2014 (3) TMI 712

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....e of Premier Color Cartons. Their factory was visited by the officers on 23.08.2006 and verifications were made. It was found that another factory in the name of M/s. Pearl Pact, being proprietor unit of Smt. Ramesh Gupta, mother of the director of the respondent company was also engaged in the manufacture of identical goods. It turned out that M/s. Pearl Pack stopped their manufacturing operation in the year 2005-06. 3. Based upon the statements recorded during the course of investigation, proceedings were initiated against the respondent alleging that they were clearing their final product in the name of M/s. Pearl Pack. As such duty was proposed to be confirmed against them by taking into account the entire clearances made by the resp....

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....Directors, enrolled some labourers for some time and also showed purchase of raw materials and some junk machines and made clearances in the name of M/s. Pearl Pack with a view to camouflage their actual clearances from the concern of appellant No.1. I find that the allegation of the department that appellant No.1 cleared their goods on the invoices of M/s. Pearl Pack is established for the period w.e.f. 1.04.2005 as it has been accepted by the appellant No. 1 and M/s. Pearl Pack also that due to labour dispute the unit at A-64, Wazirpur Indl. Area, Delhi was closed and the goods manufactured by appellant No. 1 were cleared on the invoices of M/s. Pearl Pack without payment of duty amounting to Rs. 6,45,515/- and there is no dispute about t....

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....arl Pack from various petrol stations located in the vicinity of the factory located at A-64, Wazirpur Industrial Area, Delhi. The fact of running the factory with the help of D.G. Set is further established by the fact that an amount of Rs. 2,46,103/- towards Power Generation and Rs. 83,500/- towards Generator Rent have been shown as expenses in the profit and loss account of the Balance Sheet for the year ending 31.03.2005. I find that the said Balance Sheet have been filed by M/s Pearl Pack along with Income Tax Return for the period ending 31.03.2005 filed on 27.10.2005 i.e. well before the search operation conducted 23.03.2006 and cannot be viewed with suspicion and therefore the evidence put for the by the appellants cannot be termed ....

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....uring the period prior to 31.03.2005. I find that the adjudicating authority has erred in not taking the cognizance of the evidence produced by the appellants in support of the fact that M/s. Pearl Pack was an independent manufacturing unit prior to 31.03.2005 and confirming the demand of duty against appellant No. 1 based upon the presumptions of the investigating officers without placing on record any direct and positive evidence in support of the allegations levelled against the appellant No.1. In view of the various evidence produced by the appellants, I hold that M/s. Pearl Pack was an independent manufacturing unit prior to 31.03.2005 and Central Excise duty on the clearances effected by M/s. Pearl Pack cannot be demanded from appella....