TaxTMI 
TaxTMI 
2015 (7) TMI 458
X X X X Extracts X X X X
X X X X Extracts X X X X
....99 to 2000. During visit of the Central Excise officers on 3.7.2001 to the factory of the main appellant, 23 sets of blank invoices (out of a book of 50) were found which were treated as parallel invoices . After investigation of the case and recording of statement of customers; who were all Limited Companies situated outside Gujarat, department issued a show cause notice dt. 5.12.2003 alleging clandestine removals under parallel invoices. The said notice dt. 5.12.2003 proposed recovery of duty amounting to Rs. 25,96,596/- Rs. 24,909/- alongwith interest, and imposition of penalties on the main appellant the Director Shri Manan K Shah. Order-in original No 11/Addl.Commnr/ 2004/AKM/dted 27.12.2004 confirmed duty demands of Rs. 25,96,596/- and Rs. 24,909/- with equivalent penalties against the main appellant and imposed separate penalty of Rs. 5,00,000/- on Shri Mann K Shah. In the first round of litigation, Commissioner (appeals), Ahmedabad passed OIA NO 184 to 185/2006 on 20.6.2006 and allowed benefit of cum-duty price which reduced demand of Central Excise duty to Rs. 22,10,997/- from Rs. 25,96,596/- and also reduced penalty under Section 11AC to Rs. 22,10,997/-. This Tribunal Ben....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uring search and activities being carried on in the factory of production; etc. Sr Advocate, drew the attention of the Bench to paragraphs 5.1 to 5.2 of the SCN and argued that entire demand is based on alleged parallel invoices as mentioned in the Annexure A-1, B-1 and C-1 to Show Cause Notice. That the alleged clandestine clearances cannot be confirmed as there is no tangible evidence to prove receipt of excess raw material, clandestine manufacture of goods, removal of goods from factory, documents to support transportation of such clandestinely cleared goods from the factory or receipt of cash payments for such goods. No such parallel invoices, forming the basis of demand, have been found from the factory of appellant. That transporters have not accepted having transported goods covered under those parallel invoices; that the invoices as mentioned in annexure A-1 have been produced by M/s Jalgaon Jilha Sahakari Dudh Utpad Sangh, Maharashtra, but such invoices, as mentioned in Annexure B-1 and C-1 of the SCN have not been produced M/s Dodia diary and M/s Tirumala Milk Products respectively; that the unsigned correspondence found from appellant s premises, heavily relied upon for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed upon. i) 2007(216)ELT.659(SC) CC vs Bussa Overseas Properties Ltd ii) 2007(217)ELT.561(Tri.Mum) Sunder Brothers The Sr Advocate further relied upon the following decisions regarding non-applicability of extended period of time limitation. i) 2006(197)ELT.555 (Tri Mumbai) Rivva Textiles Inds. Ltd ii) 2006(195)ELT.90 (Tri Bang) Lovely Food Industries iii) 2009(238)ELT.125 (Tri Ahd) R A Shaikh Paper Mills Pvt Ltd iv) 2009(238)ELT.21 (SC) Kushal Fertilizer P Ltd v) 2011(264)ELT.555 (Tri Mumbai) Orissa Bridge and Construction Corpn Ltd It is his submission that the case of clasdestine removal cannot be upheld merely on the basis of unsigned documents and the documents found from third party etc. or uncorroborated statement unless there is tangible, independent, proof like financial flow back, actual manufacture and clearance, excess purchase of raw material, electricity consumption, statements of workers, actual transportation of goods, statement of purchasers. That as per basic Rule of Evidence, unsigned copies of documents or documents recovered from third party cannot be considered as evidence at all. Learned Senior Advocate also argued that the case against the appellant....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Shri Manan K Shah, Director of the main appellant. However, I find that Excise Clerk has simply stated to have prepared only 7 invoices during his one year working. It is not forthcoming from his statement as to which were those 7 invoices referred by him when there is nothing to show that goods were actually cleared against those alleged parallel invoices. 