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2025 (11) TMI 1541
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.... (xiv) Excise Appeal No.10237 of 2022-DB (ACTIVE CERAMIC PVT LTD) (xv) Excise Appeal No.10238 of 2022-DB (RAJESHBHAI CHHAGANBHAI BARAIYA) (xvi) Excise Appeal No.10239 of 2022-DB (PRAYAG JAYANTILAL VANSJALIYA) (xvii) Excise Appeal No.10240 of 2022-DB (ARVIND LAXMANBHAI KANKASANIYA) (xviii) Excise Appeal No.10304 of 2022-DB (LEGEND CERAMIC PVT LTD) (xix) Excise Appeal No.10305 of 2022-DB (DUSHYANT BHAVJIBHAI PATEL) (xx) Excise Appeal No.10339 of 2022-DB (ALIVE TILES PVT LTD) (xxi) Excise Appeal No.10340 of 2022-DB (RAJNIKANT V PANCHOTIYA) (xxii) Excise Appeal No.10341 of 2022-DB (KISHORBHAI L KANIKASNIYA) (xxiii) Excise Appeal No.10342 of 2022-DB (CHETANKUMAR HARESHBHAI SORIYA) (xxiv) Excise Appeal No.10351 of 2022-DB (ADOR CERAMIC PVT LTD) (xxv) Excise Appeal No.10352 of 2022-DB (NARESH KESHAVLAL RAJPARA ) (xxvi) Excise Appeal No.10353 of 2022-DB (ANTICA CERAMIC) (xxvii) Excise Appeal No.10354 of 2022-DB (ASHWIN K DALSANIYA) (xxviii) 10369 of 2022-DB (SIYARAM VITRIFIED PVT LTD) (xxix) Excise Appeal No.10370 of 2022-DB (CHETANBHAI LALJIBHAI KALARIYA) (xxx) Excise Appeal No.10371 of 2022-DB (JAYESH THAKARSHIBHAI VARSDA) (xxxi) Exci....
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.....10469 of 2022-DB (MANSUKHLAL H PATEL) (lxvi) Excise Appeal No.10470 of 2022-DB (SMT SAROJBEN H BHORANIYA) (lxvii) Excise Appeal No.10471 of 2022-DB (PERFECT CERAMICS) (lxviii) Excise Appeal No.10501 of 2022-DB (ANITLA CERAMIC PVT LTD) (lxix) 10507 of 2022-DB (ROSSA TILES PVT LTD) (lxx) Excise Appeal No.10508 of 2022-DB (NARBHERAM PARSHOTTAMBHAI NARANIYA) (lxxi) Excise Appeal No.10509 of 2022-DB (MANHARLAL S PATEL) (lxxii) Excise Appeal No.10530 of 2022-DB (OSHO SANITARYWARES PVT LTD) (lxxiii) Excise Appeal No.10535 of 2022-DB (ARROW CERAMICS) (lxxiv) Excise Appeal No.10536 of 2022-DB (SUNITABEN H FULTARIA) (lxxv) Excise Appeal No.10537 of 2022-DB (DAYALAL J GHETIA) (lxxvi) Excise Appeal No.10538 of 2022-DB (MADHUBEN D FULTARIA) (lxxvii) Excise Appeal No.10539 of 2022-DB (MADHUBEN D GHETIA) (lxxviii) Excise Appeal No.10540 of 2022-DB (ASHWIN G PATEL) (lxxix) Excise Appeal No.10541 of 2022-DB (DHARAMSHIBHAI J PATEL) (lxxx) Excise Appeal No.10542 of 2022-DB (DAMJIBHAI J PATEL) (lxxxi) Excise Appeal No.10543 of 2022-DB (PRANJIVAN R MAGUNIYA) (lxxxii) Excise Appeal No.10544 of 2022-DB (AJAY K BHIMANI) (lxxxiii) Excise Appeal No.1054....
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....BIT CERA TILES PVT LTD) (cxviii) Excise Appeal No.10639 of 2022-DB (MAVJIBHAI PARSHOTTAMBHAI SORIA) (cxix) Excise Appeal No.10640 of 2022-DB (NEHA CERAMIC INDUSTRIES) (cxx) Excise Appeal No.10641 of 2022-DB (BALVANTBHAI K SORIA) (cxxi) Excise Appeal No.10642 of 2022-DB (JAYSUKHBHAI K SORIA) (cxxii) Excise Appeal No.10643 of 2022-DB (BHAVNABEN JAYSUKHBHAI SORIA) (cxxiii) Excise Appeal No.10650 of 2022-DB (ADMARK CERAMIC INDUSTRIES) (cxxiv) Excise Appeal No.10659 of 2022-DB (HILLTOP CERAMICS) (cxxv) Excise Appeal No.10660 of 2022-DB (TRIGUNBHAI B PATEL) (cxxvi) Excise Appeal No.10661 of 2022-DB (RANDIPBHAI B PATEL) (cxxvii) Excise Appeal No.10680 of 2022-DB (SAMRAT SANITARYWARES PVT LTD) (cxxviii) Excise Appeal No.10681 of 2022-DB (HARSHADKUMAR RAMJIBHAI AMRUTIYA) (cxxix) Excise Appeal No.10682 of 2022-DB (DEVENDRABHAI BACHUBHAI PATEL) (cxxx) Excise Appeal No.10683 of 2022-DB (PRAGJIBHAI BACHUBHAI CHATROLA) (cxxxi) Excise Appeal No.10695 of 2022-DB (DELTA TILES LTD) (cxxxii) Excise Appeal No.10696 of 2022-DB (LALJIBHAI ANANDBHAI PATEL) (cxxxiii) Excise Appeal No.10697 of 2022-DB (DARSHANBHAI SANGHANI) (cxxxiv) Excise Appeal No.10698 ....
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....OJA) (clxvii) Excise Appeal No.10742 of 2022-DB (JITENDRA THOBHANBHAI ADROJA) (clxviii) Excise Appeal No.10743 of 2022-DB (SMT BHAVNABEN BHARATBHAI ADROJA) (clxix) Excise Appeal No.10744 of 2022-DB (KANTILAL THOBHANBHAI ADROJA ) (clxx) Excise Appeal No.10745 of 2022-DB (BHARATBHAI THOBHANBHAI ADROJA) (clxxi) Excise Appeal No.10746 of 2022-DB (MANISH THOBHANBHAI ADROJA) (clxxii) Excise Appeal No.10747 of 2022-DB (SMT ANJANABEN MANISHBHAI ADROJA) (clxxiii) 10748 of 2022-DB (SMT SAROJBEN JITENDRABHAI ADROJA) (clxxiv) Excise Appeal No.10749 of 2022-DB (SISAM CERAMICS PVT LTD) (clxxv) Excise Appeal No.10750 of 2022-DB (DILIPKUMAR MAVJIBHAI SHIRVI) (clxxvi) Excise Appeal No.10751 of 2022-DB (SHAILESHBHAI MAVJIBHAI SHIRVI) (clxxvii) Excise Appeal No.10753 of 2022-DB (NILESHKUMAR AMARSHIBHAI SHIRVI) (clxxviii) Excise Appeal No.10755 of 2022-DB (HIMSUN CERAMIC) (clxxix) Excise Appeal No.10756 of 2022-DB (SMT NITABEN ASHWINBHAI PATEL) (clxxx) Excise Appeal No.10757 of 2022-DB (PRAVINBHAI BECHARBHAI PATEL) (clxxxi) Excise Appeal No.10768 of 2022-DB (ATOM CERAMICS) (clxxxii) Excise Appeal No.10769 of 2022-DB (SMT LATABEN CHHATROLA) (clxxxiii) ....
