TMI Blog2023 (2) TMI 1039X X X X Extracts X X X X X X X X Extracts X X X X ..... n assumptions and presumptions. Such a charge has to be based on concrete and tangible evidence. Reference may be made to OUDH SUGAR MILLS LTD. VERSUS UNION OF INDIA [ 1962 (3) TMI 75 - SUPREME COURT] , wherein the Apex Court has observed that demand of duty cannot be raised on the strength of assumptions and presumptions. There should be sufficient evidence of the removal of the goods alleged to have been manufactured and cleared without payment of duty. The charge of clandestine removal must be based on tangible evidence and not on inferences involving unwarranted assumptions. Further, in RADHA MADHAV CORPORATION LTD. VERSUS COMMISSIONER OF C. EX., DAMAN [ 2013 (6) TMI 395 - CESTAT, AHMEDABAD] , the issue was raised in a case where the allegation was that there was clearance of plastic film in the guise of Lay Flat Tubing (LFT). After examining the facts of the case at length, it was held that a link between the documents recovered in the search and the activities of the appellant in their factory is required to be proved. Thus, the present demand which has been confirmed against Appellant by the impugned order, is not based on evidence. Unless there is conclusive eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9002 Kgs, Thus it appeared to be a case of gross mis-declaration of the description as well as weight of the consignment. Further, investigation revealed that in fact M/s. Siddhnath Shipping received a consignment of goods containing Fancy Scarves (made from Polyester Knitted Fabrics) / Fancy Dupattas (made from 100% Polyester Filament Yarn) from M/s Cosmic Textiles Pvt. Ltd., 100% EOU, Jolwa, Surat under Cover of AR-3A all dated 21.01.2002. with corresponding excise invoices all dated 21.01.2002 describing goods as Fancy Dupattas (made from 100%PFY) and Fancy Scarves (made from Dyed Poly Knitted Fabrics). As per the documents, the subject consignment originating from the 100% EOU premises of M/s. Cosmic Textiles Pvt. Ltd. had been sent in full as per the details of AR-3As in the Kandla Special Economic Zone, which had been certified by the Preventive Officer of the Kandla SEZ. However this consignment was not available in the said premises, which suggested that the consignment covered by the AR-3As had been duly received by the trading unit of M/s Siddhnath Shipping and was clandestinely removed by them from their trading unit in the Kandla SEZ. Further, M/s Siddhnath Shipping had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r receipts of the same from M/s Cosmic. The unit was under physical control of the customs and other zonal /security agencies and the allegation of clandestine removal was merely based on assumption and presumption. Learned Commissioner failed to appreciate that the Appellant had in fact entered for export of the same goods which were received by them from M/s Cosmic within about 2.00 hours after the receipts of the same. These facts can be verified from the vehicle register of KASEZ. It is clearly established that same goods, and in the same packaging, having same marks and number, which were received from M/s Cosmic were loaded into the container and there was no clandestine removal or diversion. The Learned Commissioner failed to appreciate that the department has not brought on record the crucial evidence of the drivers of the trucks who have transported the goods from Surat to KASEZ. The statements of drivers Shri Madanlal Sharam and Shri Khimji Vishrambhai Charan which were recorded by the CBI who have confirmed that the goods brought by them were directly transferred into the container. The Learned Commissioner, though relied upon various other evidences collected by CBI, su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nducted by the CBI has in fact confirmed that there was no clandestine removal as alleged in the show cause notice. 3.2 He argued that it has been confirmed by the investigation carried out by the CBI that in fact M/s Cosmic had not dispatched the goods from the 100% EOU of Cosmic, and Shri Malpani/Kulwant of M/s Cosmic had resorted to manipulations of weigh bridge slips and other documents to cover up their deeds. Learned Commissioner failed to appreciate that the mis-declaration of quantity, value and other particulars were resorted by M/s Cosmic / Shri Natwar Malpani in the Excise Invoices and their AR-3As so as to fulfill their export obligations and/or to evade duty without the knowledge of the appellant. The Learned Commissioner also failed to appreciate that M/s Cosmic was the beneficiary of exports. The goods were removed by M/s Cosmic from the 100% EOU against the Excise Invoices without payment of duty and they have not submitted any re-warehousing certificate in the division as is evident from the statement of Shri Malpani and thus M/s Cosmic were only liable to pay the duties/fine/ penalties in respects of the goods which were removed by them. In this regard the Lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btedly the duty which is levied and collected Under Section 3 of the Central Excise Act, 1944. It is important to mention here that prior to 11.05.2007, all excisable goods produced or manufactured in Free Trade Zone or a Special Economic Zone or by a 100% EOU were liable to excise duty which were to be collected at the rate of aggregate of the duties of Customs which would be leviable under the Customs Act, 1962 and the Customs Tariff Act, 1975 and thus for the purpose of rate of duty, the reference is required to be made to the Customs Act and the Custom Tariff Act whereas the nature of duty continues to be the Central Excise Duty, which is the appropriate duty required to be demanded under the provisions of the Central Excise Act, 1944 and Rules made there under. In the present matter demand of duty in respect of Free Trade Zone / EOU is made under the Customs Act which is totally erroneous. He placed reliance on the following decisions:- CCE VS. SURESH SYNTHETICS 2007 (216)ELT 662 (SC). SARTHI TEXTILES 2002(146)ELT 69(T) (III)VIKRAMISPAT -2000(120)ELT 800 SAHELI SYNTHETIC PVT. LTD. 2002 (129)ELT 594 (TRI. MUMBAI) 3.6 He also submits that even if the duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved that demand of duty cannot be raised on the strength of assumptions and presumptions. There should be sufficient evidence of the removal of the goods alleged to have been manufactured and cleared without payment of duty. The charge of clandestine removal must be based on tangible evidence and not on inferences involving unwarranted assumptions. This very principle of law had been applied by the Tribunal in a number of cases and out of those, few are, Amba Cement and Chemicals v. CCE - [2000 (115) E.L.T. 502 (Tribunal) = 2000 (90) ECR 265], Gurpreet Rubber Industries v. CCE - 1996 (82) E.L.T. 347 and Madhu Foods Products v. CCE - 1995 (76) E.L.T. 197. 5.1 Further , in Radha Madhav Corporation Ltd. v. CCE, Daman [2012 (284) E.L.T. 369], the issue was raised in a case where the allegation was that there was clearance of plastic film in the guise of Lay Flat Tubing (LFT). The Revenue s case was based on statements of transporters and of the Director of the main appellant. The Tribunal held that the charge of clandestine removal is to be established on the basis of preponderance of probability and not on the basis of presumptions and assumptions. It was held that, on facts, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case, there is evidence of entry of goods in the SEZ by the appellant M/s. Siddhnath Shipping whereas, there is no evidence of removal of goods from the SEZ in DTA. The demand of customs duty is on the pretext that the goods which have been cleared from EOU have entered in the appellant s SEZ unit and thereafter, the same was diverted into DTA. Even if it is presumed that the goods have been diverted before bringing into SEZ, the customs duty which is for the removal of goods from SEZ cannot be demanded. In the present case, it is evident from the investigation that the goods which have been received by the appellant and the same was presented for export were not cleared from the 100% EOU of M/s. Cosmic but the same were loaded at Ambaji Market, Surat. In such case, there is no change of goods which is loaded in the container and received in SEZ and presented for export. It is also on record that the goods are in the original packing and marka therefore, no doubt can be raised that the goods was changed enroute. We further find that the investigation could not bring any single evidence for unloading of the alleged original goods from the container and reloading in other transpo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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