TaxTMI 
TaxTMI 
2014 (5) TMI 868
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....ickel pipes; were simultaneously searched by the Central Excise officers on 29/30.03.2007. During search operations, certain incriminating documents, including four diaries, showing purchase of raw materials and sale of finished goods, were recovered from the factory premises. Two diaries numbered as 1 & 2 allegedly were showing details of purchase of raw materials and two other diaries 3 & 4 allegedly showed sale of finished goods manufactured by the main appellant without accounting the same in their statutory records as explained by Shri Ranjit Singh Chauhan, Manager of the main appellant and Shri Ashok J. Shah, Director. After investigations, the Revenue issued a show cause notice raising demand which was decided under OIO dt.28.11.2011 confirming demand of Central Excise duty of Rs.2,02,31,209/- along with interest against the main appellant and imposing penalty of equivalent amount on the main appellant. Penalty of Rs.25 lakhs was imposed upon Shri Ashok J. Shah, Director of the main appellant for which Appeal No.E/186/2012-DB has been filed. A penalty of Rs.2 lakhs was also imposed upon Shri Ranjit Singh Chauhan, Manager of the main appellant which is appellant in Appeal No.....
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....s.54,43,143/-. Similarly, in the case of brass pipes for the period 12.01.2006 to 25.03.2007, the diaries pertained to total purchase quantity of 67,287 kgs against the appellant's accountal of 78,443.25 kgs in RG23A Part I register during this period. Thus, it was his case that there was no demand of any duty on brass pipes. In respect of copper pipes, the demand is raised on 4546.4 kgs for the period 22.02.2006 to 28.03.2007, against which the appellants have accounted for 2357.4 kgs in RG23A Part I register. Therefore, demand of duty could be made on 2189 kgs which works out to Rs.1,55,590/-. He further argued that small quantities ranging between 1.1 kg to less than 500 Kgs mentioned in the diaries deserve to be excluded as all such quantities are already included in appellant's RG23A Part I register. On this account, the demand of Rs.8,64,697/- deserves to be reduced from the total demand raised in Annexure A(1) to the show cause notice. That if all the above factors are taken into account, the total demand of duty against the appellant would be Rs.51,01,623.50 (including duty of Rs.3,50,360/- involved on shortage of goods, Rs.804.40 of mix scrap, and Rs.27,424.10 on brass scr....
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.... ii) CC Mumbai Vs Vaibhav Exports [2009 (244) ELT 527 (Bom.)] iii) Montex Dyg. & Ptg. Works Vs CCE Surat-I [2007 (208) ELT 536 (Tri-Ahmd)] iv) M.R. Tobacco Pvt.Ltd. Vs UoI [2008 (228) ELT 171 (Del.)] 5. Heard both sides and perused the case records. Early hearing application filed by the Revenue is disposed off as the concerned appeals are already listed for regular hearing. After hearing both sides on facts and legal arguments, we find that there are following two points which are required to be deliberated in these appeals:- i) Whether the appellants have indulged in clandestine manufacture and clearance of goods? ii) If answer to (i) above is yes, then whether the duty determined by the Revenue is correct in view of the submissions made by the appellants? 5.1 So far as clandestine manufacture and clearance of the finished goods is concerned, Revenue has based their case on the grounds that there was clandestine manufacture and clearance of goods which....
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....ctor of the Company. Similarly, in the case of CCE v. Arsh Casting Pvt. Limited [2010 (252) E.L.T. 191 (H.P.)], the Hon'ble High Court of Himachal Pradesh held that the private records maintained by the staff of the company cannot be made as the sole evidence to hold that clandestine removal of the goods is established and accordingly, the following point of law was decided in favour of the assessee:- Whether on the basis of private records, the Central Excise duty can be demanded or not when these private records show higher production than that reflected in the statutory records resulting into removal of the excess stock clandestinely i.e. without issue of invoice and without making entries of production and clearance in the statutory records? 5.2 From the above indicatory parameters for clandestine manufacture and clearance of finished goods outlined by us, we find that in the present appeals the demand is not made only on the basis of few confessional statements made by the appellants but there are other documentary evidences also. There are evidences to the aspect that during stock taking both raw materials and finis....
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....ndicated in Annexures A(1) and A(2) to the show cause notice when an abetment of duty, as calculated in Annexure A (3), has already been given. There is substance in the argument of the appellant that there could be a delay in taking entry in the RG23A Part I and in the duration of manufacture of finished goods after the receipt of the raw materials. 5.4 Revenue's argument that clandestine clearances shown in Annexures A(1) and A(2) are in addition to the clandestine manufacture out of the unaccounted raw materials in Diaries 1 & 2 is unsubstantiated as no corresponding purchase of additional raw materials, other than what is reflected in Diaries 1 & 2, for manufacture of such clandestine removals calculated in Annexures A(1) and A(2) have been brought on record by the investigation. Similarly, additional demand of Rs.10,04,619/- shown in Annexure A (5) based on LRs issued by M/s Moongipa Roadways Pvt. Ltd is not sustainable in the absence of any corresponding additional raw materials purchases required for the manufacture of these manufactured finished goods. However, appellant's argument that raw material purchase of 3 kgs to 500 kgs, shown in Diary 1 & 2 should be excluded, i....