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....RA EX DIRECTOR) (ccxvi) Excise Appeal No.10955 of 2022-DB (MAHESH KUMAR A. SARDAVA EX DIRECTOR) (ccxvii) Excise Appeal No.10956 of 2022-DB (VISHAL KANTIBHAI AGHARA EX DIRECTOR) (ccxviii) Excise Appeal No.10957 of 2022-DB (SOMNATH POLYPACK INDUSTRIES) (ccxix) Excise Appeal No.10958 of 2022-DB (ASHOKKUMAR NARABHERAM FEFAR PARTNER) (ccxx) Excise Appeal No.10982 of 2022-DB (SUNFLORA VITRIFIED PVT LTD) (ccxxi) Excise Appeal No.10983 of 2022-DB (NARENDRA DHARAMSHI BHIMANI) (ccxxii) Excise Appeal No.10984 of 2022-DB (BIRENDRAKUMAR NARENDRABHAI DHMANI) (ccxxiii) Excise Appeal No.10985 of 2022-DB (RAMESH DHARAMSHI BHIMANI) (ccxxiv) Excise Appeal No.10986 of 2022-DB (DHARAMSHI MOTIBHAI PATEL) (ccxxv) Excise Appeal No.10987 of 2022-DB (JAYANTI DHARAMSHI BHIMANI) (ccxxvi) Excise Appeal No.10988 of 2022-DB (SOLENZO CERAMIC PVT LTD) (ccxxvii) Excise Appeal No.10989 of 2022-DB (SANJAY G ZALARIA) (ccxxviii) Excise Appeal No.10990 of 2022-DB (DIPAKBHAI MAGANBHAI PATEL) (ccxxix) Excise Appeal No.10993 of 2022-DB (FRESCO CERAMIC PVT LTD) (ccxxx) Excise Appeal No.10994 of 2022-DB (GHANSHYAMBHAI M DHORIYANI) (ccxxxi) Excise Appeal No.11002 of 2022-DB (GLO....
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....Mr. Somesh Arora And Hon'ble Member (Technical), Mr. Satendra Vikram Singh For the Appellants : Shri P D Rachchh, Advocate & Shri Parth Rachchh, Advocate Appeared For the Respondent : Shri R R Kurup, Superintendent (AR) Appeared ORDER SOMESH ARORA : 1. The present bunch of cases involves 57 matters of various main parties and other allied parties. The common thread in the factual matrix of the case is that based on intelligence, the DGGI raided some Shroffs (Local Hawala Operators) and found some details of cash transactions stated to be of for some manufacturers via dealers. On the basis of investigation, including searches wherever conducted, the following position as tabulated below has emerged:- SR Main Appellants Appeal Nos. Shroff Name at Rajkot Shroff/Angadiya i.e. Middleman/Broker Name at Morbi Name of person(s) to whom cash said to have been given as per Middleman/Broker's statement Name of persons as per private records of Middlemen/bro er who is said to have received cash from Middlemen/broker Whether buyers statements were recorded? Whether statement of partners or directors of appellant recorded? 1 Famous Vitrifie....
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....cs & Mansigh Nelco No No 12 Super Ceramic E/10933-10938/2022 Shri Ambaji Enterprise, P C Enterprise & K N Brothers Sarvodaya Shroff Sandipbhai & Shileshbhai As per Shaileshbhai -Super Ceramics Kishanbhai As per Sandipbhai -No name Super Ceramic in Gujarati No No 13 Legend Ceramic Pvt. Ltd. E/10304-10305/2022 Shri Ambaji Enterprise, K N Brothers, Rajkot Kasundra Kaka L D Ceramics Dushyant Code -L D L D, L D Ankit, L D Hasubhai, L D Jino, L D Aarif Driver, L D JYS, etc. (After L D name in Gujarati) 1. Sharma Tiles Pvt. Ltd. Chennai dtd 04.06.19 1. Dushyant B. Patel dtd 20.01.2016 14 Benito Ceramic Pvt. Ltd. E/10416/2022 Shri Ambaji Enterprise, Satish, K N Brothers Satishbhai, Morbi Benito Ceramic Amrishbhai Amrish Benito in Gujarati No No 15 Sunora Ceramic Industries E/10062-10070/2023 K N Brothers, Maruti Enterprise & P C Enterprise Satishbhai, Morbi & Sarvodaya Shroff As per Satishbhai Sanora Floor Tiles & Bhaskar As per Sarvodaya Shroff-Sanora Floor Tiles & Bhaskar Viraj in Gujarati 1. Badweshvar Mahadev Tiles dtd 22.06.19 No 16 Antica Ceramic E/10353-10354....
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.... d dtd 27.05.19 No 26 Atom Ceramic E/10768-10776/2022 K N Enterprise (Lalitbhai) Satishbhai Atom Ceramic Dhruvbhai Atom, Pravin in Gujarati Atom in English No No 27 Antila Ceramic Pvt. Ltd. E/1043910442/2022 & E/10501/2022 K N Brothers, Maruti Enterprise Satishbhai Antilla Ceramic bharatbhai Antila No No 28 Aqutop Ceramic E/10791/2022 K N Brothers, Maruti Enterprise Kasundra Kaka Aquatop Nimeshbhai Atp-(in English) Kanabhai in Gujarati Atp-(in English) Babu in Gujarati No No 29 Arrow Ceramics E/1053510545/2022SM K N Brothers, Maruti Enterprise Kasundra Kaka Arrow Ceramic Damji Code-Damji Damji.Ajay Damji.Deep both in Gujarati No No 30 Magnum Ceramics P. Ltd. E/1045110453/2022SM National Enterprise, Morbi Nashir Ali Magnum Ceramic Harshadbhai Code-Harshad M Harshad in Gujarati .M (in English) No No 31 Siyaram Vitrified Pvt. Ltd E/10369-10371, 1037410376/2022SM P C Enterprise & K N Brothers Sarvodaya Shroff No name given Type written sheet in English but Siyaram Vitrified, Siyaram Granito hand written in Gujarati No No ....
