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TMI Blog2014 (7) TMI 1072X X X X Extracts X X X X X X X X Extracts X X X X ..... ds demand of duty on illicit removal of 26,534 L.Mtrs, wherein an amount of ₹ 80,663/- has been confirmed - Held that:- the purchasers of the materials M/s DCM Fabrics have clearly recorded a statement which clearly indicate that they have received this quantity of fabrics from the appellant without any duty paying documents or under cover of any invoice. - demand of duty confirmed alongwith interest and penalty - Decided partly in favor of assessee. - Appeal No.E/805,814-816/2007-SM - Order No. A/11388-11391/2014 - Dated:- 18-7-2014 - MR. M.V. RAVINDRAN, J. For the Appellant : Shri Paritosh Gupta, Adv. For the Respondent : Shri Manoj Kutty, Superintendent (AR) JUDGEMENT Per: M.V. Ravindran; 1. All these four appeals are filed against the same Order-in-Appeal, hence these are being disposed of by a common order. 2. Appeal No.E/805/2007 is filed by the Revenue against the impugned order, only on the ground that the first appellate authority has erred in extending the benefit to the assessee of cum duty assessable value on the illicit clearances and also reduction of mandatory penalty as per the provisions of Section 11AC of Central Excise Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or clandestine removal of the goods, why interest be not demanded and penalties be imposed. The adjudicating authority, after considering the submissions made on behalf of all the three appellants, confirmed the demands with interest and also imposed penalties. Aggrieved by such an order, all the appellants preferred appeals before the first appellate authority. The first appellate authority, after following the due process of law, did not agree with the contentions raised by the appellants, upheld the order of the adjudicating authority, but granted partial relief to the appellants by accepting the contention that duty liability needs recalcuation on cum-duty price. 9. Ld.Counsel appearing on behalf of the main appellant and other two individuals, after giving overall picture of the issue involved, submits that the demand can be bifurcated into three different demands against which he is making following submissions:- (a) Demand of ₹ 2,54,883/- on shortages found during the course of Panchnama is being disputed on the ground that the Panchnama in the appellant s premises had begun at 09.00 hrs in the morning and ended at 11.00 Hrs in the night i.e. after 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial demands raised and confirmed pursuant thereto, is doubtful. It is also his submission that the Department has relied upon the statements recorded during investigation to suggest that there was clandestine removal and accepted by the concerned parties, but Department has failed to appreciate that serious allegations like clandestine removal are to be established by further corroborative evidences. He would rely upon the decision of the Hon'ble High Court of Gujarat in the case of Nissan Thermoware 2011 (266) ELT 45 (Guj), Tejwal Dyestuff Industries - 2007 (216) ELT 310. It is also his further submission that the chart shows the allegations of clandestine removal as noted in the worksheet prepared by the Department even if improper as in response to worksheet which was provided with the show cause notice, appellant submitted a list and details of all the invoices/ARE 4, under which the goods were removed and charged by the Department as clandestinely removed. It is also his submission that the appellant had submitted all the copies of relevant documents to the lower authorities, which has been totally ignored. It is his submission that for the demands raised in (a) and (b), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the folding report which was found hidden in lump of fabric in the folding department. It is his submission that it is on record that these reports were prepared by the folding contractors of the firm and was admitted in his statement dt.08.06.2001. He would also submit that incriminating documents were recovered from the adjacent folding house premises owned by Shri Hiralal J. Parekh, Director of the main appellant. It is his further submission that one Shri Devichand M. Munot has admitted that MMF without any Central Excise invoices is an indicator that main appellant as engaged in clandestine removal of its goods. It is his submission that Shri Hiralal J. Parekh, in his various statements, had admitted to this fact. It is also his submission that these arguments would apply to the third demand of ₹ 80,663/-. As regards the plea of the appellant that they are operating under compounded levy scheme during the date of search, it is his submission that it is undisputed that an application dt.18.05.2001 was made by the appellant to operate under compounded levy scheme to the Commissioner of Central Excise, Ahmedabad. It is his submission that CCE vide an order dt.12.10.2001 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een confirmed, I find that the purchasers of the materials M/s DCM Fabrics have clearly recorded a statement which clearly indicate that they have received this quantity of fabrics from the appellant without any duty paying documents or under cover of any invoice. It is seen that the said statement of the buyer is not retracted by him, hence in my considered view, appellant has not made out any case for setting aside the demand of Rs.,80,663/-. (ii) As regards the demand of illicit removal of 5,19,371 and 1,05,993 L.Mtrs found as shortage during stock taking on 07.06.2001, appellant has case in his favour for more than one reason. Firstly, as noticed from the records that this demand is raised on the basis of folding record in formchits No.14/16/17 pages of the folding book seized under Panchnama and shortages, at the factory premises of the appellant. Though, various statements are recorded indicating therein that the goods were cleared illicitly, on deeper perusal of the records, I find that the said lot numbers which were recorded in the worksheet prepared were properly answered by the appellant when they filed reply to the show cause notice. I find that in one o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed the demands raised without addressed to the fact that duty liability has been discharged by the appellant after 18.05.2001 under compounded levy scheme. Though the ld.Departmental Representative submits that the said application was rejected by the authorities on 12.10.2001, I find that before rejection of said application, the fact that the appellant was discharging the duty liability on such goods, is not denied. Even if we consider that the Commissioner has rejected the application filed by the appellant to operate under compounded levy scheme, it would not indicate that the clearance of 5,19,371 and 1,05,993 L.Mtrs were illicitly removed in as much as the rejection of the application made by the appellant, at the most, would require re-consideration of value and discharge of duty liability under different headings and it cannot be held that there was clandestine removal of the goods by the appellant. On perusal of records, I find that there is no such allegation in the show cause notice. My this view is fortified by the order of this Bench in the case of Suzler Processors Ltd (supra) wherein it was held as: 4. The question required to be decided in the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X
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