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2024 (12) TMI 1357
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....sion of Central Excise Duty. This intelligence was gathered during the course of an investigation in the case against a local Tile manufacturer when they came across some suspicious bank accounts. On gathering further information about these accounts and their analysis, it was observed that these accounts pertained to certain Shroffs (Cash Handlers) and cash transactions worth several crores has been made through these accounts which seemed to be related to various manufacturers of Tiles located at Morbi. Discreet inquiry was conducted to ascertain the source and destination of such transactions alognwith purpose thereof. On the basis of such inquiry, simultaneous searches were carried out on 22.12.2015 by the officers of DGGI and four Shroff's premises and some of the connected people to find out the details of these transactions. During the search operations, various incriminating documents were recovered under Panchnama. A cash amount was also seized, during the investigation statement of various persons was also recorded. On the basis of documents/ records, recovered/ submitted from/by Shroff and Broker it was revealed that Appellant is one such tile manufacturer out of total 1....
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.... recorded. The alleged these Shroffs are supposed to be main links for depositing cash. It is pertinent to note that in any of the statements said shroffs do not even mentioned the name of the Appellant. They have no concern with the Appellant. They have only named various brokers who are supposed to have withdrawn cash deposited by the Shroffs. The Shroff M/s K.N. Brothers/ Ambaji Enterprises, Rajkot, in their statement, states that one such broker was Pravinbhai Patel. 2.1 He further submits that private records were resumed from the premises of Shroffs. Bank Statements of the Shroff M/s. K.N. Brothers/ Ambaji Enterprises were seized under the Panchanama dated 22.12.2015. Scanned image of the said Bank Statements are reproduced on internal page Nos. 8 to 15 of the show cause notice. It would be found that as far as Pravin Shirvi (Broker) is concerned, against 21 entries of cash deposit, his name is mentioned by the DGCEI in the show cause notice, although it was not there in the original bank statement. The total of these 21 entries comes to Rs. 18,21,600/- only. Further, only the words 'PS' were mentioned in the said records. The DGCEI has considered it to be 'Pravin Shirvi'.....
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..... He has saved the name of said client Mr. Amit Limbasiya as Amit (Ramco). He clarifies that said person works in M/s. Luton Ceramics Pvt. Ltd. He explains the contents of the WhatsApp chat message. The Director, Shri Rajeshbhai R. Kundariya, states in his statement that they sell their goods only under invoice and payments are received through cheque, NEFT, etc. He clarifies that as the Appellant is having a retail outlet also, if a customer purchase tiles in retail and pays in cash, the said cash is also accounted in the books. On showing an image retrieved on 22.01.2019 from his cell-phones, the said Director explains that there is one Dealer M/s. K.K. Enterprises, one Mr. Yadgiri is his customer. On being referred by M/s K.K. Enterprises, Mr. Yadgiri used to directly purchase ceramic tiles from the appellant. For that, Mr. Yadgiri used to credit payment amount in the bank account of M/s. K.K. Enterprise. The WhatsApp Chat shows that Mr. Yadgiri has credited Rs. 1,13,700/- in the bank account of M/s. K.K. Enterprises and that in turn, goods were supplied to M/s K.K. Enterprises under invoice by the Appellant. Thus there is no illegality. There is no clandestine clearances. 2.....
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....s were installed in appellant's factory and what kind of kiln were appellant having at appellant's factory? (o) Whether appellant have used any excess electricity in order to manufacture alleged clandestine quantity? (p) Whether appellant had any excess labour employed in appellant's factory who could be capable to manufacture said clandestinely cleared quantity over and above the quantity cleared under invoice ? (q) How was alleged clandestinely cleared ceramic titles transported by appellant? No statement of any transporter is recorded. Any such transporter is not even identified. 2.7 He argued that it is settled law that unless investigation is not carried out in regards to all the aforesaid, no case of clandestine clearance of excisable goods could sustain. He placed reliance on various decisions out of some are following:- • Vishwa Traders Pvt. Ltd. Vs. Commissioner of C.Ex. Vadodara -2012(278) ELT 362 (Tri. Ahd,) • Premium Packaging Pvt. Ltd. Vs. Commissioner of C.Ex., Raipur -2005(184) ELT A24 (SC) • K.Harinath Gupta Vs. CCE, Hyderabad -1994 (71) ELT 980 (Tribunal) • M. Industries Vs. Collector....
