TaxTMI 
TaxTMI 
2022 (7) TMI 229
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....d by the Commissioner, CGST & Central Excise Indore by which the demands and penalties were confirmed against them, for alleged clandestine manufacture and clearing of excisable goods. 2. The appellant, M/s MSS Food Processors is a partnership firm having Partners Shri Sunil Sadhwanin, Shri Amarchand Upadhyay having their factory premises at Plot -D, Sector-E, Sanwer Road, Indore. The owner of the factory premises and machinery is Sh. Nitesh Wadhwani who has given on rent the premises with machinery to M/s MSS Food Processors. They are engaged in manufacture of Gutka Masala (Pan Masala containing tobacco). Their brand names are Shimla, Vansh, Malik chand, Mama, Kargil. Appellant Sh. Bahadur Singh is working in M/s MSS Food Processors as electrician. Appellant - M/s Mahadev Shiv Shambhu Freshners Processors is Proprietorship firm of Shri Omprakash Talreja engaged in manufacturing and packing of sweet supari in pouches and claiming benefit of SSI exemption. Their factory is located at 231-B, Sector-F, Sanwer Road, Indore. Appellant, Sh. Ramesh Dhammani is the Supervisor in M/s Mahadev Shiv Shambhu Freshners Processors. Shri Omprakash Talreja had given the factory premises with mac....
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.... notarized by Notary Shri D. B. Pujari. On enquiry - Shri D.B. Pujari in his statement dt. 25.05.2011, stated that the said agreement was actually notarized by him in March'2011 after Holi Festival and the said document was entered in his Notary register against the entry kept blank for dt. 11.02.2011. It was alleged that Shri Omprakash Talreja has fraudulently prepared the Rent agreement, so as to escape from the demand of central excise duty and penalty. Shri Talreja provided his manufacturing unit, packing machines etc. for clandestine manufacture of Gutka of 'Shimla', 'Kargill' brands, out of the packing material and gutkha mix supplied by M/s MSS, and has also provided them their vehicle No. MP09 KC-5789 for transportation of the clandestine manufactured Gutkha. He has apparently not received the rent amount from Shri Abdul Salam, as he could not show the accounting of said amount. Statement of Shri Abdul Salam was recorded on 15.11.2011 wherein he accepted the Rent agreement and hiring of factory. He also stated that he was in factory on 18.02.2011 but went for having refreshment between 11 - 11.30 Hrs., and when came to know of the visit of the officers at 12.30, he ran to A....
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....hwani and Shri Amarchand Upadhyay both Partners of M/s MSS Food Processors and Shri Dinesh Mehta owner of premises 12 - A, Private Industrial Area, Village - Bhourasala, Sanwer Road, Indore. The proposal was based upon allegation based on search conducted on dt. 22.02.2011 at unregistered premises 12 - A, Private Industrial Area, Village - Bhourasala, Sanwer road, Indore, in the presence of Shri Dinesh Mehta, owner of said premises. Shri Mehta stated that premises was given on rent to Shri Anmol Mishra who is related to "Shimla" Gutka factory, since November' 2009 and submitted copy of rent agreement dt. 02.04.2010. During search 10 Gutka Pouch packing machines were found which were connected to the power point and the power supply was through 125 KVA Diesel Generator, which was filled with ¾ diesel. Three outer packing-sealing machines, two weighing machines, one bag stitching machines, finally packed Gutka pouches of "SHIMLA" and "MALIKCHAND" Pan Masala/ gutka bearing name and address of MSS, Gutkha Masala weighing 595.07 Kg (for packing of Gutkha Pouches) were also found. It was alleged that Pan Masala Gutkha was manufactured in said machines clandestinely by Shri Anmol M....
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....) A show cause notice C. No. IV (16) SIC/15/2011/24996 to 25000 dt. 24.08.2011 was issued based upon search conducted at Godown of Liyaqat Ali situated at 28-A, Sector - C, Industrial Area, Sanwer Road, Indore. It was alleged that during search printed lamination rolls/ outer packing of "Shimla Gutkha", "VANSH Gutkha", "MALIKCHAND Gutkha" bearing name and address of M/s MSS, and packed in jute and plastic bags were found. Shri Liaqat Ali handed over Rent Agreement dated 01.07.2007 showing that the godown was taken over on rent by Shri Sunil Sadhwani, partner of M/s MSS, who has signed as Sanjay Ajwani, as established by hand writing expert. It was alleged that the seized goods were stored and being supplied to the unregistered factory of M/s Mahadev and at Bhourasla, for clandestine manufacture of Gutkha/ Pan Masala. The show cause notice proposed confiscation of seized goods viz. 72115 Kgs of Printed lamination rolls valued at Rs. 1,80,28,750/- and 18160 Kgs of Outer pouches valued at 32,56,750/- and imposition of penalty on Shri Sunil Sadhwani, M/s MSS Food Processors and Shri Liaqat Ali (Godown Owner). (vii) A show cause notice C. No. IV (16) SIC/08/2011/5622-5628....
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.... lakhs was imposed on Shri Anmol Mishra, Rs. 75 Lakhs on Shri Amarchand Upadhyay, Rs. 75 Lakh on Shri Sunil Sadhwani, Rs. 5 Lakh on Shri Ramesh Kumar Damani. The adjudicating authority however reduced the demand and held that duty demand for the period prior to 01.04.2010 is not sustainable as there is no evidence of manufacture of Gutka. He confirmed demand under Rule 17 (2) of Pan Masala Rules for the period April 2010 to 18.02.2011, which provides that where notified goods have been found to have been manufactured in or cleared from a unit which is not registered, then the duty liability is required to be determined on the basis of number of packing machines found available in the premises of the unit and the retail sale price of the pouches manufactured with the aid of such packing machines (FFS) and unless evidence to the contrary is provided to the satisfaction of the Central Excise officer, such machines shall be deemed to have been in operation since the 1st day of April of the financial year in which the unit was found to be not registered, and shall be construed as operating packing machines for the purpose of Rule 7 and dealt with accordingly. That on the day of search o....
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....Bags, Outer packs, pouch laminates valued at Rs. 1690/-, Rs, 8100/-, Rs. 2,00,550/-. He also ordered confiscation of 41 pouch packing machines valued at Rs. 24,06,480/- and imposed penalty of Rs. 5 lakh on M/s Mahadev. The adjudicating authority ordered confiscation of same on the ground that no documents evidencing payment of central excise duty was found and M/s Mahadev were engaged in manufacture of Pan Masala and Gutkha without following the provisions of Rule 6, 7 and 9 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008 and the seized goods are liable for confiscation and penalty. (iv) In case of SCN No. IV (16) SIC/11/2011/25694 dt. 02.09.2011, the adjudicating authority ordered confiscation of Truck No. MP09 KC 5789 valued at Rs. 2,19,966/-, and absolute confiscation of goods found to be loaded viz. Gutkha and Pan Masala pouches of Malikchand and Shimla brands alongwith lamination rolls, secondary and outer packing valued at Rs. 6,73,460/-, Cotton box of acetate valued at Rs. 1,79,850/-, Gutka mix valued at Rs. 3900/-. He also imposed penalty of Rs. 3,00,000/- under Rule 25, penalty of Rs. 2,00,000/- under rule 26 of CER, 2....
