TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 101
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....e manufacture of Aluminum profiles/billets/ logs etc. falling under chapter 76 of Central Excise Tariff Act. They are also availing facility of cenvat credit of central excise duty paid on inputs. Based upon the investigation, they were issued show cause notice dated 16.12.2014 demanding duty of Rs. 2,22,62,157/- alleging that they have removed finished goods without payment of duty. A cenvat credit of Rs. 21,24,217/- was also proposed to be denied and recovered on the ground that, they have availed cenvat credit without receipt of goods on the basis of Bills of Entry, in connection with import of Aluminum Scrap and on invoices issued by M/s Satyam Sales Corporation, Mumbai. A Second Show Cause Notice dated 31.05.2016 was also issued proposing to demand duty of Rs. 1,53,163/- from M/s KLMPL on the ground that they by suppressing the production have cleared aluminum section / profile, cleared goods to M/s KI, M/s Sunshine Marketing and M/s Baser Sales, and have evaded the payment of duty. Further goods seized from M/s Sanmati Fabricators and M/s KI were proposed to be confiscated alleging that the same were cleared clandestinely by M/s KLMPL. The proposed demands as per both the sho....
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....rs. Hence the present appeals. 2. The appellant M/s Kuchchal Light Metals Pvt. Ltd., (KLMPL) are manufacturer of aluminium profiles and aluminium billets. The unit is situated at Pithampur. Mr. Ritesh Gupta is the Managing Director of the company. 3. M/s Kuchchal International (KI) is the Proprietorship concern of Mrs. Yogita Gupta w/o Mr. Ritesh Gupta engaged in the business of anodizers and powder coating on aluminium profile, section received from the appellant KLMPL and also from other customers. Besides this they are also into trading of aluminium profile / section. 4. M/s H.M. Enterprises, proprietary concern is engaged in trading of aluminium sections/ profiles located at Indore. 5. Shri Manohar Sharma and Shri Sukhdev alias Saral Patidar are the Authorised Signatory and employees of KLMPL. Shri Ritesh Gupta is the Managing Director of appellant M/s KLMPL and also helps his wife in managing her proprietorship concern M/s Kuchchal International. 6. Ld. Counsel appearing for M/s KLMPL submits that the demands of Rs. 1,76,98,647/- and Rs. 11,62,356/- are based upon the data in pen drive recovered from the hand-bag of Shri Sukhdev alias Saral Patidar, loading challans of M/....
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....ntioned in sub-section (2) relate ; and this should be signed by a person occupying a responsible official position in relation to the operation of the relevant device or the management of the relevant activities should be there. 8. He submits that in the present case, no such required certificate is available. The procedure and requirement of Section 36B were completely ignored and done away by the investigating authority and, therefore, the evidences on which the entire case is built upon is not admissible as valid legal evidence. The retrieval of data was done under panchnama dated 19.12.2015 but the data was neither signed by the panchas nor by Shri Ritesh Gupta in whose presence it is said to be retrieved. The so called data Annexures 16 and 17 were signed only by the officer, perhaps the person who had drawn the panchnama and thus the retrieved data cannot be treated as authentic and legally valid. It has to be shown that sub-section (1) (2) and sub-section (4) of Section 36 B has been followed. Since none of the conditions given in the above sub-section has been followed, therefore, the data of the pen drive is not admissible as evidence against M/s KLMPL, as held in the c....
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....ri Sukhdev alias Patidar cannot be made basis to make allegation against the Appellant. Also the revenue has relied upon the challans of Parnami Transport to allege that it contains the details of clandestine clearance of goods. It is only an assumption of the revenue that in challans of M/s Parnami Transport, wherever the name 'Ritesh' occurs, the same pertains to the goods cleared by M/s KLMPL. Shri Ritesh Gupta in his statement has clearly denied that the goods belong to M/s KLMPL. The challans are own internal record of the transporter and no bilty showing transportation of goods was seized. The loading challans show that the goods were transported from Indore to Delhi, whereas the Appellant's factory is located at Pithampur. If the challans belong to the Appellant, the goods would have shown to have been transported from Pithampur to New Delhi. As per statement dt 23.3.2013 of Shri Rajan Chugh, partner of M/s Parnami Transport, a person of the party used to travel along with the goods in truck and therefore record of delivery of goods was not required. His statement itself clearly shows that the case against the Appellant is fictitious. No person from the Appellant concern has....
