TaxTMI 
TaxTMI 
2022 (9) TMI 1056
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1025/11 dt 26.4.12 Finished goods Semifinished goods Raw Material Rs 1,90,000/- Rs.80,40,720/ Rs 28,500/- RF Rs 8,04,072/- RF Penalty Rs 19,000/- E/5033718 Karol Bagh Sale office OIO No. 16/2016 Dt 02.11.2016 OIA No. 227- 229/2017 dt. 26.9. 2017 1026/11 dt 26.4.12 Finished Goods Rs.67,87,298/ Rs 6,00,000/- RF & Rs.1,00,000/- Penalty 2. The facts relevant for present adjudication, succinctly are as follows: The Central Excise Officer conducted search in appellants factory, office and residential premises from 2.11.2011 to 4.11.2011. in the presence of Shri Sanjay Jain, director of the appellant and two independent witnesses. The officer observed that two manufacturing units of appellants have been registered on one address i.e. 8, Printing Press Area, Near Wazirpur Bus Depot, Ring Road, Delhi 110035. It was found that the front portion of 2nd floor of the premises was registered for manufacturing of diaries, binding and stitching work whereas the lower rear portion of the premises was registered for manufacturing of calendars. Both the units had separate central excise registration. The officers observed that premises were being used f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ioned on behalf of the appellant that they are engaged in manufacture of diaries/ religious books/calendars etc. After the search was conducted in appellants various premises, i.e. factory / residential premises / sales office / godown, that the raw material, finished goods and semi finished goods found at the said different premises have been alleged to be unaccounted for. Based thereupon the allegations of clandestine removal have been confirmed against the appellant. It is submitted that those allegations with the order of imposition of penalty have been confirmed without any basis. Confiscation of raw material is absolutely beyond the statutory provisions of Rule 25 of Central Excise Rules, 2002, (herein after called as Excise Rules) which do not at all cover confiscation of raw material. It is mentioned that the order to that extent is liable to be set aside. It is further mentioned that though the search was conducted at different premises of the appellant but the show cause notices are issued only for the manufacturing units, that too after clubbing the recoveries of all the premises. Finally, it is submitted that the goods were still lying in the premises of the appellants,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....about the raw materials, semi finished goods and finished goods found at their different premises at the time of search, has not been accepted by the department for want of job work challans for transferring the material by their diary division to calendar division. The transfer of raw material even to its unregistered units i.e. sales office / godown without any job work challan or proper invoices has been the basis for presuming that appellant in general have adopted the dubious method for organising their manufacture, procurement of raw material and clearance of finished /semi finished goods from their premises with the help /abatement of their Director and employees with an intent to evade central excise duty. The department presumed that appellant deliberately did not maintain proper accounts of raw material to prove their actual production and for facilitating the clandestine removal. The failure to bring on record the documents for procurement of raw material for manufacturing and clearance of finished goods is also held to be an act in furtherance of the alleged clandestine removal. The goods which have been ordered for confiscation were admittedly lying within the premises....
X X X X Extracts X X X X
X X X X Extracts X X X X
....entral Excise Act, 1944 are not acceptable. Therefore, I am of the opinion that Rule 25 of Excise Rules has wrongly been involved against the raw material. The order confiscating the raw material is beyond the scope of statutory provisions. I draw may support from the decision of Mohit Rollers P Ltd vs CCE, Delhi II reported as [2018 (9) GSTL 389 (Tri-Del)]. In another decision Tribunal in the case of K K Sales vs CCE, Delhi II reported as [2017 (345) ELT 540 (Tri-Del)], the Hon'ble High Court of Punjab and Haryana while relying upon its earlier decision in the case of CCE vs Annapurna Impex Pvt Ltd. reported as [2009 (244) ELT 35 (P&H)] has held that there is no provision for confiscation of raw material which has not been accounted since no Cenvat credit was availed on raw material, the goods were held to be not excisable. Hence the Order to the extent of confiscating the raw material and imposing respective penalty upon the appellant is liable to be set aside. 9. Coming to the order of confiscation of finished and semi -finished goods, I observe that the only evidence is departments' presumption based upon the stock found lying in the premises that the goods were in excess and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. On careful examination, it is found that with regard to alleged removals, the department has not investigated the following aspects : (i) To find out the excess production details. (ii) To find out whether the excess raw materials have been purchased. (iii) To find out the dispatch particulars from the regular transporters. (iv) To find out the realization of sale proceeds. (v) To find out finished product receipt details from regular dealers/buyers. (vi) To find out the excess power consumptions." 11. None of these evidences are there on record. In absence thereof the Panchnamas drawn during search do not receive any corroboration. The only allegation that the goods recovered during searches were not accounted in any of the documents maintained by the appellant also cannot be a ground for ordering co....