TaxTMI 
TaxTMI 
2008 (11) TMI 603
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....ents No. 1 are engaged in the processing of cotton and man made fabrics falling under chapter 52 and 55 respectively of the First Schedule to the Central Excise Tariff Act, 1985 attracting central excise duty @ 12% [8% BED & 4% AED(ST)] vide Notification No. 6/2002, dated 1-3-2002 read with Notification No. 14/2002, dated 1-3-2002. However, duty on processed cotton fabric had been exempted since 6-9-2002 vide Notification No. 47/2002, dated 6-9-2002. 3. The Hqrs. Anti Evasion team of Central Excise Commissionerate, Jaipur-II paid a surprise visit to the factory premises of the respondents on 1-11-2002 and conducted various checks over the goods manufactured and the books of accounts being maintained by the respondents. Physical stock verification of finished goods and goods under process was also conducted Sh. Prasanna Kr. Jain, Prop. of M/s. Leela (K) Tex, Pali and Sh. Bhainrulal Agarwal, Authorized Signatory of the respondents No. 1 were present at the time of visit of the factory premises and the physical stock verification was conducted in the presence of both these persons. 4. During the course of checking the visiting officers found that 120 thans of PMMF measuring 1515....
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....ck verification and stock challenge report prepared on the spot. Duty of Rs. 25455/- due on the stock found short was voluntarily debited by the assessee and which remained unchallenged thereafter also, has been dropped by the adjudicating authority. (ii) Recovery of private records coupled with Resumption Memo and statement of assessee of the case clearly shows more than pre-ponderence of probability of removal of 1255716 mtrs. of Processed fabrics clandestinely without payment of duty amounting to Rs. 2212495/-. (iii) Further, no statement was retracted at any stage, but at the time of hearing, Shri Jain (Proprietor) in his statement dated 1-11-2002 had accepted the illegal activity being undertaken by them and also appended his signatures, on the statement of Shri Agarwal and Resumption Memo, as a token of acceptance of the same. (iv) Also despite 11 summons no one turned up. No new submissions were forwarded by the assessee even after the cross examination of the officers being allowed and photocopies of private bahis being supplied to the assessee. (v) All these direct and proximate evidences are enough to....
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....to be maintained inasmuch as it had failed to provide any evidence/case law in support of its challenge as to the legality and propriety of Adjudication Order No. 31-CE/JP-II/2007 passed by the Additional Commissioner. (b) that the Additional Commissioner while passing the Adjudication Order had followed the law by observing the principle of judicial discipline in following the judgments of Hon'ble Tribunal and affirmed by Hon'ble Supreme Court in arriving at the conclusions drawn in the Adjudication Order. (c) that the Adjudicating authority was correct in holding that the physical verification of the goods had been done without applying the correct parameters of measurement. Accordingly his observation that the stock taking report was inaccurate and therefore its veracity was doubtful. (d) that the records have not been resumed under a proper panchnama as provided under Notification No. 68/63 dated 4-5-1963 as amended by 9/65-C.E., dated 6-2-1965, 46/68-C.E., dated 23-3-1968, 13/88-C.E. (N.T.), dated 29-4-1988, 48/97-C.E. (N.T.) dated 2-9-1997 read with Section 110 of the Customs Act, 1962. As such the order rej....
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.... presumptive. Consequently in absence of any positive evidence on Record the Adjudicating authority was correct in not considering the uncorroborated statements of the Respondents while Adjudicating the issue involved. (k) that the Revenue in its Appeal at Para (vii) has invoked the provisions of Section 36A regarding presumption as to documents in certain cases. The Respondents States and submits that Section 36A of Central Excise Act, can be used by the prosecution in evidence before the court of law and not in departmental proceedings of Adjudication, Appeals etc. As has been urged in above grounds of objections it is the burden of the Revenue to establish the charge of clandestine removal by adducing positive evidence. (l) that the period in dispute is 1-9-2002 to 1-11-2002, the search was conducted on 1-11-2002 and the entire investigation have been completed on 8-10-2003. The Show Cause Notice dated 15-12-2006 invoking extended period under Section 11A(1) is barred by limitation. Hence the demand was time-barred. (m) that none of the Respondents had done any act of commission or omission so as to render them....