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....n search operation had again called for the said 32 challans by writing a letter and the transporter in response submitted 19 challans supporting the figures of "Score Board Out" and for the rest of challans, it was informed that they are not traceable. The retreival of such 19 challans is not convincing since the challans, which could not be unearthed during the search were being called for by correspondence and the transporter meekly submitted some of these documents. It clearly shows that the loading challans were fabricated, just to support the data of pen drive. 8.1 Also in case of the goods alleged to have been transported through TCC Carriers, the demand is mainly based upon pen drive of Shri Patidar and personal diary of the director of the transporter, which is not admissible as evidence since the diary of a third party cannot be the basis to implicate the Appellant. Not a single LR/ GRN was seized. There is no evidence of transportation. The personal diary of transporter cannot be made basis for demand. Even though show cause notice states that the buyers have accepted the receipt of goods, but no statement has been relied upon in the show cause notice to this effect. Th....
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....s. CCE 2018-TIOL-3167 - CESTAT (All.). 9. In reference to demand of Rs. 9,31,658/-, he submits that the same has been made on the ground that the goods were cleared through transporters, M/s Parnami Transport and M/s TCC Carriers, to the buyers located at places other than Delhi. There is no corroboration of pen drive, delivery challan of M/s Parnami Transport, of details extracted from the personal diary of Shri Atri of M/s TCC Carriers, with any independent evidence. The clearances shown to have been made are not corroborated by any evidence. No buyers were identified. He relies upon the judgments in case of S.J.N Auto Industries Pvt. Ltd. Vs. Commissioner 2005 (191) ELT 1168 (TRI) that computer summary is not reliable when data is not authentic. He also relies upon rulings in Gupta Synthetics Ltd 2014 (312) ELT 225, Gopi Synthetics Ltd 2014 (302) ELT 435, Surya Alloy Ind. Ltd. 2014 (305) ELT 340 ( Cal.), Hindustan Machines 2013 (394) ELT 43 and Arya Fibers Pvt. Ltd. 2014 (311) ELT 529, that in absence of evidence, mere admission of document as evidence, does not amount to its proof. 10. He submits that demand of Rs. 2,58,607/- has been made against the Appellant on the basis o....
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....ed aluminum section on legitimate invoices. That the entries pertaining to unaccounted sales and the payments in cash were not found in his record, hence he cannot comment upon the same. Further, in his statement dated 13.2.2014, he also stated that aluminum section purchased from M/s KLMPL, was on FOR basis. That the code 'HH' found in alleged records does not indicate name of his concern. The entries shown in their name do not belong to them and the entries shown in the books of M/s KI or cash transaction in personal diary of Shri Ritesh Gupta and pen drive do not pertain to transaction of their concern. 11. In case of demand of Rs. 7,47,242/- on alleged clandestine clearance to M/s Sunshine Marketing, he submitted that the same is made on the basis of pen drive of Shri Shailesh Yadav, employee of M/s KI and his statement, and upon the record / register of M/s KI. It was alleged that the data found in the pen drive of Shri Yadav is matching with the clearance entries made in pen drive of Shri Sukhdev alias Saral Patidar and that diary of Shri Ritesh Gupta had payment details. He submits that the pen drive of Shri Shailesh Yadav is his personal pen drive and is not admissible as ....
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....idar there are no evidences to show that the goods were cleared by the Appellant. The SCN has relied upon an amount of Rs. 3,99,280/- shown to have been received, in the diary of Shri Ritesh Gupta, whereas Shri Gupta in his various statements has clearly denied the data maintained in the pen drive and even stated that he has not instructed either to maintain such data, nor the goods were cleared. He also refused that the diary pertains to clearances of any clandestine removal of goods. No buyer of such goods or transportation evidence has been found, hence the demand is not sustainable. 14. In respect of demand of cenvat credit availed by the Appellant on the basis of Bill of Entries, the goods which were purchased on high seas sale basis, and credit on invoices issued by M/s Satya Sales Corporation, he submits that the revenue has relied upon the statements of CHA/ Transporter. He submits that the goods were transported and received in the Appellant factory, and therefore the credit was availed by them. The goods were recorded in stock account and the amount towards such purchases were paid. The director of the Appellant concern as well as M/s Moongad Alumnium, Shri Rajesh Moonga....