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....valued at Rs. 8,87,774/- from the above Bhoursala factory, the adjudicating authority on the same grounds ordered for absolute confiscation of seized goods and confiscation of 10 packing machines. He also imposed penalty of Rs, 5 lakhs under Rule 25 on Shri Anmol Mishra. (vii) In case of show cause notice IV (16) SIC/12/2011/654-661 dt. 06.01.2012 all the proposals were dropped as manufactured Tobacco was not held to be excisable. (viii) In case of show cause notice IV (16) SIC/08/2011/5622-5628 dt. 13.02.2012 issued to Shri Shiv Bahadur Chouhan and Others on seizure of Truck No. UP78-AN-4940 alongwith 4275 Kgs of lamination rolls of "Shimla" brand Gutka and 678.6 Kgs of outer packings of Shimla Gutkha, the adjudicating authority ordered absolute confiscation of lamination roll and outer packings, confiscation of vehicle. He also imposed penalty of Rs. 3 Lakhs each on Shri Shiv Bahadur Singh Chauhan and M/s MSS. The order was passed on the ground that Shri Shiv Bahadur Singh Chauhan is the owner of said vehicle and did not turn up for enquiry even after issue of summons. Shri Shiv Bahadur vide letter dt. 07.07.2011 informed, that on 02.10.2010 he had sold the truc....
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....aled that Shri Anmol Mishra, Manager of M/s Mahadev and owner of M/s Bhoursala premises was in continuous touch on his mobile with Shri Sunil Sadhwani, Partner of M/s MSS. Further Shri Anmol Mishra was using mobiles which numbers were issued in the name of Shri Navneet Agarwal and Shiv Bahadur Singh Chauhan, both employee of M/s MSS. It was also found that Shri Sunil Sadhwani has taken on rent a godown for clandestine storage of lamination rolls and outer packaging which were being used for clandestine manufacture of Gutka/ Pan Masala of their brand at unregistered factory. Further it is also found that the vehicle is registered in name of Shri Shiv Bahadur Singh Chouhan who was an employee of M/s MSS. The evidences connect M/s MSS with the seized goods at aforesaid locations. M/s MSS was aware that such laminations and outer packings found in vehicle no UP78-AN-4940 were not duty paid excisable goods and were liable to confiscation. Therefore M/s MSS found to be dealing with excisable goods which were liable for confiscation and is liable for penalty under Rule 26 of CER, 2002. (ix) In case of show cause notice IV (16) SIC/15/2011/24996-25000 dt. 24.08.2011 issued to Shri....
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....cquainted with the complexities of gutka manufacturing and was instrumental in storage of non duty paid lamination rolls and outer packing, in the said godown and is held liable for penalty under Rule 26 of CER, 2002. That M/s MSS is liable for penalty as they are owner of seized goods. 5. Being aggrieved, the appellants are in appeal before this Tribunal. 6. Learned Counsel appearing for M/s Mahadev submits that, under Rent agreement dt. 11.02.2011, the factory was rented out with all machines to Shri Abdul Salam of Village Ambakhedi. Tehsil - Hatod, Indore, for Rs. 30,000/- per month, for continuation of manufacture of sweet supari and the agreement was duly notarized. After that the proprietor Shri Omprakash Talreja went on pilgrimage and was unavailable to confirm the status on 18.02.2011, when the visit was made to the factory by the officers. It was alleged that two persons namely Shri Anmol Mishra and Shri Ramesh Dammani were employed by the Appellant as Manager and Supervisor. Shri Omprakash Talreja on 16.05.2011 during recording of his statement submitted his affidavit alongwith agreement dt. 11.02.2011 with Shri Abdul Salam. The statements of Abdul Salam were record....
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....tine clearance of Gutkha Masala from MSS was going on since June'2007. He however confirmed demand of central excise duty on clearance of Zarda masala (Gutkha Mix) from 01.04.2010 to 18.02.2011 only. The above findings admittedly hold absence of any clandestine manufacture, transportation, sale or engagement of other parties to act detrimental to interest of revenue till April, 2010. The impugned order has accepted the submission of the Appellant about absence of clandestine manufacture from 2007 to March' 2010. There are no evidence for changes in fact on and from 01.04.2010. There are no evidence either oral or otherwise for change of opinion for period w.e.f 01.04.2010. The deviation in determination and the opinion is merely to stretch and support the deeming fiction of section 3A read with Rule 17(2) of P.M. Rules applied. The adjudicating authority has relied upon the statement of Shri Suresh Katiyar, Supervisor at M/s Shiv Udyog to canvass that M/s MSS were getting the manufactured tobacco produced at M/s Shiv Udyog, and then supplied to M/s Mahadev as Gutka Mix. Shri Katiyar has retracted his statement during cross examination and hence cannot be considered as evidence. The....
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....ess in view of corroboratory evidence. It is contended that no fault of workers or appellants can be found if there examination-in-chief was conducted after eight years. The adjudicating authority did not grant the cross examination, and the Appellant had to approach CESTAT, who have vide Final Order No. A/52551/2016 - SM (BR) dt. 23.06.2016 allowed the cross examination. The CESTAT's order was upheld by the Hon'ble High Court and later the SLP filed by the department before Hon'ble Supreme Court was also dismissed. It was only after such orders passed by CESTAT, Hon'ble High Court and upheld by Supreme Court, that cross examinations were permitted and hence it is revenue's fault that the cross examinations were conducted after eight years. When the appellant was not given opportunity by the adjudicating authority, in that case the contention of the adjudicating authority, that examination-in-chief and cross examination after eight long years has no meaning, is erroneous. That for retracted statements of Shri Anmol Mishra, the impugned order ignores details of property transactions brokered by him in past years. Merely non compliance of accounting or taxation by a third party canno....
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....ent is fake, is erroneous. The agreement is a documentary evidence for the purpose of Rule 17 of PMPM Rules 2008. In the said Rule, deeming manufacture from 1st April of the financial year, has an exception in the said Rule, which shifts the date of commencement of deemed production if evidence to the contrary is provided. This means, if a person is in a position to establish actual date of manufacture, the deeming provisions would not apply prior to that date. If the evidence available on record to show the actual period during which production and clearance of Pan Masala had taken place, duty would be confirmed from that date only. The adjudicating authority himself held that no manufacture of Gutkha took place till 01.04.2010. There is also on record agreement between Appellant - Mr. Talreja and Shri Abdul Salam executed on 11.02.2011, and the premises including machines were given on rent by the Appellant. As such it is clear that the factory premises cannot be held to be manufacturing notified goods prior to 11.02.2011. He placed reliance on this Tribunal order in case of Shri Krishna Gopal Lawanaia Vs. CCE Kanpur 2018 (7) TMI 1278 - CESTAT Allahabad. He submits that there is ....
