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2014 (5) TMI 794 - AT - Central ExciseDuty demand - Goods seized and confiscated - 40 bags of gutkha being transported - Driver produced invoice for 10 bags only - Clandestine removal of goods - whether 30 bags of Gutkha which were found loaded in the intercepted truck were cleared by the manufacturing unit M/s. Phoolchand Sales Corporation without payment of duty. - Held that - immediately after the seizure one Shri Ram Narain Maurya claimed the ownership of the said bags and also produced on record invoice dated 30.8.2004 and issued by M M Marketing, Lucknow. The goods were also released provisionally to said Shri Maurya. However, the appellate authority has rejected the stand of Shri Ram Narain Maurya on the ground that his name was not disclosed by the driver on the spot. - Admittedly M/s. M M Marketing is dealing with the goods manufactured by Phoolchand and Shri Ram Narain Maurya was a sales man. The goods sold by M/s. M M Marketing to Shri Ram Narain Maurya are covered by a regular bills issued by M/s. MM Marketing. There is no direct evidence of clearance of the goods from the factory of M/s. Phoolchand Sales Corporation whereas on the contrary, the ledgers produced by M/s. M M Marketing clearly show the goods in question as also sale of same to Shri Maurya. Charges of clandestine removal are required to be proved by positive evidence and cannot be upheld on the basis of assumptions. When there is clear evidence of removal of goods from the factory premises and other evidence placed on record indicate the ownership of same by Shri Ram Narain Maurya, I find no reason to uphold the charges against all the appellants. In support reliance can be placed on the Tribunal s decisions in the case of CCE, Delhi I vs. Ashok & Co. Pan Bahar Ltd. 2012 (9) TMI 863 - CESTAT NEW DELHI and Shirley Dyers vs. CCE, Jallandhar 2013 (12) TMI 108 - CESTAT NEW DELHI . - Decided in favour of assessee.
Issues:
1. Confirmation of duty against M/s. Phoolchand Sales Corporation 2. Imposition of penalty and confiscation of seized goods 3. Ownership claim of seized goods by Shri Ram Narain Maurya 4. Adjudication process and appellate orders Analysis: Issue 1: Confirmation of duty against M/s. Phoolchand Sales Corporation The judgment addresses the confirmation of duty against M/s. Phoolchand Sales Corporation, a manufacturer of 'Phool chand Super Brand' gutkha. The impugned order confirmed a duty amount of Rs.82,962 against the corporation, along with penalties and confiscation of seized goods. The intercepted truck carried 40 gunny bags of gutkha, with only 10 bags having proper documentation. The revenue alleged that the remaining 30 bags were cleared without duty payment. Issue 2: Imposition of penalty and confiscation of seized goods Apart from confirming the duty, penalties of identical amounts were imposed on two appellants, and the seized goods were confiscated with an option for redemption on payment of a fine. The judgment details the discrepancies found during checks at the manufacturing unit, where excess goods were discovered. Separate proceedings were initiated for these excesses. Issue 3: Ownership claim of seized goods by Shri Ram Narain Maurya Shri Ram Narain Maurya claimed ownership of the seized goods and produced bills from M/s. MM Marketing to verify the legitimate purchase. The Assistant Commissioner verified the bills and provisionally released the goods to Maurya. However, the appellate authority rejected Maurya's claim due to the driver not disclosing his name on the spot. Issue 4: Adjudication process and appellate orders The adjudication process involved issuing a show cause notice proposing duty confirmation, penalties, and confiscation. The Commissioner (Appeals) initially set aside the order, which was later remanded by the Tribunal for fresh consideration. The final order was passed by the Commissioner (Appeals) in denovo proceedings, where the issue of clandestine removal without duty payment was central. The judgment emphasizes the requirement of positive evidence to prove charges of clandestine removal. It highlights the lack of direct evidence linking the seized goods to M/s. Phoolchand Sales Corporation and supports the appellants based on clear evidence of ownership by Shri Ram Narain Maurya. The decision draws parallels with previous Tribunal cases to support the dismissal of charges. Ultimately, the impugned order was set aside, and all appeals were allowed in favor of the appellants, providing consequential relief.
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