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TMI Blog2025 (1) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... s-declared the actual ex-factory price of such tiles, which was recoverable from their buyers. Search was conducted at the factory premises of appellant and other premises of the appellant and during the search several incriminating records/ documents were found and the same were withdrawn under panchanama. Also searches were conducted at the major dealers/ depot of Appellant located at various places and incriminating documents were withdrawn from there. By scrutiny of the documents withdrawn and after detailed investigation and recording statements of various persons, a detail show cause notice dtd. 30.05.2009 was issued to the Appellants asking them to pay the central excise duty of Rs. 4,24,48,496/- under proviso to Section 11A of the Central Excise Act, 1944. Penalty under Section 11AC of the Central Excise Act 1944 and Rule 25 of the Central Excise Rules 2002 has also been proposed. The SCN also proposes penal action on Shri Ganpatbhai D. Patel under Rule 26 of the Central Excise Rules, 2002. In adjudication the demands were confirmed by the adjudicating authority vide impugned order. Aggrieved, the appellants have filed the present appeals. 2. The Ld. Advocate, Shri Devashi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) Vishwa Traders Pvt. Ltd. Vs. Commissioner of C.Ex. Vadodara- 2012 (278) ELT 362 (Tri. Ahmd.) (iv) Commissioner of C,Ex. Vs. Vishwa Traders Pvt. Ltd. - 2013 (287) ELT 243 (Guj.) (v) Commissioner Vs. Vishwa Traders Pvt. Ltd. -2014 (303) ELT A24 (SC) (vi) Commissioner of Central Excise Vs. Kuber Tobacco Products Pvt. Ltd. & Anr CEAC 40/2012 dtd. 11.03.2024. 2.5 He argued that although statements of various persons were recorded, cross examination of the same is not afforded. Hence the statements of witnesses would lose its credibility as the adjudicating authority fails to grant cross-examination. He placed reliance on the following judgments. (i) Andman Timber Industries Vs. Commr. Of C.Ex., 2015 (324) ELT 641 (SC) (ii) Jeen Bhavani International Vs. Commissioner of Customs, Nahva Sheva -III (2023) 6 Centax 11 (Tri. Bom) (iii) Commr. Of C.Ex., Ahmedabad -II Vs. Gujarat Cypromet Ltd. - 2017 (345) ELT 520 (Guj) (iv) J&K Cigarattes Ltd. Vs CCE - 2009 (242) ELT 189 (Del.) (v) CCE Vs. Govind Mills Ltd. -2013 (294) ELT 361 (All) 2.6 He further argued that the statements of Director of the appellant was retracted by way of affidavit before Notary Public. Same was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reiterated the findings recorded in the impugned order, to support the adjudged demands confirmed in the impugned order, against the appellants. 4. We have carefully considered the detailed submissions made by both sides and perused the records. 4.1 We find that the issue of mis-declaration of MRP and/or alteration of MRP post removal of the goods prior to 01.03.2008, was already decided in favour of various assessees. The undisputed facts are that the appellants are manufacturer of ceramic/vitrified tiles and the said tiles are covered under the provisions of Section4A of Central Excise Act, 1944 (hereinafter referred to as 'the Act') and are discharging excise duty on the basis of MRP declared on the boxes cleared from their factory premises. It is also undisputed that the appellant assessees are selling their final product ex-factory. 4.2 We find that the entire case of the Revenue as adjudicated by the Ld. Commissioner confirming the demand based upon the evidences such as the statements of various dealers who had stated that the tiles which are manufactured and cleared by the appellant are sold at a price more than the MRP declared on such tiles; statements of various shrof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quently, while deciding an application filed for rectification of mistake in the aforesaid order dated 10.01.2019 of the Division Bench, a Division Bench of the Ahemdabad Bench of the Tribunal referred the following additional issue to be decided by the Larger Bench: "(3) In the facts and circumstances of the case, if the evidence establishes that the RSP was manipulated fraudulently at the behest of the appellant by any other person, can the liability of duty be fastened on the appellants." The aforesaid questions were answered in the following manner by the Larger Bench vide Interim order No. 1-23 of 2024 dated 23.01.2024: "90. The reference made by the Division Bench to the Larger Bench of the Tribunal is, accordingly, answered in the following manner: (i) It is not permissible to ascertain the retail sale price of goods removed from the place of manufacture, without declaring the retail sale price of such goods on the packages or declaring a retail sale price which is not the retail sale price or tampering with, obliterating or altering the retail sale price declared on the package of such goods after their removal from the place of manufacture, in respect of cleara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority. Further the director of Appellant's company has also retracted his statement by filing affidavits. It was on records that Appellant have raised the dispute on statements of witness recorded during the course of investigation by investigating officers. Therefore the said statement cannot be relied upon as admissible evidence in terms of the provisions of Section 9D of the Act. The provisions of Section 9D which are reproduced as under:- "9D. Relevancy of statements under certain circumstances. - (1) A statement made and signed by a person before any Central Excise Officer of a gazetted rank during the course of any inquiry or proceeding 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 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 sale of such goods to identified parties; (e) receipt of sale proceeds,; (f) use of electricity far in excess of what is necessary for manufacture 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. 