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.... No No 43 Delphi Ceramics E/10459/2022 E/10398/2022 K N Brothers & Maruti Enterprise Satishkumar No name given Pankaj Delphi in Gujarati No No 44 Orbit Cera Tiles Pvt. Ltd., E/10638-10639/2022 K N Brothers Satishbhai Orbit Ceramic Mukeshbhai Orbit No No 45 Bej Ceramic E/10222-10227/2022 Maruti Enterprise, K N Brothers Kasundra Kaka Bej Ceramic Pranshant, Anil Code-Bej Bej in Gujarati then PD, AD in English, Bej in Gujarati AD-Dilip 1. Noble Tile World dtd 20.06.19 No 46 Admark Ceramic Inds E/10650, 1066010661/2022SM K N Brothers & Maruti Enterprise Satishkumar Admark Ceramics Bharatbhai Trigun in Gujarati with addition Admark in English No No 47 Omen Vitrified Pvt. Ltd. E/10920, 1092610928/2022SM Maruti Enterprise Kasundra Kaka no name given but entry of Omnt Nileshbhai is given Omn.V, Omn. T Pankaj, Omn.D, Omn. Hiren, Omn. Jayesh Kalpesh 1. Badveshwar Mahadev Tiles, Kolkata dtd 22.06.19 No 48 Sisam Ceramic Pvt. Ltd. E/10749-10751, 10753/2022 Shri Ambaji Enterprise, P C Enterprise & K N Brothers Sarvodaya Shroff Sisam Ceramic Ni....
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....d No No * Searches were conducted in respect of appellants at Sr. No.2 (M/s. Famous Ceramic Industries), Sr. No.13 (M/s. Legend Ceramic Pvt. Ltd.) and Sr. No.35 (Ador Ceramics Pvt. Ltd.). 1.1 On the basis of records, which were the bank statements of different banks in which cash transactions were mentioned and in front of which certain abbreviated names were mentioned, statements of Shroffs were recorded that the same were payments to brokers who in turn later paid to the manufacturers. As per the appellants, in majority of the cases, statements of Directors were not recorded and even searches were not conducted at the premises in Morbi etc. The department on the basis of investigation alleged that the appellants who are providing bank account details of Shroffs like M/s. K N Brothers, Rajkot and Others to their buyers for depositing the cash for clandestine sales in these accounts of the Shroff/ Hawala Operators. Shroffs after confirming the deposits would withdraw cash after deducting the commission and handling over to the brokers/ middlemen whose name(s) were found in the record in the abbreviated form as indicated in reproduction of specimen (infra). These b....
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....factory premises to buyers premises, payment to such raw material suppliers, transporters etc. In addition to already recorded transactions in the books of accounts/excise records, no other transaction or parallel accounts were found. Identification of the persons who had collected cash from the angadias/middlemen on behalf of tile manufacturers and given to (i.e. name of the person in the tile manufacturing unit) was not done. No inculpatory statements of anyone from the manufacturers etc. are on record. Though tiles were notified under Section 4A of the Central Excise Act, 1944 and duty of excise was payable on Maximum Retail Sale Price (MRP) less permissible abatement @ 45%, the demands were raised and confirmed on the alleged cash said to have been received by the tiles manufacturer, without ascertaining the declared MRP and without extending 45% abatement in the declared MRP. Thus, the impugned orders confirming demand of Central Excise duty, with interest and equal amount of penalty and penalty upon the Directors/ partners, etc are liable to be quashed and set aside, as it was based on lot of assumptions and presumptions and in any case on the premise that one link of cash re....
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....is nowhere mentioned. However, investigation without any base inserted name of Pravinbhai Shirvi against many entries where someone had manually/ hand written "PS". All these entries against name of Shri Pravin Shirvi were inserted baselessly by the investigation against the word "PS" but none of these entry is finding place in the Annexure - A to the SCN. It means that there is no co-relation of the entries made on the basis of records of M/s. K N Brothers and of Shri Pravinbhai, Morbi in Annexure - A to the SCN. 2.6 Even the documents seized from the business premises of Shri Pravin Shirvi, Middleman/Broker based on which Annexure - A to the SCN computing demand is prepared neither bears such file number and page numbers etc stated in the said Annexure nor the signature of panchas and of the, officers who had seized/withdrawn as well as Shri Pravin Shirvi. 2.7 According to the statements of Shri Pravin Shirvi, Middleman/Broker for one of the pages of said daily account sheets, left side shows the amount received by him and the right side shows the cash disbursed to the respective persons of the tile manufacturers. However, while preparing Annexure - A to the SCN, the invest....
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....t-Del. * Basudev Garg Versus Commissioner of Customs: 2013 (294) E.L.T. 353 (Del.) * Rajam Industries (P) Ltd. Versus Addl. D.G, D.C.E.I., Chennai - 2010 (255) E.L.T. 161 (Mad.) * Parmarth Iron Pvt. Ltd. Versus Commissioner of Central Excise - Meerut-I, - 2010 (255) E.L.T. 496 (All.) 2.9 Appellant further submits that the shroff and middleman/broker and other departmental witnesses are not jointly tried with the appellant as abettor. For the sake of argument, it presumed that cash were collected by the Shroff and handed over to middleman/broker for onward payment to the tile manufacturers including appellant then it amounts to abatement in evasion of duty of excise. However, they are not made co-noticees in the present proceedings. They might have been given clean chit on the ground that if they give the confession against the appellant, they will not be penalized. It is also settled position of law that statements of the co-accused can be relied upon only when they are jointly tried with. For their stated commissions earned, they have not even been subjected to service tax demand indicating lack of truth by the department in its own version. They rely....
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....izing officer or the Panchas etc. Therefore, same also cannot be considered as evidence. Even in absence of oral evidence, as in absence of cross examination of its author Shri Pravin Shirvi, no one can interpret the content of the said sheets which are written in Gujarati with two sides Credit and Debit with certain figures might be amount with name in short may be first name or middle name etc. with some name in bracket may be name of place and date. In absence of such statement, it cannot be considered that the amount mentioned therein were received by Shri Pravin Shirvi and handed over to the person of appellant. In any case as per settled position of law in the case of CBI Vs. V.C. Shukla (cited supra) such loose papers cannot be considered as "book" and also same alone cannot take place of evidence, especially when the author of the book is not jointly tried with the appellant. 2.11 Appellant submits that there is no other evidence adduced by the investigation other than above referred third party evidences which cannot be considered as evidence as submitted above. There is no evidence adduced to the effect that procurement of raw materials, transportation of raw materials....