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....n his statement has clearly stated that being an anodizer he takes orders for anodizing from buyers of the goods and it is not known to him whether the actual buyer of the goods is in receipt of any excise invoice issued by the factory. In fact the anodizer has no business to verify, whether there is an invoice unless he is the direct buyer of the goods. That 1351.9 kgs. was received by M/s Sanmati Fabricators on account of Baser Sales Corporation, said to have been retrieved from records of M/s KI and as they could not produce any invoice, the same was held to be clandestine removal of Appellant concern. However it can be seen that Shri Rakesh Baser, the Partner of M/s Baser Sales Corporation in his statement dt. 07.01.2013 has clearly stated that the goods shown in records of M/s KI as having been cleared to him, were never bought by them. There is no transaction with M/s KI and he does not know as to why their name has been mentioned in records of M/s KI. He has not done any transaction for last 4-5 years with M/s KI. The Appellant has also denied any transaction with M/s Baser Sales. Similarly it was alleged that 1032.40 Kgs of goods which were received by dealer M/s Sunshine M....
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.... present clinching evidences in the form of purchase of unaccounted raw material, use of electricity, sale of finished goods, quantity of raw material consumed, difference in stock of inputs, clandestine removal, mode and flow back of funds and the demands cannot be made on the basis of presumptions and assumptions. He relied upon the judgments in the cases of Continental Cement Company - 2014 TIOL - 1527 - HC-ALL, MSP Steel & Power Ltd - 2017 (357) E 275 (Tri), Golden Steel Corporation Ltd - 2017 (347) ELT 570 (Tri), Sidhartha Tubes 2005 - TIOL - 1286 - CESTAT, S T Texturiser 2006 - TIOL - 574 - CESTAT - MUM, Venateshwara Iron Castings Pvt. Ltd. 2007 -TIOL - 1861 - CESTAT, Rawalwasia Ispat Udyog Ltd. 2005 (70) RLT 435, (Tri.), in support of his contention. He submits that no corroborative evidence has been brought on record and the demand is purely on assumption/ presumption basis. He relies upon the orders in case of Fenil Udyog Vs. CCE, Mumbai 2006 - TIOL - 736 - CESTAT - MUM and Kalyan Glaze Tiles 2008 (222) ELT 147 (Tri). That the department is under obligation to investigate further by contacting or searching the buyer to whom the alleged goods have been supplied, when the de....
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....esh Gupta, which shows that the Appellant has cleared aluminum dross etc. without payment of duty. 18. He submits that the Appellant has availed cenvat credit on Bill of Entry and also on invoices issued by M/s Satya Sales, without actual receipt of goods. He submits that the statements of CHAs, transporters and their employees, showed that the goods shown to be purchased by M/s KLMPL on high sea basis, were transported to M/s Mungad Aluminum, which is apparent from the gate pass issued by M/s Concord. In case of invoices issued by M/s Satya Sales, he submits that the credit is not available since the goods were not received in the appellant factory. The invoices do not contain the mode of transportation or vehicle number; if the goods were received in the appellant factory, the same would have been found mention in the pen drive of Shri Sukh Dev Patidar. He also submits that the goods were cleared to M/s KI, Sunshine International and M/s Baser sales and hence the duty of Rs. 1,53,163/- and confiscation of goods is sustainable. He supports the impugned order and submits that in view of the findings of the adjudicating authority, the demands are sustainable. 19. Heard both the si....
