TaxTMI 
TaxTMI 
2025 (12) TMI 361
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....16 Lakhs, attracting Central Excise duty amounting to Rs 2.56 lakhs and Education cess of Rs. 5120/- only. On the ground that the appellant-company had not maintained records, their entire stock were seized. During the course of search, some loose diaries, loose sheets and katchcha sheets in 8 note books containing rough estimates for the period 2005-06, were also seized. 1.1. The Officers recorded the statement of Shri Kumar Rajoo, Supervisor of the company, on 04.05.2006, who in his statement inter alia stated that they had got two machines for production in the factory; that the production of the goods in the factory depended upon demand of the market. 1.2. Statement of Shri Prem Kumar, Director of the company was recorded on 05.05.2006, wherein he inter alia stated that the company was functioning from December 2004. He stated that the first machine was installed in their factory in December 2004 and second machine was installed in December 2005; that the production capacity of the first machine was 12 to 13 Tons per month and second machine had the capacity to manufacture 06 to 07 Tons. 1.3. On completion of the investigation, a Show Cause Notice was issued to the App....
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....een lacs sixty thousand and twenty six] on Ms Dhara Polytubes (P). Ltd. (noticee no.1) under Section 11AC of the Central Excise Act, 1944 read with Rules 25 of the Central Excise Rules, 2002. (v) I also impose penalty of Rs.1,00,000/- Rs. One lac) on Shri Prem Kumar, Director of the Company (noticee no.2) and Rs.1,00,000/- [Rs. One lac] on Shri Kumar Rajoo, staff of the company (noticee no.3) under Rule 26 of the Central Excise Rules, 2002. (vi) I order to confiscate the seized goods i.e. 30,680 kgs. of PVC pipes valued at Rs.16 lakhs under Rule 25 of the Central Excise Rules, 2002. However the noticee no.1 are given, option to get released the goods on payment of Rs 5,00,000 (Rs. Five lakhs) as redemption fine." 1.6. Pursuant to the above, the Department initiated recovery action vide letter dated 05.01.2012. The appellants took the ground that they had not received the said Order-in-Original and filed a Writ Petition before the Hon'ble Patna High Court and thereafter, the Hon'ble High Court vide Order dated 08.07.2013 directed the Respondent to supply the certified copy of the Order-in-Original to the appellants. 1.7. On appeals against the said Order-....
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....pon documents denied them the opportunity to make effective submissions in respect of the allegations raised in the Notice, the appellants have relied on the decision in the following cases: i. Kellogg India Pvt. Ltd. v. Union of India [2006 (193) E.L.T. 385 (Bom.)] ii. Uma Nath Pandey v. State of U.P. [2009 (237) E.L.T. 241 (S.C.)] 2.2. Drawing attention to the fact that the Department has construed the value arrived at from the 8 Nos. of Books, containing some Rough Estimates, to be the value of clearance of their finished goods amounting to Rs.85,95,500/- and included the same to arrive at the total clearance value for the Financial Year 2005-06, the Ld. Counsel for the appellants submits that the Department has not brought in any evidence to corroborate the allegation of clandestine clearance of the goods without payment of central excise duty, on the basis of these private documents recovered. It is their stand that clandestine clearance is a serious allegation which requires to be substantiated with cogent evidence; it is submitted that the allegation of clandestine clearance cannot be substantiated on the basis of mere assumptions and presumptions. Thus,....
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.... Thus, we find merit in the argument of the appellants that non-supply of relied upon documents denied them the opportunity to make effective submissions in respect of the allegations raised in the Notice. Thus, we hold that the impugned order passed ex-parte, without following the principles of natural justice, is not sustainable in the eyes of law. This view has been held in the case of Kellogg India Pvt. Ltd. v. Union of India [2006 (193) E.L.T. 385 (Bom.)] wherein it has been held as under: - "46. Thus affected person must be given fair opportunity not only to answer the case against him but to adduce positive evidence in support of his own case together with right to contradict all adverse allegations, if necessary, by permitting him to cross-examine the witnesses of the opponent. 47. It is needless to mention that although the principles of natural justice are aimed at ensuring a fair hearing, nevertheless, depending on all the circumstances of the case, a decision reached or hearing conducted in breach of the principles of natural justice is reviewable in an action of judicial review. 48. It is a settled law that an order passed by the administrati....
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.... "10. We have heard the learned counsel for the parties and gone through the material available on record, from which it appears that Shri Shubhashis Dev, Government Examiner of questioned documents, Shimla gave his written opinion dated 12-6-1998, wherein he has stated that "the documents of this case have been carefully and thoroughly examined. The enclosed writings and signatures stamped and marked were all written by one and the same persons". 11. From the above, it appears that all the documents were written by one and the same persons, though the dates and the name of the parties are different. When it is so then the genuineness of the documents cannot be accepted. 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 ....
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....s to be corroborated by supporting evidences. The relevant observations of Tribunal in the said case are reproduced below for ease of reference: - "40. After having very carefully considered the law laid down by this Tribunal in the matter of clandestine manufacture and clearance, and the submissions made before us, it is clear that the law is well-settled that, in cases of clandestine manufacture and clearances, certain fundamental criteria have to be established by Revenue which mainly are the following : (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 a....
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.... the matter was referred to a third Member, who held that clandestine manufacture and clearances were not established by the Revenue. We are not going into it in detail, since the learned Counsels on either side may not have had the opportunity of examining the decision in the light of the facts of the present case. Suffice it to say that the said decision has also tabulated the entire case-law, including most of the decisions cited before us now, considered them, and come to the above conclusion. In yet another decision of a co-ordinate Bench of the Tribunal [Pan Parag India v. CCE, 2013 (291) E.L.T. 81], it has been held that the theory of preponderance of probability would be applicable only when there are strong evidences heading only to one and only one conclusion of clandestine activities. The said theory, cannot be adopted in cases of weak evidences of a doubtful nature. Where to manufacture huge quantities of final products the assessee require all the raw materials, there should be some evidence of huge quantities of raw materials being purchased. The demand was set aside in that case by this Tribunal." 6.4. From a perusal of the records available before us, we find tha....