AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (6) TMI 239
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....le carrying the goods with the description of low valued item whereas the goods were found to be high valued item. The said goods and vehicles were seized on apprehension that the Appellant were clearing LCMF under the garb of HCMF. The director of the Appellant Unit Shri Ravi Mittal accepted the undervaluation of goods in his statement dt. 12.03.2004. During search at residential premises of ex-employee Shri Suresh Rakhunde, former employee of the Appellant unit, three files containing details of clandestine removal were found which contained interalia photocopies of parallel, multiple set of invoices showing details of clandestine removals made by the Appellant from their factory. Shri Rakhunde in his statement admitted that the photocopies of the invoices seized from his premises pertained to clearances of goods from the Appellant Unit. He also stated that there is no production of High Carbon Ferro Manganese in the factory and that the Low Carbon Ferro Manganese and Medium Carbon Ferro Manganese manufactured in the factory were cleared under the garb of High Carbon Ferro manganese/ Manganese Powder/ Black Oxide Powder. The samples of goods found in the vehicle were also sent fo....
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....ms, Sheva (2000(121) E.L.T. 788) (Tri). He also submits that statement of Shri Ravi Mittal cannot be relied upon as the same was obtained under coercion and duress. They had produced the Chartered Engineer certificate that they do not have capacity to manufacture the goods as alleged and their electricity consumption was also less than what was required to manufacture the impugned goods. That even the documents seized from premises of Shri Suresh Rakhunde were not seized under any panchnama and therefore the demand based upon said documents is not sustainable. He relies upon orders in case of Kuber Tobacco Products Ltd. 2013 (290) ELT 545 (TRI) as upheld by Hon'ble Supreme Court reported in 2015 (317) ELT A159 SC. That neither the copies of documents seized from residence of Shri Suresh nor the documents seized from the premises of transporters were provided to them. Even the verification report of different jurisdictional Commissionerate of 6 buyers was not provided to them. Hence the demand is not sustainable. That in absence of any evidence of other material/ tangible evidence, the statement of Shri Ravi Mittal cannot be relied upon. The invoices seized from Shri Suresh Rakhunde....
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.... such invoices. We find that though the department has investigated the transporters and buyers of the goods, however they did not find copy of single original copy of such invoice from any of the buyers inspite of the fact that as the invoices showed 73 buyers of such goods. Thus in absence of any affirmation or evidence from the buyers of the goods the demand cannot be confirmed on the basis of photocopies of parallel invoices seized from the ex-employee or the transporter. The Appellant has also contended that there was no reason for the ex-employee to store the photocopies and the same are fabricated and fake. We find that no reason has been given as to why Shri Rakhunde has stored the photocopies of such parallel/ multiple invoices and for what purpose. He was neither instructed by the owner of the unit nor he was maintaining any record. Further except these photocopies no record was found. We find that the photocopies are not corroborated with any evidence in the form of accounting records or any independent corroborative evidence from the Appellant's premises or from any other place. The revenue has relied upon the records of the transporters which are third party records an....
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....ll the evidences available on record before arriving at his decision. Regarding statement of Shri Dev Jain and Shri Yogesh Jain he recorded that these were not categorical and specific. The finding in the impugned order with reference to the contents of 116 parallel invoices cannot be faulted. The learned Commissioner (Appeals) also recorded that the statements initially given by Shri Dev Jain and Shri Yogesh Jain were apparently retracted. Such retraction though belated cannot be brushed aside especially in the facts and circumstances of this case where heavy reliance was placed only on the so-called parallel invoices and statements. The so-called parallel invoices were admittedly obtained from the ex-employee and has never been recovered from any of the premises of the respondent. The impugned order questioned the circumstances of recovery of such invoices as there is no Panchnama for the same. The assertion made by Shri J.B. Singh that the said invoices were handed over by various drivers could not be corroborated as none of the drivers were identified. It is seen that the impugned order examined in detail the contents and the bona fide nature of these invoices and came to the c....
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....t's factory. 7. The revenue has relied upon investigation made from 6 buyers of the goods. However it is alleged that the Appellant had cleared goods to 73 buyers and the Appellant had submitted communication from some of these buyers that they have purchased HCMF from the Appellant. Thus in case of buyers which has not been investigated it cannot be said that they were cleared LCMF. The duty demand in case of thus 66 buyers does not sustain. In case of 6 buyers whose statements towards acceptance of receipt of LCMF has been relied upon in the show cause notice, we find that the Appellant has contended that only on the basis of statements of buyers demand cannot be confirmed against Appellant. No evidence of receiving the goods under fake/ parallel invoice or of LCMF in place of HCMF except statement has been adduced. If such would have been the case the Appellant would have received differential amount since as per show cause notice there is huge difference between the value of both the goods. But it is not forthcoming from the statements as how the differential amount was paid by the buyers to the Appellant. The Appellant also submitted that some of the buyers were themselves ma....
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....l statements can be proved to be wrong by the makers themselves by adducing other documentary and tenable evidence. It is also well settled that documentary evidence has to be given preference over the oral evidence as observed in the case of R.P. Indus. v. CC, Ahmedabad, supra. Therefore, the Commissioner (Appeals) has rightly given preference to the above detailed documentary evidence to the respondents against their alleged confessional statements. The allegations levelled against the respondents are that, they manufactured 8,000 kgs. Laminated Pouch Rolls during July to October, 1998 and clandestinely removed the same without payment of duty to M/s. Kurele Chemicals Indus., but from the above referred documentary evidence, the Commissioner (Appeals) has recorded definite findings that respondents had no machinery even during that period for the manufacture of Laminated Pouches. They started manufacturing of such pouches only after 8-10-1998. He has also observed that even otherwise the manufacture of 8,000 kgs. of laminated pouches during the disputed period could not take place. No evidence has been also brought on record to prove the purchase of extra raw material or consumpt....
