose pen drive the data was located, should have been questioned which was not done. Shri Ritesh Gupta, Managing Director, in his statement has clearly stated that the data does not belong to them nor he has instructed any person to maintain such data. He never directed Shri Sukhdev alias Saral Patidar to keep the information / data on any computer. Thus the data found in the pen drive of Shri Sukhdev alias Patidar cannot be made basis to make allegation against the Appellant. Also the revenue has relied upon the challans of Parnami Transport to allege that it contains the details of clandestine clearance of goods. It is only an assumption of the revenue that in chall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no GR has been issued in respect of these consignments as said to be confessed by the transporter Shri Rajan Chugh of M/s Parnami Transport, in his statement dated 22.3.2013. According to Shri Chugh a person of the party used to go along with the goods in the truck, and therefore record of delivery of goods is not at all required. Such statement has got no evidentiary value, but just an attempt to involve the appellant in fictitious case. He submits that in para-28 of the Show Cause Notice it has been attempted to co-relate Score Board Out details with the transport documents in the search conducted on 4.12.2012 at the transporter s premises whereby loading challans were seized. However as admitted in the show cause notice 32 challans mentioned in data contained in Score Board Out were not available / could not be recovered during search. The investigating officer though has seized all the documents in search operation had again called for the said 32 challans by writing a letter and the transporter in response submitted 19 challans supporting the figures of Score Board Out and for the rest of challans, it was informed that they are not traceable. The retreival of such 19 cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricated. No investigation at the alleged buyers end was conducted, as apparent from the show cause notice. He relies upon the judgments in case of Shree Nakoda Ispat 2017 (348) E.L.T. 313, J. Yashoda (2012) ELT 458 (SC), and Premiere Instruments 2005 (183) ELT 65 (Tri.). He submits that the starting point of investigation was photocopies of 37 invoices. However neither the source of such photocopy is known nor any acknowledgment of buyers is there. There is no corroborating evidence from the Appellant premises, which can show that the invoices were issued by the Appellant. Thus the demand is not sustainable as on the basis of photocopies, source of which is not known, and without any corroborative evidence, it cannot be said that the Appellant made any clandestine clearances. He relies upon the Tribunal judgments in the cases of Hiralal Punj Badgujar Vs. CCE 2018-TIOL-2166-CESTAT MUM and M/s Jalan Concast Ltd Vs. CCE 2018-TIOL-3167 CESTAT (All.). 9. In reference to demand of ₹ 9,31,658/-, he submits that the same has been made on the ground that the goods were cleared through transporters, M/s Parnami Transport and M/s TCC Carriers, to the buyers loca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in his personal capacity, as apparent from his statement. Shri Dinesh Mittal, partner of M/s Sunshine Marketing has clearly stated that they did not direct Shri Yadav to maintain any such data. The allegation of removal is also based upon the register, in which entries were found to have been made by Shri Shailesh Yadav. However, it is apparent from the statement of Shri Ritesh Gupta, director of M/s KLMPL that he has refused the authenticity of such data. No entry of alleged clandestinely removed goods were found in the books of M/s Sunshine Marketing.There is no evidence of transportation of goods. He draws our attention to the statement dt 02.12.2013 of Shri Mazher Hussein, proprietor of M/s Hardware Stores to whom the goods has been shown to have been cleared, wherein he has clearly stated that they were purchasing aluminum section from the Appellant and the payment of the same was made through cheques or RTGS. He also stated that they have purchased aluminum section on legitimate invoices. That the entries pertaining to unaccounted sales and the payments in cash were not found in his record, hence he cannot comment upon the same. Further, in his statement dated 13.2.2014, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 3,04,357/- on the alleged clearances made to M/s H.M. Enterprises, he submits that the demands are based on the documents seized from the premises of M/s KI and the pen drive of Shri Shailesh Yadav. The said clearances were made under invoice of M/s KI to M/s HM Enterprises. M/s KI was undertaking job work activity of various entities including the Appellant, and, therefore, it cannot be said that the clearances by M/s Kucchal International to M/s HM Enterprises, were for goods manufactured by the Appellant. There are no corroborative evidence to show that the goods were cleared to M/s HM Enterprises by the Appellant. 