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....h packing machines were found under repairs. The premises were opened by Shri Dinesh Mehta (landlord) by breaking the locks in the presence of Panch witnesses. Some Gutkha pouches of Shimla and Malikchand brands bearing name of manufacturer M/s MSS Food Processors, Plot D, Sector-E, Industrial Area, Sanwer Road, Indore Registration no. AALFM8543RXM001 were also found. It was alleged that at both premises the goods of M/s MSS were being manufactured and duty is demandable on bulk Pan masala/ Zarda Masala from M/s MSS and duty on 41 machines installed at M/s Mahadev Shiv Shambhu Freshener Processors at 231-B, Sector-F, Sanwer Road, Indore from Appellant and others Jointly and severely under Pan Masala Packing Machine (Capacity determination and Collection of duty) Rules 2008 "PMPM" Rules. Also duty on 10 machines installed at 12-A, Private Industrial Area, Village Bhourasala, Sanwer Road, Indore from M/s MSS and others Jointly and severely under Pan Masala Packing Machine (Capacity determination and Collection of duty) Rules 2008. That on the basis of cash sales of manufactured Tobacco of M/s Shiv Udyog, presumptive calculations were made on the basis of VAT return(s) filed by M/s Sh....
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....ut any investigations with any suppliers of supari, lime, katha, purchase of huge quantities of such materials has been presumed. In absence of such vital evidences all presumptions of clandestine manufacture stand on wild grounds. He relied upon the judgment of Hon'ble High Court of Patna in case of CCE Vs. Brims Products 2011 (271) E.L.T. 184 (Pat.) in this regard. He submits that there is no evidences as per the impugned order itself, yet the demand against M/s MSS has been made. The deeming law cannot be applied in such facts. The Adjudicating authority in para 90.12 has himself held that there is no demand for the period prior to 2010 holding that there is no evidence. That even after 2010, since there are no evidences and there is no change of facts, hence there cannot be any demand. There are no evidences, oral or otherwise, for fresh start of another opinion for period w.e.f 01.04.2010, to allege manufacturing and clandestine removal of alleged Gutkha mix. The deviation in determination and the opinion is merely to support the deeming fiction of Section 3A, applied on M/s Mahadev and Shri Anmol Mishra. Import of such analogy and cross application of Sec 3A is unsustainable.....
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.... to prove clandestine manufacture and clearance has to be discharged by sufficient cogent, unimpeachable evidence as held in case of CCE Vs Vishwa Traders Pvt. Ltd. 2013 (287) ELT 243 (Guj), CCE vs. Swati Polyester 2015 (321) ELT 423 (Guj), Commissioner Vs Swati Polyester 2015 (321) ELT A217 (SC), Flevel International Vs CCE 2016 (332) ELT 416 (Guj), Arya Fibres Pvt. Ltd. Vs. CCE 2014 (311) ELT 529 (T), TGL Poshak Corporation Vs CCE 2002 (140) ELT 187 (T). There is no evidence of manufacture and hence no demand can be made as held by the Tribunal in M/S ARYA FIBRES PVT. LTD, M/S NOVA PETROCHEMICALS LTD. AND OTHERS Vs. CCE AHMEDABAD-II 2014 (311) ELT 29 (Tri.-Ahmd.). He also submitted that there is complete absence of enumeration of situations in which one could hold with slightest probability that there have been clandestine manufacture and clearances. That in Pan Parag India v CCE, 2013 (291) ELT 81, it has been held that the theory of preponderance of probability would be applicable only when there are strong evidences heading only to one and only one conclusion of clandestine activities. The said theory cannot be adopted in cases of weak evidences of a doubtful nature. M/s MSS a....
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....ndly that the appellant was in possession of the premises and is thus a manufacturer. That the duty is on the gutka manufactured with the aid of automatic packing machines. It is to be seen that whether the machines seen in video of Bhourasla premises can be termed as FFS - packing machine. As per Rule 2(c) of PMPM Rules 2008, 'Packing machine' in above rules has been defined, and the notified goods are not simply Pan Masala or Gutkha, but such Pan Masala/ Gutkha which are "manufactured with the aid of automatic packing machine and packed in pouches" (Form, Fill and Seal), as per Notification No. 29/2008-CE. He has drawn our attention to snaps taken out of the video provided to him by Revenue, and contends that there is vital technical failure, as department ought to have obtained a Chartered Engineers Certificate for the fitness of the wreckage portrayed as "Packing Machines" as to whether such machines were complete packing machines and whether if not all such machines required at least one hopper etc., for packing of any goods or whether without such hoppers such machines be said to be a functional machine. That immediately after the search and seizure, the officers had taken po....
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....ineers report produced by the appellant. The manner of levy is to be constructed as per the statute, it cannot be constructed for dismantled and incomplete equipment, missing of vital part "feeding Hopper". Denial of verification of the incomplete equipment has rendered the findings as biased and legally unsustainable. There is a vital technical failure as department ought to have obtained a Chartered Engineers Certificate for the fitness of the wreckage or dismantled machines, portrayed as "Packing Machines", whether such machines were complete packing machines. He relied upon the decision of Constitutional Bench of Hon'ble Supreme Court in matter of COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI Vs. M/s. DILIP KUMAR AND COMPANY & ORS.2018 (7) TMI 1826 - SUPREME COURT wherein Hon'ble court held that every taxing statue including charging, computation and exemption clause (at the threshold stage) should be Interpreted strictly. That in case of ambiguity in a charging provisions, the benefit must necessarily go in favour of subject/assessee, but the same is not true for an exemption notification, wherein the benefit of ambiguity must be strictly interpreted in favour of the Revenu....
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.... as to how such rent agreement was brought inside the premises. The officers should not have allowed recording of unverifiable deposition of Shri Dinesh Mehta, that there was another agreement in past which was allegedly destroyed by the Appellant. It is clear that the disputed Rent agreement was fabricated elsewhere during the proceedings, and was subsequently planted by Shri Dinesh Mehta to save his skin. That in such facts the said agreement cannot be presumed as a documentary evidence against the appellants, as it fails to comply with the provisions of Section-36A of CEA 1944. Merely signatures of the Search witnesses on said rent agreement cannot render it as a document under Section36A of the Act, to be used against the Appellant. Bringing outside documents during search is in violation of Section 18 of CEA 1944. The Adjudicating Authority has not considered the procedure and manner of search as contained in Cr. PC 1898. Section 18 of CEA refers to CrPC as to how searches are to be made. During the search it is the duty of the officers to maintain sanity of search proceedings in a cordoned environment, and any unrecorded external or internal breach of such cordoning renders t....
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....atures. The reliance upon the handwriting expert - Shri H. S. Tuteja is bad in law. The appellant questioned expertise of Shri H.S Tuteja as an expert. Nevertheless, there is no handwriting on disputed document which is typed. Neither Shri Tuteja nor the department obtained sample handwriting / sample signature of the appellant. Shri HS Tuteja admitted to have not qualified any degree or diploma in such field. The department ought to have sent the questioned document to an accredited lab for Examination, relating to the Questioned Documents. During Cross examination, Shri Tuteja admitted that though he has not taken any formal education, his training through experience is equivalent to training by Scotland Yard. When asked for his failure to obtain fresh specimen signatures for comparison, he stated that admitted signatures are adequate. He admitted that in disputed signature only letter "A" is clear and subsequent letter are neither identifiable nor readable, whereas in admitted signatures subsequent letters are identifiable. He admitted to have compared only initials of Anmol Mishra with his full signatures without having any admitted initials. On being asked for his failure to o....
