TaxTMI 
TaxTMI 
2024 (12) TMI 738
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....ential premises of the co-appellant, which was being used as a secret office. Incriminating documents were recovered from both the places, which were seized in the in the presence of the independent panchas. Joint physical stock of M.S.Ingots was also taken before the co-appellant and the employees of the main appellant. Examination of the seized documents revealed that these were related to the business activities of the appellant and the stock was found to be short of that shown in the Daily Stock Account. The documents revealed that all the sponge iron received by the appellant was not accounted , actual production was not accounted and the finished goods were dispatched without issuance of invoices and where the invoices were issued, the value was declared lesser than what was realized by them. The ledgers revealed that payments had been made by them against receipt of raw materials and also received against sales, in cash or through third persons, in order to hide the extent and nature of transactions. The entries in the bank statements of the appellant and the accounted receipts of raw materials and despatches shown in the statutory records of the appellant tallied with that ....
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....39)ELT 209 (P&H) ; (iv) Commissioner of C.Ex. Lucknow V Premier Alloys Ltd-2019 (366) ELT 659(All) ; (v) Flevel International Vs. Commissioner of Central Excise-2016 (332) ELT 416(Del); 3.2 He further submits that the sole basis for confirming the huge demand is based on the seized private records maintained by one Staff who was store in-charge which remained un-verified, un-corroborated and un-authenticated from any source despite every detail found in the alleged recovered private records. Hence, the demand based on such unverified and un-corroborated statements and documents cannot be fastened. 3.3 It is his further submission that no follow up enquiry either from the raw material suppliers, transporters, commission agents, buyers of finished goods specially when each and every details were allegedly available in the alleged private records seized from an employee of the Appellant. Merely because an employee who was store supervisor and not even concerned with maintaining the accounts of the company has admitted the details contained in those writing pads, would not be sufficient enough to fasten the duty liability on the company without any corr....
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....ts to harm the company. A simple enquiry from the raw material suppliers, transporters, commission agents and purchasers of finished goods whose details were available in those seized documents would have brought the true facts. But no enquiry was made. 3.7 He further submitted that Shri Sati Ram had ulterior motive to harm the company by Shri Sati Ram and associates as the Company had declined any raise in salary during the relevant period. This is evident from the very fact that Shri Sati Ram was working as Store In- charge but he claimed to be the Accounts Manager in order to justify the reason for being in possession of seized documents. 3.8 He, therefore, prays that the impugned order is not sustainable in the eyes of law and the same is required to be set aside. 4. The ld.A.R. for the Revenue submits that the documents were seized from the possession of the employees, which were maintaining in secret office. Shri Sati Ram made the statement that these documents belong to the appellant company. In that circumstances, the demand has correctrly raised against the appellants. 5. Heard both the parties and considered the submissions and verified the documents placed be....
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.... an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. 7. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the....
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....g relied upon by the Department, no serious attempts were made to secure their presence in the adjudication proceedings. A perusal of the adjudication order of the CCE shows that as far as Mr. Pradeep Bhargava is concerned, the summons issued to him were returned with the remarks „left without address‟ by the postal authority. No further attempt appears to have been made to secure his presence. After simply noting the above fact the CCE in the order-in-original dated 14th January, 2004 observed that "hence no purpose was going to be served by sending a fresh summons to him." 44. To say the least, this was the most perfunctory way of dealing with the request, particularly since the statements made by Mr. Pradeep Bhargava, a former employee of M/s. Thermoking, to the effect that 1022 compressors had been diverted by M/s. Thermoking to the appellant, formed one of the strong pieces of evidence with the Department to conclude that they had been used for manufacture of ACs. The Department failed to show the existence of any of the extraordinary circumstances under Section 9D of the Act to justify the denial of right to cross-examine Mr. Pradeep Bhargava. In the cons....
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....n agent, whose details were available in the record seized from the possession of Shri Sati Ram, the authenticity of the documents/records from the possession of Shri Sati Ram is doubtful. In this regard, this Tribunal in the case of Arya Fibres Pvt.Limited (supra) has laid the principles that in cases of clandestine manufactuere and clearances, certain fundamental criteria have to be established by the Revenue, which are as follows : "(i) There should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions; (ii) Evidence in support thereof should be of : (a) raw materials, in excess of that contained as per the statutory records; (b) instances of actual removal of unaccounted finished goods (not inferential or assumed) from the factory without payment of duty; (c) discovery of such finished goods outside the factory; (d) instances of sale of such goods to identified parties; (e) receipt of sale proceeds, whether by cheque or by cash, of such goods by the manufacturers or persons authorized by him; (f) use of electricity far in excess of what is necessa....
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....n with cogent and clinching evidence. It has been consistently held that no demand of clandestine manufacture and clearance can be confirmed purely on assumptions and presumptions and the same is required to be proved by the Revenue by direct, affirmative and incontrovertible evidence, as has been held in the following cases :- * Bihar Foundary & Castings Ltd. v. CCE, Ranchi [2019 (8) TMI 527-CESTAT, Kolkata] - Para 18 * Continental Cement Company v. Union of India [2014 (309) E.L.T. 411 (All.)] - Para 12 * Balashree Metals Pvt. Ltd. v. UOI [2017 (345) E.L.T. 187 (Jhar.)] - Para 5(vi) * CCE, Meerut-I v. R.A. Castings Pvt. Ltd. [2012 (26) S.T.R. 262 (All.) = 2011 (269) E.L.T. 337 (All.)] * Popular Paints and Chemicals v. CCE & Customs, Raipur [2018 (8) TMI 473 (Tri. - Delhi)] - Para 17 17. .......................................................... 18. ........................................................... 19. ........................................................... 20. We are of the view that the Learned Commissioner made a fundamental error by making assumptions only just to confirm the demand ....