13. In case of demand of ₹ 8,09,315/-, he submits that the demands were made on the ground that M/s KLMPL had cleared aluminum dross and chips to various buyers, and found from the pen drive of Shri Sukhdev alias Saral Patidar as corroboration of the same has been sought to have been made from diary of Shri Ritesh Gupta. He submits that except pen drive of Shri Patidar there are no evidences to show that the goods were cleared by the Appellant. The SCN has relied upon an amount of ₹ 3,99,280/- shown to have been received, in the diary of Shri Ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire allegation is based upon records of aforesaid persons. The irregularity done at third party end cannot be interpreted as clandestine clearance of goods by Appellant. If M/s Sanmati Fabricator could not produce the invoices of goods found at their premises, it cannot be assumed that the goods were cleared by Appellant. The show cause notice itself states that M/s KI is also dealing with the goods supplied by Aluminium Traders and perhaps the material receipt report is maintained consignment wise, even with indication of type of profile. The show cause notice has mentioned that material receipt report on a particular date is compared with the invoice issued on that particular date by the manufacturer and the difference is assumed as clandestine removal. This is illogical as it is not necessary that removal on a particular date by the manufacturer is received in the premises of anodizer on the same date. No evidence like payment of any amount, transportation is appearing. Shri Patni of M/s Sanmati fabricator in his statement has clearly stated that being an anodizer he takes orders for anodizing from buyers of the goods and it is not known to him whether the actual buyer o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nium profile at jobworker M/s KI is based upon records of M/s KI only. The inference is based upon the opening stock plus goods received minus finished goods dispatched. It is only an assumption that the accounted goods are duty paid and non accounted goods are non duty paid cleared by the Appellant. No verification of invoices were conducted either at the jobworker s end or from the Appellant. That even the stock verification was done on the basis of eye estimation, which clearly shows that the allegations are devoid of any reasoning and the confiscation of goods and demand of duty is not sustainable. Reliance based on pen drive of Shri Yadav in isolation cannot be a reliable piece of evidence as the same was maintained by Shri Yadav in his own capacity. Records found of M/s KI are not binding upon the Appellant. Moreover, there are no evidences of transportation of such goods from the Appellant factory. He lastly submits that in a catena of cases, it has been held that to prove clandestine removal, the Revenue should present clinching evidences in the form of purchase of unaccounted raw material, use of electricity, sale of finished goods, quantity of raw material consumed, diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earance of goods and receipts of consideration. Queries were also made from the buyers, some of them stated that the goods were received. In case of demands other than above, pertaining to clearances made to buyers other than Delhi, he submits that the pen drive of Shri Sukh Dev Patidar contained the details of such clearances, which shows that the goods were cleared clandestinely by the Appellant. As regards remaining demands, he submits that the pen drive of Shri Shailesh Yadav, employee of M/s KI contains the data of receipt of goods from M/s KLMPL and subsequent clearance to various other firms which were also recorded in various records seized from the premises of M/s KI, and as per the statement of Shri Shailesh Yadav as well as partners of M/s Sunshine, who have been using the premises of M/s KI. 17. In case of demand on Aluminum dross etc., he submits that the clearance details of the same are appearing in the pen drive of Shri Shailesh Yadav and registers maintained by him. Some cash transactions were also found in diary of Shri Ritesh Gupta, which shows that the Appellant has cleared aluminum dross etc. without payment of duty. 18. He submits that the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch data found in pen drive. It is coupled with the fact that Shri Sukhdev alias Saral Patidar is his statement has stated that the pen drive is his own. There is no findings as to on whose instructions such data was maintained by him. Shri Shri Sukhdev alias Saral Patidar has never clarified as to for what purpose the data was copied by him in his pen drive, nor has he said as to from which computer such data was copied. In such facts, the data found in the pen drive is not a reliable piece of evidence. The Managing Director of Appellant concern, Shri Ritesh Gupta, in his statement has denied the data to be pertaining to the Appellant concern as well as stated that such data was not maintained under his instruction or directions. The data of the pen drive is said to have been corroborated with loading challans of M/s Parnami Transport and diary of Shri Ritesh Gupta. However we find that the reliability of loading challan is questionable as no copy of such loading challans were found by the officers from the Appellant and the same were retrieved solely from the office of the transporter, M/s Parnami Transport, which is third party. The loading challans are internal documents of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e view that the demands based upon alleged clandestine removal of goods, cannot be sustained. 