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....ithout substantial corroboration. 11. It has not been considered in the impugned order that the issue relating to evidence of a handwriting expert, has been expounded by the Courts in plethora of judgments. In the case of State of Maharashtra v. Sukhdeo Singh, the Apex Court opined that before a Court can act on the opinion - evidence of a handwriting expert, two things must be proved beyond any manner of doubt, namely, (i) the genuineness of the specimen/admitted handwriting of the concerned accused and (ii) the handwriting expert is a competent, reliable and dependable witness, whose evidence inspires confidence. There is no determination on the methodical opinion of two hand writing experts as produced by him of Mrs. Nutan Supekar, Certified Forensic Document & Hand Writing Kothari Market, Indore. (Trained at Central Forensic Science Laboratories (C.B.I.), New Delhi, and Life Member- Indian Academy of Forensic Sciences, Kolkata) and Shri Brijesh Ram Shankarlalji Sharma, 134, Nanda Nagar Stadium Ground, Indore - 452 Oil (M.P.). The adjudicating authority has erred in placing reliance on retracted statements of Appellants, as such statements have no evidential value in eyes of ....
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....tment. The Adjudicating Authority has dropped penal action against Shri Dinesh Mehta. 12. As regards penalty he submits that the Appellant has not rendered any excisable goods liable for confiscation and hence no penalty is imposable on him. Rule 25 of the CER, 2002 contains two sub-rules i.e. sub-rule (1) and sub-rule (2). Further, sub-rule (1) of rule 25 of the CER, 2002 contains four clauses, viz. (a) to (d). No sub-rule or clause thereof of rule 25 has been mentioned in the SCN and the impugned O-in-O. It is well settled law that penalty is not imposable if sub-rule or clause thereof is not mentioned in the SCN. That without prejudice to the said submission, it can be seen that penalty under rule 25 is imposable only on the manufacturer under the circumstances mentioned therein. Similarly, penalty under rule 17(1) of the Pan Masala Rules is also imposable only on the manufacturer of notified goods. Appellant is not the manufacturer of the goods under seizure and does not have any relation with the seized goods. Therefore, penalty cannot be imposed on him under the said rules. Penalty under rule 26 of the CER, 2002 can be imposed on a person only when it is proved beyond doub....
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....r Shri Anmol Mishra and Supervisor Shri Ramesh Dammani stated that owner of M/s Mahadev is Shri Omprakash Talreja and admitted that the factory was engaged in packing of Gutkha with Kargill and Shimla brands. Shri Ramesh Kumar Dammani in his statement dt. 18.02.2011, 19.02.2011 and 24.02.2011 confirmed that earlier Dillagi Sweet Supari was being manufactured but from sometimes gutka manufacture was also started. Machine Operator Shri Surendra Kumar Jain, Shri Ramakant Mishra and Shri Vinod Kumar Shukla, packing worker of M/s Mahadev in their statements dt. 18.02.2011 stated that earlier Dillagi Supari was being manufactured, but from some times Gutka manufacturing was also started and that Gutka Masala was not manufactured in factory but was brought in small Eicher vehicle. Though they have retracted their statements but did not give reason to deny the statements after 8 long years. Further they confirmed that earlier 'Dillagi Supari' was packed occasionally, raw material and packing material used to come from M/s MSS. No facility of manufacture of Gutka Mix. No employee, supervisor stated regarding ownership of Shri Abdul Salam. Finished Gutka pouches of Kargill brand valued at Rs....
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.... stated that he was in factory on 11.02.2011 to 18.02.2011, through his affidavit dt. 04.02.2014, but such retraction filed after 3 years cannot be considered. The statement tendered before tax authorities is admissible and cannot be discarded by subsequent retraction. He has criminal history and does work for money. He was hired for shifting liability of manufacture, which is tutored and under influence. Shri D.B. Pujari during his examination-in-chief confirmed that he does not remember date of filing of retraction and does not have copy of retraction and that his cross examination was sought by M/s Mahadev. This shows that Shri Pujari might not have filed the retraction and somebody else has filed retraction in his name. 16.2 In case of search and seizure on 22.02.2011 in Private premises at 12A, Private Industrial Area, Bhourasala Village, Sanwer road, Indore in presence of Dinesh Mehta, the premises was stated to be taken on rent by Shri Anmol Mishra, and 10 Gutka pouch packing machines were found in operative condition to which the power supply was made by 125 KVA generator, and the fuel tank was found to be ¾ filled. Three outer packing sealing machines, two weighi....
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.... manufactured tobacco in stock were having marks in coded language of brands of M/s MSS which were explained by Shri Suresh Katiyar, that these code marks pertain to Shimla, Kargill, Malikchand, etc. M/s Shiv Udyog used to raise the sale bills in name of fake and fictitious customer in cash. 16.4 In case of seizure of Truck No. UP78-AN-4940 on 23.02.2011, he submitted that the said Truck was parked in abandoned condition and was loaded with 4275 Kgs Roll of lamination rolls and outer pouches for manufacture of Shimla brand Gutka and Pan Masala, totally valued at Rs. 13,01,752/-. The owner of goods is M/s MSS as during investigation it was found that the truck was registered in the name of Shri Shiv Bahadur who was employee of M/s MSS, as accepted by Shri Sunil Sadhwani, Partner of M/s MSS. Shri Shiv Bahadur Singh did not appear for recording of statements and the sale-purchase letter of truck (few months earlier) to one Shri Shambhu Singh was found to be not genuine. The sale/ purchase letter was notarized by Notary Shri K.N. Jaiswal, who in his statement dt. 28.07.2011 stated that the documents were notarized ante dated and the signature of Shri Shambhu Singh was not put before....
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....ed as Sanjay. That Shri Sunil Sadhwani in statement dt. 22.06.2011, accepted the storage of above goods. No standard formula can be applied across the board in all cases of clandestine removal. That if department is able to premia facie establish case of clandestine removal and violation of excise procedure, the burden shifts on assessee to prove that he is innocent. He relies upon the theory of 'preponderance of probability'. The persons/appellants who has the benefit of advice of lawyers, thus their retraction has to be viewed with suspicion. The statement tendered before tax authorities is admissible evidence and cannot be discarded summarily on subsequent retraction. That the circumstances of statements shows the demand is correct. The confessional statements are out of ambit of Section 9D and the demand based on confessional statement are justified. He relied upon orders in case of National Boards Vs. CCE, Calicut 2014 (313) ELT 113 (TRI), CCE, Salem Vs. CESTAT Chennai 2019 (366) ELT 647 (Mad.), Sudhir Sharma Vs. CC 2015 (319) ELT 450 (Del.), Harika Resins Pvt. Ltd., and Sama Rajasekhar Vs. CC,CE & ST 2021 (7) TMI 891 CESTAT - Hyd., Abbas Haji Vs. GOI & Othrs 1984 (15) ELT 129....
