TaxTMI 
TaxTMI 
2004 (12) TMI 230
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....ring the period in dispute i.e. December, 1988 to July, 1999. They had been purchasing/procuring unaccounted raw-material without entering in the statutory records and used that raw material in the manufacture of the finished excisable goods which they removed without payment of duty as well as without issuance of the invoices. They also indulged in the clandestine removal of the goods from their depot with the help of parallel set of invoices. Payments of the goods were received by them in cash which were not entered by them in their records. The allegations were based on the one hard disc, 10 zip discs and 16 floppies (hereinafter referred to as 'Peripherals') which were taken into possession from the Head Office-cum-Sale Depot of the appellants on 30-7-1999 and the statements of Shri Ajai Jain, Director; Shri Brajesh Dwivedi., Authorised Signatory; Shri Rajesh Srivastava, Clerk, Ms. Arti Srivastava, Computer Operator; Shri R.D. Gupta, Director of M/s. Vindhvasni Carriers Pvt. Ltd. (Transporter); Shri R.K. Dixit, Accountant - M/s. Pawan Carrying Corporation (Transporter); Md. Irfan, Partner - M/s. Syndicate Tobacco Product (Buyer), who purchased the finished goods from th....
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....f the computer room and rest from the Almirah placed in the computer room. Apart from these discrepancies which reflect adversely the very recovery of the discs and floppies from the possession of the appellants, we also find from the Panchanama dated 18-8-1999 that 9 zip discs were copied in the computer of the Department in the absence of the appellants without associating their any employee or the Director. One disc was declared to be blank by the Officers which was allegedly returned to the appellants. In the Panchnama prepared on 18-8-1999, there is no reference to the earlier taking out of the print outs or that any zip disc taken into possession on 30-7-1999, was blank. After a period of over six months, these peripherals were again handled by the officers of the Department on 1-3-2000 as is evident from the Panchnama of that date and they obtained print out of some more information through the computer of the Department in their Commissionerate Office. Again this was done at the back of the appellants. None of the Directors or the employees was associated at that time. Besides this, in that Panchnama dated 1-3-2000, there is no reference to the earlier copied out 9 zip disc....
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....to the Department as all these peripherals remained in their custody after the date of seizure i.e. 30-7-1999. 6. The contention of the learned SDR that Shri Ajay Jain was one of the Directors of the appellants, admitted the correctness of the entries in the print out and that the computer operator Ms. Arti Srivastava also admitted of having prepared and generated the bills in the name of different buyers through computer and entered the data from the slips and as such the computer print outs are sufficient to charge the appellants with the clandestine receipt of the raw material and the manufacture and removal of the finished goods without payment of duty, cannot be accepted. The testimony of Ms. Aarti Srivastava that she was given the responsibility to do the work related to the designs in the computer, preparation and generation of the bills through the computer, making entries from certain slips made available to her by Shri Ajay Jain, Director of the appellants' company, and misc. typing work relating to the computer, did not in any manner prove the clandestine receipt of the raw material and manufacture and removal of the finished goods by the appellants in a clandesti....
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....ere entered in their record. We find that separate show cause notice was served on the appellants on account of detection of the excess finished goods lying in their factory. Those goods were initially ordered to be confiscated by the adjudicating authority on the ground that the same were intended to be removed in a clandestine manner, but the Commissioner (Appeals) vacated that confiscation by observing that the allegations of intended clandestine removal of the goods on the part of the appellants, did not hold good in the circumstances. He, however, reduced the redemption fine for the release of the goods and the penalty. 7. In the absence of any tangible evidence regarding the clandestine receipt of the raw material by the appellants from the suppliers and the manufacture of the finished goods out of that material and clandestine removal of the same to the buyers, without payment of duty, the uncorroborated statement of Shri Vipul Jain, Director of the appellants' company, could not be made sole basis by holding the appellants guilty of the manufacture and removal of the finished goods without payment of duty during the disputed period. The appellants have rather produce....
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....d not advance the case of the Department in any manner for lack of any evidence to prove the actual receipt of the goods on the basis of those invoices by the buyers - the manufacturers of the 'PAN MASALA'. The raising of unsecured loans by the appellants from the financial companies, namely, M/s. AVP Investments (P) Ltd. and M/s. VRS Fininvest (P) Ltd. also did not in manner help the Department in proving the evasion of the duty by clandestine removal of the excisable finished goods by them. None of those companies had admitted that the advancement of loan was a sham transaction and that it was the money of the appellants which they collected by evasion of the Central Excise Duty by clandestine sale of the excisable goods. Similarly, the statements filed with the bank by the appellants for the purpose of financial accommodation, loan, payment schedules, overdrafts etc., also did not furnish any tangible proof of clandestine receipt of the raw material and manufacturer and removal of the finished goods in a clandestine manner by them. Those statements were given by the appellants for procuring more finances from the bank. It is well settled that the record maintained by an ....