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....issioner had also taken note of the fact that none of the buyers of private records had accepted any clandestine receipt of goods. He had also noted that there was no iota of evidence to prove the allegation of clandestine removal and/or observation was made that no documentary proof were produced by the investigating officers with regard to transport of goods. In para 25 of the order the Learned Additional Commissioner, with regard to the confessional statement of Shri P.K. Jain and Shri Bhairunlal Agrawal has observed that it was a settled law that statement at best oral evidence and cannot have independent existence in the absence of any material evidence. The Learned Additional Commissioner after examining the evidence on record and following the law laid down by various court and Tribunal dropped the proceedings initiated against the Show Cause Notice. (ii) that in addition to submission made vide cross objections and reiterating the observations made by the Learned Additional Commissioner, the Respondents further begs to submit as under :- (A) Submission in respect of observations of Learned Additional Commissioner with regard to non-drawal of panchnama : ....
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....ditional Commissioner is liable to be upheld because the same has been passed after having examined evidence on record. Further reliance is placed on following case laws :- (a) 2006 (196) E.L.T. 105 (Tri.-Del.) = 2007 (8) S.T.R. 319 (Tri.-Del.) - Satpushp Steels Pvt. Ltd. v. CCE, Jaipur. (b) 2006 (200) E.L.T. 86 (Tri.-Bang.) - Geekay Wires Pvt. Ltd. v. CCE, Hyd. (c) AAR Kay Industries v. CCE, Chandigarh - 2004 (165) E.L.T. 412. (d) Bhushan Strips Ltd. v. CCE, Ghaziabad reported in 2005 (179) E.L.T. 419. (e) Dulichand Silk Mills (P) Ltd. v. Commissioner of Central Excise, Hyderabad reported in 2001 (133) E.L.T. 468. (f) Shiva Steel Rolling Mills v. CCE, Calcutta-II, reported in 2005 (186) E.L.T. 326 (Trib.). (g) Kaushal Founders & Engineers v. CCE, Kanpur reported in 2000 (116) E.L.T. 133 (Trib.). (h) Order-in-Appeal No. 91-CE/06 dated 28-7-2006 passed by CCE (Appeal), Lucknow in Re : Kundan Castings (P.) Ltd., Malwan, Fatehpur. (C) Submissions countering ....
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.... Calcutta-II. (d) 2001 (136) E.L.T. 839 (Tri.-Cal.) in CCE, Calcutta-II v. Tube Bend (Cal.) Pvt. Ltd. (e) 1996 (82) E.L.T. 347 (Trib.) in Gurpreet Rubber Industries v. CCE, Chandigarh. (f) 2004 (168) E.L.T. 494 (Trib.) in Rama Shyama Papers Ltd. v. CCE, Lucknow (g) 2005 (182) E.L.T. 413 (Tri.-Bang.) Arch Pharmalabs Ltd. v. CCE, Hyderabad. (h) Ganges Rubber Industries v. CCE - 1989 (39) E.L.T. 650 (T) (i) Kashmir Vanaspati (P) Ltd. v. CCE - 1989 (39) E.L.T. 655 (T) (j) Raza Textiles Ltd. v. CCE - 1989 (44) E.L.T. 233 (T) (k) Corona Cosmetics & Chemicals (P.) Ltd. v. CCE - 1991 (55) E.L.T. 118 (T) (l) Ashwin Vanaspati Industries Pvt. Ltd. v. CCE - 1992 (59) E.L.T. 175 (T) (m) Rishab Refractories Pvt. Ltd. v. CCE, Chandigarh - 1996 (87) E.L.T. 93 (T) (E) Submissions against Appeal filed by Revenue in case of Shri P.K. Jain : (a) The Respondent No. 2 being a proprietor is not exp....
