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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 ..... ecords maintained by the proprietor were scrutinized. After scrutiny, lower authorities came to the conclusion that the appellant had during the year 2001-02, 2002-03 manufactured and cleared clandestinely finished goods and evaded duty. After completion of investigation and recording of various statements, show-cause notice was issued to the appellant directing to show cause as to why Central Excise duty should not be demanded denying benefits of on Small Scale Industries. Show cause was contested by the appellant on merits as well as on various other grounds. 3. The ld. adjudicating authorities did not agree with the contentions raised by the appellant, confirmed demands raised in the show cause notice along with interest thereof and imposed penalties under various sections on the main appellant and also confiscated the goods which were seized from the factory premises of the appellant. 4. The ld. Counsel appearing on behalf of the appellant would submit that the entire order in original is mis-directed. He would submit a small synopsis as regards dates and events: 1. 29/04/2003 The DGCEI authorities caused enquiries at the appellant's factory, the appellant's residence and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. 22/07/2003 The appellant was arrested and sent to judicial custody (page 101). 9. 30/07/2003 The appellant's father submitted an affidavit before the Court of the Additional Chief Metropolitan Magistrate, Ahmedabad in the appellant's bail application and again referred to the pressure and coercion by the DGCEI officers during the enquiry and also about the force and threats applied for obtaining confessional statements as well as pencil entries on the Sales Tax Registers (page 102). 10. 04/08/2003 The appellant was granted bail by the Criminal Court. 11. --- Thereafter, no further statement containing any admission of clandestine removal of goods has been recorded. 12. 13/04/2004 Show Cause Notice was issued by the Additional Director demanding total sum of Rs. 41,15,853/- on the ground that pencil entries made at the end of each month in the Sales Tax Registers indicated that goods valued 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/- pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uantities alleged by the department (details page 222 to 245). (iii) The value of the goods was arrived at by taking a uniform price of Rs.150/- per Kg. which was not correct nor justified in view of total 126 varieties of Winding Wires (i.e. 14 brands and 9 sizes). (iv) No manufacturer would write one pencil entry for the clandestine sales of the entire manufacture in the Sales Tax Register, and the whole case of the Revenue based on this statutory register maintained under Sales Tax law was ex-facie improbable and unsubstantiated. In the private diary of Shri Paragbhai Patel (Shree Ambuja Trading Co.) also, only one entry for a month was shown and therefore also it was not probable that a buyer would buy only one consignment in a month in unaccounted manner. (v) Other buyers were contacted 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 sca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en names and address of eight customers and there is confirmation that the officers had summoned these customers along with records, but surprisingly Revenue has not relied on any of such records would indicate that there is no evidence as to receiving goods without documents and without invoices, and would not support the case of the Revenue of the allegation of clandestine removal. It is also his submission that there is no allegation that electricity consumption has increased and there was purchase of raw-materials clandestinely and finally Panch cross examination as taken also indicates that they were not present when the documents were withdrawn by the revenue authorities. 6. The ld. departmental representative, on the other hand, would submit that during the relevant period, appellant 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 good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not conclusively established and is required to be supported by other independent corroborative and tangible evidence." 9. It can be seen from the above reproduced findings of the adjudicating authority that he is not able to 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. When we read paragraph 61, 62 & 63, it can be seen that the adjudicating authority has entered into an arena of presumption and assumption, by considering quantity of the goods which were seized in the appellant premises and also in the premises of purchaser as to be the quantity manufactured in the month of April, 2003. Taking this as base, adjudicating authority has concluded that if one month'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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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