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...., he has retracted his statement during reply to show cause notice. In case of Premium Packaging Pvt. Ltd. Vs Commissioner of C.Ex, Kanpur (2005 (184) E.L.T. 165) the Tribunal has held as under : 6. The contention of the learned SDR that Shri Ajay Jain was one of the Directors of the appellants, admitted the correctness of the entries in the print out and that the computer operator Ms. Arti Srivastava also admitted of having prepared and generated the bills in the name of different buyers through computer and entered the data from the slips and as such the computer print outs are sufficient to charge the appellants with the clandestine receipt of the raw material and the manufacture and removal of the finished goods without payment of duty, cannot be accepted. The testimony of Ms. Aarti Srivastava that she was given the responsibility to do the work related to the designs in the computer, preparation and generation of the bills through the computer, making entries from certain slips made available to her by Shri Ajay Jain, Director of the appellants' company, and misc. typing work relating to the computer, did not in any manner prove the clandestine receipt of the raw material an....
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....e cleared by them by producing out the same, during the period in dispute, were entered in their record. We find that separate show cause notice was served on the appellants on account of detection of the excess finished goods lying in their factory. Those goods were initially ordered to be confiscated by the adjudicating authority on the ground that the same were intended to be removed in a clandestine manner, but the Commissioner (Appeals) vacated that confiscation by observing that the allegations of intended clandestine removal of the goods on the part of the appellants, did not hold good in the circumstances. He, however, reduced the redemption fine for the release of the goods and the penalty. 7. In the absence of any tangible evidence regarding the clandestine receipt of the raw material by the appellants from the suppliers and the manufacture of the finished goods out of that material and clandestine removal of the same to the buyers, without payment of duty, the uncorroborated statement of Shri Vipul Jain, Director of the appellants' company, could not be made sole basis by holding the appellants guilty of the manufacture and removal of the finished goods without payment....
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....ted by Shri Brajesh Dwivedi, and also Ms Aarti Srivastava also did not advance the case of the Department in any manner for lack of any evidence to prove the actual receipt of the goods on the basis of those invoices by the buyers - the manufacturers of the 'PAN MASALA'. The raising of unsecured loans by the appellants from the financial companies, namely, M/s. AVP Investments (P) Ltd. and M/s. VRS Fininvest (P) Ltd. also did not in manner help the Department in proving the evasion of the duty by clandestine removal of the excisable finished goods by them. None of those companies had admitted that the advancement of loan was a sham transaction and that it was the money of the appellants which they collected by evasion of the Central Excise Duty by clandestine sale of the excisable goods. Similarly, the statements filed with the bank by the appellants for the purpose of financial accommodation, loan, payment schedules, overdrafts etc., also did not furnish any tangible proof of clandestine receipt of the raw material and manufacturer and removal of the finished goods in a clandestine manner by them. Those statements were given by the appellants for procuring more finances from the b....
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....tion v. R.C. Mishra - 1993 (65) E.L.T. 474 (S.C.); (16) Sunvijay Re-rolling & Eng. Works Pvt. Ltd. v. CCE, Nagpur - 2000 (124) E.L.T. 862; (17) CCE, Madras v. Madras Chemicals - 1986 (24) E.L.T. 308; (18) Godavari Steel (P) Ltd. v. CCE, Aurangabad - 2001 (134) E.L.T. 369; (19) India Tin Industries (P) Ltd. v. CCE, Bangalore - 2000 (125) E.L.T. 864; (20) Simpled Expeller Works v. CCE, Chandigarh-I - 2001 (138) E.L.T. 678; (21) Rukmini Indus. & Shri Damodar Rao v. CCE, Hyderabad - 2004 (175) E.L.T. 600 (Tribunal) = 2004 (65) RLT 70; (22) Superior Steel Products v. CCE, Delhi - 1999 (109) E.L.T. 712; (23) Mangat Ram v. CC, New Delhi - 2001 (129) E.L.T. 771; and (24) Karupasamy & Anr. v. State by Superintendent, Customs Tuticorin - 2004 (94) ECC 306 (Mad.). But the law laid down in none of these cases, regarding the proof of clandestine removal of the goods by an assessee and the evidential value of the retracted statements of the witnesses is not attracted, in the light of the facts and circumstances, detailed above, to the present case. It is a question of fact to be decided, keeping in view the facts and evidence of each case, as to whether the change of clandest....
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....that such admission of shortages without there being any admission of clandestine removal, cannot be considered to be conclusive evidence to establish the guilt of the assessee. Burden of proof is on the Revenue and is required to be discharged effectively. Clandestine removal cannot be presumed merely because there was shortages of the stock or on the recovery of some loose papers. 11. As regard allegation that the Appellant cleared Low carbon Ferro Manganese under the cover of invoice of High Carbon Ferro Manganee, we find that the allegation is based upon the goods seized during transportation and statement of some of the buyers who allegedly stated that High Carbon Ferro Manganese cannot be used to manufacture welding electrodes. However we find that the Appellant has challenged the test report on the ground that it is not known as to from where the samples were drawn and what were the goods sent for testing. We find that there is no reason to deny the claim of the Appellant as it is not forthcoming as to from where the samples were withdrawn and whether the samples were withdrawn in presence of Appellant. We are therefore of the view that the test report cannot be relied upon....