TaxTMI 
TaxTMI 
2025 (6) TMI 428
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....n the business of manufacture and sale of iron and steel products. For the said purpose, the appellant has integrated steel plants situated at various parts of the country. One such integrated steel plant, known as Durgapur Steel Plant ("DSP", in short), is situated at Durgapur in the district of Burdwan in the State of West Bengal. The instant appeal relates to DSP. 2.1. DSP manufactures various iron steel and allied products falling under Chapters 72, 73, 74, 86 and 23 etc. of the erstwhile First Schedule to the Central Excise Tariff Act, 1985. A Show Cause cum Demand Notice dated 19.01.2000 was issued to the appellant by the then jurisdictional Commissioner of Central Excise, Bolpur Commissionerate, Bolpur wherein it was alleged that DSP had evaded payment of central excise duty amounting to Rs.15,67,46,356/- by allegedly suppressing the fact of removal of 204123.09 MT of iron scrap and steel scrap falling under Chapter Heading 72.04 of the Central Excise Tariff during the period April 1995 to March 1999. The basis of the said allegation was that on comparison with the despatch figures contained in the Annual Statistics Report published by PPCD wing of DSP, it was found that ....
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....Central Excise Vs. SAIL [2024 (7) TMI 304- CALCUTTA HIGH COURT] (iii) SAIL Durgapur Steel Plant Vs. Commissioner of Central Excise Bolpur [Order No. FO/77107/2018 dated 17.12.2018 passed by this Tribunal in Appeal No. E/591/2007.] The appellant has informed that all these decisions have become final. 3.2. The appellant also contends that it is an established principle of law that the onus of proof of clandestine removal is on the Department and the Department was required in law to establish clandestine manufacture and removal through positive and tangible legal evidence; the standard of proof therefor is that the same has to be proved beyond doubt and not by mere preponderance of probabilities or by way of inferences drawn based on calculations and alleged circumstantial evidence based on assumptions, presumptions and inferences. In the absence of such positive evidence, it is contended that no case of clandestine removal of goods can be made out or established against an assessee. It is further their submission that the settled law is that in the absence of any positive evidence the benefit of doubt has to be in favour of the assessee. In this regard reliance is....
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....T 529 (T)] where the entire law on clandestine removal has been discussed and the legal position has been summarised in paragraph 40 of the order. Reliance is also placed upon the decision of the Hon'ble Delhi High Court in Flevel International Vs. Commissioner of Central Excise [2016 (332) ELT 416 (Del.)], wherein, inter alia, the above order of this Hon'ble Tribunal has been quoted with approval. 3.4. In this regard, the appellant also relies on the decision in their own case, as decided by the Tribunal at Bangalore [(2023) 9 Centax 78 (Tri. - Bang.)]. 3.5. Regarding invocation of extended period of limitation, the appellant submits that the ASRs have been prepared by Statistics Department of DSP for statistical purposes and regularly submitted to the jurisdictional Central Excise authorities during the next financial year. The appellant states that it is a fact on record that the demands have been raised on the same issue for the earlier years also. Thus, the appellant submits that the Department was very well aware of the issue and no suppression can be alleged on the part of the appellant and for this reason, extended period of limitation cannot be invoked in this case. ....
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....h were purchased in excess of that declared. There is also no evidence of use of any alleged excess inputs, used by the appellant, to establish manufacture of the alleged unaccounted quantity of the said goods during the said period. There is no statement whatsoever obtained from any of the persons or parties to whom the appellant had allegedly had cleared the alleged said goods without payment of duty thereon. As per the Show Cause Notice and the impugned order, the quantity of such unaccounted scrap materials was more than 20.41 lakh MT covering the said period of 4 years, i.e., more than 5 lakhs MT per year on an average. However, we do not find a single piece of evidence disclosed to indicate as to how, to whom and in what manner such huge quantity of the said goods were removed. There is also no evidence to show that any payment was received by the appellant from the alleged customers to whom the said alleged unaccounted goods, alleged valued at Rs. 96.70 crores approximately, were sold. Moreover, no evidence has been disclosed or brought on record to establish, even prima facie, of payment being made by the appellant to any alleged persons/parties from whom any excess raw mat....
