TaxTMI 
TaxTMI 
2014 (4) TMI 96
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....and only). On the reasonable belief that the same were the sale proceeds of the unaccounted sale of gutka and paan masala, the said cash was seized by the officers. Further, shortage of raw-materials totally valued at Rd.3 lakhs (Rupees three lakhs) approximately was detected, which the officers attributed to unaccounted use of raw-materials in the manufacture of the final product cleared clandestinely involving duty of Rs.1,81,006/- (Rupees one lakh eighty one thousand and six only). 3. The common residential premises of the various partners of the said manufacturing unit were also put to search. It is seen that the first floor of the factory was being used as a residential premises by all the brothers. The said residential premises consisted of six rooms, out of which one bed room was occupied by the father and mother and two bed rooms were occupied by two brothers along with their wives. As per facts on record, the search of the residential premises resulted in recovery of cash of Rs.15,97,000/- (Rupees fifteen lakh ninety seven thousand only). It may not be out of place to mention here that there is no specific place or room referred to by the Revenue from where the said recov....
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....hundred and fifty only). 7. The officers also resumed record from the manufacturer's factory and scrutinised the same. It was found that the said appellants were maintaining records for all their major raw-materials, namely, both uncut and cut supari, Kattha, tobacco and packaging materials (pouches). They were also showing wastages of the raw-materials being consumed by them in their final products. 8. During the course of investigations, the officers also recorded the statement of Shri Davi Sarin on 03.02.2003 and statement of Shri RC Jain on 20.01.2003. 9. Based upon the above, a Show Cause Notice dated 16.07.2003 was issued to all the appellants proposing confiscation of the cash recovered from the factory as also residential premises along with imposition of penalties on the Noticees. Notice also proposed confiscation of the goods seized from the premises of M/s. Basudev Prasad & Sons, totally valued at Rs.13,77,432/- (Rupees thirteen lakh seventy seven thousand four hundred and thirty two only) and from M/s. Jain General Store totally valued at Rs.10,940/- (Rupees ten thousand four hundred and forty only) along with proposal to impose penalties upon various noticees. Anoth....
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....h stands cleared without payment of duty. The appellants have strongly contested the said demand by submitting that the godown as also raw-material accounts are maintained by semi-literate persons and raw-material is issued on an average basis. This may result in variations in the quantity of the raw-materials. Further, it is clear from the Panchnama that the entries made on the day of visit were not recorded. Ld. Advocate has strongly contended that the confirmation of demand on the findings of clandestine removal, which in turn are based upon the shortages of raw-materials, is not in accordance with the settled principles of law. By drawing my attention to various decisions, it stands submitted that mere shortages cannot lead to the evidence of clandestine removal, in the absence of any corroborative evidences. He submits that no statement was recorded on the said count and no questions were even put to Shri Davi Sarin while recording his statement on 03.02.2008. Further, Shri Davi Sarin, in his statement in answer to question No.17, has clearly stated that all the payments are made and received through cheques and drafts. Apart from that he submits that apart from the alleged sh....
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....e, the manufacturer would have been benefited if it has availed of the Modvat Credit and cleared the goods after proper accounting. It was also submitted that there was no evidence available to substantiate the clandestine clearance. To the same effect is the decision of the Tribunal in the case of Raj Ratan Industries Ltd. Vs. CCE, Kanpur [2013 (298) ELT 111 (Tri.-Delhi)] as also in the case of DP Industries Vs. Commissioner [2007 (218) ELT 242 (Tri.-Del.)]. The Hon'ble High Court of Delhi in the case of CIT Vs. Dhingra Metal Works, vide their Final Order dated 04.10.2010 has observed that any statement made by a person recorded under Section 133A of the Income Tax Act, 1962 during the survey operation has no evidentiary value in as much as the said statement has not been taken by administering oath. The said decision of the Hon'ble High Court of Delhi stands followed by the Tribunal in a number of decisions. Similarly, in the case of JV Strips Ltd. Vs. CCE, Rohtak [2006 (194) ELT 275 (Tri.-Del.)], the Tribunal has observed that shortages of raw-materials cannot ipso facto lead to the charges of clandestine removal. (iv) In as much as there are plethora of judgements laying down....
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.... said raw-material accounts. There were second stage shortage/wastage occurred during the process of mixing of packing of various raw-materials to obtain the gutka and paan masala in finished form. Such shortage was composite wastage including various raw-materials and could not be accounted for in the raw-material account. For the above purpose, they have relied and referred to 'quantitative tally register' for the year 2002-03, which was also seized by the officers. It is seen that the said quantitative tally register was declared by the appellants to the Department vide their letter dated 30.05.1997, addressed to the Range Central Excise authority. The appellants, in their reply, have also explained in detail that the perusal of the said quantitative tally register reveals the wastage of the cumulative raw-materials during the process of mixing and packing. (ii) Without going into detail as to whether the appellants have been able to explain the excess shortages/wastages of various raw-materials during the course of mixing of various raw-materials and the subsequent packaging, which according to them stands reflected in the quantitative tally register, I find that the entire ca....
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.... to be duty paid, unless proved otherwise. In the absence of any evidence to the contrary, I set aside the confirmation of demand or confiscation of the goods seized from the premises of both the dealers. (D) Confiscation of currency of Rs.19,43,000/-. (i) Out of the above amount, Rs.3,46,000/- was seized from the factory premises, which the Revenue treated as sale proceeds of clandestinely removed goods. It is well established that the onus to show that the Indian currency was the sale proceeds of the clandestinely removed goods is upon the Revenue, which is required to be discharged by production of affirmative evidences. Except the statement of Shri Davi Sarin, no other statement of any partner was recorded. Even the said deponent nowhere admitted the said cash to be sale proceeds of clandestinely removed goods but deposed that since the records have been resumed by the officers, they are not able to reconcile the same. (ii) In any case, the appellants produced on record the affidavit of Shri Rajiv Aggarwal, proprietor of M/s.Karan Exports as also Shri RNS Sarin showing that the old car belonging to the appellants was sold by them and the seized Indian currency of Rs.3,46,000....