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TMI Blog2013 (9) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... ntries in the Sales Tax Register – Held that:- Department could not conclusively establish clandestine removal based on the private records as they were retracted and needs to be supported by other independent corroborative and tangible evidence - Adjudicating authority has entered into an arena of presumption and assumption - From private records, appellants have demonstrated that there was no clandestine removal of goods from the factory and all entries were recorded. Appellant had informed lower authorities names and address of purchasers of finished goods and investigating authorities have not recorded any statements, and even if recorded are not relied upon as is evidence from allegations in show cause notice – Relying upon the judgment of Hon'ble High Court of Gujarat in the case of Vishwa Traders P. Ltd. [2013 (4) TMI 55 - GUJARAT HIGH COURT] would be very relevant as the said judgment clearly holds as to the evidential value of the retracted statements and corroborative evidence which are required - There is also no endeavour of the lower authorities to corroborate allegations of clandestine removal of goods, in as much as, there is no evidence brought on record of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... caused enquiries at the appellant's factory, the appellant's residence and also at the office of one customer namely Shree Ambuja Trading Co. (Partner Shri Parag Patel). Two Sales Tax registers for 2001-02 and 2002-03 were recovered from the factory among other documents. It is the case of the Revenue that one pencil entry with marking "#2" at the end of each month was made in Sales Tax Registers and these entries were for weight and value of the goods sold in unaccounted manner. (Register at pg. 1 to 8 of Paper Book No.2). 2. 29/04/2003 The officers recorded statements of the appellant as well as 5 of his employees admitting that illicit manufacture of the goods was undertaken and the pencil entries in the Sales Tax registers were for goods illicitly manufactured and cleared. 3. 17/05/2003 The appellant submitted a letter to the Chief Commissioner of Central Excise, the Additional Director General of Central Excise Intelligence and the Commissioner-II, Ahmedabad, lodging protest about the high-handed manner and pressure tactics of the DGCEI officers in coercively obtaining admissions/confessions during enquiry on 29.4.2003; and affida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alued at Rs.1,48,22,401/- in F.Y. 2001-02 and Rs.3,02,59,759/- in F.Y.2002-03 were sold without payment of duty, and that these clearances were admitted by the appellant and his employees during the enquiry. The value of the goods was arrived at by taking a uniform price of Rs.150/- per Kg. of Winding Wires irrespective of 9 sizes and 14 brands of the wires (page 1). 13. 25/01/2005 The appellant filed an interim reply. 14. 25/04/2005 The appellant filed a detailed reply with the letters and affidavits already submitted before the authorities at the time of investigation. 15. 25/04/2005 The Commissioner passed an ex-parte order without considering the appellant's reply which came to be set aside by the Hon'ble Tribunal and the case was remanded for denovo adjudication. 16. 23/03/2006 17/04/06 The Senior Intelligence Officers Shri G.A. Khati, Shri Chetan Verma and Shri Y.A. Doulati and also Shri Santosh Kumar (Inspector) and two panchas of the panchnama made at Shri Ambuja Trading Co. and also Shri Parag Patel of Shree Ambuja Trading Company were cross-examined before the Commissioner, Ahmedabad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the officers because their names were given by the appellant on 30.4.2003 when his statement was recorded, but statements of these buyers were not recorded resulting in a irresistible inference that these buyers did not agree for having purchased or received any unaccounted goods from the appellant. (vi) There was no cogent or reliable evidence of indep.endent nature showing a large3 scale clandestine production and sale without payment of duties. 5. The ld. Counsel would then draw our attention to the findings of learned Commissioner at paragraph No.60 of the Order in Original. After drawing our attention, he would submit that the entire order is beyond the case as made out in the show cause notice; as demand is raised on the basis of statements of the proprietor of the appellant and others, whereas demand is confirmed in the order on the basis of alleged production for particular month i.e. April, 2003. It is his submission that this basis for confirmation of demand was never ever disclosed to the appellant and hence is violation of principles of natural justice. He would submit that the appellant herein was forced and pressurized on on 29/04/2003 in making pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant had, in fact, during panchnama held on 24/3/2003 made a statement of illicit clearance made by them and also deposited various cheques in lieu of acceptance of evasion of duty. It is his submission that there was stock of finished goods which were in ready to deliver condition and were not recorded in statutory record. Partners of Shree Ambuja Trading Co., purchaser of appellant's finished goods, confessed that the seized goods were received without payment of excise duty. He would submit that the impugned order is correct and legal and does not require any interference. 7. We have considered the submissions of both the sides. The issue involved in this case is regarding confirmation of demand under the charge of clandestine removal of goods by appellant during 2001-02 and 2002-03 and part of April, 2003. 8. On perusal of record, we find that this is not in dispute that appellant during the relevant period has claimed for the benefit as applicable to the small scale industries. It is also undisputed that appellant had maintained records of the clearance effected from his factory premises. On perusal of the show cause notice, we find that the appellant was issued show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s production quantity is this much, arrived at yearly manufactured quantity by multiplying by twelve. We find strong force in the contentions raised by ld. Counsel that this way of making out demand of duty is not put forth to appellant in the show cause notice. It is settled law that any confirmation of demand which is beyond allegation in Show cause notice is not sustainable under law. 10. We also find that the appellant is a small scale industry. He is not required to maintain any statutory register. We also find from private records that appellants have demonstrated that there was no clandestine removal of goods from the factory and all entries were recorded. The said dispatch/clearance has not disproved by lower authorities either by recording statements of the transporters or purchaser. In absence of any corroborative evidence, adjudicating authorities findings in para 61 and 62 of the order in original for confirmation of demand is unsustainable, as demand of duty cannot be done on the basis of presumption and assumption. We also find that appellant had informed lower authorities names and address of purchasers of finished goods and investigating authorities have not recor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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