TaxTMI 
TaxTMI 
TaxTMI 
2018 (6) TMI 327
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.... a private diary maintained by the manufacturing chemist showing the production of the medicines. They have also recorded the statements of the manufacturing chemist and others. As far as goods that were seized are concerned, a show cause notice was issued by Commissioner of Central Excise, Hyderabad-III within six months from the date of seizure, proposing confiscation of goods and cash and demanding duty thereon. This show cause notice was subsequently decided confiscating the goods and releasing the seized cash. 3. A separate show cause notice was issued by the Additional Commissioner of Central Excise demanding duty under proviso to Section 11A along with interest and proposing penalties with respect to the goods which were supposedly clandestinely manufactured and cleared. This show cause notice was based on the private register maintained by the manufacturing chemist, his statement as well as the statements of others recorded during investigation. The show cause notice was originally dropped by the Additional Commissioner on grounds of limitation of time which, when appealed by the Department, was set aside by the Commissioner (Appeals). The Commissioner (Appeals) observed t....
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....e) When the assessee himself had admitted that the goods were sold to unknown people in the market, Revenue cannot be expected to approach the customers and to record their statement for the purpose of corroboration as held in CCE Ahmedabad vs. Tirupati Processors [2007(212)ELT 330 (Tri.-Ahmd.)]. (f) Private diary maintained by production manager of factory showing actual production as against very low level production indicated in the statutory records - when it is established beyond doubt that authenticity and ownership of the private diary never challenged, demand based on the same is a corroborated demand, as held in CCE Pune Vs. U.D. Suryavanshi [2007(220) ELT 805 (Tri.-Mumbai)]. 5. In the instant case, the investigating officers have proof of clandestine production and clearance of excisable goods without payment of duty over and above the exemption limit of Rs. 1 crore. They have arrived at the production details conclusively based on the records seized and statements of production prepared by the Production Chemist from the seized records and confirmed by the husband of the proprietrix in his statement. The details of clearances value and duty amount involved were arrive....
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....s the goods that were seized are concerned, a show cause notice was issued and adjudicated the current appeal pertains to the second show cause notice issued with respect to clandestine removal of goods arrived at based on the documents seized and statements recorded. The most important of which is the register maintained by the manufacturing chemist substantiated by the statements recorded by the department. During personal hearing before the adjudicating authority (in denovo proceedings), the Counsel for the assessee has cross examined three witnesses including the manufacturing chemist. All three have retracted their statements. The adjudicating authority remarked regarding this cross examination "the cross examination of the chemist and few buyers made during the personal hearing is totally superfluous exercise as they all seem to parrot tutored lines regarding giving statements under duress, without mentioning any details which they had manipulated from the actual to what the department wanted to say, stating that the adjudicating authority dismissed the cross examination as an after thought". Ld. Commissioner (Appeals) did not agree with this position of the adjudicating auth....
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....y merely relying on the private records maintained by Sri V. Phani Sekhar, Production Chemist. The Appellants have contended that the Chemist had entered certain figures for his reference and entered the production figures for each stage of production process for keeping track and hence the same set of figures are repeated at each stage. It is their contention that while arriving at the production figures, the investigating authorities had summed up all these figures and arrived at a grand figure, which is wrong. I also find merit in their contention that the demand is merely based on the first stage production records, without any basis to prove such batch actually materialized into production." 9. We have examined the relevance of the statements given for by the Central Excise Officers during the course of enquiry or any proceedings. Section 9D of Central Excise Act, 1944 reads as follows: "9D. Relevancy of statements under certain circumstances (1) A statement made and signed by a person before any Central Excise Officer of a gazetted rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an....