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....ral Excise, Jaipur - 1998(97) E.L.T. 74 (Tribunal) * Ganga Rubber Industries V. CCE- 1989(39) E.L.T. 650, 655(T-Nrb) * Gurpreet Rubber Industries V. Collector Of C.Ex., Chandigarh - 1996(82) E.L.T. 347(Tribunal) * Kashmir Vanaspati (P) Ltd. V. Collector of Central Excise - 1989(39) E.L.T. 655(T); * Ahwin Vanaspati Industries P.Ltd. V. Cce - 1992(59) E.L.T. 175(Tribunal) * CCE V. R.G.Electronics - 1992(60) E.L.T.121 (T-Srb) * Hans Castings Private Limited V. Collector of C.Ex., Kanpur - 1998(102) E.L.T. 139(Tribunal) * Jay Laminart Limited V. Commissioner of C.Ex., Ahmedabad - 1998(102) E.L.T. 402(Tribunal) * Prabhavati Sahakari Soot Girini Ltd. V. CCE Reported In 1990(48) E.L.T. 522(T); * Roxy Enterprises P.Ltd. V. Cce - 1992(40) Ecr 361(T-Nrb) * V.K.Thampy V. Collector of Central Excise, Kochi - 1994(69) E.L.T. 300(Tribunal) 2.12 The issue is already settled in similar cases booked by the DGGI at or about the same time on the basis of common investigation against M/s. Ramoji Granite Pvt. Ltd. & Others Vs. Commissioner, CE & ST, Rajkot by this Tribunal. Vide Final Order No. 12987-12988/2024....
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....rice less permissible abatement @ 45% of MRPs. However, the department for the reasons best known to them has not given any abatement and demanded the central excise duty on the whole amount said to have been received by the appellant from the said middleman/broker, which by any means is not correct. The contention of the revenue is that Central Excise duty should be calculated on sale proceeds received by the Tile manufacturers in terms of provisions of Section 4A ibid read with Rule 4 ibid. Neither Section 4A nor the said Rule 4 provide for determination of duty of excise on the total value of sale proceeds. As per Section 4A read with the relevant rules prescribed thereunder, RSP has to be redetermined and then assessable value has to be arrived by reducing permissible abatement from the RSP. They are placing reliance on following decisions:- * Ravi Foods Pvt. Ltd. Vs Commissioner of C. Ex., Hyderabad - 2011 (266) E.L.T. 399 (Tri. - Bang.) * Acme Ceramics Vs Commissioner of Central Excise, Rajkot - 2014 (304) E.L.T. 542 (Tri. - Ahmd.) * Final order No. 12088-12113 /2024 dated 23.09.2024 in the case of Ocean Ceramics Ltd. & Others Vs. Commr. of C.Ex., R....
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....enied about receipt of cash other than on 4-5 occasions. Therefore, order imposing heavy penalty upon him is liable to be set aside in view of the various relied upon decisions. Further, his statement is not discarded by any other directors or author of the private records Shri Pravin Shirvi, therefore, in any case, penalty under Rule 26 ibid cannot be more than the duty of such goods which are liable to be confiscated. Therefore, at the most penalty equal to 4-5 transactions can be imposed upon him and not more than that, which by any means cannot be equal to penalty of Rs. 50,00,000/- already imposed vide impugned order. 2.18 Appellant submits that since issues involved in the rest of all the appeals are similar in view of the above submissions the other impugned Order-in-Appeals confirming demand of Central Excise duty, with interest and equal amount of penalty upon main appellants and co-appellants (Co-noticees) are liable to be set aside. 3. Further written submissions as follows were made by the Advocate after personal hearing held on 06.10.2025, as permitted to both sides by this bench. 3.1 In continuation of submissions made at the time of hearing on 06.10.2025, ap....
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....stinely nor received any amount in cash as stated in Annexure - A to the SCN read with so called page number of loose papers referred therein. 3.4 In case of M/s. Sunbeam Ceramic Pvt. Ltd., exculpatory statement of one of the directors Shri Bharatbhai Rugnathbhai Kasundra dated 24.04.2019 was recorded by the officer wherein he had deposed that "I know the said Shri Pravinbhai of Morbi but I have not received any cash from him."; that "I am the owner of mobile number 9825052244. However, I do not know who is known as 'Sabi'. In our office nobody is known by the name of 'Sabi'.; that "From the copy of the said documents, I have seen certain entries made in the name as 'Sabi'. However, I would like to again state that I am not aware of any such cash receipts by our company from Shri Pravinbhai as we have never dealt him."; that "At this juncture I am not in a position to state the names of dealers at these places. However, I state that against the supply of goods to all our dealers, we receive the payments through Cheques/RTGS/NEFT through Bank of India, Morbi Branch."; that "I have seen the copy of documents shown by you and put my dated signature in token of having seen the same.....
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....hat I am not aware of any such names and cash receipts by our company."; that "I have seen copy of the documents and put my dated signatures in token of having seen the same. However, I would like to reiterate that I do not know Shri Sandipbhai Bachubhai Sanariya and have never dealt with him. Since we were unaware of such statement, we did not take any action against him."; that "I have seen the said work sheet/Annexure, but, I do not agree with the same as the said work sheet was prepared based on the statement and documents of Shri Sandipbhai Bachubhai Sanariya with whom we had never dealt with in the course of business." 3.6 In the case of M/s. Legend Ceramic Pvt. Ltd. statements of one of the Directors Shri Dushyant B. Patel, was recorded on 20.01.2016. He had executed Affidavit before the Notary on 20.08.2020 inter alia deposing that "there was no manufacture and clearance of floor tiles without payment of duty of excise and without issue of invoice. I submit that my statements dated 20.01.2016 recorded by the investigation is not correct and is as typed by them in computer and my signatures were simply taken on certain papers. I do not know the content of the said stateme....
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....ly exculpatory and therefore, inference drawn by the investigation as discussed in para supra is totally erroneous. 3.8 In case of M/s. Ador Ceramics Pvt. Ltd., statements of Shri Naresh K. Rajpara, Executive-Director was recorded wherein he stated that "I had handled or received cash from any one not to speak of from middlemen brokers Shri Kasundra Kaka. Name "Yogeshbhai" to whom cash is said to have been given by Shri Kasundra Kaka is one of the Directors but his statement was not recorded by the department. There was no manufacture and clearance of wall tiles without payment of duty of excise and without issue of invoice. I submit that my statement dated 15.03.2016 recorded by the investigation is not correct but as typed by them in computer and my signatures were simply taken on certain papers. I did not know the content of the said statement till receipt of a copy of the same with letter dated 03.06.2020.Even copy of Annexure - A referred to in my statement is also not furnished with the SCN. Therefore, all the allegations made in para 9.4 are totally baseless and out of imagination of the investigation only. Once, I had not handled the cash nor aware about any sale of good....