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.... On the basis of VAT returns of M/s Shiv Udyog and its cash sales, it is alleged that the sales bill were raised by M/s Shiv Udyog in the name of fictitious customers, but the manufactured Tobacco was supplied to M/s MSS. That M/s MSS have used such tobacco in manufacture of Gutka Mix which was cleared to M/s Mahadev and one more premises situated at 12A, Private Industrial Area, Bhourasla, Indore, allegedly taken on rent by Shri Anmol Mishra, where the gutka mix was packed in Gutka pouches. The demand against M/s Mahadev and Shri Anmol Mishra has been computed on the basis of number of machines found to be installed in respective factory premises. Also the demand of duty against M/s MSS on Gutka Mix/ Masala has been computed on the basis of quantity of goods sold in cash sales by M/s Shiv Udyog, and as shown in their VAT return. Similarly the finished goods and packing material found from different premises and vehicles has been confiscated and penalties has been imposed upon M/s Mahadev, M/s MSS and Shri Anmol Mishra and other Appellants holding that the goods belong to M/s MSS. We find that Mr. Omprakash Talreja, Prop. of M/s Mahadev has challenged the impugned order on the grou....
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....the said contract was for transferring the unit making sweet supari. There is no scrutiny on point of the intention of Shri Abdul Salam to enter into contract for taking factory on rent, so as to determine that whether he was allured to enter into such contract, whether he received any consideration to enter into such contract and if so then what was the consideration/payment; whether the agreement was colourable device of M/s Mahadev or M/s MSS to start manufacturing Gutkha from 11.02.2011 keeping Abdul Salam in front. It had to be determined as to whether any alleged blank entry on any other date would be a conclusive proof that subject agreement was entered against blank entry, and when was the stamp paper for the agreement purchased and in whose name. We find that the impugned order is absolutely silent on these material issues and thus highly erroneous. The Agreement is a documentary evidence for the purpose of Rule 17 of PMPM Rules 2008, and when the contracting parties accept the agreement, it cannot be doubted. We also find that the Examination -in- chief of Notary - Shri D.B. Pujari was conducted on 06.12.2018 by the Adjudicating Authority, wherein he stated that he has al....
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....upari was being packed at M/s Mahadev and lately Gutka Pouches were being packed. He also stated that previously Shri Omprakash Talreja was the owner and afterwards Shri Abdul Salam became the owner. We also find that there is no direct/ material evidence to show that Shri Omprakash Talreja was operating the factory after 11.02.2011 or was knowing about manufacture of Gutka in the said premises. In such case we hold that Shri Omprakash Talreja cannot be considered as owner or of occupier the factory and manufacturer, and hence no duty can be demanded from him. The adjudicating authority has contended that the statements retracted by the workers during examination-in-chief and cross examination are eight years old, and are meaningless. However we find that the Appellant asked for cross examination after issue of show cause notice dt. 06.07.2012, which was not granted and the Appellants being aggrieved had filed appeal before CESTAT against such refusal. It was only after the Final Order No. A/52551/2016 - SM (BR) dt. 23.06.2016 passed by the CESTAT and subsequently upheld by the Hon'ble High Court and dismissal of SLP filed by the Department, that cross examinations were permitted. ....
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.... of Gutka pouches and no duty demand can be made from M/s Mahadev. Consequentially we also hold that there is no ground to impose penalty on the co-appellants and the penalty is required to be set aside. Though we have held that no duty demand can be made from M/s Mahadev as they cannot be held to be operating the factory, but even otherwise also we find on merits, there is no reason to demand duty for the period 01.04.2010 to 18.02.2011 and the duty at the utmost could have been demanded for 18 days of February' 2011 only, if we go by the reasoning of the adjudicating authority given by him for setting aside of duty demand till 01.04.2010. The Adjudicating authority has demanded duty for the period 01.04.2010 till 18.02.2011 by applying deeming fiction under Rule 17 (2) of Pan Masala Packing Machines (Capacity Determination and Collection of Duty), Rules, 2008 (Pan Masala Rules). In show cause notice the duty demand from M/s Mahadev was proposed for the period June' 2007 to 18.02.2011. However the adjudicating authority confirmed the demand only for the period April 2010 to 18.02.2011 for the reasons given in Para 90.12 and 90.16 holding as under : Para 90.12 - In view....
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.... of clandestine clearances of Zarda masala from M/s MSS and of Gutka pouches from M/s Mahadev till 01.04.2010. His findings itself holds absence of any clandestine manufacture, transportation, sale or any act detrimental to the revenue. However without any reason he applied 01.04.2010 as cut off date. We are not able to subscribe to this reasoning of applying 01.04.2010 as cut off date from which the demand can be made from M/s MSS and/or M/s Mahadev. He has applied deeming provision of Rule 17 (2) of the Pan Masala Rules as amended vide Notification No. 8/2010 - CE (NT) dt. 27.02.2010 which reads as under : "(2) If it is found that goods have been cleared from a unit which is not registered with the jurisdictional Central Excise Office, then the duty liability of such unit shall be determined on the basis of number of packing machines found available in the premises of the unit and the retail sale price of the pouches manufactured with the aid of such packing machines and unless evidence to the contrary is provided to the satisfaction of the Central Excise Officers such machines shall be deemed to have been in operation since the first day of April of Financial Year in wh....
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....a mix to M/s Mahadev was coming from outside the factory and was not manufactured by M/s Mahadev. In such case when there is no evidence on record to show that before February' 2011 any Gutka mix was brought to the factory of M/s Mahadev for the purpose of pouch packing of Gutkha/ Masala, and also there is no evidence of any pouch packing of Gutkha/ Pan Masala before February, 2011, the demand cannot be made for period before February, 2011. Further as per adjudicating authority's own findings, no evidence of procurement of gutka mix, manufacture of Gutka pouches and clearance of Gutka pouches before 18.02.2011 by M/s Mahadev is on record, in that case no demand before February, 2011 can be made from M/s Mahadev. Our view is also fortified by the precedent order in case of Shri Krishna Gopal Lawania Vs. CCE Kanpur reported in 2018 (7) TMI 1278 - CESTAT ALLAHABAD wherein it was held as under: 8. After hearing both the sides duly represented by Shri Aalok Arora advocate with Ms. Rinki Arora advocate and Shri Rajeev Ranjan Additional Commissioner, we find that there is no dispute about the fact that the appellants were operating illegally from premises located at Rehan Kala V....
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....sustainable. 23. Coming to the demand and penalty made against M/s MSS, we find that demand of Rs. 3,48,16,871/- has been confirmed against M/s MSS for the period 01.04.2010 to 18.02.2011 on alleged removal of Gutka Mix from M/s MSS to M/s Mahadev and premises located at Bhourasla. Penalty has also been imposed on Shri Anmol Mishra, Shri Amarchand Upadhyay, Shri Sunil Sadhwani and Shri Ramesh Kumar Damani. Initially the show cause notice proposed demand for the period June'2007 till February, 2011 but the Adjudicating Authority restricted the presumptive demand for the period 01.04.2010 till February, 2011, as stated by him in Para 90.12 and 90.16 of the impugned order. The show cause notice and the impugned order alleges that M/s Shiv Udyog were issuing cash sales bill in the name of fictitious customers towards clearance of manufactured Tobacco, whereas the same was received by M/s MSS for manufacture of Zarda Masala i.e., Gutka Mix for onwards supply to M/s Mahadev and another premises at Bhourasala allegedly owned by Shri Anmol Mishra, without payment of central excise duty. The show cause notice alleged that at both the above places, the goods of Appellant M/s MSS i.e. Gutk....