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....nsporter, M/s Parnami Transport, which is third party. The loading challans are internal documents of the transporter with no connection with Appellant firm. There is no acknowledgment of the Appellant on such loading challans. Further no LR of the transporter of the Goods Receipt Note has been found, which is an independent evidence. No statement of the driver has been recorded to show that the goods were transported. No evidence in the form of checkpost record has been adduced to show that the goods were transported from Pithampur to Indore. Even, the loading challans of M/s Parnami Transport shows transportation of goods from Indore to Delhi and even in such challans "Ritesh" has been shown as consignee and other parties as consignors, which allegedly has been clarified by the transporter that in the loading challans 'consignor' stands for the recipient and the 'consignee' stands for the supplier, i.e. Shri Ritesh. We find that the loading challans show transportation from Indore whereas the Appellant's factory is located at Pithampur. Further Shri Ritesh Gupta, during recording of his statement, has refused that his diary contains details of clandestine removal of any goods or ....
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.... Identifying the document containing the statement and describing the manner in which it was produced; (b) Giving such particulars of any device involved in the documents as may be appropriate for the purpose of showing that the document was produced by a computer; (c) Dealing with any of the matters to which the conditions mentioned in sub-section (2) relate ; and this should be signed by a person occupying a responsible official position in relation to the operation of the relevant device or the management of the relevant activities should be there. 21. As pointed out by the Appellant, the data has not been signed by the Panchas or Shri Ritesh Gupta, in whose presence, it is stated to be retrieved. The same is signed only by the officers, who have drawn the Panchnama. Since none of the procedures under Section 36B has been followed, the data of the pen drive is not admissible as evidence. Our views are also based upon the judgments as held in the case of Shivam Steel Corporation V/s CCE, BBSR-II 2016(339) ELT 310 (Tri) wherein the Tribunal while dwelling upon the admissibility of computer data as evidence and in respect of charges of clandestine clearances, without corrobor....
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....(iv) The information contained in the record should be a reproduction or derivation from the information fed into the computer in the ordinary course of the said activity. 22. Under Section 65B(4) of the Evidence Act, if it is desired to give a statement in any proceedings pertaining to an electronic record, it is permissible provided the following conditions are satisfied : (a) There must be a certificate which identifies the electronic record containing the statement; (b) The certificate must describe the manner in which the electronic record was produced; (c) The certificate must furnish the particulars of the device involved in the production of that record; (d) The certificate must deal with the applicable conditions mentioned under Section 65B(2) of the Evidence Act; and (e) The certificate must be signed by a person occupying a responsible official position in relation to the operation of the relevant device. 23. It is further clarified that the person need only to state in the certificate that the same is to the best of his knowledge and belief. Most importantly; such a certificate must accompany the electronic record like computer printout, Compact Disc (CD), V....
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....gar Mills Ltd. v. Union of India [1978 (2) E.L.T. (J172) (S.C.)] it is held by Apex Court in Paras 7, 11, 13 to 15 that any demand calculations based on unwarranted assumptions cannot be accepted. 8. Further a case of clandestine removal cannot be upheld on the basis of certain statements alone as held in the case of Commissioner of Central Excise v. Saakeen Alloys Pvt. Ltd. [2014 (308) E.L.T. 655 (Guj.)] wherein Gujarat High Court rejected the appeal of the Revenue by making following observations in Para 10. "10. All the appeals are based predominantly and essentially on factual matrix. The Tribunal elaborately and very correctly dealt with the details furnished by both the sides and rightly not sustained the demand of Rs. 1.85 crores, which had no evidences to bank upon. Confessional statements solely in absence of any cogent evidences cannot make the foundation for levying the Excise duty on the ground of evasion of tax, much less the retracted statements. To the extent there existed substantiating material, Tribunal has sustained the levy. No perversity could be pointed out in the approach and treatment to the facts." 8.1 In the present proceedings before us there is no ....
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....lternately there is also weight in the argument of the appellants that M.S. Ingots alleged to be clandestinely cleared by Appellant No. 2 are not sufficient to manufacture quantities alleged to have been manufactured and cleared by Appellant No. 1. 8.4 The above factual matrix of the current proceedings only convey a strong suspicion against the appellants that they are undertaking clandestine manufacture and clearance of dutiable goods. As already observed by the Courts any suspicion, however grave, cannot take the place of an evidence. In the present proceeding certain documents recovered from the residence of Shri Sanatan Maity, etc., are the only indicators to raise suspicion that certain goods might have been manufactured and cleared by the appellants. In the case of Pan Parag India Ltd. v. Commissioner of Central Excise, Kanpur (supra), relied upon by the appellants, also there were 719 loading slips indicating clandestine clearance by that appellant. It was held, by CESTAT, inter alia, that demands are not sustainable on the basis of loose papers/loading slips unless corroborated appropriately by other independent evidence. In Para 39 of this case law it is also observed t....
