TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 10
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....nly) as per the annexure a1 to a4 of the Show Cause Notice. Thus totaling Rs.4,30,13,520/- (Rupees four crore thirty lakh thirteen thousand five hundred twenty only) of Central Excise Duty including AED, NCCD, Ed Cess and Secondary and higher Ed. Cess is hereby confirmed and order to recover the same from the noticee no. 1 under the provisions of Section 11A of the Central Excise Act, 1944. (ii) I order for the recovery of interest at the applicable rate from the noticee no. -1 on the amount as confirmed at para 105 (i) above under the provisions of Section 11AA of the Central Excise Act. (iii) I impose a penalty of Rs.4,30,13,520/- (Rupees four crore thirty lakh thirteen thousand five hundred twenty only), upon the noticee no. -1 Shri Rajkumar Gupta alias Raju Sultania alias Rajkumar Sultania, under the provisions of Section 11AC of the Central Excise Act for the reasons discussed above. (iv) I order to confiscate 16,54,261 sticks of filter cigarettes of 'sunils Two' & 'India 10' brands valued at Rs.32,38,409/- which were seized on 3005.2014 from the unregistered cigarette manufacturing factory of Shri Raju Sultania running in the name and style of M/s Shani Dev Enterprises ....
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.... which shall be 50% of the value of the goods. The release of such goods on payment of redemption fine shall be done only after the goods are found to be fit for human consumption and meets the other legal requirement relating to health and safety. I also order to confiscate the unaccounted stock of raw materials / packing materials totally valued at Rs.12,37,770/- which had been seized on 30.05.2014 from the undeclared godown of Shri Raju Sultania situated at Didarganj, Near Godrej Warehouse, Fatuha, Dist.- Patna under Rule 25 of the Central Excise Rules, 2002. However, I give an option to pay Redemption fine in lieu of confiscation which shall be 50% of the value of the goods. The release of such goods on payment of redemption fine shall be done only after the goods are found to be fit for human consumption and meets the other legal requirement relating to health and safety. I order to confiscate the unaccounted quantity of 4,79,500 sticks of filter cigarettes of various brands valued at Rs.9,35,025/- seized on 30.05.2014 the undeclared godown of Shri Raju Sulatania situated at Jharkhand Tola, Village-Daniyava, Dist.- Patna under Rule 25 of the Central Excise Rules, 2002. How....
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....penalty of Rs.4,30,00,000/- (Rupees four crore thirty lakh only) upon Shri Anand Tejwani (Noticee no. 6) under the provisions of Rule 26 of the central excise rules, 2002 for the reasons discussed above. If the amount determined at para 105(i) above is paid within 30 days from the receipt of the order along with the interest payable, then as per proviso to Section 11AC of the Act, the penalty imposed at para 105 (iii), (xii) (xiii), (xiv) (xv) and (xvi) above will be only 25% of the amount determined at para 101(i) above. The benefit of reduced penalty shall be available only if the reduced amount of penalty has also been paid within the period of thirty days from the receipt of this order. 2. The Appellant states that the present dispute relates to the demand of Central Excise Duty including AED, NCCD, Ed. Cess, and secondary and higher Ed. Cess amounting to Rs. 4,30,13,520/- for the period of May, 2013 and May, 2014, and penalty imposed on the Appellant. The impugned order deals with various demands, however, the present appeal is only against the demand of duty along with interest and penalty imposed on the Appellant in the impugned order. 3. The briefly stated facts of the ....
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....godowns on rent in Patna and that they were engaged in manufacturing cigarettes from the unregistered premises at Fatuha Daniyava Road, without payment of central excise duty and cleared the same clandestinely from the said premises. In consequence to the said investigation, a show cause notice dated 28.11.2014 was issued to them by the Addl. Director General, DGCEI, New Delhi with the allegations that the Appellant is the owner of ATPL and the unregistered factory premise of ATPL and that the Appellant has engaged in clandestine removal of filter and non-filter cigarettes under different brand names. The said Notice was adjudicated by the Ld. Adjudicating Authority vide the impugned Order-in-Original dated 05.10.2018 wherein the entire demand as proposed in the Notice was confirmed along with interest and imposition of equivalent penalty. The present proceedings are against the demands confirmed against the Appellant in this impugned order. 4. In their grounds of appeal the Appellant made the following submissions: (i) The Ld. Adjudicating Authority has grossly erred in confirming the demand against the Appellant when it is settled that the levy of Central Excise duty is upon t....
