TaxTMI 
TaxTMI 
2019 (7) TMI 101
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....at the Appellant - M/s KLMPL is engaged in the 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 KL....
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..../s Sanmati Fabricators were ordered to be confiscated. Penalty was also imposed upon M/s KLMPL and Others. 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 u....
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....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. 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....
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....e never directed Shri Sukhdev alias Saral Patidar to keep the information / data on any computer. Thus the data found in the pen drive of Shri 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 ....
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...."Score Board Out" were not available / could not be recovered during search. The investigating officer though has seized all the documents in 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 notic....
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....s. He relies upon the Tribunal judgments in the cases of Hiralal Punj Badgujar Vs. CCE 2018-TIOL-2166-CESTAT - MUM and M/s Jalan Concast Ltd Vs. 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 docu....
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....purchasing aluminum section from the Appellant and the payment of the same was made through cheques or RTGS. He also stated that they have purchased 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 diar....
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....ral Patidar as corroboration of the same has been sought to have been made from diary of Shri Ritesh Gupta. He submits that except pen drive of Shri Patidar 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 i....
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....ed in the premises of anodizer on the same date. No evidence like payment of any amount, transportation is appearing. Shri Patni of M/s Sanmati fabricator in 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 App....
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....f such goods from the Appellant factory. He lastly submits that in a catena of cases, it has been held that to prove clandestine removal, the Revenue should 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). T....
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....s of the same are appearing in the pen drive of Shri Shailesh Yadav and registers maintained by him. Some cash transactions were also found in diary of Shri Ritesh 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 susta....
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....llan is questionable as no copy of such loading challans were found by the officers from the Appellant and the same were retrieved solely from the office of the transporter, 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 loc....
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....ot followed the procedure prescribed under Section 36B for retrieval of the data. The sub-section (2) of Section 36B of the Central Excise Act states as under:- (a) 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....
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....material part of the said period, the computer was operating properly and that even if it was not operating properly for some time, the break or breaks had not affected either the record or the accuracy of its contents; and (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 releva....
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....ly received by Appellant No. 1. The findings of the adjudicating authority are thus clearly based on presumptions, assumptions and surmises when the computerized documents relied upon by the Revenue are not admissible evidences as recorded in Para 7.1 above. Further, in the case of Oudh Sugar 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 th....
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....ts have indulged in any clandestine manufacture and clearance of goods based on documents recovered from the residential premises of Shri Sanatan Maity. There is also no evidence on record as to from where the raw materials for manufacturing of M.S. Ingots and Re-rollable products manufactured by appellants were procured. Alternately 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....
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....rer had procured all the raw materials required to manufacture the goods. There is a long list of decisions and reference to refer to all of them may not be necessary as it is a settled law. Similarly, the Tribunal in various cases, as detailed below, has held that charges of clandestine removal cannot be levelled or confirmed on the basis 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.) ....
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....ient evidence. The Hon'ble Supreme Court in the case of Anjlus Dung Dung v. State of Jharkhand reported in (2005) 9 SCC 765 observed that suspicious however strong cannot take place of proof." 9. In view of the above observations and the settled proposition of law appeals filed by the appellants are required to be allowed, except to the extent indicated in Para 10 below. 10. Learned Advocate submitted that the clandestine 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 thereunde....
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....ic media. In the case of M/s. Premier Instrument & Controls Ltd. (supra), the Tribunal has held that the printout of the personal computer of the company's officer, had not fulfilled the statutory condition laid down under Section 36B(2) of the Act and the demand is not sustainable. The relevant portion of the said decision is reproduced below: - "9. On the demand of duty on waste and scrap, again the appellants have made out a strong case on merits. The demand covering the 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 prin....
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....y activities regularly carried on by the company. It was also not shown that information of the kind contained in the computer printout was regularly supplied by the Company to the personal computer of Shri Sampath Kumar in the ordinary course of activities. Again, it was not shown that, during the relevant period, the computer was operating in the above manner properly. The above provision also casts a burden on that party, who wants to rely on the computer printout, to show that the information contained in the printout 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 confronte....
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....andestine removal are not adduced by any corroborative evidences. The revenue has also relied upon the diary seized from Shri Ritesh Gupta on the ground that it contains the details of clandestine clearance of goods. We find that though the show cause notice has named 9 alleged buyers of goods, and even contended that they had received the goods, but we find that the show cause does not rely upon either the records or the statements of such alleged buyers. The outcome of investigation is not appearing. Thus the show cause notice only states 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. S....
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....g, as also stated by Shri Dinesh Mittal, partner of M/s Sunshine Marketing. M/s Sunshine Marketing were engaged in anodizing and were undertaking such activity on behalf of other suppliers in addition to M/s KLMPL. Further, even if the data found in the pen drive of Shri Shailesh Yadav is matching with the pen drive data of Shri Sukhdev Patidar, it cannot be a conclusive ground to hold that the goods were clandestinely cleared by M/s KLMPL to M/s KI. It is an accepted fact from the show cause notice that in premises of M/s KI, the goods were 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 ....
