TaxTMI 
TaxTMI 
2018 (9) TMI 379
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.... E/515/2009 Niraj Satish Budhraja Dealer 6. E/516/2009 Mustufa Sales Agency Retail seller 7. E/517/2009 Rashmin M Majithia Director-ZTPL 8. E/11017/2013 Rashmin M Majithia Director-ZTPL 9. E/11029/2013 Zen Tobacco Pvt Ltd Manufacturer 2. Zen Tobacco Pvt Ltd is the only manufacturer and referred to here as M/s ZTPL. After the search, seizure and investigation, Show Cause Notice dated 09.08.2006 was issued proposing confiscation of seized goods, and also demanding duty of Rs. 11,00,883/- from ZTPL and proposing to impose penalty on ZTPL & others. However, after considering submissions by the Appellants, Additional Commissioner vide Order-in-Original No. 55/2008 dated 04.06.2008 confirmed the demand of duty Rs. 2,43,671/-, out of total duty demand of Rs. 11,00,883/-, holding that in respect of the goods involving duty of Rs. 8,57,212/-, identification numbers had been correlated with the duty paying documents. Additional Commissioner had ordered confiscation of the goods involving excise duty of Rs. 2,43,671/- and gave option to respective parties to redeem the same on payment of fine and penalties. 3. M/s ZTPL an....
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....nst confirmation of duty demand of Rs. 30,54,404/- and penalty vide their Appeal Nos E/11029/2013 and E/11017/2013 respectively. 7. M/s ZTP and 6 other appellants were represented by the Advocate shri D.K. Trivedi, who has also filed written synopsis with relied upon case laws, whereas the Department was represented by Shri S.K.Shukla Ld. Superintendent (AR). I have heard both the sides at length and have considered the documents available on records including synopsis and case laws as well as submissions of both sides. Ld. Departmental representative has reiterated the finding recorded against ZTPL & others in the impugned Orders and argued that there are statements showing removal of goods by ZTPL without payment of duty and other evidences and invoices. He also argued that the department is not required to prove such case of clandestine removal with mathematical precision. 8. Briefly stated the facts are that M/s ZTPL is a manufacturer engaged in manufacture of Chewing Tobacco, which they claim to clear on payment of the duty. On the basis of some intelligence, officers of Directorate General of Central Excise Intelligence [DGCEI] searched the factory premises of M/s Zen T....
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....arashtra. c) Transport Company, while transporting 654 cartons, had sent invoices issued by the said Shivam Sales Corporation. Some of the invoices, sent by Transport Company did not tally with the identification numbers as mentioned on the cartns when officers visited the premises of Rahul Transport. d) Shri Babubhai C. Mehta godown in-charge of Transport Company has affirmed by his Affidavit dated 31.01.2007 about mishandling of goods and invoices at their end. e) No discrepancy was found in the stock of goods at the business premises of Shivam Sales Corporation which shows that it was not clandestine removal. f) The Panchnama at Rahul Transport, has shown the identification marks of 256 cartons out of 301 cartons. g) M/s ZTPL has shown to the satisfaction of Additional Commissioner that the cartons with those identification marks were removed under cover of invoices and on payment of duty by M/s ZTPL to M/s Shivam Sales Corporation. h) Adjudicating Authority has given finding in Order-in-Original dated 04.06.2008 that there is no evidence that M/s ZTPL had used parallel identification marks because no invoice of the same seri....
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....1,08,517/- from Shivam Agency Nagpur is not sustainable and it deserves to be set aside. 10.3 As regards Seizure of goods valued at Rs. 36,000/- from Mustufa Sales Agency, Ahmedabad, I find that the said 10 cartons valued at Rs. 36,000/- were only detained by the officers at premises of Mustafa Sales Agency and there is no evidence or even statement of proprietor of Mustafa Sales Agency that the said goods were removed by M/s ZTPL without invoice and without payment of duty. Appellant ZTPL has clarified that the said 10 cartons were sold to Mustafa Sales Agency under ZTPL's Invoice No.329 dated 19.05.2005 and the said invoice is part of seized documents. This fact of clearance of goods on payment of duty under Invoice No.329 dated 19.05.2005 has not been denied by revenue or it is not the caase of the revenue that the goods cleared under the said Invoice No.329 dated 19.05.2005 were different than the goods seized and confiscated. The finding of the Commissioner (Appeals) is erroneous as he has referred to batch number without co-relating with the Invoice and it is not understood as to how it can be concluded from only batch number that the detained goods were not received under....
