TaxTMI 
TaxTMI 
2017 (12) TMI 666
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....c. was also found short valued at Rs. 20,15,486/- as per recoded stock in RG-23A part-I. On the basis of the said shortage, the panchnama was drawn in the presence of Shri Dharam Pal Singh and two independent panchas. Shri Dharam Pal Singh on the same day, stated that he is not the responsible person and no responsible person was available at the time of visit of the Central Excise Officers. He is only maintaining records. Thereafter on 8.5.2007, the statement of Shri Jitendra Kejriwal, Director was recorded who stated that as there is no shortage but in any case there was shortage he will check and revert. Thereafter on 6.6.2007, Shri Kejriwal clarified that on the date of visit, the stock lying in a particular shed could not be inspected due to oversight. He requested the department to revisit the factory. Thereafter on 20.7.2009, the statement of Shri Vikas Aggarwal, ex-director of the appellant was recorded who stated that during his tenure, the factory used to run an average of two and half shift per day and there was around 22-25% average process loss of face veneer. On 21.07.2009, the appellant wrote a letter reiterating the fact that there was no shortage of stock on the da....
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....ts (India)-2015 (325) ELT 106 (P&H) 2. CCE v.Anand Founders & Engineers-2016 (331) ELT 340 (P&H) 3. CCE v.Nissan Thermoware Pvt.Ltd.-2011 (266) ELT 45 (Guj.) 4. CCE v.Trela Footwear Exports Pvt.Ltd.-2014 (306) ELT 629 (Tri.-Del.) 5. Atlas Conductors v.CCE-2008 (221) ELT 231 (Tri.-Mum.) 6. CCE v.Shree Sharma Re-rolling Mills-2008 (232) ELT 839 (Tri.-Del.) 7. Resha Wires Pvt.Ltd. v.CCE-2006 (202) ELT 332 (Tri.-Bang.) 8. Nabha Steel Ltd. V.CCE-2016-TIOL-941-CESTAT-CHD 9. Galaxy Textiles v.CCE-2011 (263) ELT 604 (Tri.-Ahmd.) 10. Sun Pharmaceuticals Industries Ltd. V.CCE-2009 (234) ELT 666 (Tri.-Ahmd.) 11. Continental Cement Company v.UOI-2014 (309) ELT 411 (All.) 5. It is further submitted that there is no allegation that the other raw materials required for manufacturing the allegedly clandestine removed final goods were procured from some other source/or were found short, therefore, the allegation of clandestine removal does not stand. To support this, learned Counsel relied on the following decisions: (i) Nanhe Mal Export Ltd. V.CCE-2003 (157) ELT 481 (Tri.-Del.) (ii) Harsi....
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....rector of the appellants, admitted that the process loss of the face veneer of 22% to 25%. The actual production of final products recorded in the RG-1/daily stock account register is much less than the optimum capacity derived out of normal conditions. Therefore, he submitted that the department has made out a case. To support his contention, he relied on the following decisions:- 1. Raghunath International Ltd.Vs. CCE, Kanpur-2009 (237) ELT 61 (Tri.-Del.) 2. Rutvi Steel & Alloys Vs. CCE, Rajkot-2009 (243) ELT 154 (Tri.-Ahmd.) 3. Welcure Drugs and Pharmaceuticals Ltd. Vs. CCE, Jaipur-I-2007 (213) ELT 710 (Tri.-Del.) 4. Friends Auto Vs. CCE, Faridabad-2004 (167) ELT 228 (Tri.-Del.) 5. A M Industries Vs. CCE, Meerut-I-2000 (120) ELT 718 (Tri.) 6. CCE, Madras & Others Vs. D.Bhoormul-1983 (13) ELT 1546 (SC) 7. Super Tyres Pvt.Ltd. Vs. CCE, Panchkula-2009 (244) ELT 363 (Tri.-Del.0 8. Nizam Sugar Factory Vs. CCE, Hyderabad-1999 (114) ELT 429 (Tri.-LB) 10. Heard both sides and considered the submissions. 11. The facts are not in dispute as follows: 12. On 5.5.2007, there was stock taking was done in the fact....