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...., say with some certainty is that inferences cannot be drawn about such clearances merely on the basis of note books or diaries privately maintained or on mere statements of some persons, may even be responsible officials of the manufacturer or even of its Directors/partners who are not even permitted to be cross-examined, as in the present case, without one or more of the evidences referred to above being present. In fact, this Bench has considered some of the case-law on the subject in Centurian Laboratories v. CCE, Vadodara [2013 (293) E.L.T. 689]. It would appear that the decision, though rendered on 3-5-2013, was reported in the issue of the E.L.T., dated 29-7-2013, when the present case was being argued before us, perhaps, not available to the parties. However, we have, in that decision, applied the law, as laid down in the earlier cases, some of which now have been placed before us. The crux of the decision is that reliance on private/internal records maintained for internal control cannot be the sole basis for demand. There should be corroborative evidence by way of statements of purchasers, distributors or dealers, record of unaccounted raw material purchased or c....
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....ds other goods Rs. 23,25,256/-. For the year 1988-89 the total sale value comes to be Rs. 38,06,556/-. For the year 1989-90 the sale value of compressor has been Rs. 6,42,400/- and other items has been Rs. 14,60,957.54 and thereby making the total sale figures to Rs. 21,03,357.54. All such figures were verifiable from the ledgers seized by the Department. 19-B-IV As per Annexure-XVIII of SCN it is alleged that for the year 1988-89, the appellants sold 356 numbers of air conditioners. This means that the average sale price of each air conditioner should be Rs. 38,06,556/- divided by 356 and this brings the figure on an average to be Rs. 10,692/- per air conditioner, as per the show cause notice." 49. Likewise a detailed explanation was offered by the appellant for each of the sales figures in the ledger accounts. These were not discussed in any of the above orders except that of the Member (Judicial). The non-consideration of the appellant's plausible explanation also seriously vitiates the said orders. 50. The Court also finds that no attempt has been made to undertake any serious investigation even as regards the details furnished by the appellant or tho....
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....6 of order of the Tribunal, which reads as under : - 12. Be that as it may be, it is to be noted that there is no dispute that to manufacture of said final product 'Frit' requires the use of Quartz, Feldspar, Zinc, Borax Powder, Calcium and Dolomite as inputs/raw material. On the date of visit of the officers to the factory premises of the appellant, it is undisputed that the stock of raw materials as well as finished goods was tallying with recorded balances. This conclusion can be reached from perusal of records, as there is nothing on record to indicate otherwise. 13. On careful perusal of the entire records of the case, we find that there is nothing on record as to unrecorded purchases or consumption of various other raw material in the manufacture of Frit, there is also nothing on record to indicate that the appellant had purchased the Quartz, Feldspar, Zinc, Borax Powder, Calcium and Dolomite and without accounting them used for the manufacture of Frit for clandestine removal. There is also nothing on record nor there is any statement of the suppliers of other raw materials, which would indicate that the appellant had received unaccounted raw material from t....
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....cords of M/s. Sunrise Enterprises and absence of other cogent and positive evidences, would not permit it to sustain the demand of Rs. 1.85 crores raised in the Demand notice and confirmed by both the authorities below." 54. The above order has been affirmed by the Supreme Court by the dismissal of SLP (Civil) (CC Nos. 19304-07 of 2014) on 1st December, 2014 [2015 (319) E.L.T. A117 (S.C.)]. 55. Mr. Hari Shanker, learned Senior counsel for the appellant, has also drawn the attention of the Court to a decision of the CESTAT in Arya Fibres Pvt. Ltd. v. CCE, Ahmedabad-II - 2014 (311) E.L.T. 529 (Tri.-Ahmd.) where the entire law concerning clandestine removal has been discussed and the legal position has been summarised as under : "(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) disco....