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TMI Blog2012 (4) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... r its clandestine removal from the factory. In the entire notice and the order there is no satisfactory and reliable independent evidence as regards the unaccounted manufacture and or receipt of the huge quantities of raw materials. There is also no cogent evidence about any freight payment for any such movement. The demand confirmed against M/s. Aum Aluminum P. Ltd. on the charges of clandestine removal is set aside along with setting aside the penalty of equivalent amount imposed upon them u/s 11AC of the Act. Penalties imposed upon Shri G.G. Bansal, Shri V.N. Agarwal and M/s. Vinviv Holding & Trading Co. P. Ltd. are also set aside. The confiscation of the section seized from factory of M/s. Aum Aluminum P. Ltd. for their non-accountable is upheld, however, redemption fine is reduced from ₹ 8 lakhs to ₹ 75,000/- and penalties imposed on M/s. Aum Aluminum P. Ltd. on this account is reduced from ₹ 1 lakh to ₹ 50,000/- Appeal disposed off - decided partly in favor of appellants. - E/597-600/2007 - Final Order Nos. A/589-592/2012-WZB/AHD - Dated:- 17-4-2012 - Ms. Archana Wadhwa, Member (J) and Shri B.S.V. Murthy, Member (T) Third Member on Ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement of various other persons. 5. On the above basis, proceedings were initiated against the appellants, which culminated into an order dated 31-3-2004 passed by Commissioner, confirming the allegations made in the show cause notice and confirming demand of duties as raised therein and imposing penalty. The said order was appealed against by the appellant before Tribunal, who vide their order dated 8-7-2005 [2005 (190) E.L.T. 393 (Tri.-Ahmd.)] set aside the same and remanded the matter to Commissioner for de novo adjudication with following observations : After hearing both sides and considering the details as given in annexures to the SCN and on perusal of the statements of transport companies personnel and inspection of seized records, we find that the burden is on the Department to establish the case with cogent material. While the SCN has, prima facie, on consideration of the material raised a grave charge, we find that the adjudicator has not performed in a manner required of a quasi-judicial authority. The specific plea raised were required to be met and brought to a logical conclusion, if necessary, by putting questions in nature of cross-examination of witness f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d could not be made the basis for decision against them. (iii) That the initial statements of Shri Bansal, Shri V.N. Agarwal and Shri Jayesh Sharma stand retracted by them at first available opportunity and as such cannot be made sole basis of holding against them. (iv) Even according to the said statements, Aluminum Sections manufactured by M/s. Aum were transported to M/s. Vinviv or M/s. Allied Aluminum without the cover of invoices. However, the scrutiny of the records maintained at the premises of said two alleged recipients has not shown any such receipt by them and the stock of the goods at their premises had been found to be as per the records maintained therein. (v) As regards the Bill book/LR/Booking register recovered from the premises of the transport company, the appellants pleaded that in all those cases, payments were made in cash and the bookings had been done by Shri Bansal, as has come on record during the cross-examination of various transporters. Shri Bansal has already admitted that he was doing the business of transportation for the other manufacturing units located in the area and as M/s. Aum were enjoying a concessional rate from the transport comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon any factual position, charges of clandestine removal, cannot be upheld against them based upon the recovery of the documents from the transport company or from the residential premises of their manager Shri Bansal, which in any case, they have explained. (xiii) The records seized from the transporters premises lacks credibility. They either do not mention the consignee s name or the kind of the goods transported or the actual receipt by the consignee. There are no statutory presumptions and assumptions to the truth and accuracy, of the third party s records; it was incumbent on the department to establish the credibility, genuineness and accuracy of the record, which has not been .done. They also relied upon the Tribunal s decision in case of M/s. Brims Products v. CCE - 2001 (130) E.L.T. 719 (Tri.) and M/s. Kothari Synthetic Industries v. CCE - 2002 (141) E.L.T. 558. (xiv) That during the course of cross-examination, it has come on record that all the books were opened by Shri Bansal who used to get the goods loaded from places other than the factory premises of M/s. Aum. The said statement of Shri Chetan Mehta, employee of one of the transport companies, has been cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s though his attention was brought to the same. Though not specifically doubting the correctness of the same, he has observed that these production estimates are based upon the assumptions that the Billets made in the plant are converted into Sections only in the extrusion press installed in the plant and the sections framed are of final gauge. He has further observed that on many occasions, the appellants get the Billets converted into Sections on job work basis from other units. He refers to the period April, 2006 to September, 2006 wherein out of the total production of 297.32 MT, 118.097 MT of aluminum Sections were manufactured through job workers and only 179.22 MT of Sections were manufactured in the factory. On the above basis, he has observed that since the plant can produce up to 4 MT of billet per day and part of the billets can be converted into Sections through job workers, the production of sections to the tune of 1000 MT was not impossible. 