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....asis of private records, the authenticity of which was doubted by the manufacturer without any corroborative evidence and the private records/registers of third party cannot be the sole basis for arriving at the clandestine removal in the absence of corroborative evidences. (i) Dalmia Vinyls P. Ltd. - 2005 (192) E.L.T. 606 (Tri.-Bang.) (ii) Chemco Steels P. Ltd. - 2005 (191) E.L.T. 856 (Tri.-Bang.) (iii) C.M. Re-Rollers & Fabricators - 2004 (168) E.L.T. 506 (Tri.-Del.) (iv) TGL Poshak Corpn. - 2002 (140) E.L.T. 187 (Tri.-Che.) (v) Minakshi Steels - 2005 (190) E.L.T. 395 (Tri.-Kol.) (vi) Sri Jayajothi & Co. Ltd. - 2002 (141) E.L.T. 676 (Tri.-Che.) (vii) Sharma Chemicals - 2001 (130) E.L.T. 271 (Tri.-Kol) (viii) Opel Alloys P. Ltd. - 2005 (182) E.L.T. 64 (Tri.-Del.) Similarly, in the case of Paras Laminates P. Ltd. reported in 2005 (180) E.L.T. 73 (Tri.); as confirmed by Hon'ble Supreme Court reported in 2006 (199) E.L.T. A182 (S.C.); Ruby Chlorates P. Ltd. reported in 2006 (204) E.L.T. 607 (Tri.-Che.); D.P. Industries reported is 2007 (218) E.L.T. 242 (Tri.-Del.); Durga Trading Co. reported in 2002 (148) E.L.T. 967 (Tri.Del.); Durga Trading Co. reported in 2003 (1....
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.... manufacture and removal of the goods cannot be upheld based on the printout of the data contained in the USB drive without following the requirement of condition of Section 36B of the Central Excise Act, 1944. Section 36B of the said Act provides admissibility of microfilms, facsimile copies of documents and computer printouts as documents and as evidence. Clause (c) of Section 36B(1) states that the statement contained in a document and included in a computer printout would be an evidence if the condition mentioned in the sub-section (2) and other provisions contained in this section are satisfied in relation to the statement and the computer in question, shall be deemed to be the document for the purpose of this Act and the rules made thereunder and can be admissible in proceedings. Sub-section (2) of Section 35B provides the condition referred to in sub-section (1) in respect of the computer printout shall be the following viz. "(a) the computer printout containing the statement was produced by the computer during the period over which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over that period by th....
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....he period November, 1993 to September, 1998 is based on certain computer printout relating to the period February, 1996 to September, 1998. These printouts were generated from a personal computer of Shri G. Sampath Kumar, a junior officer of the Company, whose statements were also recorded by the department. Admittedly, whatever facts were stated by Shri Sampath Kumar, in his statements, were based on the entries contained in the computer printouts. The statements of others, recorded in this case, did not disclose any additional fact. Therefore, apparently, what is contained in the computer printout is the only basis of the demand of duty on waste and scrap. The question now arises as to whether these printouts are admissible as evidence, in this case. Ld. Sr. Counsel has pointed out that the computer print-outs did not satisfy the statutory conditions. He has referred to the relevant provisions of Section 36B of the Central Excise Act which deals with admissibility of computer printouts etc. as evidence and says that the statement contained in a computer printout shall be deemed to be a document for the purposes of the Act and the rules made thereunder and shall be admissible as e....