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....impugned order has relied upon the retracted statement of Shri Anmol Mishra, terming him as Manager of M/s Mahadev and owner of Bhourasala premises, as well as by Supervisor of M/s Mahadev - Shri Ramesh Dammani, that Zarda masala was received from M/s MSS. Though such statements has been retracted, but we find that even there is no corroboration of such statements with even a single evidence. Only on the basis of retracted statements and coupled with fact that there is no procurement of raw material/ packing material, manufacture, clearance and transportation and receipt of consideration or identification of buyers, no duty demand can be made against M/s MSS. No discrepancy in stock was noticed on 19.02.2011, when the factory of M/s MSS was visited by the officers. The alleged quantity of Zarda Masala cleared i.e., 1082,479 Kgs. has been calculated on the basis of VAT returns of M/s Shiv Udyog, without any corroborative evidence at the end of M/s MSS. Hence the allegation of clearance of Zarda Masala by M/s MSS is not sustainable. The show cause notice and the impugned order has also placed reliance on statement of Shri Suresh Katiyar who deposed as Supervisor of M/s. Shiv Udyog on....
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....r eight long years and has no meaning is erroneous. It was the department itself which did not permit the cross examination and the Appellants had to approach CESTAT for allowing cross examinations. Nevertheless the department approached the Hon'ble High Court against the CESTAT order for giving cross examination and later to Apex Court, which upheld the order passed by CESTAT. In such case no fault can be found if the examination-in-chief was conducted after eight years. There was no hurdle from the Appellant's side for conducting the examination in chief immediately after last show cause notice which was issued in the year 2012. Even otherwise also we find that there is no evidence of manufacture of any unaccounted Gutka Mix as the appellants were regularly maintaining all records of stock purchase, transportation, receipts consumption in the required manner. They have been regularly filing their ER-1 Returns and have also been subjected to audit. Moreover the appellants were operating under PMPM Rules 2008 since June 2008. It cannot be the case that for three continuous years, such officers failed to note any objectionable or unaccounted stock of raw materials. In view of above ....
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....e department has not done so. Few more cases in this regard are as under :- (i) 2001 (130) E.L.T. 228 (T), Commissioner of C. Ex., Patna V. Universal Polyethylene Industries Clandestine removal and clearance is a serious charge against manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. (ii) 2001 (130) E.L.T. 334 (T), Chennai M.T.K. Gurusamy V. CCE, Madurai Clandestine removal - Evidence Standard of - No positive evidence to establish clandestine removal adduced by department - Quantity alleged removal calculated on basis of transport company's records based on presumptions and assumptions not sustainable. (iii) Gurpreet Rubber Industries, 1996 (82) E.L.T. 347 (T) = 1996(63) ECR 68 (T) Clandestine production and removal not proved by any evidence such as installed capacity purchase & utilization of raw materials labour employed, power consumed, etc., demand set aside. (iv) Ambica Metal Works - ECR Vol. 29 page 549 Evasion of duty must be based on solid and acceptable evidence (v) D.S. Screen Pvt. Ltd. - 1990 (50) E.L.T. 475 (Tri.) I....
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....Steels Ltd. V. CCE Chandigarh No cogent reasons given for figures of production - Co-relation between various other documents - Gap in power consumption - No sufficient materials for establishing clandestine removal. (xvii) 2000 (117) E.L.T. 659 (T) -RLT 35 p. 654 (T) Pepsico India Holding V. CCE Meerut All other parameters as laid down in Rule 173E should also have been taken into consideration. The legal position as brought out in the cases mentioned above leaves no doubt that the demand cannot be sustained on the ground of presumption. 15. From the replies to the show cause notice dated 9-10-97, 6-1-97, 2-2-97, 17-2-97 on pages 120 to 211, it is crystal clear that the appellants have submitted specific replies to the points raised by the department and as such it was incumbent on the department to prove their case beyond reasonable doubt. In the absence of any strict, tangible, direct, positive and corroborative evidence, we do not find any justification to sustain the demand raised in this case. We, therefore, set aside the impugned order and allow the appeals filed by the appellants with consequential relief, if any."....
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....e or transportation of Gutka pouches bearing brands of M/s MSS or has procured any raw material/ packing material themselves or were concerned with the transportation of same. The demands and penalties are totally based upon assumption and presumption by stating the same as circumstantial evidence. Such assumption/ presumption are not to be considered as material evidence so as to demand duty and penalize the Appellant. Further we find that the vehicle was seized in February' 2011 and during this period the factory of M/s Mahadev was rented out by the Proprietor Shri Omprakash Talreja to Shri Abdul Salam. No evidence of linking M/s Mahadev or M/s MSS with said goods was found. There is no acceptance on the part of the Appellants that the goods were owned by them. The revenue did not cause any enquiry with the supplier regarding purchaser/ recipient of said goods nor tried to ascertain the same. Only for the reason that the vehicle had some quantity of Gutka Mix and lamination roll, outer packing and gutka pouches bearing name of M/s MSS, it cannot be said that the seized goods had ownership of M/s Mahadev or M/s MSS. None of the persons from M/s Mahadev or M/s MSS have owned the go....
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....r. They also submitted opinion by Chartered Engineer - Shri Pradeep Chhabra on the basis of video (recorded during inspection) that such equipments cannot be used for packing of any goods. Ld. Commissioner observed that the said machines were seized on 22.02.2011 and the videography and photography of the entire operation was conducted. I therefore find that a long period of eight years has passed since the seizure of machine and there is every possibility of corrosion and other adverse conditions might have affected serviceability and I therefore decide that verification by the Chartered Engineer after lapse of eight years would not be fruitful. I have gone through the still photographs and video of search operation conducted on 22.02.2011 at Bourasala premises all machines are visible. Pouch packing machines were available and some of them are connected to the power points. However, the Commissioner observed that feeding hopper (a detachable part of the machine) was missing from all the machines. Further most of the machines were opened and internal parts were exposed. I notice that some of the parts, chains, nuts bolts etc were lying near some of the machines. It appeared to me ....
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....eriod the Adjudicating authority held that there is no case to demand duty from December, 2009 as rent ledger produced by Shri Dinesh Mehta is not supported by any evidence. Investigation has not placed any evidence to establish manufacture of Gutkha pouches from 2009 with regard to manufacture and clearance of Gutkha pouches, source of funds, sale of such gutkha pouches to customer and receipt of consideration. The rent agreement dt. 02.04.2010 will hold good and the Bhourasla premises was functional and engaged in clandestine clearances of Gutkha pouches from 02.04.2010 only under rule 17 (2) of Pan masala Rules, 2008. In case of show cause notice IV (16) SIC/14/2011/119-125 dt. 22.02.2011 on seizure of goods valued at Rs.8,87,774/- the adjudicating authority on the above grounds ordered for confiscation of goods and also imposed penalty under rule 25 on Shri Anmol Mishra. We find that the Appellant was detained on 18.02.2011 and arrested on 19.02.2011 in connection with investigation at M/s Mahadev. On 22.02.2011 the officers visited premises situated at 12-A, Private Industrial Area, Village Bhourasla, Sanwer Road, Indore belonging to one Shri Dinesh Mehta. The lock was break o....
