TaxTMI 
TaxTMI 
2017 (1) TMI 365
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....found that the appellant manufactured Filter Cigarettes of Fursat and Seven-10 brand manufactured by M/s.Inderjit Sons Enterprises was found available without any legitimate bills. As the dealers could not produce evidence of legitimate purchase of said stock of cigarettes, the same was seized. Further investigation was conducted on the basis of investigation, it was alleged that the appellant has cleared Filter cigarettes without cover of invoice. Consequently, it was alleged that the appellant cleared the cigarettes clandestinely. Consequently the impugned proceedings were initiated by both the lower authorities confirmed the demand of duty alongwith interest and penalty imposed on both appellants on account of clandestine removal of the ....
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.... the source of procurement of the goods without payment of duty. In fact, the appellant is under physical control of the Central Excise Department. Therefore, it cannot be alleged that the appellant is engaged in the manufacture of clandestine removal of the goods. Moreover, the similar issue came up before this Tribunal in the case of Musk Tobacco (India) Pvt.Ltd.-2013 (289) ELT 161 (Tri.) wherein this Tribunal has observed as under: "4. Above is factual position as is apparent from orders of both the lower authorities below. Revenue certainly would have been benefited had they found evidence in respect of removal of goods while physical control of factory was with departmental officers. Such evidence is not on record. Even to app....
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....r the Central Excise law and also under the State excise laws, there cannot be any clandestine production and removal without the same being noticed by the State excise authorities. As rightly contended by the assessee, no case has been made against them by the State excise authorities who issued transport permits for the assessee to remove molasses to their distillery. The least that the department could have done in this case is to cross-check with the State excise authorities and the records maintained by them to satisfy, whether, indeed, there has been production and clearance of the molasses to the extent of 12539.300 MTs as made out in the show-cause notice which has not been done in the instant case. Further, molasses has to be produ....
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....posted in the factory and distillery unit to safeguard the case of State excise revenue on molasses and allied products. The State excise authorities, in this case, have not made any allegation of shortage of molasses or any unaccounted production of molasses. In view of this position, when there is a physical control of the department of State excise and also records based control by the Central Excise authorities there cannot be any allegation of clandestine removal of goods without substantive evidence as has been held in the case of LML Limited v. Commissioner of Central Excise (supra). It is also a well settled position of law that in the case of clandestine removal, the department has to adduce evidence and the department cannot make ....