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....ater stage as no explanation was given why earlier two statements were signed. Further in the case of Welcure Drugs & Pharmaceuticals Ltd. (supra) retraction was done after 22 days after confessional statement. Therefore, the decision of the Tribunal is not relevant to the facts of this case. We find that there is no retraction made by the appellant. During the course of cross examination of the Shri Vikas Aggarwal and Shri Dharam Pal Singh, they have stated true facts. Moreover, Shri Dharam Pal Singh stated that he was dealing with excise records and have nothing to do with the activity of the appellant. 14. Learned AR relied on the decision of the Tribunal in the case of Friends Auto (India) Ltd. (supra), the said decision not is applicable to the facts of this case as in that case this Tribunal has proceeded with the fact that the appellant has admitted the shortage of the goods as per panchnama which is not the case here as the appellant never admitted the shortage of the raw materials. 15. Further, learned AR relied on the decision of the Tribunal in the case of A.M.Industries (supra) and in the case of D.Bhoormul, Hon'ble Supreme Court has observed that the department i....
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....set aside the findings of the clandestine removal of the goods recorded by the adjudicating authority by holding that the assessee's record which were admittedly lying in the adjoining sister concern M/s. Adhunik Industrial Corporation were not scrutinized. Further, it was held that the assessee had clarified the stock position vide letter dated 9-8-2008 which was rejected summarily as an after-thought without making the verifications. Shri Kamal Kant in his statement has admitted only shortages and not the fact of clandestine removal and there was no evidence to show the clandestine activities as no further investigation was conducted to establish the identity of the buyers or the suppliers of the raw materials. The adjudicating authority had mentioned that the production was recorded by weight but in the sale invoices, the goods were sold by numbers without indicating the weight of the finished goods but nothing was proved that how the stock position was verified regarding sale invoices which only showed numbers without giving their weight. Accordingly, the Commissioner (Appeals) extending the benefit of doubt to the assessee had set aside the order passed by the adjudicating....
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....f duty on the raw material was also based on the quantification of the production calculated on the input and output ratio. The department did not produce any evidence of clandestine removal and sale of goods which may lead to a conclusion that duty of excise was paid by reason of fraud, collusion or any wilful misstatement or suppression of fact or contravention of any provisions of the Act or Rules with the intention to evade payment of duty. It is in these circumstances that the Tribunal disagreed with the view taken by the Adjudicating Authority as upheld by the Commissioner (Appeals) for imposition of penalty under Section 11AC of the Act and deleted the penalty. Therefore, we find no legal infirmity in the view taken and accordingly the appeal is liable to be dismissed. 20. Further in the case of Nissan Thermoware Pvt.Ltd. (supra), Hon'ble Gujarat High Court has observed as under: 7. Thus, on the basis of findings of fact recorded by the Tribunal upon appreciation of the evidence on record, it is apparent that except for the shortage in raw material viz., HD which was disputed by the assessee and the statement of the Director, there was no other evidence on record....
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....me raw material is not sufficient to prove that the clandestine manufacture and removal of their final product in the absence of evidence to show that the inputs found short are used in the manufacture of their final product which were removed without payment of duty. In these circumstances, I find that this demand is not sustainable, hence set aside. 23. Further in the case of Harsingar Gutkha Pvt.Ltd. (supra), this Tribunal has observed as under: 7.It is well settled that the charge of clandestine manufacture and removal of the goods by the manufacturer cannot be sustained on assumptions and presumptions. It has to be proved by adducing cogent and convincing evidence. In the present case, the Revenue has failed to produce such an evidence. 24. Further, in the case of L.G. Electronics India (P) Ltd. (supra), this Tribunal has observed as under: 4. We find that dispute is in respect of colour picture tubes which according to the appellant were rejections during the production of colour televisions and claim of the revenue is that these are used in the manufacture of televisions which are cleared without payment of duty. The appellants are maintaining a regis....