15. The Commissioner in his above findings, has not rebutted the appellant s plea that their working capacity is much less. On the other hand, he has candidly accepted their stand that plant can produce up to 4 MT of Billet p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bansal. Shri Bansal has also admitted during cross-examination that he was doing his own business of arranging transportation for other parties, without knowledge of his employer Shri V.N. Agarwal and he was booking the trucks in the name of M/s. Aum for transportation of the other parties goods inasmuch all the transporters were offering concessional rate to M/s. Aum, being one of their biggest customer. Shri Vipin Jain, during the course of argument has explained that if any Five Star hotel like Taj provides a concessional rate, made to one of his friend on account of his being a frequent customer, he may like to get the room booked in his name to save money, though it would be he and not his friend who would be staying in the room. On the above analogy, he explained that booking of truck in the name of M/s. Aum by Shri Bansal for furthering his own business, cannot be made the basis for holding that said trucks were used for transportation of the Sections, especially when there is no name of the buyer forthcoming on record. 18. We find sufficient force in the above plea of the learned advocate. The Commissioner has merely observed that LRs issued by transporters to a person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely because entries were made in the booking register, is no conclusive proof of actual movement of goods, as has been held in the precedent decisions of the Tribunal, referred supra. 22. We also take note of the observations of the Commissioner that the transport companies have not disputed that consignments of aluminum sections were dispatched by M/s. Aum to M/s. Vinviv, M/s. Allied Aluminum and M/s. Chitra Hardware. However, surprisingly, while dealing with the seizure of the goods and recovery of duty in respect of aluminum sections found from the premises of M/s. Allied and M/s. Vinviv, Commissioner in Para 7.9 of his impugned order observed that there is nothing on record to prove that the aluminum section seized from the godown premises of M/s. Vinviv Mumbai are those which had been manufactured by M/s. Aum and cleared by them clandestinely without payment of duty. I, therefore, hold that neither the demand of duty amounting to ₹ 2,12,016/- in respect of 14723.325 kgs. of aluminum sections seized from the godown premises of M/s. Vinviv Mumbai is sustainable nor the proposal for their confiscation under Rule 173Q(1) of CER, 1944 is sustainable. 23. Surprisingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m billets per annum and by conversion of billets into sections through job-workers, production of aluminum sections, alleged in the SCN is possible. It has been emphasized by AAPL and other notices that the department s case against them is based on assumptions and presumptions only. This plea is totally incorrect as the department s allegation of clandestine removal against AAPL and other notice is based on strong circumstantial evidence in form of the records of the transport companies regarding transportation of the goods manufactured by AAPL to various destinations, backed by the statements of the employees of the transport companies, unaccounted purchases of furnace oil and aluminum scrap, recovery of blank invoice book of Allied Aluminum Mumbai, a dealer from the office premises of AAPL at Kalol coupled with the fact that in respect of a number of consignments of aluminum sections dispatched from Kalol to Chitra Hardware, Delhi, Allied Aluminum had been shown as consignor and recovery on unaccounted stock of aluminum sections from the factory of AAPL at Kalol at the time of investigating officer s visit to the factory. AAPL instead of rebutting the allegation against them on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. Similarly, bank statements filed with the bank for the purpose of financial accommodation, loan, etc. was held not to be of tangible proof of clandestine receipt. Tribunal observed that the charges of clandestine removal has to be proved by the department by adducing cogent, sufficient and positive evidences and not on assumptions and presumptions so as to saddle the assessee with duty liability. While dealing with identical issue, Tribunal in case of Reshma Wires P. Ltd. v. CCE, Bangalore, 2006 (202) E.L.T. 332 (Tri.-Bang.) has held that in absence of any corroboration of electricity consumption, purchase of excess raw material, or sale of unaccounted goods produced, the charges of clandestine removal cannot be upheld. In fact, it was further observed that Revenue should do thorough investigation. If duty evaders do not leave any trace of their offences, we cannot presume commission of offence and penalise them. Detection of economic offence is verily a battle of wits between Revenue and trade. Adjudicating authority cannot come to the rescue of Department Officers who abdicate their responsibility. It appears as though the adjudicating authority justifies the poor investigati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al and technical lapse, which requires lesser redemption fine and penalty. 32. We, accordingly, reduce the redemption fine imposed upon M/s. Aum Aluminum Pvt. Ltd. from ₹ 8 lakhs to ₹ 75,000/- (Rupees Seventy Five Thousand only) and penalty from ₹ 1 lakh imposed upon M/s. Aum Aluminum Pvt. Ltd. under Rule 173Q to ₹ 50,000/- (Rupees Fifty Thousands only). Separate penalties of ₹ 1 lakh each imposed upon Shri V.N. Agarwal, Shri G.G. Bansal for non-entry in terms of Rule 209A are not called for. The same are, accordingly, set aside. (Pronounced in Court on ..) Sd/- (Archana Wadhwa) Member (Judicial) 33. [ Per : B.S.V. Murthy, Member (T) ]. - I have gone through the order proposed by learned Member (Judicial) and since I am unable to agree with the conclusions, respectfully I record a separate order. 