TaxTMI 
TaxTMI 
2018 (10) TMI 1461
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.... carried out by the Income Tax Authority wherein some excess stock was found, the appellant right from beginning made categorical submissions that there was no stock difference and no goods have been clandestinely removed. He submits that firstly investigation of Income Tax Authority was not free from doubt, secondly, merely on the basis of investigation carried out by some other agency without independent investigation by Central Excise Officer, the case under Central Excise Act and Rules there under cannot be made. He placed reliance on the following judgments: • Ravi Foods Pvt. Ltd Vs. CCE., Hyderabad 2011 (266) ELT 399 (Tri.Bang.) • CCE., Raipur Vs. Saini Industries Ltd. 2014 (304) ELT 282 (Tri.Del.) • Chetak Marmo Pvt. Ltd Vs. CCE & ST., Jaipur-ll 2015 (325) ELT 150 (Tri.Del.) • Supreme Cylinders Ltd. Vs. CCE., Jaipur-l 2016 (332) ELT 373 (Tri.Del.) 3. Sh. S.N. Gohil Ld. Superintendent (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. 4. I have carefully considered the submission made by both the sides and on perusal of the records, I find that the entire case is based on the investig....
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....ppropriate records and failed to assessee and pay appropriate duty on the goods cleared by them, which resulted in contravention of Rule 4, 6,8, 10, 11 and 12 of Central Excise (No.2) Rules, 2001. 25. The information of detection of clandestine removal and evasion of duty came to the knowledge of the Department through external sources. But for the raid by the IT Department and obtaining the records from them, these facts would have not come to the notice of the Central Excise Department. No statutory record contained the above particulars except the slips of manuscripts and other papers recovered during search. The suppression of production and clearances were clearly admitted by the Director and the Financial Controller during the statements given before the IT Department. The details of the production and clearances were never made known to the Department, though they have been filing regular periodical returns under Central Excise Rules, with a malafide intention to evade payment of duty. Thus, there was enough evidence to invoke the proviso to Section 11A of Central Excise Act, 1944 for demanding duty beyond one year from the date of detection. It can be seen from the ab....
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.... that the said charges as alleged against the appellants were not proved. If that be so, the show-cause notice which proceeded against the appellants on the charge of clandestine manufacturing and removal of final products with intention to evade duty, proceedings should have been dropped. We find that the adjudicating authority has confirmed the demand on the appellants. We find that the judgments of the Honble Supreme Court in the case of CCE, Nagpur Vs. Ballarpur Industries Ltd. [2007(215) ELT 489(SC)] and in CCE, Bhubaneswar-I Vs. Champdany Industries Ltd. [2009(241) ELT 481(SC)], has settled the law that once the order confirms a demand beyond the allegations mentioned in the show-cause notice, then impugned order is not sustainable." In the case of Saini Industries Ltd (Supra) this Tribunal passed the following order: "3. The Revenue in their Miscellaneous Application again reiterated the same very stand that the report of the Income Tax authorities has to be accepted. I find that apart from that there is nothing on record that the respondents had actually manufactured and removed the goods clandestinely as rightly discussed by the Commissioner (Appeals). The stock veri....
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....ccepted as income before the income tax department, the natural presumption would be to relate it with the core activity of the assessee which in this case was manufacture. It was for the appellants to discharge the onus of proving that the income did not relate to their manufacturing activity but they have not discharged this onus. Therefore, I not see any reason to modify the Order-in-Original. 3. As is seen from the above, the finding of clandestine removal and consequent confirmation of demand and imposition of penalties is solely based upon the disclosure of income made by the appellant before the Income Tax Authorities. The appellate authority has observed that such disclosure leads to presumption that such income was generated through illegal activities of manufacture. It is well settled law that clandestine removal has to be established by production of positive evidence. In the absence of any other evidence on record, some disclosure and surrender of income before the Income Tax authorities especially when the appellant had taken a ground that they were also doing other activities for generation of income, cannot held to be sufficient evidence so as to uphold the findin....