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....instruction of Appellant. Nor the same is corroborated with any records of Appellant firm to show that the same were clandestine removed goods. In such case, it cannot be concluded that the clearances by M/s Kuchchal International to M/s H.M. Enterprises were of goods manufactured by the Appellant and cleared clandestinely without payment of duty. Further we find from the statement of Shri Parvez Hasan, Partner of M/s H.M. Enterprises, when he was shown the printouts of data from the pen drive of Shri Shailesh Yadav, that he is not aware of 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 ....
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....dav point to removal of goods without payment of duty by KLMPL. 30. We find that the charges are mainly based upon the pen drive of Shri Shailesh Yadav employee of M/s KI and who was also maintaining records/ stock of M/s Sunshine Marketing. In case where the demands are based upon the pen drive and such records are third party records and in absence of any affirmation by the Appellant, it cannot be concluded that the Appellant has removed the goods without payment of duty. In case of M/s Rama 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....
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....ribunal has in the case of Emmtex Synthetics Ltd., supra, when the charge of clandestine removal was made against the Appellants therein out of yarn received from a third party based on the diary, loose documents and packing slips allegedly recovered from Shri B.M. Gupta, Vice President of the Supplier Company, held that "no presumption on the basis of uncorroborated, uncross-examined evidence of B.M. Gupta and the alleged entries made by him in the private diary, loose sheets, charts, packing slips could be drawn about the receipt of polyester yarn by the 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 w....
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....enue has not been able to adduce any corroborative evidence to show the movement of goods from the premises of the Appellant-company to the premises of M/s. Chitra Traders or the Customers whom the goods were sent directly to as per the direction of Chitra Traders. No inquiry has also been made into these Customers who ultimately received the goods. There is no substance in the reasoning given by the Commissioner in the impugned order to the effect that "as the party did not challenge the fact of their business association with M/s. Chitra Traders, Delhi, the enquiry 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 tran....
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....ords of M/s. Kothari Trading Corporation cannot be relied on to find evasion by the respondents. The Day Book cannot be relied on as the author of its contents could not be identified and his statement obtained. Revenue has not been able to establish receipt of excess amounts against clearances of yarn by the respondents with any reliable evidence. The Commissioner (A) also had found that the Day Book and the records of the broker did not match in entirety. He had found discrepancies in important respects between the entries in the Day Book and the records of the yarn broker. In the 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 s....
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.... not authorized any person to issue such invoice and it may be a case of robbery from his factory. He also undertook to pay duty if found that goods were cleared twice. We find that there is no admission in his statement that the goods were cleared. The department also did not undertake any interest to verify whether the goods against both the invoice were actually cleared or not by way of investigation at the buyers end. In such case we do not find any reason to demand duty. Coming to the charges of clandestine removal it is trite law that the same cannot be upheld merely on the basis of statements 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....
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.... when Rules 173E mandatorily requires the Commissioner to prescribe/fix norm for electricity consumption first and notify the same to the manufacturers and thereafter ascertain the reasons for deviations, if any, taking also into account the consumption of various inputs, requirements of labour, material, power supply and the conditions for running the plant together with the attendant facts and circumstances. The Tribunal further observed that no experiment have been conducted in the factories of the appellants for devising the consumption norms of electricity for producing on MT of steel ingots. Tribunal 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 hi....
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.... factory at Pithampur. We find that it is a fact on record that the goods were purchased by the Appellant on high sea sales basis, for which payment was made through bank. If the goods were not directly delivered to the Appellant's factory, it cannot be concluded that the goods have not been received in their factory. The bills of entry are in the name of the Appellant. Further no record of the Appellant or of M/s Mungad Aluminum has been relied upon to show that the imported scraps were not received in the Appellant's factory and were instead received at the factory of M/s Mungad Aluminum. No disposal of such goods otherwise 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 fi....
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....ase of demand of Rs. 1,53,163/-, we find that the demand has been made against the Appellant on the ground that they have cleared the goods to M/s Kuchchal International, M/s Sunshine Marketing and M/s Baser Sales Corpn. Further, the quantity of goods, i.e. aluminum Section & profiles, were ordered to be confiscated. We find that the demand has been made on the basis of alleged receipt of goods at the job workers / processors premises, i.e. anodizers or dealers premises. However, no investigation has been conducted at the Appellant's end or their factory and the demand is based on the records of such alleged job workers. Only 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 ty....
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....abricators in their record had shown that the goods were received from M/s KLMPL. Similarly, the Appellant has also denied supplying the goods to M/s M/s Sanmati Fabricators or any sales to M/s Baser Sales Corpn in their respective statements. In such case, the allegation of clandestine removal on the strength of entry appearing in the record of M/s Sanmati Fabricators, which is a third party, cannot be sustained. Similarly, in case of goods found at M/s Kuchchal International, were shown to have been received by M/s Sunshine Marketing from the Appellant. On the ground that in respect of Invoice No. 146 dated 24.6.12, the quantity 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 receiv....