20. In case of demand of duty of goods said to be transported through TCC Carriers, we find that reliance has been placed only upon the pen drive of Shri Sukh Dev alias Saral Patidar and personal diary of Shri Sunil Atri of M/s TCC Carriers. We have held that pen drive is not reliable as it is not even known as to from where such data was generated/ copied/ prepared on Pen drive. The pen drive and personal diary of Shri Atri of M/s TCC Carriers are third party documents and do not show any connection with the Appellant for the alleged clandestine clearances. Therefore, we do not find any reason to demand duty on such alleged clearances. Though we have discarded the evidentiary value of the pen drive, diary of Shri Ritesh Gupta and other evidences relied upon by the Department, we, however, also find that the Revenue has not followed the procedure prescribed under Section 36B for retrieval of the data. The sub-section (2) of Section 36B of the Central Excise Act states as under:- (a) Identifying the document containing the statement and describing the manner in which it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emed to be a document only if the conditions mentioned under sub-section (2) are satisfied, without further proof or production of the original. The very admissibility of such a document, i.e. electronic record which is called as computer output, depends on the satisfaction of the four conditions under Section 65B(2). Following are the specified conditions under Section 65B(2) of the Evidence Act : (i) The electronic record containing the information should have been produced by the computer during the period over which the same was regularly used to store or process information for the purpose of any activity regularly carried on over that period by the person having lawful control over the use of that computer; (ii) The information of the kind contained in electronic record or of the kind from which the information is derived was regularly fed into the computer in the ordinary course of the said activity; (iii) During the material part of the said period, the computer was operating properly and that even if it was not operating properly for some time, the break or breaks had not affected either the record or the accuracy of its contents; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ratio laid down by the Apex Court will thus be squarely applicable to the provision of Section 36B of the Central Excise Act, 1944 and any reliance placed on the computerized printouts, without following statutory procedures and conditions of Section 36B, are not acceptable as evidence. It is observed that none of the statements recorded by the investigation convey that the entries made in the documents recovered from the residence of Shri Sanatan Maity are actually manufactured and cleared clandestinely by either Appellant No. 1 or Appellant No. 2. The conclusions arrived at by the adjudicating authority are based on his own analysis. 7.2 In Para 6.4 of the Order-in-Original dated 29-5-2009, in the case of Appellant No. 2, it is observed by the adjudicating authority that since an amount of ₹ 1,88,00,000/- was received by Appellant No. 2 from Sunderlal , therefore, the remaining amount of ₹ 3,04,21,230/- appears to be attributable to the sale proceeds of M.S. Ingots clandestinely received by Appellant No. 1. The findings of the adjudicating authority are thus clearly based on presumptions, assumptions and surmises when the computerized documents relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute about the proposition that the Courts can disengage the truth from the falsehood of the statement of a person. The person may speak partly true and partly false. The grain can be separated from the chaff but in the instant case, except for the statement of Shri R.K. Gupta, there is no corroboration by the Revenue during the investigation. The part of the statement of Shri R.K. Gupta is in favour of the Revenue and part of it not. If the statement of Shri R.K. Gupta is to be believed then it has to be believed in entirety. The scrutiny of the statement of Shri R.K. Gupta reveals that he has stated that about 50% of the transactions were bogus and the transactions where Tempo Nos., were same as in the purchase invoices of the same date, the transactions were genuine and actual delivery of goods took place and further, the transactions were genuine where material supplied was less than 6 tons. 8.3 In the present proceedings there is no confessional statement recorded during investigation that appellants have indulged in any clandestine manufacture and clearance of goods based on documents recovered from the residential premises of Shri Sanatan Maity. There is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nutshell, it has been the constant stand of