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....him and the same was the very basis of the start of the investigation against the Appellant. (viii) The Appellant states that it is a settled principle that the allegation of clandestine removal is a serious one and the same has be brought on record by the department, which has not at all been done in the present case. (ix) The Appellant relied on the decision of the Tribunal in the case of M/s AMBICA IRON AND STEEL PVT LTD vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX , ROURKELA 2022-TIOL-67-CESTAT-KOL wherein it has been held that clandestine manufacture and removal of excisable goods is to be proved by tangible, direct, affirmative and incontrovertible evidences relating to (i) Receipt of raw material inside the factory premises, and non-accounted thereof in the statutory records; (ii) Utilization of such raw material for clandestine manufacture of finished goods; (iii) Manufacture of finished goods with reference to installed capacity, consumption of electricity, labour employed and payment made to them, packing material used, records of security officers, discrepancy in the stock of raw materials and final products. The department could not bring in any such....
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....ious brands of M/s ATPL was found. The said Santhosh Kr. Jodhwani failed to produce any purchase documents against the stock of cigarettes found at his premises. In his statement, he stated that he used to contact Shri Mahesh for purchase of cigarettes and the orders were placed on phone and that the cigarettes were received in his godown directly from ATPL and that the payments were made in cash to different traders upon the instructions of Shri Mahesh. But, we observe that no statement was recorded from Shri. Mahesh to confirm the statement of shri Santhosh Kr. Jodhwani. The investigation has blindly accepted the statement of Shri Santosh Kr Jodhwani, without any evidence. Shri Santhosh Kr. Jodhwani in his statement stated that the Appellant is owner of ATPL. We observe that the investigation has not brought in any evidence to substantiate this claim. 8. We observe that search was later carried out at the premises of ATPL including an unregistered factory premises of ATPL situated at Village - Mohiduddinpur (Village - Narma), Fatuha Daniyava Road, Dist. Patna and two godowns situated in and around Patna on 30.05.2014. During the search two cigarette making machines were found in....
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....or manufacture of excisable, goods, but also any person who engages in their production or manufacture on his own account;]" From the above definition, it can be seen that in order to construe a person as a 'manufacturer' it must be established that he employs his labour for production of goods or engages himself directly and produce goods on his own account. 11. In the present case, we observe that there is no evidence brought on record by the investigation to establish that the Appellant has engaged his labour to manufacture cigarettes in the Fatuha Daniyava Road premises where two cigarette making machines were found. There was no evidence available on record to implicate the Appellant in the manufacture of cigarettes found in the Fatuha Daniyava Road premises or at the other godowns. The cigarettes found the said premises were bearing the brands owned by M/s ATPL. Obviously M/s ATPL should be questioned first regarding the ownership of the goods, since they were registered with the department for the manufacture and clearance of cigarettes under various brand names owned by them. Apparently, the investigation has not questioned any of the Directors of M/s ATPL. No demand was ....
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....ods with reference to installed capacity, consumption of electricity, labour employed and payment made to them, packing material used, records of security officers, discrepancy in the stock of raw materials and final products; (iv) Clandestine removal of goods with reference to entry of vehicle/truck in the factory premises, loading of goods therein, security gate records, transporters' documents, such as L.Rs., statements of lorry drivers, entries at different check posts, forms of the Commercial Tax Department and the receipt by the consignees; (v) Amount received from the consignees, statement of the consignees, receipts of sale proceeds by the consignor and its disposal. Whereas, in the instant case, no such clinching or corroborative evidences to the above effect have been brought on record. 15. In the instant case, the entire case of the Revenue is based on the Kaccha Chithas seized from the residence of the Director. The manner in which the said Kaccha Chithas is seized has been strongly agitated by the Appellant. We find that the said Kaccha Chithas/documents should have been seized in the presence of the Director. There is considerable force in the contention of the App....
