9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (5) TMI 1015 - AT - Central ExciseClandestine manufacture and Removal - shortage of stock of 18480 poly packs of Gutkha - no corroborative evidences - sole basis to allege clandestine manufacture and clearance of the goods is the document resumed from Shri Manoj Rajouria and statement of Shri Manoj Rajouria which has already been discarded by this Tribunal while remanding the matter to the Adjudicating Authority on 08/11/2016 - HELD THAT - It is settled principal that no demand can be confirmed on the basis of third party evidences as has been the case in the impugned order -This Tribunal in various decision has categorically held that the third party record can be the sole evidence to confirm the evasion of central excise duty - reliance placed in the case of M/S. JAI MATA INDUSTRIES LTD. VERSUS CCE, ROHTAK 2013 (11) TMI 1121 - CESTAT NEW DELHI . There is no material on record or any documentary admissible evidence to prove that the appellants are engaged in clandestine manufacture and clearance of the goods, therefore, the impugned demand is not sustainable in the absence of any evidence. Demand set aside - penalty also set aside - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Alleged evasion of Central Excise duty by M/s Som Sugandh Industries Ltd. through suppression of production and clandestine removal of goods. 2. Admissibility of documents and statements recovered from a third party (Shri Manoj Rajouria). 3. Evidentiary value of statements from transporters and other third parties. 4. Reliance on best judgment method for quantification of duty. 5. Appropriateness of penalties imposed on M/s Som and its directors. Detailed Analysis: 1. Alleged Evasion of Central Excise Duty: The case revolves around an intelligence report suggesting that M/s Som Sugandh Industries Ltd. was evading Central Excise duty by suppressing production and clandestinely removing finished goods. Searches conducted at the factory and the residence of Shri Manoj Rajouria led to the recovery of documents indicating suppressed production and clandestine clearances. The Commissioner initially demanded a duty of ?8,25,00,000 based on the best judgment of production capacity, which was later revised to ?13,41,65,685 after remand proceedings. 2. Admissibility of Documents and Statements: The Tribunal had previously ruled that the documents recovered from Shri Manoj Rajouria's residence were not admissible evidence, as he admitted to fabricating these documents due to enmity with M/s Som. Despite this, the Adjudicating Authority relied on these documents and the statement of Shri Manoj Rajouria, which the Tribunal found to be a non-application of mind. The Tribunal reiterated that no demand could be confirmed based on third-party documents without corroborative evidence. 3. Evidentiary Value of Statements from Transporters and Other Third Parties: The statements from transporters, particularly Shri Pitamber Sharma, were found unreliable. Shri Pitamber Sharma admitted to not maintaining records and receiving payments in cash. No statements from the drivers who allegedly transported the goods were recorded. The Tribunal emphasized that without corroborative evidence, such statements could not substantiate the allegations of clandestine manufacture and clearance. 4. Reliance on Best Judgment Method: The Tribunal noted that the quantification of duty based on the Pan Masala Packing Machines (Capacity Determination & Collection of Duty) Rules, 2008, was inappropriate as these rules were of later origin and not applicable to the impugned period. The Tribunal highlighted the need for rational and reasoned quantification of duty, rather than a summary approach. 5. Appropriateness of Penalties: The penalties imposed on M/s Som and its directors were also scrutinized. The Tribunal found that there was no positive evidence on record to substantiate the allegations of clandestine manufacture and clearance. Consequently, the penalties imposed were deemed unsustainable. Conclusion: The Tribunal set aside the impugned order, ruling that the demand for duty and the penalties imposed were not sustainable due to the lack of admissible evidence and corroborative support. The appeals filed by M/s Som and its directors were allowed with consequential relief. The Tribunal emphasized the principle that no demand could be confirmed based solely on third-party evidence, aligning with precedents in similar cases.
|