quasi-judicial and judicial appellate forums that for establishing the fact of clandestine removal, there need to be sufficient evidence on record leading to conclusive proof of production of goods, their removal from the factory by any mode of transportation and clandestine clearance to the buyers. Mere doubts, howsoever strong cannot take the place of evidence required to be produced by the Revenue. The onus to establish such clandestine activities, resulting in confirmation of demand is placed heavily on the Revenue and is required to be discharged by production of sufficient evidences. Again, it is to be proved by the Revenue that the raw materials required for production of huge quantity of final product were obtained by the assessee in a manner which is not in its regular course of its business. It stands held by the Tribunal in the case of Mohan Steels Ltd. reported in 2004 (177) E.L.T. 668 (Tri.), that duty demand cannot be confirmed unless it is shown that the manufacturer had procured all the raw materials required to manufacture the goods. There is a long list of decisions and reference to refer to all of them may not be nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dealing with probative value of the entries made in the books of accounts, the Hon ble Supreme Court observed that such statements shall not alone be sufficient evidence to charge any person with liability. Entries even if relevant are only corroborative evidences and required independent evidence as to trusthworthiness of those entries necessary to fasten liability. The entries made in the diaries though admissible u/s 34 of the Evidence Act, 1872, truthfulness thereof is not proved by any independent evidence. Relying on the above observations made by Apex Court to the facts of the present case, we find that the entire cases of the Revenue is made on the basis of 719 invoices of doubtful nature, the trustworthiness of which do not stand established by the Revenue by any admissible independent evidences. Similarly, in the case of Ratna Fireworks reported in 2005 (192) ELT 382 (Tri.), it was observed that though mathematical procedure is not required to establish the clandestine removal but that does not mean a fact could be proved without sufficient evidence. The Hon ble Supreme Court in the case of Anjlus Dung Dung v. State of Jharkhand reported in (200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue a certificate in this behalf by a person occupying the responsible official position in relation to the operation of the relevant device or the management of the relevant activity (whichever is appropriate) shall be evidence in any matter stated in the certificate and for the purpose of the subsection, which shall be sufficient for a matter to be stated to the best of the knowledge and the belief of the persons stating it. In the present case, the data was not stored in the computer. It is stated that the computer expert accompanied with the Central Excise officers had taken the printout from the USB drive by connecting to the computer. The officers had not obtained any certificate as required under Section 36B of the said Act. It is also noted that none of the conditions under Section 36B(2) of the Act, 1944 was observed. In such situation, it is difficult to accept the printout as an evidence to support the clandestine removal of the goods. It is noted that the requirement of certificate under Section 36B(4) is also to substantiate the veracity of truth in the operation of electronic media. In the case of M/s. Premier Instrument Controls Ltd. (supra), the Tribunal has held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vities, information of the kind contained in the statement of the kind from which the information so contained is derived; (c) throughout the material part of the said period, the computer was in operation properly or, if not, then any respect in which it was not operating properly or was out of operation during that part of that period was not such as to affect the production of the document or the accuracy of the contents; and (d) the information contained in the statement reproduced or is derived from information supplied to the computer in the ordinary course of the said activities. Ld. Sr. Counsel has argued that the above conditions were not fulfilled in respect of the computer printout taken from the personal computer of Shri Sampath Kumar. It appears from the statement of Shri Sampath Kumar and the averments in the memorandum of appeal that it is an admitted fact that Shri Sampath Kumar was the person having lawful control over the use of the computer. The computer was not shown to have been used regularly to store or process information for the purposes of any activities regularly carried on by the company. It was also not shown that infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quate material available on record to establish the clandestine removal of goods. Therefore, the demand of duty solely on the basis of these materials cannot be sustained. Hence, as the clearance value was within the SSI exemption, the confiscation of the goods cannot be sustained. So, the imposition of penalties are not warranted. 