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....ucted by the department are as below: The appellant has also annexed the photos of complete pouch packing machines as shown below- 28. The Appellant in their reply had questioned the fitness of the machine contending that it is wreckage or incomplete machine portrayed as "Packing Machines" and cannot be considered as complete packing machines. That the machines did not have even hopper and the machines are lying in dismantled condition. The Appellant since very beginning had been requesting for technical inspection of machines. The machines were removed from the premises on 22.02.2011 by the department and shifted to central excise office and are in possession of the department. The adjudicating authority refused inspection on the ground that after lapse of eight years the serviceability of the machines may have been affected and thus verification by chartered engineer is not warranted. We find that this observation of the adjudicating authority is against the principles of natural justice. Even otherwise also at the time of visit at factory, the officers should have conducted testing to show that the machines were able to pack gutka pouches or were in wor....
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.... find that the adjudicating authority has not negated the expert report produced by the Appellant, nor he has refuted that the machines were not found in workable condition as vital parts were missing. He himself has observed that feeding hopper was missing in all the machines and presumed that repairs might be going on. However we find that in panchnama or the show cause notice there are no facts or evidence that the machines were under repair nor there is any statement to this effect. From perusal of photographs and above facts, we are of the view that the machines cannot be said to be packing machines. We find that if the machines are being made basis of demanding duty liability under PMPM Rules, in that case the first and foremost primary requirement is presence of a packing machine. In absence of feeding hoppers, and given the fact as recorded by the adjudicating authority that some parts were missing, we are of the view that seized equipments do not fit into the definition of Packing Machines as provided in Rule 2(c) of PMPM Rules 2008. The levy is on installed packing machines and it cannot be on dismantled and/or incomplete equipment. Hence on this ground alone the proceedi....
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.... must be strictly interpreted in favour of the Revenue/State. Further in similar facts in case of M/s. GOYAL TOBACCO CO. PVT. LTD. Vs. COMMISSIONER OF C. EX. & S.T., JAIPUR-I, 2017 (348) E.L.T. 720 (Tri. - Del.), the CESTAT has set aside the demand by holding as under : 6. We have heard both the sides and perused the appeal records. 7. The whole case of the demand against the appellant is on the basis of the availability of three machines in the premises verified by the Central Excise Officers. The demand was confirmed by considering these machines as having been used for illicit packing of excisable goods which were later cleared resulting in non-payment of duty. Admittedly, no other corroborative evidence has either been collected or presented by the officers in confirmation of such demand. In such situation, the actual condition of the machine at the time of detention of the said machines has become crucial. We note that the appellant on various occasions (25-2-2011, 18-3-2011, 19-5-2011, 4-7-2011, 8-7-2011, 14-7-2011) repeatedly requested for examination of the machines by the experts. The same was not accepted by the Department. We are not able....
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.... relevant to the production of notified goods shall be the number of packing machines in the factory of the manufacturer. Rule 5 stipulates that the quantity of goods shall be determined to be as per the table appended therein. Rule 18(2) stipulates that if it is found that the goods have been manufactured or cleared from a unit, which is not registered with the jurisdictional Central Excise Officers, then the duty liability of such unit shall be determined on the basis of number of packing machines found available in the premises of the unit, unless evidence to the contrary is provided to the satisfaction of the central excise officers, such machine shall be determined to have been in operation. Keeping in view the above provisions of the Rules, we find that the non-functional scrap condition of the machines have been repeatedly asserted by the appellants on many occasions during the course of investigations. No verification or technical examination of the machines have been carried out by the department to establish the functional capability of the machines. Since the machines were detained and were under custody of the department, the repeated prayer of the appellant for technic....
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....s is a condition precedent for charging excise duty without which no levy can be made. The Rule cannot be made to go beyond the scope of the charging provisions. 10. Apart from the physical availability of three packing machines, the Revenue relied on the statements of Shri Rajesh Goyal (second appellant), Shri Rakesh Kumar, Shri Pramod Kumar Sharma, Shri Deepak Sharma, Shri Dinesh Jogi and Shri Babu Lal Meema. Shri Rajesh Goyal retracted his statement immediately at the earliest possible occasion. Though the other persons did not retract their statements, their cross-examination was sought by the appellant, which was not allowed by the Adjudicating Authority. However, reliance was placed on these statements as a corroborative evidence to conclude that these machines were in fact used for packing dutiable items. As such, in terms of 2010 Rules, duty liability was determined. In this connection, we note that denial of cross-examination and relying on the statements, put the impugned order in legal jeopardy. The provisions of Section 9D of the Central Excise Act, 1944 is very clear. By now, it is well-settled legal position that the Adjudicating Authority, if he intends to r....
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....and applicable legal provisions in arriving at the findings of non-payment of duty. The order is not sustainable for more than one reason as recorded above. 12. Accordingly, we set aside the impugned order. The appeals are allowed". 29. The above order has been upheld by the Hon'ble Rajasthan high Court as reported in 2018 (360) E.L.T. 477 (Raj.). COMMISSIONER OF C.G. & S.T., JAIPUR Vs. GOYAL TOBACCO CO. PVT. LTD., In view of facts narrated above, we hold that the machines found in the factory being found in dismantled and incomplete condition cannot form basis for demand of duty under PMPM Rules. We also find that the Appellant had been requesting for cross examination of Panch Witness, photographer and videographer, as they were witness to seizure of machine. Despite repeated requests for several years, they were not allowed to cross examine the eye witnesses of panchanama, the photographer and the videographers. Also when the investigating officers are of the view that the factory belongs to the Appellant, he should have been included in the proceedings as he was available in custody. No evidence except the rent agreement on which his signatures are disputed is on re....
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....e tenant is compulsorily required to be reported to the jurisdictional Police Station, but Shri Dinesh Mehta did not do so. We find from the letter of the Station Officer, Police Station, Banganga, Indore, that no such information to the Police Station was given by Shri Dinesh Mehta. We find that during cross examination when Shri Dinesh Mehta was questioned that when earlier agreement was made in 2009, then what was the need of making new agreement in April' 2010, he replied that it was for increasing the rent. However, when shown his own account records that he has continued to receive the same rent and asked to show where he has booked increased rent, he failed to do so, and feigned ignorance. He also failed to show in his submitted accounts the entries for the amount of increase in rent. He also failed to answer as to why the disputed agreement or the signatures are not dated. During cross examination of witness of disputed Rent Agreement Shri Jitesh Joshi stated that he could not trace any date on which such agreement was signed. He admitted that said agreement does not disclose on which date it was signed. He could not explain as to why he did not dated his own signatures. Th....
