AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (7) TMI 987
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....ties stand imposed on the other appellants in terms of provisions of Rule 26 of the Central Excise Rules. 2. As per facts on record, the factory premises of M/s. Atishay Trading Company located at WZ-406 Naraina Village, New Delhi was put to search on 26.11.07. One Shri Sanjeev Kumar, supervisor was found to be present in the said premises and informed the visiting officers that they were manufacturing gutkha with brand name Tufan and they have not obtained any registration from the Central Excise duty. Search of the premises revealed that various machines i.e. one supari oven, one supari cutting machine, one supari sieving machine, one katha grinding machine, one weighing scale, one generator, and one sieving machine and one mixer machine were installed in the basement. Further, some machinery and 17 bags of tufan gutkha in fully manufactured condition were found on the second floor along with pouch making machines and some raw materials. 5 bags of tufan gutkha were found in the second room of the said premises. Shri Sanjeev Kumar, supervisor informed the visiting officers that Shri Abhay Kumar Jain is proprietor of the manufacturing unit and the factory runs in one shift of 8 ....
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....f found to have been evaded. 5. The statement of Shri Abhay Kumar Jain, was again recorded on 2.5.08 wherein the black diary recovered during the course of search of the registered premises was shown to him. He admitted that same contains details of purchase of inputs used for manufacture of Tufan gutkha against cash. On showing the other documents resumed during the course of search, he agreed that the same was relatable to the bills of raw materials as also the finished goods manufactured out of it. He further agreed that deliveries made to M/s. Sonu Stores were on the fictitious bill in the name of M/s. Shill Enterprises. The duty evasion in respect of clearances made to M/s. Sonu Stores, Naraina, New Delhi during the period October, 2006 to November 2007 was admitted to be around Rs. 7,11,275/-. He also agreed that pouch making machines found in their premises has the capacity to produce 110 pouches per minute. It may not be out of place to mention that said two statements of Shri Abhay Kumar Jain recorded with a gap of around 5 months gave details of modus operandi being adopted by the said assessee for clandestine manufacture and clearance of their final product i.e. Tu....
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.... The payments were made in cash and he used to receive 40 bags per month during the period October, 2006 to November, 2007. The said statement of Shri Suresh Khurana was also accepted by Shri Abhay Kumar Jain, to be correct statement. 8. Further, Shri Sachin Matta of M/s. Sonu Stores, Naraina Village, New Delhi, in his statement recorded on 17.4.2008 revealed that they were receiving 20-25 bags per month of Tufan Gutkha during the period October, 2006 to Novemner, 2007, for which they were making payments in cash. Wherever, they receive the bills, the same were in the name of M/s. Shill Enterprises. The said statement of Shri Sachin Matta stand accepted by Shri Abhay Kumar Jain who further added that goods sent to M/s. Sonu Stores were sent on fictitious bills and that cash received as a consideration for the sold goods was not accounted by them in their books of accounts. 9. Based upon the result of the above investigation, as also on scrutiny of various records, and incriminating documents recovered during the course of search, proceedings were initiated against the appellant alleging the total removal of Tufan gutkha involving Central Excise duty of Rs. 35,19,256/- during ....
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....ion to redeem the goods on payment of Redemption fine of Rs. 25,000/- and Rs. 7,000/-. In addition penalty of Rs. 35,64,114/- upon M/s. Atishay Trading Co. under Rule 25 of the Central Excise Rules, 2002. An amount of Rs. 30,00,000/- deposited towards payment of duty also stand appropriated. Penalty of Rs. 5 lakh stand imposed on M/s. Delhi Gondia Road Lines and penalty of Rs.One lakh was imposed on M/s. Lamba Door to Door / Godown services under Rule 26 of the Central Excise Rules. The said order of the original adjudicating authority was appealed against before Commissioner (Appeals) who upheld the same. 13. Hence, the present appeals. 14. Learned advocate Shri Prabhat Kumar appearing for the appellant Atishay Trading Co. submitted that the allegation and findings of the clandestine manufacture and removal of the goods stand against them on the basis of statements of various persons, without their being any corroborative evidence in relation to the production of the said goods and hence the findings are not sustainable. He submits that it is settled law that diaries / documents recovered during the course of such investigations cannot be relied upon for alleging clandest....
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....they were engaged in the manufacture of Tufan brand gutkha without obtaining any registration from the department and without even intimating the Revenue. Further, the statements of Shri Abhay Kumar Jain, proprietor of the company clearly accepted the fact of manufacture and clearance of gutkha. We otherwise agree with the contention of the learned advocate that a case of clandestine manufacture and clearance cannot be made solely on the basis of a statement but in the present case, we find that the Revenue did not stop there and investigated the matter further. During investigations, the statement of raw material supplier, the transporters as also the buyers were recorded. The said statements clearly showed that the appellant was indulging in clandestine clearance of their final product. These facts further get corroborated from the fact that raw material as also the final product along with a fully manufacturing set up with power backup and employment of 12 persons including production Incharge and Supervisor was found at the time of visit of the officers. As such, we are of the view that there is sufficient material on record to establish beyond doubt that the appellant was indu....