TMI Blog2024 (2) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... rs located outside Gujarat to whom the goods was sold by the appellant has been produced. The record and the statement of the buyers are also inconclusive and not admissible as evidence and these persons were also in the nature of co-accused. No instance of any money having been received through any agencies have been cited in the show cause notice. Admittedly no evidence of the appellant having received the huge amount in unaccounted manner from buyers to whom goods was sold was found. Not a single instance of cash receipt at appellant s end is on record. In such case when the allegation is based upon the statements of buyers which is not supported by even a single evidence, we are of the view that the demand does not sustain. It is evident from the fact that cogent evidence of disproportionate power consumption, capacity utilization and labour employed, or any cogent evidence of clandestine manufacture of unaccounted quantity alleged as clandestinely removed were not produced by the department. It is evident that unaccounted production in the factory of the Appellant has not been established and therefore the case of clandestine clearance of goods by the Appellant does not sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.85,000/- Shri Vipul Dhirajlal Rupapara (Partner of M/s.Alakh Metal Product) 7 E/10489/2017 Rs1,75,000/- Shri Harshadbhai Pranlal Borsaniya (Proprietor of M/s. Alloy Components) 8 E/10497/2017 Rs.2,00,000/- Shri Rasikbhai Parshotambhai Kateshiya (Proprietor of M/s.Vadachi Products) 9 E/10495/2017 Rs.1,80,000/-. Shri Jenul Abedin Ebrahim Darjada (Authorized Person of M/s. Sanjari Press Products) 10 E/10490/2017 Rs.1,55,000/- Shri Vishalkumar Hasmukhbhai Rabadiya (Proprietor of M/s. M.K.Enterprise) 1.2 Brief facts of case are that the M/s. Krupalu Metals Pvt. Ltd was engaged, inter alia, in the manufacture and sale of brass/copper patti and sheets. They were registered with Central Excise department and paying appropriate central excise duty on removal thereof. Investigation was carried by Central excise department and it was alleged that the M/s. Kr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o find out the dispatch particulars from the regular transporters. To find out the realization of sale proceeds. To find out finished product receipt details from regular dealers/buyers. To find out the excess power consumptions 2.3 He further submits that it is a settled legal position, substantial electricity consumption and other raw material consumption will have to be shown, which is not at all established by revenue. As such, the demand based on such records is unsubstantiated and cannot bring home the serious charge of clandestine removal as such. 2.4 He submits that the proceedings are vague inasmuch as it alleges that the entries of clandestine removal were made in such registers by either Shri. Dama Amit Mudhibhai (Supervisor) or Shri. Sanghani Rajnikant Chhaganbhhai (Supervisor) or the two directors. Since the authorship is kept open ended in such manner, the authenticity of the private registers is as such not properly established. 2.5 He relies decision in case of Gautam Ferrow Alloys 2021(377) ELT 776(Tri-Kolkata) wherein it was held that when Department alleging undervaluation of goods on basis of private diary seized from assessee s Head Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed self-contradictory approach inasmuch as on one hand, it is alleged that the Appellant used to procure scrap in cash, without entering in records, produce finished goods and sell the same in cash, without entering in records. The Director was made to admit, in forcible manner, that the alleged shortage of physical stock found was cleared by them in clandestine manner. When such clandestine removal was invariably such where the stock was never entered in physical record at all, in such circumstances, there would never be any physical stock shortage compared to statutory records at all. This itself shows that the revenue has created merely a concocted theory to justify demand of duty, without any cogent evidence as such. These goods are not necessarily presumed to be clandestinely removed. 2.8 He further submits that statements of Shri. Dama Amit Mudhibhai (Supervisor) and Shri. Sanghani Rajnikant Chhaganbhhai (Supervisor) cannot be relied upon in the present case because Firstly, Shri. Dama Amit was only looking after the activities since last four months prior to the date of investigation as per his own statement. Similarly, Shri.Sanghani Rajnikant Chhaganbhhai (Supervisor) wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herwise covered in favour of the Appellant vide the above decisions. 