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....gned order(s) confirming demand are liable to be set aside. Even otherwise, as per the settled position of law, in absence of examination and cross examination of department's witnesses, any inculpatory statement has no evidential value at all. 3.11 Learned Advocate further submitted that the shroff and middleman/broker and other departmental witnesses are not jointly tried with the appellant as abettor. For the sake of argument, if it presumed that cash was collected by the Shroff and handed over to the middleman/broker for onward payment to the tile manufacturer(s) including appellant, then it amounts to abetement in evasion of duty of excise but they are not made co-noticees in the present proceedings. They might have been given clean cheat on the ground that if they give confession against the appellant, they will not be penalized. It is also settled position of law that statements of co-accused can be relied upon only when they are jointly tried with. Reliance is placed on the decision in the case of Union of India Vs Lal Chand - 2016 (335) E.L.T. 416 (Mad.). 4. Learned AR, on the other hand, apart from relying upon the evidences brought to light during the investigation....
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....No.1 were recorded voluntarily u/s 14 of the Act which were never retracted. There is no allegation of duress, threat, or coercion during recording of their statements. * The statements of the third parties (Shroff & Broker) are strongly corroborated by the statements of the Directors of Appellant No.1, Shri Rajesh Adroja and Shri Ashwin Ghodasara who also admitted that Shri Piyush Sanariya was involved in the sales and cash transactions of the company. * Shri Pravin Shirvi (Broker) in his statements specifically named "Famous Ceramics (Vitrified Tiles) - Piyush - 9727770092" as one of the manufacturers to whom he had handed over cash. He * Shri Piyush Sanariya (Appellant No.2) admitted that the name "Piyush" and mobile number- 9727770092 mentioned in the statement of Shri Pravin Shirvi (Broker) belonged to him. * Director of Appellant No.1 Shri Rajesh Adroja confirmed that "Piyush" is the cousin of another shareholder and works with Appellant No.1. * Director of the Appellant No.1 Shri Ashwin Ghodasara also admitted that Shri Piyush Sanariya was handling sales rates and cash transactions for Appellant No.1 during the disputed period. ....
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....y. Further the Appellant No.2 was directly involved in the act of collecting illicit cash out of sale of clandestinely removed goods. Also, the Appellant No.3, as the main director looking after finance and sales, was unquestionably aware of and responsible for the clandestine activities of the company. Hence, appellant have correctly been imposed penalties u/Rule 26 of the Central Excise Rules, 2002. 4.7 Reliance is placed on following case laws:- * International Cylinders Pvt Ltd vs. CCE, 2010 (255) ELT 68 (H.P.) * 1983 (13) E.L.T. 1631 (S.C.) Shah Guman Mal Versus State Of Andhra Pradesh. * Ramachandra Rexins Pvt. Ltd. vs. CCE, 2013 (295) ELT 116 (Tri. - Bang.) * A.N. Guha & Co. vs. CCE, 1996 (86) ELT 333 (Tri.) * S.M. Steel Ropes vs. CCE, 2014 (304) ELT 591 (Tri. - Mumbai) * K.I. Pavunny vs. Asst. Collector, 1997 (90) ELT 241 (S.C.) * CCE, Mumbai vs. Favourite Industries vs. CCE, 2013 (289) ELT 3 (S.C.) * CCE, Mumbai vs. Kaheri Foods India Pvt. Ltd., 2011 (270) ELT 643 (S.C.) * Lawn Textile Mills Pvt. Ltd. vs. CCE, 2018 (362) ELT 559 (Mad.) * Patel Engineering Ltd. vs. UOI, 2014 (307) E....
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.... Rule 26 of the Central Excise Rules, 2002 . In appeal, the Commissioner(A) also upheld the OIOs. Category wise submission is as under:- a) Case of 11 MAIN APPELLANTS : M/S. OMEN VITRIFIED PVT. LTD. E/10920/2022 AND other 10 appeals. Para 7.4/ 8.2 & 11.2 of the OIA : The clandestine removal is proven not just by 28 seized diaries from the premises of the shroffs and Brokers, but is corroborated by external evidence as one of the customers M/s Badveshvar Mahadev Tiles, Kolkata admitted about receiving different grades of tiles and paying a differential amount in cash (Para 10.3). The opportunity for cross-examination was provided, and even if it wasn't fully executed, the Department possesses external, and independent corroboration in the form of admission from a buyer regarding payment of differential amount. The customer admission stands independent of the broker's statement and solidifies the clandestine removal. Denial of cross-examination does not necessarily vitiate the proceedings if the facts are proved by other documentary evidences i.e 28 seized diaries and further strengthened by the admission by the buyer. b) (3 MAIN APPELLANTS) M/S. SUNBEAM CER....
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....y found the statement to be voluntary, spontaneous, and un-retracted during the recording process. The subsequent retraction made without sufficient proof of coercion holds no evidential value in a quasi-judicial proceeding that the statement was voluntary and un-retracted initially The Department does not solely rely on the statement, as it also relies on the fact that the statement decodes seized private documents. Thus, the statement acts as a key to the documents, and denial of cross-examination does not strip the documents of their evidentiary value. The voluntary nature of the statement and its direct nexus with the decoded private records override the technical defense of Section 9D as taken by the appellant. III. On the contention that demand is based on suspicion/assumption Para 9.2 of the OIA: Appellant No. 1 had devised such a modus operandi that it was almost impossible to identify the buyers of goods or transporters who transported the finished goods. The Appellant No. 1 used to inform M/s K.N. Brothers, Rajkot, Shroff, or Shri Sandipbhai Bachubhai Sanariya, broker/Middlemen, about deposit of cash in bank accounts of Shroff on receipt of communication....
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....nk statements, as emerging from the records. So, there was no details of the buyer(s) available who had deposited cash amount in the bank accounts of Shroff. This way the Appellant No. 1 was able to hide identity of the buyers of illicitly removed goods. It is a basic common sense that no person will maintain authentic records of the "illegal activities or manufacture being done by it. It is also not possible to unearth all evidences involved in the case. The adjudicating authority is required to examine the evidences on record and decide the case. The Hon'ble High Court in the case of International Cylinders Pvt Ltd reported at 2010 (255) ELT 68 (H.P.) has held that once the Department proves that something illegal had been done by the manufacturer which prima facie shows that illegal activities were being carried, the burden would shift to the manufacturer. The above finding is based on the financial flow of unaccounted cash against sale of finished goods. Since the cash flow through Shroffs and Brokers has been established, physical removal of goods for that cash is a natural and reasonable inference which the Appellant has failed to rebut Statements record....
