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2018 (11) TMI 1015 - AT - Central ExciseClandestine removal - Chewing Tobacco & Pan Chatani - entire case of the Revenue is based upon the statement of one Shri Suresh Kumar Dubey, an employee of the Transport Company - burden to prove - penalty. Held that - Apart from the said statements of Shri Dubey there is virtually no evidence on record to show that all the goods booked in the name of M/s S.K. Traders for the period in question were in fact cleared by the appellant from their factory without payment of duty. The Revenue has made investigations/inquiries and had also recorded statements of concerned persons. No incriminating evidences stand produced by Revenue to establish, beyond doubt that the S.K. Trader‟s GRs issued by the transporters were in fact, in respect of the goods cleared from the assessee‟s factory. No statement of the owner of the transport company, so as to seek clarification from them, was recorded. Not only that the names of the consignee of the goods as shown in the invoices of S.K. Traders and G.R. of the transport company were available with the Revenue. Only a meager attempt to contact them by writing letters to their counterpart Central Excise Officers having jurisdiction over the premises of the said consignee was made, which was never responded by them. The statement of the buyers was never recorded.No statement of the owner of the transport company, so as to seek clarification from them, was recorded. Not only that the names of the consignee of the goods as shown in the invoices of S.K. Traders and G.R. of the transport company were available with the Revenue. Only a meager attempt to contact them by writing letters to their counterpart Central Excise Officers having jurisdiction over the premises of the said consignee was made, which was never responded by them. The statement of the buyers was never recorded. The settled law the allegations of clandestine removal are required to be upheld on the basis of positive and tangible evidences indicating such activities on the part of the manufacturing unit - the entire case of the Revenue is based upon the sole statement of Shri Suresh Kumar Dubey and there is no corroborative evidence on record to establish that the clearances made under the name of Shri. S.K. Traders was made by the present manufacturer. Admittedly, onus to prove and establish clandestine removal is on the Revenue, which is required to be discharged by effectively investigating the matter and by producing relevant sufficient evidences so as to tilt the weight of the same in favour of the Revenue - in the present case, there is virtually no evidence on record to show any clandestine activity on the part of the assessee. The findings of clandestine removal resulting in confirmation of demand of duty of ₹ 2,53,31,825/- are unsustainable. Penalty upon Shri Jai Kumar Arya, partner of the manufacturing unit - Held that - Inasmuch as we have set aside the confirmation of demand, such penalty is required to be set aside. Similarly, penalty of ₹ 10 lakhs imposed upon M/s Mehra Transport Company, the same is required to be set aside - there is no justification for imposition of penalty on the said transporter in respect of the goods on which the duty stand confirmed by us inasmuch as the said non duty paid goods were only received by him in his premises, expecting excise documents to be received subsequently and no GR was prepared by him and the same were not in the process of being transported. Penalty of ₹ 10 lakhs on M/s Prabhat Zarda International - Held that - here is no evidence on record to show that M/s Prabhat Zarda International was aware of the fact that the said truck lended by them to the appellant would be used by them for clearances of the goods without payment of duty. The Truck has already been confiscated with an option to redeem the same on payment of redemption fine and in the absence of any evidence to reflect clearance of goods without payment of duty by M/s s Prabhat Zarda International, imposition of penalty upon them is not justified. Appeal disposed off.
Issues involved:
1. Demand of duty and penalties on M/s Jjk Zarda Pan Products for clandestine removal of goods. 2. Confiscation and redemption fine of seized goods. 3. Penalties imposed on M/s Prabhat Zarda International, M/s Mehra Transport Company, and Shri Jai Kumar Arya. Issue-wise detailed analysis: 1. Demand of duty and penalties on M/s Jjk Zarda Pan Products for clandestine removal of goods: The Commissioner of Central Excise, Noida confirmed a demand of ?2,58,13,713/- against M/s Jjk Zarda Pan Products for clandestine removal of their final products, along with interest and a penalty of an identical amount under Section 11 AC of the Central Excise Act. The Tribunal noted that the appellant did not dispute the liability to pay duty for the goods found loaded in the truck intercepted outside their factory and those found at the transporter's premises. The appellant's explanation for non-payment of duty was due to their staff being busy with export consignments. The Tribunal upheld the confirmation of demand of ?4,81,892/- along with an identical penalty and confiscation of goods with a redemption fine of ?1,69,727/-. 2. Confiscation and redemption fine of seized goods: The goods seized from the truck and the transporter's premises were confiscated, and a redemption fine was imposed. The Tribunal upheld the confiscation and the redemption fine, considering the appellant's admission of clearing goods without payment of duty. 3. Penalties imposed on M/s Prabhat Zarda International, M/s Mehra Transport Company, and Shri Jai Kumar Arya: The Tribunal examined the evidence related to the alleged clandestine removal of goods. The Revenue's case was primarily based on the statement of Shri Suresh Kumar Dubey, an employee of the transport company, which was not corroborated by other evidence. The Tribunal found that the Revenue failed to provide sufficient evidence to prove clandestine removal, such as verifying the use of raw materials, electricity consumption, or transportation details. The Tribunal referred to previous judgments emphasizing the need for positive and tangible evidence to establish clandestine removal. Consequently, the Tribunal set aside the demand of ?2,53,31,825/- and the penalties imposed on M/s Jjk Zarda Pan Products. Penalties on individuals and other entities: - Shri Jai Kumar Arya: The penalty of ?20 lakhs imposed on Shri Jai Kumar Arya was set aside as the demand of duty was not upheld. - M/s Mehra Transport Company: The penalty of ?10 lakhs imposed on M/s Mehra Transport Company was also set aside. The Tribunal found no justification for this penalty as the transporter received the goods expecting excise documents to follow, and no GR was prepared. - M/s Prabhat Zarda International: The penalty of ?10 lakhs imposed on M/s Prabhat Zarda International was set aside. The Tribunal noted that there was no evidence to show that M/s Prabhat Zarda International was aware that their truck would be used for clearance of goods without payment of duty. Conclusion: The Tribunal disposed of all the appeals by upholding the demand and penalties related to the seized goods but setting aside the larger demand of ?2,53,31,825/- and associated penalties due to lack of corroborative evidence. The penalties on M/s Prabhat Zarda International, M/s Mehra Transport Company, and Shri Jai Kumar Arya were also set aside.
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