2018 (4) TMI 535

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....factory was visited by the Central Excise Officer on 19.2.2004 and search was conducted. As a result of stock taking, shortages in the appellant's final product 'plant returns' was detected to the extent of around 2181 MTs. The appellant representative Shri V. Balasubramaniam accepted such shortages. 2.1 As the appellant could not give any explanation for such shortages, at the time of visit of officers, Revenue entertained a belief that the goods have been cleared without payment of duty. However, subsequently, the appellant vide their letter dated 22.7.2005 submitted that 'plant returns' are their factory rejects, which are again re-used for manufacture of their final product. The shortages detected by the officers were only pseudo and n....

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....r. Hence, the present two appeals. 3. As regards clandestine clearance, we find that the Revenue's entire case is based upon the shortages detected by the officers at the time of their visit, read with statement of the appellant's representative Shri Balasubramaniam. We also note that Shri Balasubramaniam in his statement, has nowhere attributed the shortages as clandestinely removed and has simplicitary accepted the shortages. Revenue has made no further investigation and there is virtually no evidence on record to substantiate the Revenue's allegations, in relation to the procurement of raw materials, the manufacturer of such goods in the factory, their transportation or the identification of the customers. The appellants have given the ....

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....is also not a confessional statement, the finding of clandestine removal cannot be upheld against the appellant. 3.2 As regards the denial of the CENVAT Credit on the ground that the appellant was purchasing bazaar/quality scrap from the market and was arranging Central Excise invoices separately for the purpose of availment of CENVAT Credit, we note that such allegation and findings is also based on sole statement of Shri Balasubramaniam read with fact that 11 no. of trucks were found loaded at the factory gate of the appellant. From the above circumstances, Revenue has assumed that the scrap lying in stock in the assessee's factory was also bazaar scrap. 3.3 However, we note that apart from the above, there is no evidence on record to s....