12. In view of the above discussion, the demand of duty along with interest and penalties on the appellants cannot be sustained. Accordingly, the impugned orders are set aside. All the appeals filed by the appellants are allowed . 26. The above judgment was upheld by the Hon ble High Court of Gujarat as reported in Ambika Organics 2016 (334) ELT A67. Similar views has been taken by the CESTAT in case of Premium Packaging Pvt Ltd V/s CCE 2005 (184) ELT 165 (CESTAT). In view of the aforesaid judgment which are exactly on point of admissibility of data as evidence and proving charges of clandestine removal on the basis of statements, we are of the view that the data of pen drive relied upon by the revenue is not a reliable piece of evidence. Further the charges of clandestine removal are not adduced by any corroborative evidences. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd even if conducted, has not been relied upon. In absence of any such corroboration it cannot be said that the Appellant has removed the goods clandestinely. 27. Some of the demand are confirmed against the Appellant on the basis of data found in personal pen drive of Shri Shailesh Yadav, employee of anodizer/ processor M/s KI. Shri Yadav was also working for M/s Sunshine Marketing. The demand has been confirmed against the Appellant concern on the ground that no invoices towards clearances were found at M/s KI, whereas their records show the receipt of material. A demand of ₹ 3,24,240/- has been made on the basis of pen drive of Shri Shailesh Yadav alleging that the goods were cleared by the Appellant to M/s KI and from there to M/s Sunshine Marketing. We find from the statement dated 4.12.2012 of Shri Shailesh Yadav that he was saving data in his personal pen drive and no data was fed or stored on computer by M/s KI. There is no acceptance on the part of the owner of M/s KI, that the data maintained in the pen drive belongs to their concern. It is also a fact that Shri Shailesh Yadav was also working for M/s Sunshine Marketing, as also stated by Shri Dinesh Mittal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them. Also, that the entries shown in the books of M/s Kuchchal International or cash transaction in the personal diary of Shri Ritesh Gupta or pen drive of Shri Shailesh Yadav does not pertain to transaction of their concern. In view of such fact when the alleged buyer of the goods has refused receipt of goods and in absence of any other evidence, duty cannot be demanded from M/s KLMPL. A demand of ₹ 3,04,357/- has been made on the ground that the details of such clearances to M/s H.M. Enterprises were found from the documents seized from the premises of M/s Kuchchal International and the pen drive of Shri Shailesh Yadav. Further reliance has been placed upon statement of Shri Parvez Hasan, Partner of M/s H. M. Enterprises. We find that M/s KI were undertaking job work activity of various entities including the Appellant and the clearances were made to M/s H.M. Enterprises by M/s KI under invoice. The charges of clandestine removal are based upon the pen drive of Shri Shailesh Yadav employee of M/s KI, who was also working for M/s Sunshine. The Pen drive of Shri Shailesh Yadav is his personal pen drive and were not maintained by him under the instruction of Appellant. Nor t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat all evidences were retrieved from third party. The pen drive is owned by Shri Shailesh Yadav in his personal capacity. The records of Sunshine Marketing are their own records. Shri Ritesh Gupta in his statement has denied that the diary seized from him has details of any clandestine transactions. The data found in the pen drive from Shri Shailesh Yadav was not known to have been copied from any office computer of M/s KI or M/s Sunshine Marketing. No record of M/s Sunshine marketing has shown receipt of such stocks and disposal thereof. The pen drive of Shri Shailesh Yadav and the records relied upon are third party documents without any corroboration and the same cannot be relied upon to fasten the duty liability against the Appellant. We find that on the basis of third party records, the demand cannot be confirmed against Appellant concern. We find that M/s Sunshine was receiving goods from other parties also viz. M/s Vimsar, M/s Ravi Enterprises, M/s Hindustan Marketing amongst others. In absence of any corroborative evidence of removal of goods from the Appellant (KLMPL) factory, it cannot be said that the records of M/s Sunshine Marketing or pen drive of Shri Shailesh Yadav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case the driver did not report back for the next 3-4 days, it was presumed that the goods had reached the consignees end. Further, the name of the Applicant No. 1 on one GR No. 34 had been written not by Shri Sanjay Garg, but by his brother, whose statement has not been recorded and on GR 187, there is no mention of the name of the Appellant No. 1 at all. No statement of the drivers concerned has been recorded by the Revenue to establish that the finished goods manufactured by the Appellants were removed without payment of duty. The