2019 (1) TMI 1100

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..... 2. Brief facts of the case are that the respondents were manufacturer of Gutkha. The manufacturing premises as well as premises of dealers, transporters, godown and residential premises of two persons related to respondents were searched on 30.05.2006. On physical stack taking conduced at the factory of respondent, it was noticed that there was shortage of 884 Kg of lamination and 1000 Kg perfume as compared to recorded stock of said raw material and there was 15800 Kgs of Gutkha available in ready to pack condition. The said ready to pack condition Gutkha was not entered in any record. Statements of various persons were recorded and show cause notice dated 31.07.2008 was issued to respondent making allegation of manufacture of Gutkha ....

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....rder in para-4.4 that the demand was largely based on theoretical calculation of the number of pouches which could be manufactured by using a single raw material viz. perfume. The learned Original Authority has also observed that perfume is not a major raw material as its quantity forms a meagre 0.8% of the finished goods. He further noted that Supari, Kattha and Tobacco are the main raw materials. In para-4.6 the Original Adjudicating Authority has recorded that Shri Sachin Gupta had retracted his statement dated 04.07.2006. In respect of 15800 Kg of Gutkha seized, the learned Original Authority has recorded that the same was adjudicated and was ordered to be accounted for in the Central Excise record. In respect of shortage of lamination,....

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....f duty from the factory. 4.11 In my considered view, the above six parameters are reference points through which the trajectory of evidence must pass in order to make out a case of clandestine removal of goods by an assessee. It is a matter of common reasoning that for removing the final product clandestinely or otherwise, the same is first required to be manufactured. As such, it is very essential for the authorities to establish, with sufficient and reasonable evidence, that such goods were manufactured by the assessee. In the instant case, there is no cogent positive evidence to that effect available on record. There is also no evidence to show disproportionate power consumption, capacity utilization or labour employment. Also, the De....