4.8 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. What one could, however, say with some certainty is that inferences cannot be drawn about such clearances merely on the basis of estimates/ debit memos maintained. In the present matter the statements were not recoded of any buyer whose name is mentioned in said alleged estimates/debit memos. In the present matter there is no proof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd discovered during the raid, the Tribunal was right in holding that there was no positive evidence of clandestine production and removal of goods was answered against the Revenue and in favour of the assessee. (ii) In T.G.L Poshak Corp. v. CCE [2002 (140) E.L.T. 187], Tribunal considered the issue as to whether the demands can be confirmed on the basis of recovery of exercise note books and certain balance sheets maintained by the assessee and in the absence of any corroborative evidence. In fact, in a tabulated form Tribunal dealt with the judgments which were referred to, to support the plea that demands cannot be confirmed which contained the reason for this Tribunal coming to the conclusion that, in the absence of any corroborative evidence, of a tangible nature, clandestine removal cannot be established. Tribunal relied on the tabulated list of citations furnished by the Counsel that unless there is clinching evidence on the nature of purchase of raw material, use of electricity, sale and mode of flow back of funds, demands cannot be confirmed solely on the basis of note books maintained by some workers. (iii) In Hilton Tobacco v. CCE [2005 (183) E.L.T. 378], certain pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... movement they were not clandestine clearances. The Managing Director of the company had even stated that they were making clandestine clearance of the finished products without recording the same in their books of account. The request for cross examination of some of the persons whose statements were relied upon was rejected by the Adjudicating Authority only on the ground that the assessee had not given any reason and justification for their cross examination. Tribunal held that this approach of the Adjudicating Authority is inconsistent with the law of evidence. On a careful perusal of the entire records of the case, the Tribunal found that there was nothing on record as to unrecorded purchases or consumption of other various raw materials in the manufacture of finished products. There was no statement of suppliers of raw material, except in respect of one of the raw materials. His cross examination has also been rejected. In the absence of any other tangible evidence to show that other major raw materials had been procured without recording the same in books of accounts, this Tribunal did not accept the contention of the Revenue that finished goods had been clandestinely manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f final products, clandestineremovals, the mode and flowback of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. On careful examination, it is found that with regard to alleged removals, the department has not investigated the following aspects : (i) To find out the excess production details. (ii) To find out whether the excess raw materials have been purchased. (iii) To find out the dispatch particulars from the regular transporters. (iv) To find out the realization of sale proceeds. (v) To find out finished product receipt details from regular dealers/buyers. (vi) To find out the excess power consumptions. 13. Thus, to prove the allegation of clandestine sale, further corroborative evidence is also required. For this purpose no investigation was conducted by the Department." 4.10 The recovery of said "unofficial ledger" by department does not establish actual clearances of goods by the appellant. No evidence of actual clearance has been brought on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regularly to store or process information for the purposes of any activities regularly carried on over that period by the person having lawful control over the use of the computer; (b) during the said period, there was regular supply to the computer in the ordinary course of the said activities, information of the kind contained in the statement or of the kind from which the information so contained is derived; (c) throughout the material part of the said period, the computer was operating properly or, if not, then any respect in which it was not operating properly or was out of operation during that part of period was not such as to affect the production of the document or the accuracy of the contents; and (d) the information contained in the statement reproduces or is derived from information supplied to the computer in the ordinary course of the said activities." 4.12 There is nothing to indicate compliance with the strict stipulations contained in sub-sections (1) and (2) of Section 36B of the Act in the present case. Therefore in our view no demand is sustainable on this ground also. 5. As a result of entire above discussion and finding, order under challenge is he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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