2.10 He submits that statements of 8 alleged buyers cannot be relied upon because on the face of it the statements of the alleged buyers are recorded almost in cyclostyle identical manner, and were pre-dictated as such. The issue is well covered vide various case laws that such cyclostyled pre-dictated statements cannot be relied upon. Also, it is inconceivable that such huge quantity of Finished goods were clandestinely cleared and not a single transport evidence is on record. While most buyers were made to say that they arranged own vehicle to pick up the goods, there is no evidence to this effect as well that they had own vehicles or had arranged for vehicle from outside and no vehicle/transporter is also identified for this purpose. Each lot shown to be supplied clandestinely cannot be simply carried in small vehicles such as Chhakda as well and hence, the entire concocted theory on part of the revenue is totally baseless. No payment proof was brought on record. To whom the buyers eventually sold the goods / how they consumed the goods in own production is also not shown. If they did consume the goods in ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 He further submits that the Panchnama drawn is also highly questionable since the manner of drawing it shows that it was as such prepared at Central Excise office at Rajkot itself where Panch witnesses remained present. The Panchnama is drawn by stating that it was signed on 5.1.15 which states that the proceedings concluded on 6.1.15, which per se shows gross irregularities therein. The Appellant also wishes to point out that the Panchnama quantified alleged clandestine removal value based on private records as Rs.22.58 crores whereas the eventual demand is based on clandestine removal income of Rs.25.91 crore. Such questionable Panchnama and documents purportedly recovered thereunder cannot be relied upon. The Appellant craves leave to refer to and rely upon the following decisions in this regard:- M/s Kuber Tobacco Products Pvt. Ltd. vs. Commissioner of Central Excise, Delhi reported in 2013 (290) ELT 0545 (Tri. - Del.) Commissioner of Central Excise, Ahmedabad versus Mukesh Industries ltd. reported in 2009 (235) ELT 527 ( Tri.- Ahmd.) 2.14 He submits that all such instances clearly show that the revenue has not discharged its onus of proving clandestine procurem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als versus CCE - 2007 (215) ELT 434 3. Shri Ashok Thanvi, Learned Assistant Commissioner (AR) for department relied upon observations and findings made by the adjudicating authority in the impugned order. 4. Heard both the sides and perused the records. We find that the show cause notices was issued alleging clandestine removal of finished goods and on this account demand of central excise duty amounting to Rs. 3,20,30,376/- has been raised. Such demand is based mainly upon private records of appellant and the statements of few buyers of the goods who have allegedly purchased goods which is very less when compare to total allegedly clandestine cleared quantity being valued at Rs. 25,91,45,436/-. Department has not even investigated other purchasers/buyers of alleged balance quantity of clandestinely cleared goods. However, in any case, we find that except the statements of few buyers no evidence has been put on record. The evidence in the form of details of cash receipts from alleged buyers, any document proving cash transaction has not been brought on record. We also find from the statement of alleged buyers that the statements were cyclostyle. During investigation no evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dara reported in 2012 (278) ELT 0362 (Tri. - Ahmd.), it is held that unless clandestine manufacturing is brought on record, there cannot be any allegation of clandestine clearances, uncorroborated with evidences. 4.3 The department has also not initiated inquiry for transportation of such an alleged huge quantity of goods i.e. 620198.480 kgs. of finished goods to different customers. Many of the buyers of the finished goods are from out of city and even out of state of Gujarat. 4.4. It is evident from the statements of Shri Rasiklal Kalayanjibhai Bhatt Prop. of Deepak Products, Shri Malay Rejendra Mehta, Partner of M/s Arihant Corporation, Jamnagar and Shri Sunil Durgeshbhai Bhatt partner of M/s Shri Ambica Industries, Jamnagar, Statement of Shri Vipul Dhirajlal Rupapara, Partner of M/s Alakh Metal Product, Jamnagar recorded on 16.02.2016, Statement of Shri Harshadbhai Pranlal Borsaniya, Proprietor of M/s Alloy Components, Jamnagar recorded on 16.02.2016, Shri Rasikbhai Parshotambhai Kateshiya, Prop. of M/s Vadachi Products, Jamnagar recorded on 23.03.2016, Shri Jenul Abedin Ebrahim Darjada Authorised Person of M/s Sanjari Press Prdocuts, Jamnagar recorded on 23.03.2016 and S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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