5.2 It is also observed that demand of duty is worked out on the basis of parallel invoices referred to in Annexure A-1, B-1, and C-1to in SCN, but none of these parallel invoices have been found from the factory of the main appellant during search or follow up investigation. Out of 27 invoices, only 11 invoices referred to in Annexure A-1 and 3 invoices referred to in Annexure C-1 appear to be produced, which are recovered from the buyers. The three receipts of the packing materials were regular buyers, who were accounting for all their goods into their Books of Account. However, these documents recovered from third party does not have evidential value unless fully supported by other independent corroborative evidences. I also find that 3 buyers have stated to have purchased the goods in question against payments made by de....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in 2013(287)ELT.43 (Guj) and 2014(303)ELT.A24(SC) respectively. Similar views have been expressed in other case laws also as mentioned in Para 3.1 above cited in support of the contentions of the appellant. In case of CCE vs Nand Mangal Steels Ltd [2008(226)ELT.702 (P&H)] the Hon ble High Court has held that department has failed to produce any material corroborating the parallel invoices etc and hence the demand of duty on the basis of the parallel invoices in that case was held not sustainable. On the issue of clandestine removal based on parallel invoices it has been held by courts that demands so raised are not sustainable. Few other such case laws relied upon by the appellant are CCE Ludhiana vs Nand Mangal Steels Ltd (supra). Pet Metal Pvt Ltd vs CCE, Vadodara (supra), Shree Industries Ltd vs CCE, Ahmedabad (supra). In the present proceedings no evidence has been brought forward from the transporters that such clandestinely cleared goods were sent through any transporting agency. In the case of Vishwa Traders Pvt Ltd vs CCE Vadodara (supra), inter-alia, also the facts involved recovery of 179 parallel invoices from the residential premises of the Manager of the appellant in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ne removal, very clearly held as under : "6. Considering the above arguments of the appellant in the light of the various decisions of the Tribunal, it is seen that it has been consistently held by the Tribunal that entries in rough register cannot be made the sole basis for arriving at finding of clandestine manufacture. Reference in this regard be made to the Tribunal decision in the case of Essvee Polymers (P) Ltd. [2004 (165) E.L.T. 291 (Tri. - Chennai)], Krishna Bottlers (Vijayawada) Pvt. Ltd. v. Commissioner of Central Excise, Gantur [1999 (32) RLT 845 (CEGAT)], Ganga Rubber Industries v. Collector of Central Excise [1989 (39) E.L.T. 650 (Tribunal)]. The ratio of all the above decisions is that the allegations of clandestine manufacture and removal being quasi criminal in nature are required to established beyond doubt by producing evidence in the shape of procurement of raw materials, shortage, excess use of electricity, flow back of funds and purchase of final products by customers etc. Admittedly no such evidence has been produced on record by the Revenue, the evidentiary value of the statements relied upon by the Revenue already stands discussed by me in the proceedings ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ord, that the Revenue authority, despite having engaged themselves in massive investigation, has not brought on record a single evidence of procurement of other major raw materials required for manufacture of Frit, either in the form of entries in the books of accounts or in the form of statements of supplier of the other major raw materials. It is undisputed that for manufacturing of Frit (the final product) major raw material is Quartz which is approximately 45% of the total inputs going in the manufacturing of Frit . We find from the records that Revenue has not produced a shred of evidence, to indicate that the appellant had been procuring Quartz without accounting them in books of account nor is there any evidence to indicate that other raw materials were also procured without recording them in books of accounts. In the absence of any such evidence, we are unable to persuade ourselves that the appellant M/s. VTPL had clandestinely manufactured the quantity of Frit during the period 1998-1999 to January 2002. If there is no clandestine manufacture, there cannot be any clandestine clearance. Further, we also find from the records that there is no investigation which has been car....