TaxTMI 
TaxTMI 
2016 (2) TMI 104
X X X X Extracts X X X X
X X X X Extracts X X X X
....ufacture of M.S. Ingots, classifiable under Chapter 72 of the Schedule to the Central Excise Tariff Act, 1985. The Central Excise Officers on the basis of certain intelligence visited the business premises of the assesses buyer, namely M/s. Vishnu Steel. It was found that the name of assessee alongwith other manufacturers were mentioned, in their private records and on the basis of the said records, the Central Excise Officers issued summons to the Partner of the assessee. A Show Cause Notice dated 04.09.2009 was issued proposing demand of duty alongwith interest and to impose penalty on the assessee and to impose penalty on the Partner of the assessee. The Adjudicating Authority confirmed the demand of duty of Rs. 20,24,356.00 alongwith i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the partner of the assessee accepted the clandestine removal of the goods, and therefore, there is no requirement of the cross examination of the buyer and broker. He further submits that they have not requested cross examination before the Commissioner (Appeals). 4. After hearing both the sides and on perusal of the records, I find that the entire case was made out on the basis of the statement of one clerk of the buyer of the assessee, namely M/s. Vishnu Steel and the broker Shri Shiv Gopal Damini. It has seized private records of the buyer. No visit was effected to the assessee factory and no enquiry was conducted at the assessee in respect of the clandestine removal of the goods. The entire case was made out on the basis of the sta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d broker. The appellant in their reply to show cause notice dtd 3.10.2009 retracted the statements. It is observed by the Commissioner (Appeals) that the retraction of the statements under duress of the Appellant No 2, is a brain child of the Learned Advocate and not Shri Manish R Agarwal. The appellant requested cross examination of the buyer and the broker in their reply to show cause notice. The Adjudicating Authority rejected the prayer for cross examination, as the exercise would be futile as the Appellant No 2 in his statement accepted the statements of the buyer and broker. It is seen that the retraction of the statement of the Appellant No 2 was rejected on the ground that it is a brain child of the Learned Advocate and not Shri Man....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in this situation, the cross examination of the buyer and the broker are necessary to establish the truth. The Tribunal in the case of Arya Fibres Pvt Ltd vs CCE - 2014(311)ELT.529 (T) held that clandestine manufacture and removal, Reliance on private records seized from buyers premises not to be the sole basis for demand especially when corroborative evidence like purchase of extra raw material, actual removal of clandestine goods, receipt of sale proceeds, etc. not produced. The Hon'ble Delhi High Court in the case of Flevel International Vs CCE vide judgment dtd 17.9.2015 in CEAC 6/2013 approved the decision of the Tribunal in the case of Aarya Fibre Pvt Ltd (supra) as under: 55. Mr. Hari Shanker, learned Senior counsel for the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....epartment to substantiate the allegation of manufacture of as many as 606 ACs by the Appellant. No evidence has been produced to show that the basic raw materials required for manufacturing such a large number of ACs was procured by the Appellant. 57. For all of the aforementioned reasons, the Court is satisfied that the impugned majority order of the CESTAT on the issue of clandestine removal of 606 ACs by the Appellant without payment of duty suffers from serious errors and, therefore, cannot be sustained in law. 58. The Court is not inclined to consider the plea of the Respondent that the matter should be remanded for a fresh consideration by the CESTAT. In the first place, it must be remembered that the search operatio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e, the Director admitted the shortage of material used in the manufacture of goods and clandestinely removed without payment of duty. It has been observed that there is no evidence to indicate clandestine manufacture and removal of goods except shortage of raw material and statement of the Director of the Appellant Company and the Tribunal rightly given the benefit to the assessee. In the case of CCE vs Saakeen Alloys Pvt Ltd - 2014(308)ELT.655 (Guj.) the Hon'ble Gujarat High Court held that confessional statement cannot form the foundation for levying excise duty. 11. The Learned Authorised Representative for the Revenue submitted that the documents recovered from the premises of the buyer are corroborating the statement of the Ap....