TaxTMI 
TaxTMI 
2018 (1) TMI 475
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....e was a search was conducted in the factory premises of one M/s Ambika Ispat, Raipur on 15/12/2010. During the course of search, a diary was recovered from the possession of the peon of M/s Ambika Ispat, Raipur, who was located outside the factory and on the basis of that diary, the appellants were called after 4 years to state whether the goods entered in that diary had been received by them or not. It is alleged that the same has been used in manufacturing of final goods, which has been cleared clandestinely. The appellants denied the charges but the show cause notice was issued on 19/08/2015 to allege clandestine removal of goods. Consequently, the impugned orders have been passed. Against the said orders, the appellants are before me. ....
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....s of third party evidence which cannot be relied upon as held by this Tribunal in the case of Rudra Ventures Pvt. Ltd. (supra), wherein this Tribunal observed as under :- "6. In this case, I find that the charge of clandestine removal has alleged against the appellant on the premises that the cigarettes in the brand name of the appellant were recovered from one M/s. Shardha Traders but Sh. Ajay Adwani proprietor of Sharddha Traders never named the appellant that they have procured the said goods from the appellant. The statement of Sh. Samay Lal Janghel railway booking agent also did not disclose the name of the appellant. The only statement of M/s. Pankaj Logistics is disclosing the fact that they were transporting the cigarettes manufa....
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....of both the lower authorities below. Revenue certainly would have been benefited had they found evidence in respect of removal of goods while physical control of factory was with departmental officers. Such evidence is not on record. Even to apply ratio of judgment of Hon'ble High Court of Madras in the case of Alagappa Cement Pvt. Ltd. v. CEGAT, Chennai - 2010 (260) E.L.T. 511 (Madras), there is no preponderance of probability of tracing of tobacco after that is alleged to have vanished from factory of the appellant which is stated to have been controlled as above. Where about of tobacco could not be traced. This factual position has handicapped the Revenue to succeed today. In such circumstances, benefit preponderance of probability does ....
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.... to satisfy, whether, indeed, there has been production and clearance of the molasses to the extent of 12539.300 MTs as made out in the show cause notice which has not been done in the instant case. Further, molasses has to be produced out of crushing of sugarcane. To produce the quantity of molasses alleged to have been clandestinely produced and removed, the assessee should have procured 3,41,732.115 MTs of sugarcane. Such huge quantity could not have been procured by anyone without documentation relevant to their purchase, transport, payment and so on. No investigation worth the name has been conducted by the department in this regard. Further, as rightly pointed out by the assessee, to crush this much quantity of sugarcane the factory s....
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....n the case of LML Limited v. Commissioner of Central Excise (supra). It is also a well-settled position of law that in the case of clandestine removal, the department has to adduce evidence and the department cannot make allegations based on conjunctures and surmises as has been held in the case of Leather Chemicals and Industries Ltd. v. Commissioner of Central Excise (supra). One could cite several judgments on the subject matter to show that the department has to produce substantial and reliable evidence to prove the case of clandestine production and removal which the department has failed miserably in this case. 7. In the light of the above discussions, we are of the view that the department has failed miserably in proving the....