9911796707
TMI Blog2024 (11) TMI 1220X X X X Extracts X X X X X X X X Extracts X X X X ..... Also imposed a penalty of Rs.5 lakhs on the Director. Being aggrieved, the appellants are before the Tribunal. 3. The Learned Advocate appearing on behalf of the appellants makes the following submissions: (i) Panchanama was drawn for a limited purpose towards the stock taking of finished goods and raw-materials lying in their factory and the goods loaded is six trucks as on 20/21.3.2017. (ii) The Panchanama does not disclose any fact that the factory was running on the day on which the officers visited or prior to that date. (iii) The officers have taken away the CPU of the appellant without any proper seizure memo or recording anything in the Panchanama drawn. (iv) In respect of six trucks which were found to have some materials loaded, it is very clearly mentioned in the annexure that they pertain to used and other miscellaneous items. (v) In one truck, it is shown that 800 metric tons of coal and other miscellaneous items have been loaded. (vi) Though Show Cause Notice has been issued towards these six trucks on 16 March 2018, so far no adjudication process has been taken up. (vii) He further submits that in the present case, all the recorded statements have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty has come into light and they had to undertake various exercises like sending the CPU for forensic lab and getting the report from them. And he also shows the summons issued to the concerned persons who were not attending the summons on various pretexts. All these things have led to the delayed issue of Show Cause Notice. Therefore, he justifies the extended period invoked in the show cause notice and justifies the confirmed demand in respect of extended period. Accordingly, he prays that the Appeals may be dismissed. 9. Heard both sides in detail. The AR submits that he would like to make some more written submissions in defense of the Revenue's stand. The office of the AR is given time till 4th November 2024 to make the submissions. 10. As per the permission granted to the Revenue, the Ld A R has made written submissions on 4.11.2024, in support of the allegations and the confirmed demand. 11. The crux of his submissions are as under: (1). The appellants had declared that their unit was closed on 06.07.2016 with a closing stock of 99.371 MT. However, after receiving a complaint on 10.03.2017 that the unit was still running and goods were being manufactured and cleared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the work. Since the search had commenced suddenly without any notice, there would be no chance for the appellant to hide these factual evidences. But no evidence towards stock of raw materials, consumables, in-process stock or finished goods stocks have been found or recorded in the Panchanama. The panchnama nowhere indicates anything to suggest that manufacturing activities were noticed by the investigating team at the time of their surprise visit. Even in the six trucks loaded with materials, while it is being claimed by Revenue that they are finished goods by nature, the appellants have countered the same stating that these trucks were carrying scrap arising out of Kilns being fabricated and installed in the factory. The appellant have claimed that the factory was closed from 6.7.2016, in order to fabricate and install Kilns in order to increase their productions capacity. In such a case, the Revenue was bound to go through the installed machineries and ascertain as to whether the old Kilns were still functional, or if the new Kilns were already functional, whether they were already being used for the manufacturing purposes. 16. Even in respect of 6 trucks seized, the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of 19901 MTs (Table at page 37 of SCN) of finished goods. For such a huge quantity of finished goods to be manufactured, raw materials like Sponge Iron, Coal and many other consumables would be required to be procured. In case the intent is to clear the goods clandestinely, then the procurement would also be by way of cash purchases only. We do not see that any evidence has been brought in by the revenue towards purchase such a huge quantity of raw materials either on cash or through banking channels. If 19901 MTs of goods were cleared clandestinely, this would require hundreds of trucks to make the movement. No records have been obtained in respect of inward - outward movement of trucks. 21. Finally, if the activity is being carried out in an apparently closed unit on a regular basis, there would be plenty of movement of persons, goods, vehicles etc, which all the neighboring industries / families would have noticed. We do not see that any effort has been made by the Revenue to check these facts with the neighbouring industries / persons, to check as to whether the factory was closed or was in working condition. 22. All these would lead us to conclude that the Revenue has pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upport thereof should be of : (a) raw materials, in excess of that contained as per the statutory records; (b) Instances of actual removal of unaccounted finished goods (not inferential or assumed) from the factory without payment of duty. (c) Discovery of such finished goods outside the factory (d) Instances of sales of such goods to identified parties. (e) receipt of sale proceeds, whether by cheque o by cash, of such goods by the manufacturers or persons authorized by him; (f) use of electricity for in excess of what is necessary for manufacture of goods otherwise manufactured and validity 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 document recovered during the search and activities being carried on in the factory of production; etc. Needless to say, a precise enumeration of all situations in which one could hold with activity that there have been clandestine manufacture and clearances, would not be possible. As held by this Tribunal and Superior Courts, it would depend on the facts of each case. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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