2017 (9) TMI 1057

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....ed by Shri Ram Anugrah Singh, Chemist was found in which he has made entries of raw material received for production and finished goods produced. Statement of Shri Sanjay Sharma, Computer operator, Shri Sudhir Natani, partner and Shri R.A. Singh, were recorded and relied upon. On the basis of investigation, it was alleged against the assessee that during the period September, 2004 to July, 2007, the assessee was engaged in clandestine clearance of Medicines without payment of duty. It is pertinent to mention here that the assessee was availing SSI exemption for goods manufactured by them in their own brand but paying duty on the manufactured for others under the brand name of others. The major basis of evidence to allege clandestine clearance of goods is the register maintained by the Shri R A Singh, chemist wherein the entries mentioned as 'MSP' and 'MSP (P)'. Entries mentioned in record as regards 'MSP' were cleared against the invoices but entries mentioned as 'MSP(P)' goods were cleared without invoices. On the basis of these entries made as MSP(P), it was alleged that same has been cleared clandestinely and if same is included in the total turno....

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....ere manufactured / produced / prepared. But in fact, he explained that the non-maintenance of certain quantity can manufacture specific quantity of finished goods. But he has never admitted that such quantity of goods have been manufactured. Therefore, the said statement in toto cannot be relied upon. He also submits that the statement of Shri Ramswaroop Natani is only related to the period 2007-2008 and with regard to the statement of Shri Sudhir Natani, it is alleged that he has stated that "whenever a sign of 'P' is marked, medicines of that batches were cleared without payment of duty. It is his contention that same is related to the goods cleared after reprocessing. He also submitted that the duty has been demanded on the clearances on the basis of figures taken from the register maintained by Chemist, Shri R A Singh, taking the quantity entered in RG 1 and remaining quantity was treated as suppressed production. This register cannot be relied on for clandestine clearance. To that effect, he contended that there are discrepancies and objection raised. Therefore, he stated that the register maintained by Chemist is a rough register and cannot be said that entries made against '....

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....ment, Shri Sudhir Natani has admitted clandestine clearance of the goods. Therefore, the Revenue has proved clandestine clearance of goods by the assessee. Therefore, the impugned order qua dropping the demand is to be set aside. With regard to appeal filed by the Revenue, it is his submission that it is an admitted fact that appellant was engaged in the activity of clandestine clearance of the goods, therefore, the learned Commissioner (Appeals) has erred in giving benefit of SSI exemption for the period 2004-2005 and 2007-2008. Therefore, the impugned order qua the said findings is to be set aside. 7. Heard both sides. Considered the submissions. 8. On careful consideration of the submissions made by both sides, I find that the assessee is engaged in manufacture and clearance of medicines and availed the benefit of SSI exemption for the goods manufactured by them in their own name and paying duty on the goods manufactured by them on behalf of others. The case of the Revenue is based on rough register maintained by Chemist Shri R A Singh. Although statement of Shri R A Singh was recorded but Shri R A Singh was never asked the question what 'MSP(P)' denotes for. Infact the au....

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....p 100 ml against batch No.469, in column 'Production as per production register" 100 + 100 Ltr is written whereas in RG-1 entered 995 and suppressed production is 1000. Again on 26.7.2006 against batch No. 469, 100 Ltr 100 is written and 1000 shown as suppression. Firstly, there is a double i.e. on 18.4.2005 and 26.7.2006 entry and how it is possible that against 100 + 100 Ltr. in record shown 995 and 1000. These figures has been taken from RUD-XXI and RUD XXIII. 10. With regard to these discrepancies, the Revenue has failed to explain why there are double entries and why they have taken the quantity as cleared clandestinely and how the quantity was arrived. No corroborative evidence has been produced by the Revenue. Therefore, the said register maintained by Chemist is a rough register and the same cannot be a piece of evidence to allege clandestine clearance of goods and in the absence of corroborative evidence, as held by Tribunal in the case of Tulsi Polymers Pvt. Ltd. (supra) wherein this Tribunal has held as under: "5. After considering the reasons adopted by Commissioner (Appeals), I note that the fact of clandestine removal is required to be established by production ....