TaxTMI 
TaxTMI 
2019 (1) TMI 704
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....eized under Panchnama dated 6.7.2012. A Statement of various persons namely (1) Sh. Mayur Jayantibhai Vadhediya, billing clerk of the respondent company, (2) Sh. Namdev Govankar, Dispatch clerk of the respondent company, (3) Sh. Pravin Kanjibhai Kasundra, director of the respondent company, (4) Sh. Chetanbhai Himmatbhai Nagar and various other persons were recorded. On the basis of investigation, an SCN was issued wherein demand of Central Excise duty amounting to Rs. 20,39,668/- was proposed on the alleged clandestine removal of duplex paper. The SCN was culminated into adjudication order whereby the demand of Central Excise duty, interest, and penalty against the respondent were confirmed. The respondent being aggrieved by the O-I-O filed appeal before Commissioner (Appeals) which was allowed. Being aggrieved by the said O-I-A dated 19.01.2018, the Revenue filed present appeals. 2. Ms. Nitina Nagori, Ld. Deputy Commissioner (AR) appearing on behalf of the Revenue appellant reiterates the grounds of appeal. She submits that there are ample evidence in the form of Dispatch register, various statement and admission of the respondent director which clearly reveal that the responde....
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.... not in respect of removal of goods. He submits that the production capacity of the unit was not verified, the details of production capacity of the unit read with electricity consumption, certificate of CA were given from which it was submitted that it was not possible to manufacture alleged quantity over and above that quantity which was already cleared under invoice, no excess electricity consumption was found; no evidence to support surreptitious procurement of raw material or surreptitious procurement of finished goods or cash flow back was found; no goods were found unaccounted at the premise of any of the alleged buyers. The director of the respondent company namely, Sh. Pravinbhai Kanjibhai Kansundra, Sh. Mayurbhai Jayanti Vadhedia and Sh. Namdev Govankar, Dispatch clerk retracted their statements. The respondent had requested to afford cross-examination of the buyers, supplier and their own employees whose statements were sought to be relied upon and also panchas to the panchnama. Cross-examination of six buyers, three suppliers and two panchas were carried out before the adjudicating authority wherein it was revealed that any of the buyers had never purchased any goods wi....
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....ol) • Tulsi Intermediates-2010 (256) ELT 281 (Tri. Ahmd.) • Somesh Paper Tubes P Ltd-2014 (313) ELT 669 (Tri. Ahmd.) • K P Abdul Majeed-2017 (51) STR 507 (Ker) • Surie Engg Works-2004 (167) ELT 195 (Tri. Del.) • Divine Solutions-2006 (206) ELT 1005 (Tri. Chennai) • Trans Trades-2008 (228) ELT 424 (Tri. Chennai) • Vinod Solanki-2009 (233) ELT 157 (SC.) 4. I have carefully considered the submissions made by both the sides. I find that though on the investigation which detailed in the SCN show a picture of clandestine removal of duplex paper by the respondent. However, subsequently statements were retracted by the director and employees of the respondent company, not only that all the buyers of alleged clandestine removed goods and alleged supply of raw-material retracted there statements before the adjudicating authority. In the proceeding of cross-examination it was established on the basis of their procurement of inputs, manufacture and clearance of goods i.e. input output ratio that neither any raw-material in excess was procured nor any finished goods was manufactured in excess too. The ....
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....yment of Central Excise duty. After comparing the entries made in the said register with the Central Excise invoices issued in the normal course of business by the Appellant, the Officers concluded that in those cases where corresponding invoices were issued/found as regards the entries in the said register, the goods were taken to be cleared on payment of appropriate duty. Bu where the corresponding Central Excise invoices were not available, it was concluded that those entries in the said register were relating to the goods cleared without payment of duty. - The Appellant has contested that said register was a 'Production Planning Register' maintained by dispatch clerk and not a 'Dispatc Register'. The Appellant has stated that the planning mentioned in the sai register by dispatch clerk would have been followed by the Appellant firm in most of the cases but it was not possible to execute all the orders to the extent of 100%. They stated that the Appellant was not in position to execute 100% planning as recorded in the said register. They contested that ever there was some entry in the production register, if the corresponding....
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....hich it emerged that noticee no. 11 was small handcart owner and he had never supplied any waste paper to the Appellant and that on being called and threatened by the Departmental Officers he was made to sign on the statement prepared by the Departmental Officers. He also stated that ne was an illiterate person and cannot even read Gujarati Language. During cross examination it emerged that noticee no. 12 was a matador vehicle driver who had never supplied any waste paper to the Appellant. He also stated that he was an illiterate person not even knowing Gujarati, thus, not able to read what was written in the statement which he was made to sign. During, the cross examination of sh. Yash Harjibhai Gami partner of M.'s Radheshyam Papers, it emerged that he had never supplied any waste paper to the Appellant without issuing proper Central Excise invoices. He also stated that his signatures were obtained under pressure and threat of arrest and that his statements were prepared by the Departmental Officers. During cross examination both the panchas stated that they were alsÉ” no present in the factory of the Appellant during the search ....
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....bad)] t was observed that to prove the allegation of clandestine clearance, it is a must to prove surreptitious procurement of raw material and manufacture of goods in excess of the recorded quantity. It is also settled in the said judgment that the demand cannot be based only on the registers found from the factory In the case of Sakeen Alloys Pvt. Ltd. vs Commissioner of Central Excse, Ahmedabad reported at 2013 (296 ELT 392(Trib. Ahmedabad]) it is settled that the demand could not sustain only on the basis of confessional statements and that demand could not sustain on the basis of private records and also demand could not sustain on the basis of the statemen's which were subsequently retracted. I find force in the argument of the appellants mentioning therein that in absence of collaborating the evidence like discrepancy in stock, use of excess labour / packing martial/electricity, unaccounted cash etc. the clandestine removal cannot be proved. The register maintained by " dispatch clerk has been made the only instrument by the investigating authority to prove clandestine removal which I don't find sufficient. ....