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.... present case, no evidence has been adduced to show that the Respondent No. 2 was having the belief that the goods were liable to confiscation. The requirement of Rule 26 is very specific and it shows that it refers to removal of excisable goods or concerning oneself with such excisable goods physically and the same should have been done with the knowledge or reason to believe that the goods are liable to confiscation. No evidence has been led in by the Department as to how the Respondent No. 2 has been having knowledge/reason to believe that the goods are liable to confiscation. For establishing knowledge there must be some positive evidence which is missing in the present proceedings against the Respondent No. 2. Reliance is placed on the following judgments : (i) Anil Kumar Saxena v. CCE - 2000 (129) E.L.T. 351 (ii) Laurel Organics Ltd. v. CCE - 2002 (140) E.L.T. 151 (iii) M/s. Kamdeep Marketing v. CCE reported in 2004 (165) E.L.T. 206 (Tri.-Del.) (iv) Steel Tubes of India Ltd. v. CCE, Indore - 2007 (217) E.L.T. 506 (Tri.-LB). 7. I have carefully gone through the case records, g....
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....ainrulal Agarwal, authorized signatory of the respondent in his statement dated 1-11-2002 recorded on the spot under Section 14 of Central Excise Act, 1944 admitted their fault and agreed to debit the Central Excise duty of Rs. 25,455/- leviable on this quantity. His statements were seen by Shri Prasanna Kumar Jain, Proprietor of the respondent's firm. Shri Prasanna Kumar Jain agreed with the statements of Shri Bhainrulal Agarwal. 9. From the scrutiny of the private invoice book, 3 books of delivery challans and private Bahi (ledger) mentioned at S.No. 4, 5 & 6 respectively of the resumption memo dated 1-11-2002, the department concluded that a total quantity of 1297098 mtrs. (41382 mtr. + 1255716) of man made fabrics valuing Rs. 1,84,37,459 were removed by the appellant involving Central Excise duty amounting to Rs. 22,12,495/- without payment of duty. From the show cause notice, I find that due opportunities to Shri Prasanna Kumar Jain, Proprietor of the respondent's firm were given by way of summons but he did not present himself for tendering his statement. Thus, show cause notice was issued to the respondent for demanding above duty of Rs. 25,455/- and Rs. 22,12,495/- total....
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....examination of Shri Suresh Mehta, Mohd. Shariff, Rajendra Mehta, Prakash Jain and Vipin Chajed has stated that the challans alleged to clear the goods to their firms, have not been received by them nor they have made any payments to the appellant. The private records resumed by the visiting team do not bear signature of Shri Bhairu Lal Agarwal or Shri Prasanna Kumar Jain or any authorized person. The investigation has not been carried out as to who has maintained all the alleged private records. No statements have been recorded from the person who has maintained these records, no enquiries have been made from the consignees inspite of the fact that the names of the consignees appears on the alleged private records, no finding has been made about the consumption of electricity, which is required for such huge quantity alleged to be cleared clandestinely. Further, no verification has been made about the source of various chemicals which were consumed in the processing of goods allegedly deemed on the basis of private records. The charges of clandestine removal cannot be based on assumption and presumption. In the M/s. Sangamitra Cotton Mills case, it was held that in the absence of e....
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....r : "We also find that the duty demand of Rs. 69,79,797/- has been raised against the company on account of clandestine removal of 247007 watch cases. This demand, in fact, had been based on the strength of rough entries in a pad and some loose papers found in the factory at the time of visit by the officers. But the very author of the entries in the documents had not been identified. Mere unsatisfactory explanation regarding the entries in these documents by the M.D. and authorized signatory of the company, did not warrant an inference that these goods were manufactured and removed clandestinely, especially when there is no tangible evidence to prove the correctness of these entries and actual removal of goods to various buyers by the company in the market. Even the names of buyers had not been identified to whom the goods were cleared. Therefore, the duty demand of the above referred amount in respect of these goods, is set aside, in the light of the above referred facts and ratio of the law laid down in the case of Sulekh Ram and Sons v. UOI, 1978 (2) E.L.T. 525; and Collector of Central Excise v. Decent Dyeing Co. - 1990 (45) E.L.T. 201 (S.C.), that it is for the Department ....