TaxTMI 
TaxTMI 
2018 (11) TMI 1015
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....n fine and penalties etc. as also of confirmation of demand. The Adjudicating Authority also seized vehicles with an option to the appellant to redeem the same on payment of redemption fine. Further, penalty of Rs. 10 lakhs each stand imposed upon M/s Prabhat Zarda International and M/s Mehra Transport Company and of Rs. 20 lakhs stand imposed upon Shri Jai Kumar Arya, partner of M/s Jjk Zarda Pan Products. The said penalties have been imposed under Rule 26 of Central Excise Rules, 2002. 2. As per facts on record, M/s Jjk Zarda Pan Products is engaged in the manufacture of „Chewing Tobacco & Pan Chatani‟ and were duly registered with the Central Excise Department. On 24.08.2012, a truck was intercepted by the officers outside the factory premises of the said appellant and it was found that the same was carrying 20 cartons of chewing tobacco and was not accompanied by any duty paid documents. Accordingly, the same was seized by the officers. Simultaneous searches were made in the premises of the transporter, M/s Mehra Transport Company, which resulted in presence of 25 cartons lying in the premises. Another 50 cartons were found loaded in the truck located outside the t....
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....m the said deponents about the existence of M/s S.K. Traders. The searches were also conducted at the places of raw material suppliers, dealers and other transporters and Courier agencies etc. as also in the sale depots of M/s Prabhat Zarda International and M/s Diamond Flakes which are factories of assessee‟s relatives but nothing incriminating was recovered either from the dealer‟s premises or the raw material suppliers or transporter‟s premises or from the CPU data maintained by M/s Prabhat Zarda Factory International. 6. As the Revenue found that the address of M/s S.K. Traders was fake and fictitious and based upon the statement of one Shir Suresh Kumar Dubey, a view was entertained that all the GR issued by M/s Mehra Transport Company under the name of S.K. Traders was in fact in relation to M/s JJK Zarda Pan Products. Accordingly, proceedings were initiated against them by way of issuance of Show Cause Notice dated 23.02.2013, raising the demand of duty for the period 01.04.2012 to 02.04.2012, to the extent of around Rs. 1,21,85,196/- along with proposal to confirm the demand in respect of seized goods. Subsequently, a corrigendum was issued on 28.03.2014 ....
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....ns of chewing tobacco which were in fact covered by the invoices issued by him. He clarified that there was a mistake on the part of his employee in stating that the 25 cartons received from the appellant‟s were in fact covered by invoices of M/s S.K. Traders. As such it is the appellant‟s contention that his product is not covered by the invoice of S.K. Trader and it was S.K. Traders own goods which were covered by the invoices issued by him. 9. In any case and in any view of the matter, we note that apart from the said statements of Shri Dubey there is virtually no evidence on record to show that all the goods booked in the name of M/s S.K. Traders for the period in question were in fact cleared by the appellant from their factory without payment of duty. The Revenue has made investigations/inquiries and had also recorded statements of concerned persons. No incriminating evidences stand produced by Revenue to establish, beyond doubt that the S.K. Trader‟s GRs issued by the transporters were in fact, in respect of the goods cleared from the assessee‟s factory. Surprisingly, while recording the statement of various persons including the statement of partner....
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....ined confessional statements the Revenue Officers did not carry out the detailed investigation into the relevant aspects of the case, particularly, the Bank accounts of Bhimanis and the working of the assessee's factory. Recording of the confessional statement would not put an end to the investigation and the Revenue Officers should be careful to ensure that they are not tricked out of a regular and detailed investigation by making strategic confessions which are retracted by preparing affidavits soon after they are made and which affidavits are again strategically withheld from the Revenue Officers, so that they become complacent and do not carry out a fuller investigation. It appears that the Revenue Officers in the present case have fallen victim to this type of strategic confessional statements which have been retracted soon after they were made in the affidavits which were withheld by the deponents till the proceedings came up before the Commissioner, by which time the damage of not a making fuller investigation, thinking that the confessional statements are made and not retracted, was already done. The Revenue Officers have not even cared to investigate into the types of fina....
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....ne manufacture and clearances of goods by them, the Revenue‟s appeal has to be rejected. 14. Though the learned advocate places reliance on number of decisions of the Tribunal laying down to that effect but suffice is to say that clandestine charges are to be proved by Revenue and in the absence of any evidence to reflect upon the same such charges cannot be upheld. In the present case, we note that even the evidences relied upon by the Revenue is not sufficient to upheld in their favour on the principal of preponderance of probabilities. The only evidence is statement of Shri Suresh Kumar Dubey which also stands explained by the owner of the transport company as incorrect, is insufficient. We are surprised that the Revenue has not even bothered to find out as to who paid for the transportation of the goods made under the cover of documents issued by S.K. Traders. No such question was ever put to transporter and his account books was never scrutinized. 15. In view of the forgoing decision, we held that the findings of clandestine removal resulting in confirmation of demand of duty of Rs. 2,53,31,825/- are unsustainable. The same are accordingly set aside along with setting ....