TaxTMI 
TaxTMI 
2025 (10) TMI 1072
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....turing of various diamonds processing machines like Automatic Diamond Brutting Machine, 4P laser machines etc. and its accessories falling under Chapter 84 of the Central Excise Tariff Act, 1985, without obtaining Central Excise registration and without payment of Central Excise duty payable thereon. Acting upon the intelligence, coordinated searches were conducted on 13th March, 2015 simultaneously at the factory cum office premises of M/s. Bhayani Engineering Company, residential premises of Shri Thakarshibhai Kukadiya, residential premises of Shri Kishorbhai Bhayani, M/s. Khodiyar Diamond, M/s. Jalpa Diamond and M/s. Thakar Traders. 1.2 During the search conducted at factory cum office premises of M/s. Bhayani Engineering Company, J. B. Shopping Centre, opp. Shivnagar Society, Lambe Hanuman Road, Surat, it was found that, besides M/s. Bhayani Engineering Company, two more firms namely M/s. Om Synthetics and M/s. Thakar Traders are also operating from the said premises. All the three firms function under the brand name M/s. Bhayani Engineering Company. After the investigation, the department found that the appellant contravened Rules 4, 6, 8, 10, 11, 12 of the Central Excise R....
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....s per Taz Invoice excluding VAT (Rs) Actual clearance as per delivery challans recovered during search (Rs) 2011-12 30,36,200/- 1,80,33,900/- 2012-13 42,75,300/- 2,71,04,500/- 2013-14 51,01,152/- 2,03,03,500/- 2014-15 27,53,500/- 2,98,35,321/- Thus, M/s Om Synthetics, Surat have resorted to sell the goods without proper documents, by suppressing the actual value of manufacture and clearance of fully finished Excisable goods manufactured by them, by resorting to fraud, collusion etc. and thereby knowingly and purposefully evaded the Central Excise duty. It appears that M/s Om Synthetics had manufactured and clandestinely cleared excisable goods like Russian Brutter, Coning Machine, Vit Machine, 4P Laser Machine etc. totally valued at Rs. 9,73,12,799/- during the period 1 Oct 2010 to 2014-15 (up to 07.03.2015) on which no Central Excise duty has been paid by them to the extent of Rs. Rs. 1,11,20,402/-/including Cess (Rs. One Crore Eleven Lakh Eighty Twenty Thousand Four Hundred Two only) as worked out in Annexure 'E' to this Show Cause Notice, which is required to be recovered under the proviso to Section 11A (1) of the Central Excise....
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....ory. It was under their supervision and directions they cleared their products without payment of duty with intent to evade payment of duty and having agreed and admitted by them in their respective statements discussed in above paras. The fact of clandestine clearance and contravention of this nature could not take place without their conscious knowledge. Therefore, they cannot hide behind the shadow from penal action. Both the noticees being active partners were in such a position that the fact regarding clandestine removal of goods without payment of duty was definitely known to them. Thus, both Shri Kishorbhai Shambhubhai Bhayani and Shri Thakarshibhai Bhagwanbhai Kukadiya had actively concerned themselves in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner dealt with, the excisable goods as described in the foregoing paras which they knew or had reason to believe are liable to confiscation under the Central Excise Act, 1944 and rules framed thereunder. As such they both are liable for penalty under the provisions of Rule 26 of the Central Excise Rules, 2002 for their above described acts. Aggrieved from the above mentioned ....
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....ering or the person has signed as being related with M/s Bhayani Engineering, in that case it was imperative to include M/s Bhayani Engineering in investigation and issue show cause notice for their involvement. Merely on the basis of statement of Partner or the supervisor, it cannot be concluded that the clearances were of M/s Om Synthetics when the seized records show otherwise. No value of clearances has been shown to have been made by M/s Bhayani Engineering Co. When the documents/ records relied upon for making demand has been seized from residence of partner of M/s Bhayani Engineering, in that case, the first presumption will be that such documents belong to clearances of M/s Bhayani Engineering. It was especially so when the documents bear the name of M/s Bhayani Engineering and or were signed on behalf of Bhayani Engineering. Only on the basis of half cooked investigation, the demand cannot be raised. We also find that though clearances of Rs. 2,77,35,400/- has been alleged to have been made by Om Synthetics on the basis of delivery challan, however when the same is corroborated with record No. 18 and 20, it is hardly corroborating to the extent of Approx. Rs. 35 lakhs. In ....