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.... goods by the Tile manufacturers of Morbi. It is on record that DGCEI had simultaneously booked offence cases against 186 such manufacturers for evasion of Central Excise duty who had adopted similar modus operandi by routing sale proceeds of illicitly cleared finished goods through Shroffs /Middlemen/brokers. It is also on record that out of said 186 manufacturers, 61 had admitted and had also paid duty evaded by them. So, the documentary evidences gathered by the investigating officers from the premises of Shroffs / middlemen contained trails of illicitly removed finished goods and preponderance of probability is certainly against Appellant No. 1. It has been consistently held by the higher appellate fora that cross examination is not mandatory and it depends on facts of each and every case. The above findings of the Commissioner(A) notes that the statements from the Shroffs and middlemen are admissible evidence because they are consistent across multiple Independent parties and are corroborated by the seized private records. In quasi-judicial proceedings, the courts have consistently held that such a convergence of evidence constitutes "substantial evidence" proving the....
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....ts. The statements explain and authenticate the primary documentary evidence, i.e. the incriminating loose papers/worksheets seized from the premises of the Shroffs/Brokers. The fact is that the Broker, Shri Pravin Shirvi, deciphered the seized records and specifically identified the cash recipient, "Shri Ravi of M/s Famous Ceramic Industries", which creates an irrefutable link that cannot be broken by a subsequent affidavit. * The statement of Shri Bharatbhai R. Kasundra's Director was exculpatory and he denies dealing with Shri Pravinbhai or agreeing with the worksheets. The Commissioner (Appeals) held that the key person of the Appellant was "directly Involved in clandestine removal. This finding confirms that the evidence of overall financial trail, seized documents, and corroboration was sufficient to prove the Appellant's knowledge and involvement, despite the Director's attempts to evade responsibility or disagree with the worksheet years later. * No Director's statement was recorded, and the Authorized Representative's statement was exculpatory, denying knowledge of 'Rehan' or Shri Sandipbhai B. Sanariya, and refusing to agree with ....
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....on-fatal to the case, as the case is built on material evidence and not just oral evidence. * The Department relies on the finding in the Order-in-Appeal which conclusively links the Appellant to the modus operandi and the evidence at the following para. * Para 8.1 of the (Order-In-Appeal No. RAJ-EXCUS-000-APP-055 to 057-2021 dated 17.12.2021): "On examining the Statements of Shri Lalit Ashumal Gangwani, owner of M/s KH Brothers, Rajkot, and Shri Pravin Shirvi, Morbi, it is apparent that the said Statements contained plethora of facts, which are in the knowledge of the deponents only. For example, Shri Pravin Shirvi deciphered the meaning of each and every entry written in the private records seized from his premises. He also gave details of when and how much cash was delivered and to which Tile manufacturer and even the concerned person who had received the cash amount. He deposed that he used to hand over cash received from Shroff to Shri Ravi of M/s Famous Ceramic Industries and also gave the mobile number of Shri Ravi. These facts have been corroborated during investigation and found to be true as both Appellant No. 2 and 3 have concurred with the contents." R....
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....ther evidence nor any allegation about clandestine manufacture, supply, transportation of finished goods, transportation of raw materials for manufacture of such goods, installed capacity to manufacture additional such goods, use of excess manpower, electricity, gas, payment to transporter, receipt of payment if any against such supply etc. from the specific buyer of the goods. There are no details about manufacture and supply of how many boxes of tiles etc by the appellants to whom and who had paid such amounts to appellants. 6.2 Appellants submits that merely based on uncorroborated and unsubstantiated statements of such shroffs/angadias based at Rajkot and middlemen shroffs/angadias at Morbi which are recorded by the officers as per their whims under Section 14 of the Central Excise Act, 1944, demands are raised and confirmed. As discussed in the grounds of appeals, submission made at the time of PH and further submissions after PH, even general statements of few directors/partners were recorded by the investigation as per their whims, and many of the statements are either exculpatory or self contradictory. Even so called confession taken by the investigation are of such part....
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....e recovered and oral evidence in the form of statements of shroffs/angadias based at Rajkot and middlemen Shroffs/Angadias based at Morbi and few statements of directors/partners and buyers. 6.5 Appellants submit that the learned Commissioner (Appeals) has heavily relied upon those statements amongst other of shroffs/angadias based at Rajkot and middlemen Shroffs/Angadias based at Morbi to upheld the orders of the adjudicating authority in sheer disregard to very clear provisions of examination of such persons/witnesses under Section 9D(2) of the Central Excise Act, 1944 and settled position of law. As per Section 9D(2) ibid, statement recorded under Section 14 of the Central Excise Act, 1944 by the Central Excise officer of a gazetted Rank is relevant for the purpose of proving an offence under the Central Excise Act, 1944, the truth of the facts which it contained only when the person who made the statement is examined as a witness in the case before the adjudicating authority, then the such statement can be admitted in evidence in the interests of justice. Since, none of the person whose statements are relied upon was examined as witness and cross examined, such stateme....
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....on any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under the Customs Act. 16. Section 138B of the Customs Act deals with relevancy of statements made under section 108 of the Customs Act and it is reproduced below: "138B. Relevancy of statements under certain circumstances. (1) A statement made and signed by a person before any Gazetted Officer of customs during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains, - (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the court and the court is of opinion that, having regard to the circumstances of the case, the sta....
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....section 138B of the Customs Act. 19. It would now be appropriate to examine certain decisions interpretating section 138B of the Customs Act and section 9D of the Central Excise Act. 20. In Ambika International vs. Union of India - 2018 (361) E.L.T. 90 (P&H) decided on 17.06.2016, the Punjab and Haryana High Court examined the provisions of section 9D of the Central Excise Act. The show cause notices that had been issued primarily relied upon statements made under section 14 of the Central Excise Act. It was sought to be contended by the Writ Petitioners that the demand had been confirmed in flagrant violation of the mandatory provisions of section 9D of the Central Excise Act. The High Court held that if none of the circumstances contemplated by clause (a) of section 9D(1) exist, then clause (b) of section 9D(1) comes into operation and this provides for two steps to be followed. The first is that the person who made the statement has to be examined as a witness before the adjudicating authority. In the second stage, the adjudicating authority has to form an opinion, having regard to the circumstances of the case, whether the statement should be admitted in evide....
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.... prescribed by plenary parliamentary legislation for admitting, into evidence, a statement recorded before the gazetted Central Excise Officer, which does not suffer from the handicaps contemplated by clause (a) of Section 9D(1) of the Act. The use of the word "shall" in Section 9D(1), makes it clear that, the provisions contemplated in the subsection are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory. 24. The rationale behind the above precaution contained in clause (b) of Section 9D(1) is obvious. The statement, recorded during inquiry/investigation, by the gazetted Central Excise Officer, has every chance of having been recorded under coercion or compulsion. It is a matter of common knowledge that, on many occasions, the DRI/DGCEI resorts to compulsion in order to extract confessional statements. It is obviously in order to neutralize this possibility that, before admitting such a statement in evidence, clause (b) of Section 9D(1) mandates that the evidence of the witness has to be recorded before the adjudication authority, as, in such an atmosphere, there would be no occas....