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.... Commissioner has asserted in the impugned order that the demand based on the Kacha Chithas and the statement of Director is sustainable and that no further corroboration was required in view of the clinching nature of the oral and documentary evidence establishing clandestine production and removal of finished goods at para 17.2 of the Order-in-Original is clearly contrary to the judicial precedents cited supra. 19. We further find that the contention of the Learned Commissioner in the impugned Order-in-Original that it is neither feasible nor desirable to cause enquiry at all possible points concerning the clearances at Para 17.5 of the impugned order itself clarifies that the demand has been raised solely on the basis of assumptions and presumption and no corroborative evidence was brought out by the Revenue except the so called Kacha Chithas and statement of Director. 20. We are of the view that the Learned Commissioner made a fundamental error by making assumptions only just to confirm the demand on the allegation of clandestine clearance. It is a well settled position of law that serious allegation cannot be made merely on assumptions and presumptions and in the absence....
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....ory of production; etc. 21. We agree to the proposition of the learned Commissioner that the department is not required to prove clandestine removal by mathematical precision. However, the instant case, we find that not even single evidence has been brought on record to show clandestine removal, conclusively establishing at least in a sample transaction. We find that the Annexure-H contains alleged receipts by M/s SPRML date wise from the appellants. The Annexure contains Truck Nos. We do not find any investigation regarding the transportation at least, of which some evidence, in the form of Truck numbers, was available with the department. We also find that no stock verification has been conducted at the appellant's premises to see if there were any discrepancies in the stock of raw material, finished products etc. The allegation is about clandestine removal of a huge quantity of 13,683.05 MT valued at Rs.52.00 Crores. To prove evasion of such magnitude, the department should have established the purchase of raw material, consumption of electricity, deployment of labour, arrangement of transportation, receipt at the customers' end and financial transactions. Receipt of money in re....
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.... case of Anwar P.V. Vs. P.K. Baseer, MANU/SC/0834/2014 and further followed by this Tribunal in the case of Popular Paints vide Final order dated 06.08.18. I further find that the learned Commissioner (Appeals) erred in relying upon Section 36A of the Act, which is not applicable to the facts of the present case. I further find that the alleged private records cannot be relied upon as evidence without any corroborative evidence. I find that the Hon'ble Chhattisgarh High Court in the case of Hi-Tech Abrasives Ltd. Vs. CCE&C, Raipur, 2018 (362) ELT 961 (Chhattisgarh), has held that:- "12.2 We have gone through the detailed order passed by the adjudicating authority and we find that so far as the demand of challenge in the present case is concerned it rested only on two materials. One was the so called statement of the Director which the adjudicating authority and the Customs, Excise and Service Tax Appellate Tribunal received in advance as admission of clandestine removal by the Director of the appellant/Company and the other was the notebook which contained certain entries, which according to the adjudicating authority constitute relevant material to draw inference of clandestin....
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....ave been affirmed by the Hon'ble High Courts and Supreme Court.......................... 9. I further find that merely deposit of money at the time of investigation would not amount to acceptance of allegations of clandestine manufacture and removal as alleged by the department. It is well settled law that, payment of money at the time of investigation would be treated as a deposit under protest, which is held in following judgements............ 10. I further find that burden to prove allegation of clandestine manufacture and removal is heavily on the department and has to be discharged by producing clinching evidence on record, which has not been discharged by the department in the present case. 11. In the light of the above discussions, the impugned order cannot be sustained and is accordingly set aside. The appeal filed by the appellant is allowed with consequential relief as per law." 16. We observe that the issue involved in the present appeals is clandestine removal of goods without payment of Central Excise duty. The charge of clandestine removal is a very serious charge which entails serious consequences which are both civil and criminal in nature. Hence, before....