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....d by said Prabhat Kumar in his statement recorded under Section 14 of Central Excise Act. (10) Shri Santosh Kumar Dubey, in his cross-examination, has clearly deposed that he had purchased the Chewing Tobacco from Raju Enterprises as well as from open market. He has categorically denied to have received any chewing tobacco from Prabhat Kumar. (11) In any case there is no evidence or any material on record as to how the goods were received by Prabhat Kumar and where he was storing goods at Chennai. (12) In absence of any material showing transportation of goods from Ahmedabad to Chennai, there is no substance in the department's case which deserves to be rejected. (13) In the appeal filed by Department, reference has only been made to the statement of Santosh Kumar Dubey without bringing any material on record to contradict his testimony during cross-examination. (14) It is settled law that the serious allegation of clandestine clearance cannot be made merely on the basis of statement which has not been corroborated by any other evidence. (15) In CCE Vs Anil Agarwal 2013 (287) ELT 489 the Tribunal has held that sole reliance of R....
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....ed its heavy burden to prove charge. Appellants have placed Reliance on the decision in Rama Shyama Papers Ltd. Vs CCE, 2004 (168) ELT 494 wherein the Tribunal has also set-aside demand of duty as Revenue had not been able to adduce any corroborative evidence to show movement of goods. The learned Advocate also relied upon the decision in CCE Vs Renny Steel Castings Ltd., 2011 (274) ELT 94 wherein the Tribunal has held that since entries made in the private records were not corroborated with the transporters and no authorized person of the Company had admitted to unaccounted production and clearance, there is no case of clandestine removal. (6) Consequently, confiscation of goods valued at Rs. 26,800/- from Nobel Joseph, Chennai is not sustainable and it also deserves to be set aside. 11. As regards the duty Demand amounting to Rs. 30,54,404/- upheld by OIA dated 19.03.2013, On behalf of M/s ZTPL, it is submitted by the Advocate Shri D K Trivedi that the entire case of clandestine manufacture and removal of goods has been made on the basis of seizure of goods/documents from the premises of third parties and on the basis of statements of persons without independent corro....
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....ds were supplied to M/s Gopal Sales without payment of duty. The Advocate has also argued that said letter was regarding reconciliation of Scheme Amount and Target Scheme. M/s ZTPL also provide incentive to dealers, like most of Companies. Ld. Advocate has also argued that the free stocks received from Shivam mentioned in the said letter does not mean that the goods were supplied to Gopal Sales without payment of duty. He has argued that in fact 175 cartons were sold by ZTPL to one Geeta Traders, Ahmedabad on payment of duty and as they were not be able to sell those goods completely, 140 cartons were sent to M/s Shivam Agency Nagpur by Geeta Traders under commercial invoice. A copy of Geeta Traders' letter dated 10.02.2006 under which they had sent 140 cartons to Shivam Agency had been submitted to the Department along with Journal Voucher which had been ignored by the Department as well as by the ld Commissioner (Appeals). Advocate has also argued that as Shivam Sales also could not sell, those goods were sent to Gopal Sales and since Shivam Agency had not made any payment towards those goods, they did not issue bills. These facts have been stated by Rashminbhai in his statement ....
