TaxTMI 
TaxTMI 
2017 (8) TMI 96
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.... M/s Panchwati Prayogshala (Food Division), a proprietary concern of Shri Pankaj Goel, also Husband of Smt. Pooja Goel. Appellant was claiming benefit under Notification No.08/2003-SSI Exemption. A team of officers of Central Excise, (Preventive) visited the factory premises of appellant located at 25-26, A-B Mohkampur Industrial area, Phase-I Delhi Road, Meerut (UP) on 7^th September, 2006 and conducted checks therein. During physical verification of the stock of finished goods, the shortages of finished goods totally valued at Rs. 10,90,207/- was noticed. Shri Lalit Mohan, Authorized Signatory of the appellant in his statement on the same date recorded under Section 14 of the Act could not offer any valid explanations/reason for the said shortages. It appeared that the appellant had removed the finished goods found short clandestinely without discharging duty liability thereon. The Central Excise duty on the goods found short was worked to Rs. 1,74,433/- + Education Cess of Rs. 3489/-. 3. Further, during the search, certain loose paper slips were recovered from the factory premises and the same were resumed under panchnama dated 07^th September, 2006. On scrutiny of the said s....
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....tement in respect of loose slips recovered from the factory premises, appeared to be not tenable as he had stated that recovered slips related to production/packing of goods in 'primary packing'. From the scrutiny of records that is RG-1, it was observed that the quantities for which the slips have been issued tally with the quantities of goods produced and reflected in production record. It appeared that appellant issued loose paper slips showing excess production of goods. However, this quantity of production was not enterred in the statutory records. Thus, it appeared that appellant was not reflecting the actual quantity of goods manufactured by them and was removing the unrecorded quantity of finished goods clandestinely. 5. The SCN was adjudicated on contest vide Order-in-Original dated 20^th February, 2009 by the Additional Commissioner. However, he was pleased to drop the demand of Rs. 32,64,000/- which was proposed for disallowing the SSI exemption, observing that the appellant have applied for the Trade Mark 'Panchwati' on 27^th April, 2005 and have been allotted official No.2201 dated 27^th April, 2005 having Trade Mark No.01353552 dated 27^th April, 2005. Further, the....
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....of any clandestine removal and no demand can be raised for goods lying on the production floor, duly accounted in the records, and there being no evidence of any removal. The explanation was rejected, observing that the same is out of context. Accordingly, the demand of Rs. 7,66,922/- (1,77,922+5,89,000/-) was confirmed along with equal amount of penalty, with further demand for interest. 9. Being aggrieved, the appellant preferred appeal before the learned Commissioner (Appeals), who have been pleased to reject the appeal upholding the Order-in-Original. Being aggrieved, the appellant is before this Tribunal. 10. The learned Counsel for the appellant among others, inter-alia urges that the shortage of finished goods in respect of which duty is demanded for Rs. 1,77,922/-, was not the real shortage, as the quantity of the finished goods had not been correctly determined. In presence of the search team/officials, staff of the appellant were fearful and could not properly assist in stocktaking. Further, the duty demand of Rs. 5,89,000/- based on the loose slips recovered from the factory, alleged to be containing record of the production of finished goods, is not sustainable, a....
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.... duty; (i) links between the documents recovered during the search and activities being carried on in the factory of production; etc. Tribunal further observed- needless to say, a precise enumeration of all situations in which one could hold with certainty that there have been clandestine manufacture and clearances, would not be possible. It would depend on the facts of each case. What one could, however, say with some certainty is that inferences cannot be drawn about such clearances merely on the basis of note books or diaries privately maintained or on merely statements of some persons, may even be responsible officials of the manufacturer or even of its Directors/partners who are not even permitted to be cross-examined, as in the present case, without one or more of the evidences referred to above, being present. It is further observed that reliance on private/internal records maintained for internal control cannot be the sole basis for demand. There should be corroborative evidence by way of the statements of purchasers, distributors or dealers, record of unaccounted raw materials purchased or consumed and not merely the recording of confessional statements. Theory....