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.... had been supplied to the computer in the ordinary course of business of the company. We find that none of these conditions was satisfied by the Revenue in this case. We have considered the Tribunal's decision in International Computer Ribbon Corporation v. CCE, Chennai (supra). In that case, as in the instant case, computer printouts were relied on by the adjudicating authority for recording a finding of clandestine manufacture and clearance of excisable goods. It was found by the Tribunal that the printouts were neither authenticated nor recovered under Mahazar. It was also found that the assessee in that case had disowned the printouts and was not even confronted with what was contained therein. The Tribunal rejected the printouts and the Revenue's finding of clandestine manufacture and clearance. We find a strong parallel between the instant case and the cited case. Nothing contained in the printouts generated by Sampath Kumar's PC can be admitted into evidence for non-fulfilment of the statutory conditions. It is also noteworthy that the computer printouts pertained to the period February, 1996 to September, 1998 only but the information contained therein was used for a findin....
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....tes that investigation has been conducted but in absence of any affirmation and evidence from the buyers, the demands does not sustain. Shri Ritesh Gupta in his statement has refused that the details found in his diary pertain to any clandestine removal. The only enquiry we find from the show cause notice is about investigations made at M/s Duke Metal or Madhu International at Delhi. However in both the cases, there is no acceptance of any clandestine receipt by the said parties. The show cause notice has also relied upon the 37 photocopies of invoices said to have been provided by the anonymous complainant and which culminated into investigation. Such invoices have not been corroborated with any evidence in the form of investigation at the buyers' end. The invoices were not found from the Appellant's factory or premises nor there is original copy of any such invoice. Thus it cannot be said that the 37 photocopies of invoices are reliable piece of evidence. In case of Shree Nakoda Ispat2017 (348) E.L.T. 313 the photocopy of invoices in absence of seizure of same from the assessee's premises and without any corroboration, were held to be not a reliable piece of evidence. While passi....
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....re also being received from M/s Vimsar, M/s Krishna Profiles as well as other persons. In such case it cannot be alleged that the goods found to be entered in seized records of M/s KI or M/s Sunshine (which was also operating from the same premises) belong to the Appellant - KLMPL. Even the owners of M/s KI were not put to questioning about maintaining such pen drive by Shri Shailesh Yadav. It is not forthcoming as to from which source, such data was compiled by Shri Shailesh Yadav. The show cause notice has relied upon the statements of Shri Ram Mittal and Shri Dinesh Mittal, partners of M/s Sunshine Marketing. However, we find that M/s Sunshine Marketing were undertaking the job work activity for other parties also. The Show cause notice has not brought on record any books or records of any person to whom M/s Sunshine Marketing has cleared such goods. There are no transport documents of such goods. The records of M/s KI and the pen drive of Shri Shailesh Yadav is not a conclusive evidence to allege clandestine removal from M/s KLMPL. Also, a demand of Rs. 2,58,607/- has been made on the ground that the pen drive of Shri Shailesh Yadav shows clearances to M/s Hardware House holdin....
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....f same. Further M/s H.M. enterprises in their reply has stated that during inspection of their shop, no discrepancy in stocks were found. All proper sale/ purchase bills were found and that they were not involved in any purchase/ sale of duty evaded goods. We are of the view that when no incriminating evidence at the Appellant end and the buyers end has been found. Neither their statements are inculpatory, in that case on the basis of third party records or pen drive, the duty cannot be demanded from the Appellant. 28. A demand of Rs. 8,09,315/- has been made on the basis of pen drive of Shri Sukhdev alias Saral Patidar on alleged clearance of Aluminium dross. The show cause notice also relied upon the diary of Shri Ritesh Gupta, which shows receipt of amount of approx. Rs. 3,99,280/-. We find that Shri Gupta in his various statements has denied the data mentioned in the pen drive and stated that he has not instructed any person to maintain such data nor any goods have been cleared. He has even stated that the diaries seized from him does not pertain to any clandestine clearance of goods or receipt of consideration of any clandestine sale. No investigation seems to have been under....