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.... He admitted that in one case he gave contradictory reports for same signatures. He also admitted that in another matter a Criminal Case against him vide Cr. Case no. 24548 / 2013 is pending before Judicial Magistrate First Class Gr-I, Indore, for allegations under IPC 420. He stated that he does not know why his opinion in the matter was sought when a Government Forensic Lab is available in Bhopal for doing forensic analysis of questioned documents. In view of above answers in cross examination by Shri Tuteja, we find that his report is highly doubtful and cannot be made basis to conclude that the rent agreement was signed by Shri Anmol Mishra. Even the Adjudicating Authority in the impugned O-in-O has not stated as to why any expert would have refused the signatures on PAN and Driving License as admitted signatures. The Government documents are highly acceptable and beyond doubt. Our views are also based upon the decision of Hon'ble Bombay High Court in case of BHARGAV KUNDALIK SALUNKHE VERSUS STATE OF MAHARASHTRA reported as 1995 (12) TMI 384 - BOMBAY HIGH COURT wherein the Court held that - "12. The Apex Court in the case of Magan Bihari Lal v. State of Punjab, has hel....
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....rt must always try to see whether it is corroborated by other evidence, direct or circumstantial. It is interesting to note that the same view is also echoed in the judgments of English and American Courts. Vide Gurney v. Longlands, (1822) 5B &Ald 330, and Matter of Alford Foster's Will, 34 Mich 21. The Supreme Court of Michigan pointed out in the last mentioned case : "Every one knows how very unsafe it is to rely upon any one's opinion concerning the niceties of penmanship - Opinions are necessarily received, and may be valuable, but at best this kind of evidence is a necessary evil." We need not subscribe to the extreme view expressed by the Supreme Court of Michigan, but there can be no doubt that this type of evidence, being opinion evidence, is by its very nature, weak and infirm and cannot of itself form the basis for a conviction. We must, therefore, try to see whether, in the present case, there is, apart from the evidence of the handwriting expert B. Lal, any other evidence connecting the appellant with the offence. 30. The adjudicating Authority has not considered the issue relating to evidence of a handwriting expert. In case of State of Maharashtra ....
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....Shri Sunil Sadhwani as circumstantial evidence, but the same cannot be equated with "dealing" in contraband goods as contemplated in rule 26 of the CER, 2002. Hence his calls cannot be regarded as a conclusive proof of 'dealing' in contraband excisable goods attracting provisions of rule 26 of the CER, 2002. Our views are also based upon the judgments in case of SHAFEEK P.K. Vs. COMMISSIONER OF CUSTOMS, COCHIN 2015 (325) E.L.T. 199 (Tri. - Bang.) and KHEMANI PURSHOTTAM MOHANDAS Vs. CC, CSI AIRPORT, MUMBAI 2017 (354) E.L.T. 275 (Tri. - Mumbai), M/s Popular Paints and Chemicals Vs CCE, Raipur, 2018 (8) TMI 473 - CESTAT New Delhi and Anwar P.V. Vs. P.K. Basheer, 2017 (352) ELT 416 (SC). We also find that the adjudicating Authority has erred in placing reliance on retracted statements of appellants and such statements, as the same were not corroborated with any evidence thus have no evidential value in eyes of law. Our view is based upon judgment in case of SUNTREK ALUMINUM P. LTD. VERSUS COMMISSIONER OF CUS., C. EX. & ST., RAJKOT 2013 (288) E.L.T. 500 (Guj.) wherein it was held that - "6.7 More importantly the statement in question was too weak to be relied on as evidence on ....
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....Amarchand Upadhyay and Shri Sunil Sadhwani is concerned we find that no evidence is on record of their involvement in alleged offence. Only for the reason that the gutka mix or packing material and finished goods bearing name of M/s MSS was found cannot be an evidence of their involvement. Shri Anmol Mishra in his cross examination have categorically stated that he does not have any dealing with M/s.MSS, Shri Sunil Wadhwani or Shri Amarchand Upadhyay. Recovery of pouches of brands used by M/s MSS, laminations and outer packing from impugned premises does not conclusively prove that the zarda masala (gutkha mix) used for the manufacture of such brands of gutkha in factory at Bhorasla was actually and physically received from the factory of M/s MSS. The SCN does not contain any evidence to establish clandestine manufacture of zarda masala in question. There is no evidence on record to prove alleged clandestine manufacture by M/s MSS with reference to the installed capacity of the factory, excess consumption of the electricity, number of labourers employed, quantity of raw materials consumed, difference in the stock of inputs and final products, amount received on account of clandesti....
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.... having concern with transporting, removing, depositing, keeping, concealing, selling, purchasing or dealing in any manner with the seized goods is on record. Hence penalty under Rule 25 or 26 of the Central Excise Rules, 2002 is not attracted in case of MSS and is set aside. Further as far as penalty on appellant Shri Shiv Bahadur Singh Chauhan, the owner of the vehicle is concerned, we find that no evidence is on record to show that the goods were non duty paid and hence liable for confiscation. The manufacture of goods has not been ascertained and no enquiry has been caused from the supplier/seller of the lamination or outer packing which were found in seized vehicle to ascertain their duty paid/ non duty paid nature. We have already noted that no linkage of the seized goods with M/s MSS has been established. Further no statement of Shri Shiv Bahadur Singh Chauhan is on record to show that he was involved in illegal transportation, hence the contention of the adjudicating authority that the goods were liable for confiscation being not duty paid, is not correct. The adjudicating authority has held that Shiv Bahadur Singh during enquiry and reply to SCN has stated that the vehicle....
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.... mislead the enquiry. Shri Sunil Sadhwani has denied signing the agreement and for contesting submitted the report of two handwriting experts namely Mrs. Nitin Supekar and Shri Brijesh Ram Sharan Shankarlalji Sharma, according to which the signature of Sanjay Ajwani made on rent agreement were not made by Shri Sunil Sadhwani. The appellant have contested the allegations that the brands mentioned on laminations and outer packings are not owned by them. That SCN has failed to answer questions like how, when and from where Shri Sunil Sadhwani had procured the said packing materials; how and when he stored in the said godowns; what means of transportation was used for bringing the said goods upto the said godown; who was instrumental in transportation of the said material and unloading in the said godown; and to whom, when and by whom the payment for purchase of such goods were made. That the SCN do not place any evidence on record that such goods were non duty paid, as all excisable goods available in market are considered to be duty paid goods, until proved otherwise. The adjudicating authority relying on the report of unqualified hand writing expert Shri H.S Tuteja, held that signat....
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.... on above opinions. Further we do not find any cogent reason for not getting the signatures tested from Govt. Forensic labs, and to instead get the same tested from some private (unqualified) person. We find that our findings given in preceding paras on reliance of report of hand writing expert, in case of demand against Shri Anmol Mishra, shall hold equally good and applies in present case also. The impugned order has held that Shri Sadhwani was instrumental in storing the seized goods being partner in a firm producing gutkha and pan masala. We find that no physical/ material evidence in relation to procurement, storage, transportation, unloading, godownkeepers etc in relation to seized goods by Shri Sunil sadhwani or M/s MSS is on record. The Appellant and its partners were regularly complaining that duplicate products of their brands are being sold in the market. Even then no attempts were made for any forensic test or visual comparision or chemical analysis of the seized / abandoned materials with the goods of the appellants. In absence of such preliminary and vital investigations, the nexus of the seized goods is zapped with the appellants. Such nexus can not be presumed on th....