TaxTMI 
TaxTMI 
2019 (2) TMI 935
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....uck, on enquiry informed that the goods in the truck has been loaded from the premises of appellant No. I. On scrutiny of the documents being carried by the driver it transpired that the documents pertains to one M/s Suri Enterprises, Uttam Nagar, New Delhi and same has been issued in the name of M/s Bharat Electricals, Chandigarh (Buyer), however, there were no indication on such goods having been produced, manufactured or sold by the appellant No. I. The officers on suspicion that the goods have been manufactured by the appellants and cleared without payment of duty, visited the premises of the appellant No. I and confronted the Managing Director namely, Shri Subhash Khattar (appellant No. 2) with the verbal assertion of the driver and the documents of M/s Surya Enterprises, Uttam Nagar, being carried by the driver of the truck. As per the show cause notice, Shri Subhash Khattar admitted that the subject goods has been loaded from his factory. After conducting the detailed investigation, the Department reached to the conclusion that the appellant No. I was engaged in manufacture and clearance of excisable goods namely slotted angles, shelves, cable trays etc. it has also been ass....
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....e of amount of demanded central excise duty amounting to Rs. 77,93,783/- has been dropped. 4. The learned Advocate appearing for the assessee have assailed the findings of order-in-original stating that the Adjudicating Authority have failed to comply with the directions given by this Tribunal vide its decision dated 04/03/2015 as out of the total 13 witnesses which were crucial for confirmation of central excise duty only one witness namely Shri Jitender, Truck Driver was produced for cross-examination and balance 12 witnesses were not produced for cross-examination and, therefore, the evidence/statements of these persons cannot be relied for establishing alleged evasion of central excise duty. It has been the contention of the learned Advocate that no extra-ordinary circumstances exist which could have prevented the witnesses to be produced for cross-examination had the Adjudicating Authority had the desire and will power to produce them and since the such extra-ordinary circumstances are not present in this case the compliance of Section 9D of Central Excise Act, 1944 have not been made in spite of a specific directions given by this Tribunal. The learned Advocate has also st....
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....irely on flimsy grounds. The learned Advocate has taken us through various invoices which indicate that the appellant have purchased slotted angles etc. on payment of appropriate amount of VAT/sales tax and these goods have also been sold to various buyers on payment of appropriate amount of the VAT and these transactions are properly recorded in their books of accounts. These facts clearly indicate that the dealings of the appellant have been absolute transparent and open to the scrutiny of the law. It has further been added that in the present case there is no corroborative evidence of any extra purchases of raw material, dispatch of finished goods to any of the buyers, any excess consumption of the electricity or any other raw materials. The learned Advocate has contended that the department has failed to establish their case as it is required that in cases where the demand of central excise duty is on the allegations of the clandestine removal of excisable goods, the onus is on the department to establish and corroborate it with the evidences to prove it beyond doubt that certain additional quantities of goods have actually been manufactured and cleared without recording the sa....
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....ability of manufacturing excisable goods in much higher quantities than what has actually been reflected in their statutory records maintained. It is a matter of record that the above observations are primarily based on the statements of various persons recorded during the course of investigation and who are the suppliers of traded goods as per the records maintained by the appellant. We find that the entire case of department is primarily based on the statements of 13 odd witnesses whose statements have been relied upon in the show cause notice for demanding central excise duty. We find that as ordered by this Tribunal in its previous order dated 04/03/2015 that the department need to comply with the requirement of Section 9D (1) of Central Excise Act, 1944. It has been provided under Section 9D (1) of Central Excise Act, 1944 that statement made and signed by a person before any central excise officer of a gazette rank during the course of enquiry of proceeding under the Central Excise Act shall be relevant for the purpose of proving, non-prosecution for an offence made under this Act, which it contains :- (a) When a person who made the statement is dead, or cannot be found, o....
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.... is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. 7. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks ....
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....ous materials, finished goods for trading purposes. 14. We are of opinion that for proving a case of clandestine manufacture and clearance of dutiable goods, some evidences more concrete and convincing nature need to be adduced. It is a settled law that in cases of alleged clandestine removals and duty evasion the burden lies on the department to prove that activities of manufacturing, its clearance and thus duty evasion have taken place with concrete evidences. We find that the department have not been able to adduce any evidence to show as to from where such a huge quantity of raw materials have been procured by the appellant to manufacture the excisable goods and to whom the same were sold without payment of duty, as to how such a huge quantities has been transported clandestinely after its clearances. We find that no enquiries have been made at the end of the buyers. 15. Since the department has failed to establish the crucial evidences of clandestine manufacture and its clearance, we find that a case of clandestine removal and thereby evasion of central excise duty has not been established by the department. Holding the above view, we also take the shelter of Hon'ble All....
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.... considering the totality of the case, we are satisfied that no case is made out for extra so called clandestine sale of the Portland Cement to the said parties. We are satisfied that the first appellate authority has rightly deleted the addition and cancel the penalties. Hence we hereby set aside the impugned order passed by the Tribunal and restore the order passed by the first appellate authority, along with the reasons mentioned herein". 16. Thus, we hold that the order-in-original is devoid of any merit so far as confirmation of demand is concerned and, therefore, same is set aside and the appeals of the appellant No. I and II are allowed. 17. So far as Departmental appeal against the impugned order is concerned we find that respondent in this case namely M/s Slotco Steel Products. Pvt. Ltd. have produced a certificate from a Charted Accountant which proves that the appellant have in fact supplied the goods to Delhi Metro Rail Corporation (DMRC). We feel that department has also not produced any concrete evidence to prove goods have not been supplied to DMRC and thereby they are not entitled for the Notification No. 6/2002-CE dated 01/03/2002. We also feel that since the....