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....Shyama Papers 2004 (168) ELT 494 (CESTAT), this Tribunal, while dwelling upon the similar issue of reliance having been placed upon third party records, held as under: 9. We have considered the submissions of both the sides. The Revenue has charged the Appellants with clandestine manufacture and removal of paper, mainly on the basis of documents seized from the premises of Chitra Traders and Transporters and the various statements recorded from the Proprietor of Chitra Traders, transporters and labourers working in the factory of the Appellants and also the driver or cleaner of the Truck which was in the process of loading on 22-6-2001 when the Central Excise Officers visited their factory premises. The Appellants, on the other hand, have contended that most of the persons whose statements have been relied upon have not been produced for cross-examination and the documents seized from third parties' premises have not been corroborated by adducing evidence of any of the customers though the enquiries were conducted at different places as deposed by Shri Anurag Sharma, Inspector, in his cross-examination on 4-3-2002. Out of 19 consignments said to have been cleared by the Appellant....
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....he Appellants from the company, M/s. HPL, in a clandestine manner during the period in question. Similarly, no inference could be legally drawn against the Appellants of having manufactured texturised yarn out of the said polyester yarn and the clearance thereof, in a clandestine manner without the payment of duty." The Tribunal had also referred to the decision in Oudh Sugar Mills Ltd. v. Union of India, 1978 (2) E.L.T. (J172) wherein "the Apex Court has observed that no show cause notice or an order can be based on assumptions and presumptions. The findings based on such assumptions and presumptions without any tangible evidence will be vitiated by an error of law". The Tribunal also took note of the decision in Kamal Biri Factory and Shri Khushnuden Rehman Khan v. CCE, Meerut - 2003 (161) E.L.T. 1197 (T) = 1997 (23) RLT 609 (CEGAT) wherein view has been taken that the allegations of clandestine removal of the goods will not stand established when based on the entries made by the assessee's employee in a diary or on the basis of third party's record in the absence of any corroborative evidence. It has also been the consistent view of the Tribunal that the statements of the witnes....
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....nquiry further down the line was not considered necessary." The onus of proof that the goods were removed by the Appellants without payment of duty and without entering the same in their records is upon the Revenue which cannot be discharged merely on the strength of the entries made in the records of a third party without linking the removal of goods from the premises of the Appellant-company. The mere fact that the Appellant-company had business relation with Chitra Traders, does not mean that they will be liable to each and every entry made by Chitra Traders in their books of account. It is also noted that none of the transporters and none of the labourers whose statements have been relied upon by Revenue have mentioned that the goods in question were delivered to Chitra Traders from the premises of the Appellants. The material brought on record may at the most create a doubt only. But doubt cannot take the place of evidence. The Revenue has, thus, not proved its case against the Appellants in respect of 149 consignments. We, therefore, set aside the demand of duty and penalty imposed on Appellant-company and consequently the demand of interest. 11. As far as the excess stock ....
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....e decision of the Tribunal in the case of Rhino Rubbers Pvt. Ltd., it was held that third party's records were not reliable when no direct links could be established between the records and offending transactions. In the circumstances, we find that the appeal filed by the Revenue seeking to restore the order of the original authority is devoid of merit. In the result, we sustain the impugned order and dismiss the appeal filed by the Revenue. 31. In case of M/s Hindustan Machine Vs. CCE 2013 (294) ELT 43 CESTAT it was held that the internal records maintained by a worker in his private capacity is not sufficient to alleged clandestine removal. Also in case of Savitri Concast 2015 (329) ELT 213 (TRI), the Tribunal held that ledgers/ private note book recovered from third party are not reliable. The findings were as under: 7. Coming to the 1st question as to whether on the basis of the recovery of a private ledger book from the factory premises of SSSRM which contain entries regarding receipt of MS Ingots by SSSRM from the appellant company during the period from April, 2005 to August, 2005 allegation of clandestine removal can be made against the appellant we are of the view that ....
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....tements and private records unless the corroborative evidence are adduced in the form of procurement of raw material, production records, use of other inputs, transportation etc. The adjudicating authority has alleged that the Appellant received huge quantity of Aluminium scrap from the parties, which was not accounted. In case of one of the supplier M/s Balaji Metals, Bhopal, the scrap has been said to be supplied through transporters M/s Acharya Roadline and M/s New Royal India Transport, through more than 100 consignments. The reliance has been placed upon the bilties and loading register as well as entries of cash payment appearing in diary of Shri Ritesh Gupta. It was alleged that the diary show cash payment to "Sunil Gupta, BPL" or "S Gupta BPL and that the same stands for Sunil Gupta, proprietor of M/s Balaji Metals. We find that Shri Sunil Gupta in his statement has stated that they have sold scrap to the Appellant only to the tune of Rs. 8,06,579/-. The transporter in his statement has stated that the place of consignment is not known as the employee of consignor used to travel with the vehicle for delivery of scrap at Pithampur. In such case when the alleged consignor has....
