TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 245
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....vailing the facility of credit of duty paid on inputs under the provisions of MODVAT/CENVAT rules as applicable during the material period. On an information received from DGCEI Vadodara that M/s CL were engaged in suppression of production of their final goods in the statutory accounts and subsequent clandestine removal of such un-accounted finished goods in large volume, search operations were conducted on 2nd/3rd July 2003 of the factory premises of M/s CL at Vadodara. During the search operation, large number of incriminating documents were recovered and placed under seizure. As a follow-up action, search operation was also conducted in the premises of second appellant M/s AIMCO Pharmaceuticals Mfg. Co (hereinafter referred to as M/s AIMCO), and during the course of search operation, no manufacturing activity were found to be carried out in the premises and M/s AIMCO were conducting the manufacturing activity of finished goods at the premises of M/s CL. No records were found in the premise of M/s AIMCO. During the course of investigation, DGCEI officers recorded statements of persons who are concerned with the facts relevant to the goods. After scrutinizing the seized documents....
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....egarding maintenance of various records in their factory premises. He would submit that these letters are not denied by the adjudicating authority and the Departmental officers have been visiting their factory premises regularly and were also shown these registers. It is his submission that the appellants had shown various documents as regards purchasers of their final product in their documentary evidence and the said private registers also indicate the names of the purchasers. It is his submission that despite such information being on record, the investigating authorities have not recorded a single statement of any of the purchasers. It is his submission that the entire case of the Revenue is that the clearances made by the appellant are clandestine removal. It is his submission that, in fact, 80 to 90% of the suppliers to whom the final product has been cleared by the appellant, are the Government departments, for which he refer to Page No.49 of the paper book and submit that the percentage of total sale from the appellant to the Government departments is to the tune of 22% to 89% during the relevant period, which is a percentage of sale to the total sales as given in the balan....
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....nt of Shri A.D. Parmar, is not even corroborated by the statement of Shri Shah. It is his further submission that the statements of Shri Ambalal V. Patel, which have been recorded on various dates i.e. 03.07.2003 and 29.07.2003 is nothing but confirmation of contents of panchnama, statements given by the employees. It is his submission on mere perusal of the statement of Shri A.V. Patel, it is very clear that the statement only is recorded that in Panchnama, the statement of Shri A.D. Parmar and Shri Shah is true and correct and also that Shri A.V. Patel has perused the statement of Shri Pillai who is the Administrative Manager of M/s M/s AIMCO. It is his submission all the 3 persons have retracted the said statements immediately by filing affidavit. He would draw our attention to the various affidavit dt.03.07.2003, which are enclosed at Page No.84, 87, 88, 92, 93 or paper book No.1. It is also his submission that the statements which were recorded by DGCEI authorities were, in a way, retracted by letter dt.3.7.2003, 22.12.2003, 30.10.03, 6.1.04. It is also submitted that the adjudicating authority has just summarily discarded this evidence of retraction by stating that the appell....
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....the superior officers. For this proposition, he would rely upon the following decisions:- a) Surjeet Singh Chhabra 1997 (89) ELT 646 (SC) b) Illias Vs CCE AIR 1970 SC 1065 (SC 5 Member Constitution Bench) c) Vaibhav Exports 2009 (244) ELT 527 (Bom.) d) Montex Dyg. & Ptg. Works 2007 (208) ELT 536 (Tri-Ahmd) 5.1 It is his submission that when the proprietor of M/s CL had admitted and confirmed that P&P medicaments are manufactured and cleared clandestinely and hence there is no requirement of any further corroborative evidence. It is his submission as regards the claim of the appellant herein that such clandestine removal was without any corroborative evidence, is incorrect in as much as investigating authorities have recovered 2 sets of daily stock accounts in the form of RG-1 registers one maintained statutorily and another parallel register containing production and clearance details invoice-wise. It is his submission that M/s CL was availing SSI exemption for the first value of clearances of Rs.1 crore and it was found that M/s CL and M/s AIMCO were working under loan licencee agreement and M/s AIMCO has no machinery as recorded in the panchnama. It is his submission that va....
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....ished excisable goods during the period 1999-2000 to 2003-2004, is sustainable or otherwise on merit as well as on the aspect of limitation. 7. It is to be seen that the entire issue in this case started with the visit of the DGCEI officers to the premises of the appellant on 2nd/3rd July 2003. It has to be noted that the adjudicating authority has relied upon entirely on the statements recorded of Shri Shah, Shri A.D. Parmar and Shri A.V. Patel, for confirming demand of duty liability, interest and consequent penalties under the charge of clandestine removal. First and foremost, we have to appreciate whether these statements which were relied upon by the adjudicating authority do have the evidentiary value or not. We find that it is the claim of the appellant before us that Shri A.D. Parmar, Shri Patel, Shri A.K. Shah, Shri Pillai all of them have in their affidavit dt.3.7.2003 have retracted all the statements made by them on 2nd/3rd July 2003. On perusal of the records, we find that the appellant herein M/s CL in their letter dt.3.7.2003, addressed to the DGCEI office, has specifically stated as under: Date: 03.07.2003 To The Directorate General of C. Excise Intelligence, Va....
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....g the statements recorded. Instead of dealing with the affidavit summarily rejecting the same by the adjudicating authority is not in not in consonance with the law. 10. We further find that the adjudicating authority, relying upon such statement of acceptance of Shri Shah, has held that there was mis-match of packed quantities produced by the appellant in the un-recorded in the batch registers and in the statutory records. We take up the example given by the adjudicating authority in the impugned order of Verapamil 40 mg tablets. The adjudicating authority has taken an example of these tablets of Batch No.426002 and held that the batch register of such batch number indicate the manufacturing quantity of 1,75,000 tablets. On perusal of the said batch card/note book maintained by Shri Shah, following details emerge. 11. It can be seen from the above reproduced details of note book which has been maintained by Shri Shah, it cannot be considered as batch card. It is also to be noted that the said note book only indicate about the quantity of materials consumed for manufacturing of batch number 426002 of batchsize of 1,75,000 tablets. It is common knowledge that the theoretical batch....
