TaxTMI 
TaxTMI 
2021 (4) TMI 641
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....Officers of Central Excise, Customs and Service Tax acting upon the intelligence gathered about evasion of central excise duty by the appellant by way of procurement of unaccounted raw materials, clandestine manufacture of excisable goods without accounting the same in their daily stock account and removing the same without payment of central excise duty. The documents were recovered during the search and the investigating team also got stock of finished goods and raw material during the physical verification. While comparing the said physical verification report and the documents recovered with the opening stock finished goods and the raw material declared by the noticee the team noticed that 56.300 MT of MS Ingots and 221.693 MT of Iron O....
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....notice has been confirmed. The Commissioner (Appeals) has also erred in not recognizing that the raw material was of one day production only and there was no removal of any excisable goods from the appellant's premises. There is no evidence to prove either of the two allegations. He again has erred by relying upon Rule 25 (1) (b) of Central Excise Rules, 2002. The appeal has been dismissed under the wrong interpretation of the said provision. The order is accordingly prayed to be set aside. While relying upon the various case laws, as mentioned in the grounds of appeal, learned Counsel has prayed for the appeal to be allowed. 4. While rebutting these arguments, learned Departmental Representative has mentioned that in terms of Rule 10 of E....
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.... appellant with an intent to remove those unrecorded goods without issue of invoice and without payment of central excise duty was to be ascertained that too on the basis of cogent evidence. The burden was to be discharged by the Department. Also whether mere violation of Rule 10 of Central Excise Act amounts to deliberate intention is again for the Department to prove. But I observe that there is no such evidence produced by the Department. Contrary there has been a decision of this Tribunal in the case of Pepsi Foods verses CCE - 2002 (139) E.L.T. 658 (CEGAT), wherein it has been held that 'account for' as has been used not only in Rule 10 of the Central Excise Rules, but also in Rule 25 thereof does not merely mean "making entry in books....
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....i, Daman - 2010 (261) E.L.T. 486 (Tri. - Ahmd.) and pleaded that goods cannot be confiscated and no penalty can be imposed. I find in the said case there was no documentary evidence that the goods were ready for clandestine removal apart from the initial statement of authorized signatory. Mere non-accountal of goods in RG-1 Register would not invite confiscation of same or imposition of any penalty unless there is an evidence to show that goods were meant for clandestine removal". In subsequent para while relying Nilesh Steel & Alloy Pvt. Ltd. versus Commissioner of Central Excise, Aurangabad - 2008 (229) E.L.T. 399 (Tri. - Mumbai), it has been observed that penalty should not have been imposed merely because stock of finished goods lying ....
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....niversal knowledge cannot be applied. Simple failure of non-accounting of goods in records does not prove malafide intention to clear goods clandestinely and cannot invite confiscation. Mere acceptance of such excess stock at time of visit of officers is not a conclusive proof that the said goods would be used in clandestine manufacture. Evidences placed on record lead to nowhere let alone the allegation of clandestine manufacture. Evidences remain to be provided to establish that such excess stock not entered in records is a deliberate act and with malafide intent to manufacture and remove excisable goods clandestinely". 8. Relying upon the case of Commissioner of Central Excise, Aurangabad versus Gal Aluminium Extrusions Pvt. Ltd. - 2011....