TMI Blog2022 (10) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... products, corresponding quantity of raw materials ought to have been procured by the appellant. From the records recovered from the Appellant s premises, there is no evidence of any physical receipt of raw materials used in production of such a huge quantity of finished goods. 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. No single payment detail of clandestine sale has been brought on record. Nor there is any evidence of any excessive power consumption which is one of the vital factor otherwise required for the alleged large scale production. No document in the form of receipts of any cash or kind on account of clandestine clearance and sale of goods has been seized from the parties. No evidences of removal of excisable goods or procurement of raw materials and its consumption are on record. Clearly, there is also no evidence in the form of unaccounted procurement of raw materials, fuel, labour, receipts of unaccounted cash, etc. which are some of the basic parameters which have been laid down by Courts and Tribunals over a period of time for determining whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out payment of Central Excise Duty and without accounting for the same, in their books of account, searches were conducted by the officers of DGCEI at the premises of M/s Metal Gems and M/s Moongipa Roadways Pvt. Ltd. and also seized several records and documents. The officers recorded the statements of various persons including employees and partners of the Appellant and also the transporters, amongst others. 1.2 The documents recovered from M/s Moongipa Roadways Pvt. Ltd. were scrutinized and it appeared that they are engaged in the transportation of the consignment of Copper Pipes/ tubes/ coils from M/s Metal Gems, Daman. They have been showing the name of /details of the consignor and consignee when the goods are covered under proper central excise invoices and whenever the goods are not covered under proper invoices, they have been showing the consignment to have been booked in abbreviated form such as NKD, RKD, SMD, MKD, Lalitbhai, PD, KK, AE, etc. they have admitted that the consignment which have been transported by them under the abbreviated names have been received by them, for transportation, without the cover of any proper duty paying documents. They also admitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been done by the department apart from three parties, from whom nothing incrementing regarding the clandestine clearance of goods was found, therefore, in such circumstances demand of duty in respect of entire consignments allegedly cleared under 63 code names cannot be made against the Appellant. Shri Ramnivas Sharma, Manager in M/s Moongipa Roadways in his cross -examination in answer to question 14 stated that code name mentioned by them was as per the instruction of Shri J.K. Yadav from their Mumbai office and in answer to question 15 he stated that they used to transport copper pipe for other parties as well as M/s R.R. Cables, M/s Salasar Copper, M/s Mandev Metals, M/s Parasmani, M/s Jalan etc., Most importantly in his answer to question 16 he mentioned that they used to transport goods for above parties in code name only. Thus it is unambiguously clear that when details of various parties are mentioned in the loading register in code names than solely on the basis of loading register demand of clandestine clearance of goods cannot be made against Appellant. Hence demand is not sustainable on this ground alone. 2.2 He further submits that all the details related t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upported 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 booking register/loading register recovered from the business premises of transporter, no doubt, gives rise to suspicion that these are details relating to clandestine clearance of the goods. However, clandestine manufacture and clearance alleged against the appellant is a very serious charge which needs to be proved by Revenue by producing tangible and reliable evidences. For clandestine clearance of such huge quantities of finished products, corresponding quantity of raw materials ought to have been procured by the appellant. The finished products allegedly have been cleared to various customers. In fact, in the said transporter records it revealed that clearances under abbreviated name have been effected under 63 code names, the investigation has been conducted only in respect of 3 codes, no investigations were conducted in respect of remaining 60 codes. However, we note that Revenue has failed to bring any material evidence on record even for the procurement of raw materials without en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods otherwise manufactured and validly cleared on payment of duty; (g) statements of buyers with some details of illicit manufacture and clearance; (h) proof of actual transportation of goods, cleared without payment of duty; (i) links between the documents recovered during the search and activities being carried on in the factory of production; etc. The aforesaid ratio also finds support in the following judgments : VISHWA TRADERS PVT. LTD. V. CCE, 2012 (278) E.L.T. 362 (T), AS AFFIRMED BY THE HON BLE GUJARAT HIGH COURT IN CCE V. VISHWA TRADERS, 2013 (287) E.L.T. 243 (GUJ.), SAKEEN ALLOYS PVT. LTD. V. CCE, 2013 (296) E.L.T. 392 (T), WHICH HAS BEEN AFFIRMED BY THE HON BLE GUJARAT HIGH COURT IN CCE V. SAKEEN ALLOYS, 2014 (308) E.L.T. 655 (GUJ.), MAHESH SILK MILLS V. CCE, 2014 (304) E.L.T. 703 (T), AS AFFIRMED BY THE HON BLE GUJARAT HIGH COURT IN CCE V. MAHESH SILK MILLS, 2015 (319) E.L.T. A52 (GUJ.) CCE V. AIR CARRYING CORPORATION, 2009 (248) E.L.T. 175 (BOM.). 4.1 We also noticed that the reliance of third party documents/ records placed by the learned Commissioner while conforming demand against present appellant is also observed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d statements cannot be made stand-alone basis for arriving at an adverse conclusion against the assessee. Though an admission or a statement is one of the important piece of evidence but the same has to bear the test of veracity through the tool of cross examination. Further, as per various decisions, it is well settled law that no reliance can be placed on the deponents statements unless he is allowed to be cross examined for testing the correctness of his statement. Reference in this regard can be made to the Hon ble Supreme Court s decision in the case of Godrej Pacific Tech Ltd. v. Computer Joint India Ltd. - 2008 (228) E.L.T. 507 (S.C.); Shalimar Rubber Industries v. Collector of Central Excise, Kochin - 2002 (146) E.L.T. 248 (S.C.); Arya Abushan Bhandar v. UOI - 2002 (143) E.L.T. 25 and Laxman Export Ltd. v. Collector of Central Excise - 2002 (143) E.L.T. 21 (S.C.). In all these decisions, it stands specifically observed by the Hon ble Apex Court that the oral statements of third party implicating the assessee for clandestine purchase of raw material, with the subsequent written denial, cannot be relied upon for establishing the charge of clandestine manufacture unless such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 05. In view of the discussions made herein above, we find that Department has failed to prove the allegations against the appellant. The confirmation of duty demand along with interest and penalty against the appellant is, therefore, held to have been confirmed without any cogent basis. Order under challenge is, accordingly, hereby set aside. As a consequent thereto, the appeals are allowed. 06. As regard the other Appeals filed by the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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