2014 (11) TMI 75 - AT - Central Excise

Clandestine manufacture and clearance of excisable goods - 8 note books recovered from the appellants during the search operations. - Held that - One of the arguments taken by the appellants is that the said eight note books were recovered from the residence of Shri Chnadulal M Vohera and not from the factory premises. It is not appreciated as to what difference it will make when appellants are not disputing the correctness of the facts stated in these eight note books when the same were maintained by either the appellants or their employees. It is also observed from the case records that suppliers of some of the raw materials, who received the finished goods have confirmed the correctness of the entries made in the eight note books maintained by the appellant. Therefore, the case is not merely made on the basis of few confessional statements but also on the basis of private note books which are further corroborated by the statements of some of the raw materials suppliers. No justification in interfering with the order passed by the adjudicating authority - Decided against assessee.

Summary

Issues:
Clandestine manufacture and clearance of excisable goods based on recovered note books.

Analysis:
The appeals were filed against the OIO passed by the Commissioner of Central Excise & Customs, Vapi, following a remand order instructing de-novo proceedings. The main argument presented was that the case against the appellants was solely based on note books recovered during search operations, which detailed accounts of cash, stock, production data, and deliveries. The appellants denied preparing invoices for finished goods delivered outside the factory, leading to duty demands. The appellants contended that the demand lacked corroboration, as no excess raw materials or finished goods were found, and not all transporters mentioned in the note books were investigated.

The advocate further argued that even if the case was not in their favor, the appellants should still be eligible for cenvat credit and exemption under Notification No. 7/97-CE. Additionally, it was claimed that the data in the note books was unreliable, citing discrepancies in physical stock and raw material consumption figures. The advocate also highlighted the lack of increase in electricity consumption during the relevant period and the absence of cross-examination of relied-upon statements' makers.

The Revenue defended the adjudicating authority's order, emphasizing the oral and documentary evidence presented in the show cause notice. The Revenue relied on various case laws to support its position. After hearing both sides and examining the case records, the judge noted that the case was primarily built on the recovered note books, even though they were from the appellant's residence, not the factory premises. The judge found the explanations provided by the appellants unconvincing, as the note books were confirmed by raw material suppliers. The judge agreed with the adjudicating authority's detailed findings and rejected the appeals, stating that the department did not need mathematical precision to establish a case.

In conclusion, the appeals filed by the appellants were rejected, and the order was pronounced on October 31, 2014.