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....The calculation is made on the basis of alleged details of records, alleged to have been received from the Shroffs who are having bank accounts and alleged details of records alleged to have been recovered from the broker Shri Pravin Shirvi. The duty payable is worked out on transaction value basis, considering duty @ of 12.36 % Adv. In other words, whatever amount is found to be deposited in the Bank Account of the Shroff, duty @ of 12.36% is calculated on the same. Section 4 of Central Excise Act, 1945 is applied instead of Section 4A. It is settled law the same cannot be done. 2.10 He also submits that there is absolutely no investigation conducted by the DGGI in the direction of ascertainment the MRP declared by the Appellant on the package of Ceramic Tiles cleared by them. The investigation agency was duty bound to check from the package as to what MRP was declared. They were supposed to follow the Rules viz. Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 introduced vide Notification No. 13/2008-CE (N.T.) dated 01.03.2008, as the same is not done, even otherwise, the demand is unsustainable. 2.11 He argued that in the impugned order, L....
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....4 (Guj.) • Shalini Steels Pvt. Ltd. Vs. CCE, Hyderabad- 2011 (269) ELT 485 (AP) • ACTO, Anti -Evasion -I, Alwar Vs. Khandelwal Foods Products • CCE, Delhi-I Vs. Praveen Kumar & Co. -2015 (328) ELT 220 (Tri. Del) • National Boards Vs. CCE, Calicut -2014 (313) ELT 113 (Tri.-Bang,) • Ramchandra Rexins Pvt. Ltd. Vs. CCE, Bangalore-I- 2013 (295) ELT 116 (Tri,.-Bang) • Soni Vallabhadas Liladhar & Others Vs. CC, Jamnagar -1983 (13) ELT 1408 (SC) • Bhana Khalpa Bhai Patel Vs. CC, Bulsar-1997 (96) ELT 211(SC) • Rajesh Kumar Vs. CESTAT-2016 (333) ELT 256 (Del) • Haryana Steel & Alloys Ltd. Vs. CCE, New Delhi -2017 (355) ELT 451 (Tri,-Del) • Somesh Paper Tubes P Ltd. Vs. CCE, Daman -2014 (313) ELT 669 (Tri. Ahmd) 4. We have considered the submissions made at length by both sides and perused the records. 4.1 After appreciating the submissions made by both sides and after going through the impugned order, we find that the appellant are manufacturing Tiles. The allegations of clandestine removal of goods are primarily based upon the private documents/records rec....
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.... v. UOI and in the case of Basudev Garg v. UOI supra. Reference can be made to the Hon'ble Delhi High Court's decision in the case of J&K Cigarettes Ltd. v CCE, 2011 (22) S.T.R. 225 (Del.). While upholding the constitutional validity of the said section, the Court observed as under: "(i) That, provisions under section 9D provides for relevancy of statements recorded under section 14 of the Act, under certain circumstances, in criminal as well as quasi judicial proceedings, to meet the ends of justice. (ii) That, the quasi judicial authority can rely on the statement of such a person only when the stated grounds is proved. (iii) That, the opinion or order of the quasi judicial authority is subject to judicial review by the Appellate Authority." 4.2 It is well settled law that though the statements carry good persuasive value but such untested statements of third parties cannot be made stand-alone basis for arriving at an adverse conclusion against the assessee. Though an admission or a statement is extremely important piece of evidence but the same has to bear the test of veracity through the tool of cross examination. In the case of NU Trend Business M....
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.... the present matter stand on a doubtful platform and cannot be made the basis for confirming huge demands on the ground of clandestine activity. Similarly, in the case of CCE, Chandigarh-1 v. Shingar Lamps Pvt. Limited [2010 (255) E.L.T. 221 (P&H)], the Hon'ble High Court held that the private records which have been discovered during the raid may not be sufficient for holding clandestine production and removal but there should be some positive evidence suggesting clandestine production and removal. 4.4 We also find that in the present matter appellant's production capacity is not being doubted by the revenue; that there is no direct evidence of procurement of raw material and clearance of tiles, buyers of alleged clandestine cleared tiles have not been identified; that the excess consumption of electricity is neither alleged nor proved on record; that excess labour utilization has not been examined; and above all, the transporter of the allegedly removed Tiles have not been identified and their statements recorded. Thus the Revenue's case which is based mainly on the third party records and statements cannot be sustained. The Tribunal in the case of Charminar Bottling Co. Pvt L....