2017 (9) TMI 15

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....i R. Subramanian, I find that the appellants are engaged in the manufacture of cotton cone yarn of various counts. As a result of investigations, Revenue seized one diary from a broker of yarn Shri A.K. Sri Vatsava. Scrutiny of the diary revealed that there were certain entries showing sale of cotton yarn manufactured by M/s. Senthil Kumar Spinners Pvt. Ltd. The appellant s factory was also visited by the officers, who collected all the statutory records maintained by them in the ordinary course of their business. As the entries made in the yarn broker s diary were not reflected in the statutory record of the manufacturing unit, Revenue entertained a view that such clearances were effected by the manufacturing unit without payment of duty. ....

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....erms of Rule 26 of the Central Excise Rules, 2002. 4. The said order was challenged by the appellant before the Commissioner (Appeals) on the ground that the findings of clandestine removal are based only on the entries made in the diary of the yarn broker and the transporter s, without there being any corroborative evidence establishing clandestine activity on the part of the appellants. They accordingly prayed for setting aside the impugned order. 5. The appellate authority however, did not find favour with the appellant s contention and by referring to certain decisions of the Tribunal, observed that the clandestine activity can be established on the basis of preponderance of the probabilities and in as much as the diary of the yar....

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....r them to prove genuineness of these entries with corroborative evidence. In as much as there was no physical verification of stocks, raw materials, consumption of electricity, flow of cash from buyers, issuance of parallel invoices or maintenance of other documents by the assessee, the uncorroborated entries in the third party records cannot be adopted for upholding allegations of clandestine removal. 7. I find that the law on the said issue is final by umpteen number of precedent decisions. It is for the Revenue to prove by production of tangible evidence that the appellant had been indulging in clandestine activities. Needless to observe that such corroboration cannot be by mathematical precision but should be atleast to an extent so ....