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....t for proving the truth of the contents thereof." (emphasis supplied) 21. The Punjab and Haryana High Court in Jindal Drugs Pvt. Ltd. vs. Union Of India - 2016 (340) E.L.T. 67 (P & H) that was decided on 21.06.2016 also held that unless and until one of the circumstances contemplated by clause (a) of section 138B(1) of the Customs Act applies, the adjudicating authority is bound to strictly follow the procedure contained in clause (b) of section 138B(1) of the Customs Act, before treating a statement recorded under section 108 of the Customs Act as relevant. 22. In Hi Tech Abrasives Ltd. vs. Commissioner of C. Ex. & Cus., Raipur - 2018 (362) E.L.T. 961 (Chhattisgarh) decided on 04.07.2018, the Chhattisgarh High Court also examined the provisions of section 9D of the Central Excise Act. The allegation against the appellant was regarding clandestine removal of goods without payment of duty and for this purpose reliance was placed on the statement of the Director of the Company who is said to have admitted clandestine removal of goods. The contention of the appellant before the High Court was that the statement of the Director could be admitted in evidence o....
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....obliged under the law to examine him and form an opinion that having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. Therefore, we would say that even mere recording of statement is not enough but it has to be fully conscious application of mind by the adjudicating authority that the statement is required to be admitted in the interest of justice. The rigor of this provision, therefore, could not be done away with by the adjudicating authority, if at all, it was inclined to take into consideration the statement recorded earlier during investigation by the Investigation officers. Indeed, without examination of the person as required under Section 9D and opinion formed as mandated under the law, the statement recorded by the Investigation Officer would not constitute the relevant and admissible evidence/material at all and has to be ignored. We have no hesitation to hold that the adjudicating officer as well as Customs, Excise and Service Tax Appellate Tribunal committed illegality in placing reliance upon the statement of Director Narayan Prasad Tekriwal which was recorded during investigation when his examination bef....
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....aightaway, to oppose a request for provisional release of seized goods. The reliance, in the appeal before us, on various statements recorded during the course of investigation in the present case cannot, therefore, in our view, invalidate the decision, of the Learned Tribunal, to allow provisional release of the seized 25400.06 grams of gold jewellery, covered by Bill of Entry No. 107190, dated 20th April, 2019." (emphasis supplied) 24. In M/s. Drolia Electrosteel P. Ltd. vs. Commissioner, Customs, Central Excise & Service Tax, Raipur - 9. Excise Appeal No. 52612 of 2018 decided on 30.10.2023 decided on 30.10.2023, a Division Bench of the Tribunal examined the provisions of section 9D of the Central Excise Act and after placing reliance upon the decision of the Punjab and Haryana High Court in Jindal Drugs, observed that if the mandatory provisions of section 9D(1)(b) of the Central Excise Act are not followed, the statements cannot be used as evidence in proceedings under Central Excise Act. The relevant portions of the decision of the Tribunal are reproduced below: "14. Evidently, the statements will be relevant under certain circumstances and these are given i....
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....ained the rationale behind the precautions contained in the two sections. It has been observed that a statement recorded during inquiry/investigation by officers has every chance of being recorded under coercion or compulsion and it is in order to neutralize this possibility that statement of a witness has to be recorded before the adjudicating authority, after which such a statement can be admitted in evidence. 26. Thus the statement made by the appellant under section 108 of the Customs Act cannot be considered as relevant as the procedure contemplated under section 138B of the Customs Act had not been followed. 27. It is only because of the statement made by the appellant under section 108 of the Customs Act that the amount mentioned in the seven proforma invoices have been preferred over the amount mentioned in the commercial invoices, whereas it is the amount mentioned in the commercial invoices that is arrived at after negotiations that has to be taken into consideration. The amount mentioned in the seven proforma invoices cannot, therefore, be considered for valuation purposes. 28. What is also important to notice is that after the statement under ....
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....ana against the Order-in-Original passed by the adjudicating authority confirming demand of duty and imposing penalty without granting permission for cross examination of makers of the statements, it was inter alia held by Hon'ble High Court that: "15. Once discretion, to be judicially exercised is, thus conferred, by Section 9D, on the adjudicating authority, it is self-evident inference that the decision flowing from the exercise of such discretion, i.e. the order which would be passed, by the adjudicating authority under Section 9D, if he chooses to invoke clause (a) of subsection (1) thereof, would be pregnable to challenge. While the judgment of the Delhi High Court in J&K Cigarettes Ltd. (supra) holds that the said challenge could be ventilated in appeal, the petitioners have also invited attention to an unreported short order of the Supreme Court in UOI and another vs. GTC India and others in SLP (C) No. 2183/1994 dated 03/01/1995 wherein it was held that the order passed by the adjudicating authority under Section 9D of the Act could be challenged in writ proceedings as well. Therefore, it is clear that the adjudicating authority cannot invoke Section 9D(1)(a) of t....
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....n, would arise only after the statement is admitted in evidence in accordance with the procedure prescribed in clause (b) of Section 9D(1). The rigour of this procedure is exempted only in a case in which one or more of the handicaps referred to in clause (a) of Section 9D(1) of the Act would apply. In view of this express stipulation in the Act, it is not open to any adjudicating authority to straightaway rely on the statement recorded during investigation/inquiry before the gazetted Central Excise officer, unless and until he can legitimately invoke clause (a) of Section 9D(1). In all other cases, if he wants to rely on the said statement as relevant, for proving the truth of the contents thereof, he has to first admit the statement in evidence in accordance with clause (b) of Section 9D(1). For this, he has to summon the person who had made the statement, examine him as witness before him in the adjudicating proceeding, and arrive at an opinion that, having regard to the circumstances of the case, the statement should be admitted in the interests of justice." (Underline provided) It was further held at para 22 of the said order by Hon'ble High Court that: "22. Clearl....
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....ance of SCN - Presence of person concerned not necessary when statements of other persons obtained during preliminary investigation - Statements obtained during preliminary investigation only for making prima facie case and not means such documents would be used against person concerned - Section 11A of Central Excise Act, 1944 - Section 108 of Customs Act, 1962. [paras 38, 39] Natural justice - Violation of - Show cause notice pre-judging issue - Cross-examination of persons giving statements to be given in such case - Natural justice violated in present case as cross-examination not given. [para 58] Natural justice - Document copies, providing of - Concept of natural justice relating to show cause notice includes providing documents relied on in SCN - Party cannot be expected to give effective reply unless copies of relied upon documents furnished. [para 54] d) PARMARTH IRON PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE -I, - 2010 (255) E.L.T. 496 (All.) "Natural justice - Documents, relied on and non-relied upon, supply of - Assessee asking for Photostat copies of relied upon documents - Apex Court in 1997 (92) E.L.T. 467 (S.C) holding that ....
