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2018 (9) TMI 379 - AT - Central ExciseClandestine removal - Chewing Tobacco - statements showing removal of goods by ZTPL without payment of duty and other evidences and invoices - Seizure - Confiscation - excise duty demand. Seizure of goods valued at ₹ 1,08,517/- from Shivam Agency Nagpur - Held that - The said seized goods have not been directly transported from the factory of ZTPL to the said Shivam Agency; that 21 cartons seized from Shivam Agency Nagpur were purchased by them from M/s Geeta Trading Company Nagpur out of the 30 cartons purchased by them from M/s ZTPL earlier. It is also seen that the said 21 cartons were sold under commercial Invoice No. 451 dated 28.01.2006 and goods were transported under lorry receipt No. 4901272. In view of such documentary proof and in absence of evidence of clearance of said goods by M/s ZTPL without payment of duty, clandestine removal of goods valued at ₹ 1,08,517/- is not established - Confiscation not sustainable and is to be set aside. Seizure of goods valued at ₹ 36,000/- from Mustufa Sales Agency, Ahmedabad - Held that - This fact of clearance of goods on payment of duty under Invoice No.329 dated 19.05.2005 has not been denied by revenue or it is not the caase of the revenue that the goods cleared under the said Invoice No.329 dated 19.05.2005 were different than the goods seized and confiscated. The finding of the Commissioner (Appeals) is erroneous as he has referred to batch number without co-relating with the Invoice and it is not understood as to how it can be concluded from only batch number that the detained goods were not received under Invoice - Confiscation not sustainable and is set aside. Seizure of goods valued at ₹ 4,09,080/- from M/s Balaji Pan Centre, Chennai - Held that - It is settled law that the serious allegation of clandestine clearance cannot be made merely on the basis of statement which has not been corroborated by any other evidence - confiscation set aside. Seizure of goods valued at ₹ 26,800/- from Nobel Joseph, Chennai - Held that - The allegations are based only on the statement and entries made in his private records without independent corroboration - Confiscation not sustainable. Duty Demand amounting to ₹ 30,54,404/- - the entire case of clandestine manufacture and removal of goods has been made on the basis of seizure of goods/documents from the premises of third parties and on the basis of statements of persons without independent corroboration - Held that - There is no seizure in factory of ZTPL, all seizures have been made at the premises of others - Nowhere it has been stated in his statement dated 17.07.2006 that goods were clandestinely cleared by ZTPL. Thus, charge of clandestine removal of goods by ZTPL without payment of duty does not prove. It seems an undue inference has been drawn by the ld Commissioner (Appeals) which is not permissible - It is thus evident that said goods were not cleared without payment of duty. It is also argued by Revenue that the department is not required to prove its case with mathematical precision. But the Revenue has to establish such a degree of probability that a prudent person may, on its basis, believe in the existence of the fact in issue - The theory of preponderance of probabilities cannot be accepted in cases of weak evidences of doubtful nature. The settled law is that Charge of clandestine removal is required to be proved by sufficient evidences and in the present matter, these are no evidence on the basis of which such a serious charge of clandestine manufacture and clearance can be established. Penalty imposed on Rashminbhai Majithia, Director of ZTPL - Held that - In any case, penalty under first SCN dated 09.08.2006 cannot be imposed as he was never put to notice as to why penalty should not be imposed upon him. Thus, Additional Commissioner (Appeals) travelled beyond the scope of SCN in imposing penalty of ₹ 20,000/- on Rashminbhai Majithia. Further, the ld. Commissioner (Appeals) has also acted without any jurisdiction to enhance the said penalty to ₹ 1,00,000/- though no appeal was filed by Department for enhancement of penalty or any notice was issued by Commissioner(Appeals) proposing to enhance penalty already imposed by O-I-O. Thus penalty is liable to be set-aside. ZTPL and others have pointed out that wherever identification marks were recorded by DGCEI officers in Panchnama, M/s ZTPL has shown corresponding invoices showing removal of those goods on payment of duty. In absence of evidence relating to