TMI Blog2022 (5) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... andestine removal. It is settled law that documents recovered from a third party can be used against the manufacturer to prove clandestine removal only when these are supported with corroborative evidences. The Revenue has alleged that huge quantity of finished products have been manufactured and cleared clandestinely without payment of Central Excise duty - the investigation has not tried to approach any of the buyers to corroborate the documents recovered from transporter and broker. The investigation also failed to establish the procurement of raw materials attributed to the huge quantity of alleged clandestine removal. In fact on the date of search, no discrepancy was recorded in respect of stock of raw materials and finished goods vis-a-vis that recorded in statutory records. It is true that the evidence which is required to be produced in quasi judicial proceedings should be such that the charges get established on the basis of preponderance of probability. The standard of evidences need not be as high as in criminal proceedings, where the charges are required to be established beyond reasonable doubts. But in the present case, the allegation of clandestine manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 2019, 11330 of 2019 , 11662 of 2019, 11665 of 2019, 11693 of 2019, 11785 of 2019, 11813 of 2019, 11888 of 2019, 11963 of 2019, 11968 of 2019, 12134 of 2019, 12135 of 2019, 12201 of 2019, 12202 of 2019, 12203 of 2019, 12212 of 2019, 12214 of 2019, 12228 of 2019, 12259 of 2019, 12319 of 2019, 12320 of 2019, 12323 of 2019, 12336 of 2019, 12445 of 2019, 12469 of 2019, 12470 of 2019, 12497 of 2019, 12498 of 2019, 12562 of 2019, 12565 of 2019, 12599 of 2019, 12635 of 2019, 12636 of 2019, 12736 of 2019, 10200 of 2021, 10268 of 2021, 10269 of 2021, 10270 of 2021, 10278 of 2021, 10504 of 2021 ORDER The following appeals are arising out of orders wherein a common investigations/evidences were relied upon therefore, they are taken up together for disposal. A chart showing the details of Appeals and demand therein is as under:- Sr. no Name Appeal No Impugned Order Date Duty Penalty 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd E/12276/2019 OIA : BHV-EXCUS-000-APP-239-242-2017-18 23/03/2018 1470476 5832920 12 Sukesh Aggarwal E/12067/2018 OIA : BHV-EXCUS-000-APP-181-184-2017-18 8.3.2018 0 1598759 13 Vinodbhai Amarshibhai patel E/12134/2018 OIA : BHV-EXCUS-000-APP-181-184-2017-18 8.3.2018 0 18051 14 Kishorbhai Amarshibhai Patel E/12162/2018 OIA : BHV-EXCUS-000-APP-181-184-2017-18 8.3.2018 0 18051 15 Guru Ashish Ship Breakers E/12066/2018 OIA : BHV-EXCUS-000-APP-181-184-2017-18 8.3.2018 1598759 1598759 16 Salasar Balaji Ship Breakers P Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017-18 19/02/2018 0 1097853 27 Madhav Industrial Corporation E/11313/2018 OIA : BHV-EXCUS-000-APP-139-141/2017-18 19.2.2018 3834615 3834615 28 Madhav Steel E/11315/2018 OIA : BHV-EXCUS-000-APP-228-231-2017-18 9.3.2018 4785882 4785882 29 Mahendra Ambalal Rana E/12565/2019 OIA : BHV-EXCUS-000-APP-188-195-2019 27/06/2019 0 796849 30 Kishorbhai Amarshibhai Patel E/12562/2019 OIA : BHV-EXCUS-000-APP-176-179-2019 21.6.2019 0 232080 31 Kishorbhai Amarshibhai Patel E/12498/2019 OIA : BHV-EXCUS-000-APP-188-195-2019 27/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42 Iqbal Ahmed Lakhani E/10804/2019 OIA : BHV-EXCUS-000-APP-010-011-2019 24/01/2019 0 550000 43 Malwi Ship Breaking Co E/10805/2019 OIA : BHV-EXCUS-000-APP-010-011-2019 24/01/2019 0 5368630 44 Shiv Corporation E/12203/2019 OIA : BHV-EXCUS-000-APP-176-179-2019 26/06/2019 10601392 10601392 45 Hareshbhai Gajendrasinh Parmar E/12202/2019 OIA : BHV-EXCUS-000-APP-176-179-2019 21.6.2019 0 2036827 46 Marinelines ship breakers p ltd E/10968/2019 OIA : BHV-EXCUS-000-APP-055-058-2019 27/02/2019 8237636 8237636 47 Shree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OIA : BHV-EXCUS-000-APP-048-053-2019 27.2.2019 0 1122578 58 Vinodbhai Amarshibhai patel E/10504/2019 OIO : BHV-EXCUS-000-COMM-007-2020-21 23/03/2018 0 2891968 59 Mahendra Ambalal Rana E/10278/2021 OIA : BVR-EXCUS-000-COMM-007-2020-21 26/11/2020 0 2000000 60 Shree Ram Steel Rolling Industries E/10270/2021 OIA : BVR-EXCUS-000-COMM-007-2020-21 26/11/2020 20355586 20355586 61 Chetanbhai M Patel E/10269/2021 OIO : BHV-EXCUS-000-COMM-007-2020-21 26/11/2020 0 2000000 62 Kishorbhai Amarshibhai Patel E/10268/2021 OIO : BHV-EXCUS-000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7670197 73 Kishorbhai Amarshibhai Patel E/10937/2019 OIA : BHV-EXCUS-000-APP-016-019-2019 24.1.2019 0 1655682 74 Vinodbhai Amarshibhai patel E/11785/2019 OIA : BHV-EXCUS-000-APP-43-45-2019 18.2.2019 0 1974938 75 Vinodbhai Amarshibhai patel E/11693/2019 OIA : BHV-EXCUS-000-APP-028-031-2019 31/01/2019 0 2777814 76 Bhadresh Jaysukhlal Shah E/10596/2019 OIA : BHV-EXCUS-000-APP-343-346-2018-19 31.12.2018 0 1000000 77 Paras Steel Corporation E/12319/2019 OIA : BHV-EXCUS-000-APP-211-213-2019 Cash of Rs. 17.50 lacs confiscated 16.7.2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the noticees. Being aggrieved with, in majority cases appellants preferred the appealsbefore Commissioner (Appeals). The appeals having been dismissed by the Commissioner (Appeals), they have approached this Tribunal by the present appeals. One impugned original order bearing No.BHV-EXCUS-000-COMM-007-2020-21 dated 26/11/2020 was passed by the Commissioner as adjudicating authority against which appellants directly filed appeals in this Tribunal. 02. Shri J.C.Patel, learned Counsel appeared for the appellant M/s. Madhav Industrial Corporation and it s partner Shri. Jivrajbhai R. Patel submits that demand of Central Excise Duty was made on the basis of investigation carried out with transport commission agents who had supplied trucks for loading of scrap.He submits that clandestine removal cannot be established on the basis of the entries in Booking registers of transport commission agents. Firstly the statement of the appellants partner Shri Jivabhai R. Patel in respect of the said entries is exculpatory and he has not confessed to any clandestine removal and has specifically denied having cleared any goods as per entries in Annexure T.R.1.2. Shri Jivabhai in his statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss examination is totally contrary to the law laid down in the aforesaid judgments. 2.1 Without prejudice to the above submissions, he further submits that in any event the mere entry in the booking register of transport commission agent does not by itself establish that the trucks mentioned therein were actually loaded with the goods at the appellants premises and cleared by the appellants. As is evident from Annexure T.R.1.2 the booking was not done by the Brokers named therein. There is not a single statement of any other Brokers named in the said Annexure T.R.1.2. the brokers whose statements are referred to in the show cause notice are not the brokers named in the Annexure T.R.1.2 nor are their statements in respect of the 14 entries appearing in Annexure T.R.1.2. 2.2 He further submits that no statement of any of the drivers or owners of the trucks mentioned in the said Annexure T.R.1.2 has been recorded. Not a single lorry receipt in respect of any of the said entries in Annexure T.R.1.2 has been shown. There is no evidence of payment of freight by the appellants in respect of the entries shown in the booking registers. Not a single buyer of the goods alleged to be tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeds of alleged clandestine removal. He submits that confiscation of cash was ordered under Section 121 of Customs Act read with Section 12 of the Central Excise Act, 1944. However the conditions of the said section for confiscation of the cash were not fulfilled. Hence the confiscation of cash is illegal. It is his further submission that the cash was reflected in the account books of the appellant which has not been disputed. The cash seized and subsequently confiscated is accounted for and the same is legitimate. The cash book of the appellant was also submitted to the adjudicating authority with reply to show cause notice which was not considered. 