other transporters have not been produced for the purpose of cross-examination nor the statements of drivers who might have actually carried the goods, had been recorded. Moreover no statement of any of the recipients of the goods had been brought on record. Thus the statements of the transporters have remained uncorroborated and also suffers from the short coming of being not being cross-examined by the Appellants. It has been the settled law that the liability cannot be fastened on an assessee on the strength of documents seized from the possession of third party. There should be some corroborative evidence/material. The Tribunal has in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CCE, Jaipur, 2002 (141) E.L.T. 558 (T) that entries made in the transport Register of the transport company could not be accepted as a conclusive proof of clandestine receipt of goods from that transport company for want of corroboration from any tangible evidence. Following the ratio of these decision, the duty demand cannot be upheld solely on the basis of uncorroborated statements and records of transporter. The statements tendered by the labourers can also not be relied upon by the Revenue as these persons were not produced for being cross-examined. Moreover, there is no corroboration of their statements with regard to the Trucks by which the goods were allegedly removed or the persons who received the goods. The Truck driver Shri Shiv Bahadur Yadav has also not been cross-examined and cleaner Shri Rakesh Kumar had deposed that the Bills/Invoices are supposed to be with the Driver and he being cleaner had no knowledge. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of excess goods found unaccounted, there is no need to impose separate penalty on Director and Authorised Signatory under Rule 209A of the Central Excise Rules, 1944. We, therefore, set aside the penalty imposed on Appellant Nos. 2 and 3. In case of M /s Rajguru Spining Mills 2009 (243) ELT (280), this Tribunal while examining the Third party records as evidence, held as under: 3. We have carefully considered the case records and the submissions made by both sides. In the appeal filed by the Revenue, no valid grounds have been raised to challenge the findings of the Commissioner (A). The appeal is based on the existence of material which the first appellate authority had found to be unreliable as evidence. The appeal proceeds on the basis that denial of ownership of the Day Book seized from respondents was no ground to discard it as evidence. That the entries in the Day Book matched with the entries in the registers maintained by M/s. Kothari Trading Corporation was adequate circumstance which established excess realization by the respondents and evasion. We find that charge of evasion cannot be found solely on the basis of records of third party. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of MS Ingots from the appellant during the period from April, 2005 to August, 2005 are not supported by any other independent evidence on record. Therefore, we hold that merely on the basis of the entries in the private ledger book of SSSRM, the allegation of duty evasion against the appellant company cannot be sustained. 32. We also find that the show cause notice has relied upon the statement of driver of vehicle no. MP-09-KA-4616 Shri Raghuvir Maurya, that he was transporting goods from the Appellant factory to premises of M/s KI. However as pointed out by the ld. Counsel no record of such clearance has been brought on record. Merely on the basis of statement of Shri Raghuvir Maurya, it cannot be said that the goods were transported clandestinely through such vehicle and therefore there is no ground to demand duty. An invoice no. 179 dt. 07.10.2011 is alleged to have been issued twice by the Appellant i.e. once to M/s Lucky Aluminum, Bhopal and again to M/s Sunshine Marketing. The same was shown to Shri Ritesh Gupta who in his statement stated that duty shall be paid for such abnormality. However we find that Shri Ritesh Gupta in his statement refused to accept the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... four cheques for ₹ 20 lakhs were given as security, however issue of cheques as security cannot be taken as evidence of purchase of scrap. Even if some of the scrap has been shown as purchased by the Appellant but not recorded in books, the same cannot be evidence that the said scrap was used by them in clandestine production and removal of Aluminium Ingots. The adjudicating authority has relied upon the project report of West Bengal Tiny Industries Department to show that the electric consumption of Appellant unit is more and therefore the excess consumption has been used for manufacture of excess production which was cleared clandestinely. WE find that no physical verification of electric consumption was undertaken at the factory. Moreover the Hon ble Allahabad High Court in case of CCE Meerut Vs. R.A. Castings Pvt. Ltd. 2011 ELT 337 (All.) has held as under: 3. Being aggrieved by the impugned orders, the respondents filed appeals before the Customs, Excise Service Tax Appellate Tribunal, New Delhi. The Tribunal observed that it is settled principle of law that the electricity consumption cannot be the only factor or basis for determining the duty liability, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any material and perverse. We find that the Revenue has invoked the proviso to Section 11A(1) of the Act but no case has been made out in the show cause notices or in the adjudication order that there were any mis-statement, suppression of fact or fraud on the part of the respondents. No substantial question of law arises from the order of the Tribunal. 