clandestine clearance of goods from factory, absence of statement from any employee of ZTPL and no evidence of transportation of the goods, charge of clandestine removal is not proved against M/s ZTPL - Held that - The ld. Advocate for ZTPL has rightly contended that only on the basis of Gopal Sales letter and statement it cannot be charged that goods more than ₹ 81 Lakhs were removed without invoices. Again, there is no evidence of transportation of these goods from ZTPL to premises of Gopal Sales in Maharashtra - the department has not verified facts and has presumed without evidence that goods worth ₹ 50 Lakhs were given as bonus by ZTPL to Gopal Sales. The position has been clarified by Hari Chand Gidwani, Prop. of Gopal Sales in his Affidavit by affirming that goods of ZTPL were sold by Payal Sales Corporation and Pooja General Stores in his area for which it was binding for ZTPL to give him incentive. In absence of any corroborative evidence, Revenue has not been able to establish charge of clandestine removal of goods to Gopal Sales. There is no independent evidence to show that any goods were removed by ZTPL without payment of duty to any person or firm. This Tribunal has been consistently holding that the charge of clandestine removal cannot be proved merely on the basis of statement - since the charge of clandestine manufacture and removal against M/s ZTPL is not established, penalty is not imposable on ZTPL, the Director and other persons. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Seizure and Confiscation of goods valued at ?32,70,602/- along with demand of excise duty of ?11,00,883/- by SCN dated 09.08.2006. 2. Excise duty Demand of ?30,54,405/- upheld by OIA dated 19.03.2013. Issue-wise Detailed Analysis: 1. Seizure and Confiscation of Goods: *Seizure from Rahul Transport Sales Co. Pvt. Ltd.:* - 301 cartons valued at ?26,90,205/- were seized but not directly transported from ZTPL's factory. - The goods were dispatched by Shivam Sales Corporation to Rahul Transport for further transportation. - Discrepancies in invoices and identification numbers were due to mishandling by the transport company. - No evidence of clandestine removal was found; the goods were cleared under invoices and on payment of duty. - Confiscation of goods valued at ?26,90,205/- from Rahul Transport Sales Co. Pvt. Ltd. was set aside. *Seizure from Shivam Agency Nagpur:* - 21 cartons valued at ?1,08,517/- were seized, purchased from Geeta Trading Company, which had bought them from ZTPL on payment of duty. - No evidence of clandestine removal; confiscation was set aside. *Seizure from Mustufa Sales Agency, Ahmedabad:* - 10 cartons valued at ?36,000/- were detained, sold under ZTPL’s Invoice No. 329 dated 19.05.2005. - No evidence of removal without payment of duty; confiscation was set aside. *Seizure from Balaji Pan Centre, Chennai:* - 160 bags and 5 cartons seized; 86 bags and 5 cartons released as their identification matched with duty-paid invoices. - Remaining 74 bags also had identification marks not seen by officers; no evidence of clandestine removal. - Confiscation of goods valued at ?4,09,080/- was set aside. *Seizure from Nobel Joseph, Chennai:* - Confiscation based on goods valued at ?26,800/- and statements of Noble Joseph. - Noble Joseph had purchased goods worth ?28 Lakhs on payment of duty from ZTPL and sold them at Chennai. - No evidence of clandestine removal; confiscation was set aside. 2. Excise Duty Demand of ?30,54,405/-: - The case of clandestine manufacture and removal was based on third-party documents and statements without independent corroboration. - No unaccounted goods/cash seized from ZTPL’s premises; no discrepancies in stock. - No statements from ZTPL employees confirming unaccounted manufacture/removal. - The duty demand based on a letter from Gopal Sales was not substantiated by evidence of transportation or clandestine removal. - The Tribunal found no evidence of clandestine activities and set aside the duty demand of ?30,54,404/-. Penalties: - Penalty on Rashminbhai Majithia, Director of ZTPL, was imposed without notice and jurisdiction. - Penalty of ?2 Lakhs confirmed by Commissioner (Appeals) was set aside due to lack of evidence of personal gain or dealing with excisable goods liable to confiscation. Conclusion: - The charge of clandestine manufacture and removal against ZTPL was not established. - Confiscation of seized goods was set aside. - Appeals filed by ZTPL and 6 others were allowed with consequential reliefs.
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