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....ey have been manufacturing and clearing the pharmaceutical goods mostly to the Government departments. This issue has also not been examined by the adjudicating authority in correct perspective. If the appellant's clearances are mostly to the Government departments, the lower authorities could have easily recorded the statements of the purchasers of said pharmaceutical products from the appellant, tally the same with the records maintained by the appellant and could have come to a conclusion as to whether there was any clandestine manufacture or clearance of the final product. In our view, in the absence of any such corroboration from the purchaser, Revenue's case cannot be held as correct. We find that the appellant has always stated before the lower authorities that they have cleared the consignments to various distributors/dealers. The investigating authorities have not bothered to record the statements of those persons within their jurisdiction also nor they have sought help from their counterparts in various places where the goods were dispatched. In the absence of any corroborative evidence from the purchasers of the medicines, we are of the view that the Revenue has failed t....
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....62] has recorded in their order [reported at 2013 (287) ELT 243 (Guj.)] as under: We have heard learned Standing Counsel Mr. Y.N. Ravani appearing for Central Excise and Customs Department and learned senior counsel Mr. Devan Parikh, assisted by learned Counsel Mr. Nirav P. Shah for the respondent. 2. Learned counsel Mr. Ravani has stated that the civil application can be heard, only if the appeal is heard and if the appeal is admitted, then the question of grant of stay would arise. Learned counsel Mr. Parikh has no objection, if the appeal is heard on merits. With the consent of learned counsel for the parties, we have taken the civil application alongwith the appeal for hearing, at the admission stage. 3. This Tax Appeal has been filed under Section 35-G of the Central Excise Act, 1944, challenging the order dated 1-11-2011 of the Customs Excise and Service Tax Appellate Tribunal (the Tribunal for short) passed in A/1846-1851/WZB/AHD/2011 [2012 (278) E.L.T. 362 (Tribunal)] on the following two proposed substantial questions of law, which are extracted below :- (i) Whether the order of the Hon'ble Tribunal relying upon Tribunal's own order dated 29-3-2007 [2007 (213) E.L.T. 6....
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....raph Nos. 12, 13 and 16 has recorded clear finding that when the premises of the respondent were visited, the stock of raw-material and finished goods were tallying with the recorded goods. Further, nothing on record was found by the authority, which showed that unrecorded raw-materials were purchased or consumed by the respondent or that the respondent had clandestinely manufactured or removed the goods. It is necessary to extract Paragraph Nos. 12, 13 and 16 of order of the Tribunal, which reads as under :- 12. Be that as it may be, it is to be noted that there is no dispute that to manufacture of said final product 'Frit' requires the use of Quartz, Feldspar, Zinc, Borax Power, Calcium and Dolomite as inputs/raw material. On the date of visit of the officers to the factory premises of the appellant, it is undisputed that the stock of raw materials as well as finished goods was tallying with recorded balances. This conclusion can be reached from perusal of records, as there is nothing on record to indicate otherwise. 13. On careful perusal of the entire records of the case, we find that there is nothing on record as to unrecorded purchases or consumption of various other raw ma....
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.... the view taken by the Tribunal, and the appeal is devoid of any merits. Both the questions raised by the appellant do not involve any substantial question of law and therefore, the appeal is dismissed. We have heard learned Standing Counsel Mr. Y.N. Ravani appearing for Central Excise and Customs Department and learned senior counsel Mr. Devan Parikh, assisted by learned Counsel Mr. Nirav P. Shah for the respondent. 2. Learned counsel Mr. Ravani has stated that the civil application can be heard, only if the appeal is heard and if the appeal is admitted, then the question of grant of stay would arise. Learned counsel Mr. Parikh has no objection, if the appeal is heard on merits. With the consent of learned counsel for the parties, we have taken the civil application along with the appeal for hearing, at the admission stage. 3. This Tax Appeal has been filed under Section 35-G of the Central Excise Act, 1944, challenging the order dated 1-11-2011 of the Customs Excise and Service Tax Appellate Tribunal (the Tribunal for short) passed in A/1846-1851/WZB/AHD/2011 [2012 (278) E.L.T. 362 (Tribunal)] on the following two proposed substantial questions of law, which are extracted belo....
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....or the aforesaid reasons also, the matter was to be adjudicated before the competent authority. 7. The Tribunal in Paragraph Nos. 12, 13 and 16 has recorded clear finding that when the premises of the respondent were visited, the stock of raw-material and finished goods were tallying with the recorded goods. Further, nothing on record was found by the authority, which showed that unrecorded raw-materials were purchased or consumed by the respondent or that the respondent had clandestinely manufactured or removed the goods. It is necessary to extract Paragraph Nos. 12, 13 and 16 of order of the Tribunal, which reads as under :- 12. Be that as it may be, it is to be noted that there is no dispute that to manufacture of said final product 'Frit' requires the use of Quartz, Feldspar, Zinc, Borax Power, Calcium and Dolomite as inputs/raw material. On the date of visit of the officers to the factory premises of the appellant, it is undisputed that the stock of raw materials as well as finished goods was tallying with recorded balances. This conclusion can be reached from perusal of records, as there is nothing on record to indicate otherwise. 13. On careful perusal of the entire recor....