6. In the result, all the appeal fails and are accordingly, dismissed . The above judgment was maintained by the Apex Court as reported in 2011 (269) ELT A208 (SC). 33. The adjudicating authority has also confirmed a demand of ₹ 21,24,217/- on the ground that the Appellant had availed credit of duty on the basis of bills of entries of the goods, i.e. Aluminum Scrap, shown to have been purchased on high sea sale basis from M/s Moongad Aluminium and also on the basis of invoices issued by M/s Satya Sales Corporation, Mumbai. The show cause notice and the impugned order has contended that the said goods were received in the factory of Mungad Aluminium, as evident from the deposition of CHA and transporters and which is also corroborated by gate passes issued by CONCOR, which reflects the picture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le registration numbers and therefore, it cannot be presumed that the goods were delivered to the Appellant. Further, that the imported goods of Satya Sales Corpn, who is dealer of imported scrap were supplied to the Appellant from the container imported at ICD, Pithampur; that even if the goods received in Pithampur is supplied to Indore, they can supply other goods / scrap available with them to the Appellant, for which they have issued an invoice. We find that the small procedural / technical lapse of non-mentioning the vehicle number or mode of transportation cannot be a reason to deny credit to the Appellant. If the receipt of goods is not found in the pen drive of Shri Saral Patidar, the authenticity of which itself is highly doubtful, the same cannot be a reason to deny credit to the Appellant. The invoice issued by M/s Satya Sales Corporation is a valid invoice issued in the name of the Appellant and in absence of any significant evidence, the credit available to the Appellant cannot be denied on the basis of irregularity committed by the supplier. Further in case of cenvat demand no diversion of goods by M/s Moongad Aluminium or M/s Satya Sales Corporation, has been shown. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egation of clandestine removal cannot be made against the manufacturer. The anodizer, from whom the goods are seized, i.e. Shri S. P. Patni of M/s Sanmati Fabricators, has himself stated that he takes orders for anodizing from the buyers of the goods and it is not known to him whether the actual buyer of the goods is in receipt of an excise invoice issued by the factory or not. The show cause notice has alleged that M/s Sanmati Fabricators had received 1351.9 kg of aluminum profile on account of M/s Baser Sales Corporation, which was received from the factory of appellant KLMPL, as the record maintained by M/s Sanmati Fabricators show that the goods are received from the Appellant. Since no invoice could be produced by M/s Sanmati Fabricators, the same are clandestinely removed by the Appellant. We find from the statement of Shri Rakesh Baser, partner of M/s Baser Sales Corporation, who is said to be original buyer, who sent the goods for anodizing to M/s M/s Sanmati Fabricators, the goods shown to have been supplied by M/s KLMPL in the record of M/s Sanmati Fabricators has never been bought by them and confirmed that since last 4 / 5 years, he has no transaction with the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed without verifying availability of invoice at the job workers premises or at the manufacturers premises. Without undertaking verification, no conclusion can be reached. The show cause notice does not mention whether there was any invoice showing duty payment, could be traced at the job workers premises. It is also not known if the goods lying in stock with the job workers were to be dispatched on challans in future or whether the duty payment character of the goods is proved or not. The show cause notice in case of M/s Kuchchal International has admitted material receipt from another trader / customer namely M/s Nakoda Anodizing, to be deducted in respect of two invoices, whereas one more consignment of the party weighing 661.69 kg was not accounted for without any reason. It shows that the investigations were not conducted properly. We also find that the stock taking was done on eye estimation, as has been admitted in the concerned panchnama. In such case, we do not find any reason to sustain the demand. The charges of clandestine removal must be proved with independent / cogent / clear and tangible evidence in the form of receipt of raw material, utilization of such raw materi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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