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....ribunal also observed that the electricity consumption varies from one heat to another and from one date to another and even from one heat to another within the same date. Therefore, no universal and uniformly acceptable standard of electricity consumption can be adopted for determining the excise duty liability that too on the basis of imaginary production assumed by the Revenue with no other supporting record, evidence or document to justify its allegations. The Tribunal has also considered the report of Dr. Batra, which has been relied upon for making the allegations that there was higher electricity consumption. It appears that Dr. Batra in his report has observed that for the production of 1 MT of steel ingots, 1046 units electricity required. 4. So far as the various after allegations relating to the fictitious firms and the income from the share trading, the Tribunal recorded the finding that since the incriminating statements of share brokers etc. have been relied upon in the proceedings, it was incumbent upon the Revenue to produce them as well as the investigating officer for crossexamination by the appellants, as was repeatedly requested by them. In the absence of the ....
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....se has been shown in the impugned order. Further though the Show Cause notice has alleged that the Appellant received unaccounted scrap, but there is no matching quantity. We find that on the one hand show cause notice mentions that the logs manufactured out of such scraps are also sold to different customers and on the other hand the show cause alleges that there is no actual supply of logs because the quantity claimed to have been manufactured, is more than the capacity of the plant. This fact is contrary in itself, since on one hand the show cause notice in first place alleges removal of huge quantity of aluminum profile said to be manufactured clandestinely whereas in the second part it is alleged that the intermediate goods, i.e. logs, required for such clandestine manufacture was not possible to be produced in the factory due to nonavailability of raw material namely scrap and also because the capacity of the plant is limited to justify the production claimed. Thus, the allegation of clandestine production vis-à-vis allegation of non-receipt of raw material is contrary to each other. The payment against the purchase of imported scrap has been legally made against valid....
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.... on the basis of documents of the third parties, without any corroborative evidence at the end of the manufacturers, the demand does not sustain. In case of M/s Sanmati Fabricators, we find that they could not submit the invoice being the job worker. However, this cannot be a reason that such goods were cleared clandestinely by the Appellant. Similarly, in case of M/s Sunshine Marketing, they were undertaking anodizing / powder coating job work of other parties also, including some aluminum traders. Further, in the SCN itself, it is an admitted fact that the type of profile found at the factory of M/s Kuchchal International was not found in the invoice of the Appellant. The show cause notice states that the invoices mentioned in the said material receipt report on a particular date was compared with the invoices issued on that particular date by the Appellant and the difference was presumed as clandestine removal. This is merely an assumption as it is not necessary that the removal done on a particular date by the manufacturer is received in the anodizers premises on the very same day. It is also possible that the anodizer, who is not obligated to maintain proper records, especiall....
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....ntity shown by the anodizer, M/s Kuchchal International, in its record is 2152.40 kg, whereas the invoice issued by the Appellant shows the quantity only as 1120 kg. It was, therefore, alleged that the difference of quantity of 1032.40 kg, as clandestinely removed goods. Further, in job workers record, for quantity of 1323.450 and 325.00 kg, no invoice could be produced. However, show cause notice also states that though invoice No. 150 dated 2.11.12 of Appellant, involving quantity of 1253.75 kg is available, no such quantity has been shown to have been received in anodizers / job workers record. It was, thus, alleged that the excess quantity received and the quantity for which no invoice could be produced are clandestinely removed goods by M/s KLMPL. We find that the above discrepancies can only lead to a conclusion that the anodizers / job workers were not maintaining records properly. The show cause notice does not reveal as to whether any enquiry was conducted at the premises of the appellant. If at all, there was a clandestine removal, the same should have been proved by any incontrovertible evidences collected from the supplier /manufacturer premises. We are of the view that....