TaxTMI 
TaxTMI 
2026 (7) TMI 5
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.... signatory of the unit. From the resumed documents, officers suspected that the appellant had clandestinely cleared finished goods without payment of duty. Statement of Shri Bhadresh R. Lade was recorded under Section 14 of the Central Excise Act, 1944 who admitted that finished goods have been cleared under the recovered challans without issue of invoice and without payment of excise duty. Regarding missing pages from 1-19 of the resumed challan book, he stated that either partner of the company or Shri Rajeshwaran Menon Authorised Signatory who authored those challans, can tell anything about clearances. Inspite of issue of several summons, Shri D. Saravanan, Partner of the appellant firm did not join investigation and avoided it on one or the other ground. The officers also did not record statement of Shri Rajeshwaran Menon and Smt. Bhagyashree Churi, Administrative Officer of the unit who authored notepad books. 1.2 After conducting investigation, Revenue issued a show cause notice dated 20.11.2015 to the appellant demanding central excise duty of Rs.16,94,770/- (including Education Cess and Secondary and Higher Education Cess) on clandestine clearances under Section 11A(4) ....
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....om where the inputs have been procured by the appellant, if the inputs have not been supplied to the appellant under the invoices in question. The order was therefore, set aside. * They also rely on the following decisions:- a) CCE Meerut-II Vs Vam Organic & Chemical Ltd.-2016 (342) ELT 174 (T) b) Grover sons Vs CC New Delhi-2016 (332) ELT 378 (Tri.-Delhi) c) Sharad Electronics Vs CCE, Delhi-IV-2015 (328) ELT 560 (Tri.-Delhi) d) Portland Cement (I) Ltd Vs CCE, Lucknow-2015 (326) ELT 304 (Tri.-Delhi) e) Karnavati Synthetics Ltd Vs CCE, Ahmedabad-I-2014 (304) ELT 696 (Tri.-Ahmd) * No discrepancy was found by the officers in the stock position during search of the factory. Also from the seized records, no evidence was found against entries found in the challan book of M/s Ami Enterprises, Mumbai. There is also no proof of transportation, money flow, production of excess goods, purchase of excess inputs and excess consumption of electricity. * Allegation of clandestine removal cannot be constructed upon documents which are private in nature and maintained by the employee of the company. They rely on the following d....
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....ed excess production of goods and for excess production, there should be purchase of unaccounted inputs and other basic raw materials. No such evidence has been produced by the department in their case. Hence, allegation of clandestine clearance is not sustainable. They rely on the decision of Hon'ble Delhi High Court in the case of Flevel International Vs. CCE reported at 2016 (332) ELT 416 which has also been accepted by Revenue and circulated to the field formations. Similarly, decision in the case of M/s. Vishnu & Co. Pvt. Ltd. reported at 2016 (332) ELT 416 and in the case of M/s. Bajrang Castings Pvt. Ltd. reported at 2007 (216) ELT 623 have been accepted by the revenue. * Despite repeated requests, they have not been provided with basis of arriving at the value of goods or duty demand in their case. * Extended period of limitation has been invoked in an arbitrary manner without citing the grounds and evidences. There is also no investigation at the end of the recipients. In absence of proper reasoning being given in the impugned order, confirmation of demand and imposition of penalty is not sustainable. * There is no proposal for confiscation of go....
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....vt. Ltd., 2015 (323) ELT 106 (Del) c) Gupta Synthetics Ltd Vs C.C.Ex., Ahmedabad, 2014 (312) ELT 225 (Tri Ahmd) d) Chandan Tobacco Company Vs Commissioner of C.Ex, Vapi, 2014 (311) ELT 593 (Tri Ahmd) e) Raghuveer Rolling Mills Vs Commissioner of Central Excise, (2024) 15 Centax 127 (Tri.-All) Learned Advocate also argued that since duty demand is not sustainable, hence neither the firm nor it's Partner are liable to any penalty. He prayed for allowing their appeals by setting aside the impugned order confirming duty demand along with interest and penalty on the appellants. 4. Opposing the prayer, learned AR mentioned that the authorised signatory of the company Shri Bhadresh Lade has clearly admitted clandestine removal of finished goods without issue of invoice and without duty payment. His say is also corroborated by the seized private records. This statement of Shri Lade was never retracted. Recovery of challan books of M/s. Ami Enterprises, Mumbai shows clearances of goods without following the central excise procedure. He justifies denial of cross examination by the Adjudicating Authority on the ground that the persons of the appellant firm did....
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....records. We however find that revenue has not recorded any statement of these employees to confirm details of goods cleared clandestinely to various customers. The officers issued several summons for recording the statements of Shri. D Saravanan, Partner but they did not succeed as he avoided appearance before the officers on one or the other ground as mentioned in the show cause notice. We find that annexure B to the show cause notice shows value of finished goods cleared clandestinely during 2010-11 and 2011-12 and value of scrap/ waste cleared in 2011-12 on which duty calculation have been made. Thus, the charge of clandestine clearance, rests only on the statement of Shri Bhadresh Lade and resumed private records viz. note pads/ writing pads/ challan books. 5.1 We find that in the case of Gupta Synthetics Ltd. Vs. Commissioner of C. Ex., Ahmedabad-II reported at 2014 (312) E.L.T. 225 (Tri. - Ahmd.) it has been held that, there should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions. Evidence in support thereof should be of : (a) Raw material purchase, in excess of what is shown in statutory records; ....
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....bstantiated by evidence encompassing various activities in the chain of events. We also find that the Tribunal in para 40 of its Final Order Nos. A/11207-11219/2013, dated 26-92013 in the matter of Nova Petrochemicals v. CCE, Ahmadabad-II, held as under- "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." 5.3 Similar findings have been given by majority decision of this Tribunal in the case of Aum Aluminum Pvt. Ltd. Vs C.C.Ex., Vadodara reported at 2014 (311) ELT 354 wherein, at para 60.7 & 60.8 it was held that- "60.7 In the entire records of proceedings, there is no evidence to indicate that there was clandestine manufacturing. There is no independent tangible evidence on record of any clandestine purchases or receipt of the raw materials required for the manufacturing of the alleged quantity of finished goods for its clandestine removal from the factory. In the entire notice and the o....
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....ed. Revenue challenged the above decision before Hon'ble Supreme Court which upheld the said decision as reported at 2015 (323) E.L.T. A23 (S.C.). 5.5 This Tribunal in the case of Chandan Tobacco Company Vs. Commissioner of C.Ex, Vapi reported at 2014 (311) ELT 593 (Tri.-Ahmd) has again held that the charges of clandestine removal are a serious accusation and therefore, proof which is required is to be established with cogent evidence. The evidences should be carefully examined and weight attached depending on facts of each case. For applying test of preponderance of probability, though every link of the process is not required to be proved, yet revenue is not relieved of burden of producing some credible evidence in respect of the fact in issue. Mere presumptions and assumptions are not enough. Vast difference between "might have" and "must have", has to be travelled by revenue by production of evidence of record. Manufacturing and clearance of final product without payment of duty only cast doubt on assessee for past period and cannot take place for legal evidence. 5.6 We have also gone through various case laws relied upon by revenue but we observe that facts contained the....