03. Countering the arguments, Shri Dharmendra Kanjani, learned AR, reiterated the findings of the Commissioner in the impugned Order. He placed reliance on the following decisions :- PATEL ENGINEERING LTD., 2014(307)ELT 862 K BALAN 1982(10)ELT 386 KANUNGO CO, 1983 (13) ELT 1486 (SC) P C ABRAHAM 1999 (109) ELT 95 (KER) AHMEDABAD ROLLING MILLS 2014(300)ELT 119 KALVERT FOODS 2011-TIOL-76-SC-CX NARESH SUKHWANI 1996(83)ELT 258(SC) D BHORMULL 1983 (13) ELT 1546 (SC) GOPAL INDUSTRIES 2007(214)ELT 19 (T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd brokers records, names of several buyers have been indicated. However, we are in utter surprise that investigation has not tried to approach any of the buyers to corroborate the documents recovered from transporter and broker. The investigation also failed to establish the procurement of raw materials attributed to the huge quantity of alleged clandestine removal. In fact on the date of search, no discrepancy was recorded in respect of stock of raw materials and finished goods vis-a-vis that recorded in statutory records. 4.2 It is true that the evidence which is required to be produced in quasi judicial proceedings should be such that the charges get established on the basis of preponderance of probability. The standard of evidences need not be as high as in criminal proceedings, where the charges are required to be established beyond reasonable doubts. But in the present case, we are of the view that the allegation of clandestine manufacture and clearance has not been substantiated by any tangible evidences. The only evidence unearthed by Revenue in the form of records of third party which alone cannot be considered as sufficient proof to support such allegation. This is pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed only on this ground alone. In this regard the appellant gets support from the judgments which are reproduced below:- Andaman timbers Industries V/s. CCE, Kolkata- 2015 (324) ELT 641 (SC) 6 . According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat case, the validity of Section 9D of the Central Excise Act, 1944 was in question. The said Section 9D of the Central Excise Act, 1944 reads as under :- 9D. Relevancy of statement under certain circumstances . - (1) A statement made and signed by a person before any Central Excise Officer of a gazette rank during the course of any inquiry or proceedings under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains :- (a) When the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the Court and the Court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. (2) The provisions of sub-section (1) shall, so far as may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay and expense which, under the circumstances of the case, the Court considers unreasonable. It is clear that unless such circumstances exist, the Noticee would have a right to cross-examine the persons whose statements are being relied upon even in quasi judicial proceedings. The Division Bench also observed as under :- 29. Thus, when we examine the provision as to whether the provision confers unguided powers or not, the conclusion is irresistible, namely, the provision is not uncanalised or uncontrolled and does not confer arbitrary powers upon the quasi judicial authority. The very fact that the statement of such a person can be treated as relevant only when the specified ground is established, it is obvious that there has to be objective formation of opinion based on sufficient material on record to come to the conclusion that such a ground exists. Before forming such an opinion, the quasi judicial authority would confront the assessee as well, during the proceedings, which shall give the assessee a chance to make his submissions in this behalf. It goes without say ..... X X X X Extracts X X X X X X X X Extracts X X X X
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