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....NTRAL EXCISE, KOLKATAII - 2015-TIOL-255-SC-CX has held as under: "Central Excise - Adjudication - Cross Examination - not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected . The order of the Commissioner was based upon the statements given by the two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such 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, rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brough....
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....ial Lave Petition - 2019 (367) ELT A322 (SC) are totally misplaced as there is no direct confession similar to the said case. Even in few cases where statement of directors/partners were recorded at all and there is no other corroborative evidence adduced for alleged clandestine removal of the goods by the appellants except third party unauthenticated private records and unsubstantiated oral evidences. Therefore, ratio of the same is not applicable in the present case. Apart from that, in fact provisions of Section 138B of the Customs Act, 1962 were not brought to the notice of Hon'ble High Court and therefore, in any case ratio of the said decision based on statement of directors under Section 108 of the Customs Act, 1962 is not applicable in the facts and circumstances of the case. Findings:- 7. In the instant case, the department has alleged clandestine removal on the part of various tile manufacturers (Appellants) mainly on the basis of details of cash deposited in the accounts of Shroffs etc., which were considered as clandestine sale in the records of certain Shroffs of Rajkot who confirmed that the records pertain to Tile dealers of Morbi who were allowed to withdraw t....
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....fference of opinion, held that clandestine removal is a serious accusation which has to be established by sufficient, cogent and unimpeachable, relevant and credible material evidence by applying test of prudent man's estimate of preponderance of probability. Conclusion should be logical borne out from the records and not figments of imagination. There cannot be mere presumptions. Though mathematical precision is not warranted, revenue is not relieved altogether of burden of producing some credible evidence in respect of the facts in issue. Again the Division Bench of this Tribunal by majority in 2012 (282) E.L.T. 234 (Tri. - Ahmd.) in the matter of Shreeji Aluminum Pvt. Ltd. Vs. Commissioner of Central Excise, Vapi held that the burden of proof in clandestine removal matters is on revenue and is required to be discharged by adducing strong, sufficient and positive evidence. Assumptions and presumptions leading to doubts against the manufacturers, are not sufficient. It was also held that the standard of proof though is not beyond doubt, should have more than 50% chance that proposition is true on basis of facts and evidences available. The above decisions only echoes the ancient, ....
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....habad in the matter of Continental Cement Company Vs. Union Of India wherein, while emphasising criteria of the clinching evidence of purchase of raw material, use of extra electricity, sale of final products, clandestine removal, transportation, payment, realization of sale proceeds, mode and flow back of funds are all required to be shown to prove clandestine removal and same could not sustain merely on the basis on presumptions and assumptions. Demands can be confirmed as clandestine removal which is a serious charge only on production of such evidences. In fact, in para 12 following criteria have been laid down:- "12. Further, unless there is clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. On careful examination, it is found that with regard to alleged removals, the department has not investigated the following as....
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....and are not supported by any corroboration of raw material supply, excess electricity consumption, excess labour required, excess stock found with buyers or with the manufacturing units in any manner. Infact, no stock discrepancy was found. Merely, on the basis of third party statements or its record, case cannot be proved. Therefore, case is not supported by any substantive evidence or is corroborated as is the requirement of burden of proof indicated by the case law relied upon by us of various High Courts. We also find that case laws quoted by the learned AR do not help the cause of the department. In Commr. of Central Excise Vs. International Cylinders Pvt. Ltd. reported in 2010 (255) E.L.T. 68 (H.P.), the matter was remanded for assessee to discharge shifted onus, after documentary evidence was found by the department by way of records of municipal barrier and police barrier indicating that the offending goods were transported and also the statement of workers indicated that the goods were manufactured at night and cleared without payment of duty. No such strong documentary evidence has even been attempted to be brought on record by the department. There is no evidence of tran....
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.... but the same was not controverted by the appellant. In the instant case, no transport document has even been attempted to be placed on record by the department through its investigation. The cash receipts are for clandestine removal of which dates is also not established. Various High Courts have ruled that the statements in the matter of clandestine removal need to be subjected to examinationin-chief by the Adjudicating Authority and then if found admissible, same is required to be offered for cross-examination. No such examination-in-chief was done by the Adjudicating Authority nor cross examination offered. Various relevant pronouncement in this regard are as follows:- a) 2022 (380) E.L.T. 264 (Bom.) in the matter of PRAKASH RAGHUNATH AUTADE vs. UNION OF INDIA. b) A person whose statement has been relied upon has to be offered for cross examination as has been held in 2019 (366) E.L.T. 280 (Cal.) in the matter of SAMPAD NARAYAN MUKHERJEE vs. Union of India. Point of emphasis here is on offering for cross examination. c) In the same context is the decision of AMBIKA INTERNATIONAL vs. Union of India reported in 2018 (361) E.L.T. 90 (P & H). d) ....
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....s and the same have not been properly de-coded by the author of such third-party records. Following evidence produced at page 8 & 9 of the show cause notice issued to M/s. Famous Vitrified will indicate this: 8.2 From the above, it can easily be made out that while various entries indicate in the Axis Bank account statement that there were cash deposits, the names were written by some authors of the recipient Shroff. The bank statement itself does not indicate any name and at the end, are hand scripted names with abbreviations, which have been reduced to in box names like Pravinbhai Shirvi, Satishkumar etc. There is nothing to indicate by any documentary or otherwise established evidence as to how PS was construable as Pravinbhai Shirvi by the department, how names scripted in Gujarati became Shatishkumar for the department. The evidence therefore is far from credible. Even the investigations has admitted that the abbreviations did not provide clue in many cases of follow up investigations, how then same is construed as evidence. Therefore, there is substance in the defence of the appellants, that the names of the appellants and the third party private records are not matching p....
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....naccounted finished goods including excess consumption of electricity and clandestine removals of such goods and stock discrepancies at the end of the manufacturer or buyers, receipt of cash by the manufacturer and payment link to the buyers through a series of middleman including Shroff, non-availability of excess cash during search at any end, transports document and transport related authorities have not even been attempted to be produced, same is therefore fatal to the case of the department. 8.4 In view of the foregoing, we find substance in the defence made by the appellants in relation to charge levied against them of clandestine removal. We find that the same is far from the truth on the basis of various submissions, made before us by the appellants on various aspects in isolation and collectively. After due appreciation of the various materials on record, including case laws and on proper evaluation of evidence produced before us, we find that the charge of clandestine removal is far from proved against the appellants and other co-accused. The other aspects of valuation etc. pale into insignificance, on the basis of findings that the charge of clandestine removal itself....