TaxTMI 
TaxTMI 
2017 (6) TMI 470
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....the option to redeem the same on payment of redemption fine of Rs. 1,00,000/-. A penalty of Rs. 2,93,17,554/- has also been imposed on the assessee under Section 11AC ibid. Central Excise duty demand of Rs. 1,21,42,057/- proposed in the SCN on clearance of Copper Wire Rods was dropped in the impugned order. 2. Brief facts of the case, leading to these appeals are as follows:- 2.1 The appellant - assessee is engaged in the manufacture of copper ingots, falling under Chapter - 74 of the Central Excise Tariff Act, 1985 and is registered with Central Excise Department. The unit of the appellant-assessee was searched by officers of DGCEI on 21.09.2005. The residential premises of Sh. Rajinder Prasad Gupta, father of Sh. Vinod Gupta, who is the sole proprietor of the assessee, was also searched on 21.09.2005. During the course of search of the residential premises of Sh. Rajinder Gupta, Indian currency amounting to Rs. 6,20,000/- was recovered and the same was seized by the visiting officers. During the course of search in the factory premises of the appellant-assessee, the officers detected a shortage of 3500 kgs. of copper scrap valued at Rs. 3,85,000/-. Some records were also re....
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.... currency and imposition of equal amount of penalty are not proper and justified. Revenue has assailed the impugned order, so far as it dropped the proposed duty demand of Rs. 1,21,42,057/- on clearance of copper wire rods. 3. In response to the demand confirmed in the adjudication order, the submissions of the assessee as made in the grounds of appeal and in the written note are as follows:- 3.1 That the Central Excise Officers during the course of stock taking, did not weigh the stock of copper scrap, but have arbitrarily taken the stock to be of 12526.900 Kgs. on the basis of eye estimation only. Since such scrap comprised of odd pieces of copper and the actual weighment had not been done, duty demand cannot be fastened against the assessee on the ground that quantity of copper scrap found short was used for un-accounted manufacture of finished goods by the assessee. The assessee has relied on the decisions rendered by the judicial forums in the case of CCE Vs. Kwality Tube Industries -2009 (240) ELT 20 (Guj.), CCE Vs. Kundan Castings Pvt. Ltd.- 2008 (227) ELT 465 (Tribunal), Sri Chakra Cements Ltd., Vs. CCE - 2008 (231) ELT 67 (Tribunal), Hans Metals Pvt. Ltd. Vs. CCE- 20....
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....ar any date. Thus, no reliance can be placed on the note book to allege clandestine removal of goods, since it is not possible to ascertain to which period, these transactions pertain to. The assessee has relied on the decisions in the case of Rama Shyama Papers Ltd. & others Vs. CCE - 2004 (168) ELT 494 (Trib.), Sakeen Alloys Pvt. Ltd. Vs. CCE - 2013 (296) ELT 392 (Trib.)- 2013 (308) ELT 655 (Guj.) - 2015 (319) ELT A117 (SC), Karnavati Synthetics Ltd. Vs. CCE - 2014 (304) ELT 696 (Trib.), Raj Sandeep Vs. Collector - 2003 (162) ELT 1028 (Trib.), Commr. Vs. Rexin Sea India Ltd. - 2003 (156) ELT 147) Trib.), CCE Vs. Chola Spinning Mills (P) Ltd.- 2009 (92) RLT 731 (Trib.) to state that demand of duty on the basis of the documents recovered from third party is not sustainable. 3.4 With regard to the reliance placed in the show cause notice on the statements of Shri Girish Chand, Shri Devinder Kumar Sharma, Shri Kishan Kumar Srivastava, Shri Rajender Prasad Gupta, Shri Vinod Kumar Gupta and Shri Anurag Jain, the assessee submitted that the said persons had retracted from the statements earlier furnished before the DGCEI Officers and also stated that such statements were recorded und....
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....cannot be questioned. However, it is not clear as to whether actually a physical weighment has been made of the stock of raw-material. Admission of the authorized representative by signing the Panchnama is the sole reason recorded by the original authority to uphold the shortage of raw-material. Even considering that there is such shortage, that cannot be automatically converted into a charge of un-accounted manufacture and clearance of excisable final product. 7. The main reliance by the Revenue was placed on the documents and statements of Shri Girish Chand and Shri Davinder Kumar Sharma. The original authority held that these two persons are employees of the appellant - assessee. Shri Girish Chand is stated to be only a labour contractor supplying labourers to the appellant - assessee. He also supplies labourers to various other similarly placed clients. Similarly, Shri Devinder Kumar Sharma is stated to be a dealer of copper items and scrap. The appellant - assessee strongly contended that these two persons are not their employees or not in their payrolls. They relied on the salary and employees register and also further affidavits filed by these two persons. We note that th....
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....re falling short of minimum requirement of credible case of clandestine removal. While no specific parameter for list/ nature of evidences could be set as a standard to establish clandestine manufacture and clearance, some of the basic criteria which are to be considered in such cases have been examined by the Tribunal in the case of Arya Fabrics Pvt. Ltd. - 2014 (311) E.L.T. 529 (Tri. Ahmd.) observed as below:- "40. After having very carefully considered the law laid down by this Tribunal in the matter of clandestine manufacture and clearance, and the submissions made before us, it is clear that the law is well-settled that, in cases of clandestine manufacture and clearances, certain fundamental criteria have to be established by Revenue which mainly are the following : (i) There should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions; (ii) Evidence in support thereof should be of : (a) raw materials, in excess of that contained as per the statutory records; (b) instances of actual removal of un-accounted finished goods (not inferential or assumed) from the factory withou....