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....wo firms, namely Pooja General Stores and Payal Sales Corporation, falling within area of Gopal Sales, had sold goods of Rs. 49,18,410/- which was rounded to Rs. 50,00,000/- for purposes of bonus. The learned Commissioner has termed explanation as an afterthought merely because of rounding off figure. The ld. Counsel contended that Rashminbhai Majithia in his statement dated 15.06.2006 has stated that the said bonus amount represents sale effected in the area of Gopal Sales. Thus it can't be said that explanation was an afterthought at all. In this connection, I further find that shri Hari Chand Gidwani has affirmed in his Affidavit that "Bonus from you" was in respect of sale effected by Payal Sales Corporation and Pooja General Stores in his area and he was, therefore, eligible for incentive. I also find that there is no independent evidence to show movement of alleged goods worth Rs. 50 Lakhs from factory of ZTPL at Ahmedabad to Chandrapur. The ld. Counsel referred to decision in CCE Vs Ganesh Agro Industries, 2012 (275 ELT 470 wherein the Tribunal has held that in absence of any confessional statement of employee and transporter, the case of clandestine removal cannot be based ....
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....nce on record, not even any statement, that goods were cleared without payment of duty by ZTPL to the said M/s Shiv Enterprises Surendra Nagar. The amount of Rs. 16,840/- was received as the same was payable by the said Shiv Enterprises for the goods supplied to them earlier on payment of duty. The Advocate also referred to the grounds wherein it has been contended that ZTPL had neither received any excess tobacco nor any laminates. 13. In respect of the penalty imposed on Rashminbhai Majithia, Director of ZTPL, It is argued by the Advocate that no penalty is imposable since there has been no clandestine removal. In any case, penalty under first SCN dated 09.08.2006 cannot be imposed as he was never put to notice as to why penalty should not be imposed upon him. Thus, Additional Commissioner (Appeals) travelled beyond the scope of SCN in imposing penalty of Rs. 20,000/- on Rashminbhai Majithia. Further, the ld. Commissioner (Appeals) has also acted without any jurisdiction to enhance the said penalty to Rs. 1,00,000/- though no appeal was filed by Department for enhancement of penalty or any notice was issued by Commissioner(Appeals) proposing to enhance penalty already imposed ....
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....(278) ELT 362 (Tri-Ahmd) that the charge of clandestine manufacture and removal has to be proved beyond doubt and there is nothing to prove that the Appellants had clandestinely manufactured and cleared the final product. The Hon'ble Gujarat High Court has also dismissed the appeal filed by Revenue, by observing that since the stock of raw material and finished goods tallied with the recorded goods, the Assessee had not clandestinely manufactured or removed the goods. This order in Vishwa Traders is upheld by Gujarat High Court and supreme Court in 2013(287)ELT.43 (Guj) and 2014(303)ELT.A24(SC) respectively. 15. The case of Revenue is that goods were clandestinely removed to some cities. However, there is no evidence brought on record to show their transportation from ZTPL's factory at Ahmedabad to those cities. Not a single statement of truck driver has been brought on record who had allegedly transported clandestinely removed goods to Nagpur, Chennai, Chandrapur etc. The Hon'ble High Court of Gujarat has held in CCE Ahmedabad-II Vs Chhaju Singh Kanwal, 2011 (272) ELT 202 (Guj) that clandestine removal is not established in absence of investigation to ascertain discrepancies in....
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....ine removal of goods to Gopal Sales. 18. I find there is no independent evidence to show that any goods were removed by ZTPL without payment of duty to any person or firm. This Tribunal has been consistently holding that the charge of clandestine removal cannot be proved merely on the basis of statement. In this regard reference is made to the decision in CCE VS Anil Agarwal 2013 (287) ET 489 (T-Del) has held as follows: "The Hon'ble Delhi High Court in decision in the case of Commissioner of Income Tax v. Dhingra Metal Works - 2010 (101) E.L.T. 603 (Del.) has held that though a confessional statement is important piece evidence but it cannot be held to be conclusive. As such the sole reliance of the revenue on the statement of Sh. Agarwal without any other evidence to reflect upon the clandestine activities of the respondent is not proper and just. Even for applying the ratio of decision of Hon'ble Supreme Court in the case of D. Bhoormull, there has to be some evidence for assessment and then the degree of evidence has to be adjudged. In the present case, I note that there is virtually no evidence on record to reflect upon the clandestine activities of manufacturer-re....