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....meagre quantity supplied. During investigation no excess raw material was found or shortage of raw material was detected. No unrecorded finished goods were found. In case of Rama Shyama Papers Ltd vs. C.C.E. Lucknow (2004 (160) ELT 494 (Tri.Delhi) the tribunal held as under: "9. We have considered the submissions of both the sides. The Revenue has charged the Appellants with clandestine manufacture and removal of paper mainly on the basis of documents seized from the premises of Chitra Traders and Transporters and the various statements recorded from the Proprietor of Chitra Traders, transporters and labourers working in the factory of the Appellants and also the driver or cleaner of the Truck which was in the process of loading on 22-6-2001 when the Central Excise Officers visited their factory premises. The Appellants, on the other hand, have contended that most of the persons whose statements have been relied upon have not been produced for cross-examination and the documents seized from third parties' premises have not been corroborated by adducing evidence of any of the customers though the enquiries were conducted at different places as deposed by Shri Anurag Sha....
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....ade by him in the private diary, loose sheets, charts, packing slips could be drawn about the receipt of polyester yarn by the Appellants from the company, M/s. HPL, in a clandestine manner during the period in question. Similarly, no inference could be legally drawn against the Appellants of having manufactured texturised yarn out of the said polyester yarn and the clearance thereof, in a clandestine manner without the payment of duty." The Tribunal had also referred to the decision in Oudh Sugar Mills Ltd. v. Union of India, 1978 (2) E.LT. (1172) wherein "the Apex Court has observed that no show cause notice or an order can be based on assumptions and presumptions. The findings based on such assumptions and presumptions without any tangible evidence will be vitiated by an error of law". The Tribunal also took note of the decision in Kamal Biri Factory and Shri Khushnuden Rehman Khan v. CCE, Meerut 2003 (161) ELT. 1197 (1) 1997 (23) RLT 609 (CEGAT) wherein view has been taken that the allegations of clandestine removal of the goods will not stand established when based on the entries made by the assessee's employee in a diary or on the basis of third party's record in the ....
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....rder to the effect that "as the party did not challenge the fact of their business association with M/s. Chitra Traders, Delhi, the enquiry further down the line was not considered necessary." The onus of proof that the goods were removed by the Appellants without payment of duty and without entering the same in their records is upon the Revenue which cannot be discharged merely on the strength of the entries made in the records of a third party without linking the removal of goods from the premises of the Appellant-company. The mere fact that the Appellant-company had business relation with Chitra Traders, does not mean that they will be liable to each and every entry made by Chitra Traders in their books of account. It is also noted that none of the transporters and none of the labourers whose statements have been relied upon by Revenue have mentioned that the goods in question were delivered to Chitra Traders from the premises of the Appellants. The material brought on record may at the most create a doubt only. But doubt cannot take the place of evidence. The Revenue has, thus, not proved its case against the Appellants in respect of 149 consignments. We, therefore, set aside t....
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...., then it is possible that out of such goods certain quantities were sold to various customers by accepting payment in cash. In such a situation, the quantification undertaken by the investigation becomes doubtful and incorrect. For this purpose cross-examination of the person Incharge looking after the records of M/s. Sunrise Enterprise was must, which was not allowed by the adjudicating authority. In view of the above observations, the demand of duty of Rs. 1,85,10,861/- is not sustainable and is required to be set aside." 11. The above order of the Tribunal was upheld by the Hon'ble High Court as reported in 2014 (308) E.L.T. 655 (Guj.) and was maintained by the Apex Court as reported in Commissioner v. Saakeen Alloys Pvt. Ltd. 2015 (319) Ε.Ε.Τ. A117 (S.C.). 13. Similar views were given by the Tribunal in case of Ogesh Industries 1997 (94) E.L.T. 88 and M/s. Dawn Fire Works Factory and Others 1999 (31) RLT 104. We also find that Shri Kishorebhai, Shri Thakarshibhai and employees of M/s Om Synthetics had filed retraction affidavits. In such case their statements could not have been made basis for making demands." 14. We also find....