34. Since the facts have been reproduced and arguments advanced have also been discussed, I am not reproducing the same. However, wherever relevant, the facts, arguments advanced, etc. would be mentioned. 35. The case of Revenue as regards clandestine removal of aluminum sections is built on the following supporting evidences. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ineer s certificate issued by Saran Engineers Consultants in 2002 and Shri Nilesh Patel in 2006. Saran Engineers Consultants stated that actual average production capacity of plant is about 400 Tons per annum whereas Shri Nilesh Patel came to the conclusion that the average production capacity is about 432 per ton. Appellants also submitted the details of production over the past 15 years to prove their point that their production on an average was about 400 MT only. They also submitted that power and fuel consumption was also constant during the period in support of their contention. As regards furnace oil, they contended that Shri Bansal, Manager was doing trading on his own account without the knowledge of the Director Shri V.N. Agarwal and the furnace oil was purchased in their name and sold to other units by Shri Bansal. It is their contention that excess quantity of furnace oil was never received or utilised in the factory. As regards scrap also, the defence of the appellants is that this was a part of business of trading on the part of Shri Bansal and therefore it cannot be considered for the purpose of raw materials procured by the company. Further, they have also submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed. But the main point of the department is that the appellants have not been accounting for the production. If they do not account for full production in their own factory, and if there are sufficient evidences available to show that this is indeed so, it is ridiculous expect that they would follow the proper procedure for movement of raw material to the job worker and account for production sincerely. Therefore, the possibility of getting the aluminium sections manufactured by the job workers cannot be ruled out. In any case these conclusions have to be treated as the ones that arise as a result of analysis and assessment of all the evidences. At this stage the effort is to show that the appellants claim that they could not have produced the additional quantity of aluminum section is not supported by any concrete evidence. This is further supported by submissions made by learned SDR wherein he has brought out utilization of electricity and furnace oil in different processes by the appellants and has tried to show how critical is the utilisation of furnace oil for the manufacturing operations of the appellant. The relevant para is reproduced below : Furnace oil is one of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment. Further, Shri Bansal, in his statement on 12-4-2001, immediately after seizure had admitted that approximately 65% of the actual production was only accounted for. This cannot be ignored even though the appellants claimed that this statement was retracted subsequently. This is because the whole case of clandestine removal and quantification of clandestine removal is based on the transporters documents which were verified subsequent to 12-4-2001. Further, the quantity of clandestine removal worked out after detailed verification is approximately 50% which again goes to show that Shri Bansal, in his statement had actually under-estimated the accounted production. The very fact that percentage of the accounted production as per the submissions of Shri Bansal and what was ultimately found by Revenue are so near to each other shows that Shri Bansal, had indeed given correct statement and this is another reason why the statement of Shri Bansal given initially can be and has to be relied upon. 41. Now, I come to the next point relating to the claim by the appellant that the furnace oil which has been shown as supplied to them by the oil companies was in fact part of trading a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porters, he was asked Is it possible that your driver could have, in connivance with the employee of AAPL, delivered the part or the entire material somewhere else? The answer given by Shri N. Roy is No. There is no such possibility. It is also on record that the transporter was hired by AAPL and not by IOCL/HPOL. Thus, the transporter of AAPL himself clearly stated that all the furnace oil was delivered only to the factory of AAPL. How this oil was later taken out of the factory storage tanker and transported to various buyers (Who will be shown to be non-existent very soon) is a million dollar mystery which is impossible to solve. Secondly, even though Shri Bansal claimed that he had sold 4.58 lakhs Kilo Ltrs of furnace oil/LDO on his own account and against the provisions of Explosive Act and had delivered the same to some private parties, he could not give a single name of the party when he was asked by the Commissioner. He simply stated that he was doing this without knowledge of the director and as regards names he replied that at present he did not remember. This was on 29-6-2006. By this time, the appellants were already aware that this would be their defence argument a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are working. The above discussion clearly shows that the claim of the appellant that Shri Bansal was engaged in private trading of furnace oil and they have not actually received the furnace oil is not correct. 42. The next argument put forth by the defence is about the clandestine removal of Sections. 42.1 Their contention is that there was no clandestine removal is supported by the fact that goods seized from M/s. Vinviv Trading has not been confiscated by the Commissioner and those seized from M/s. Allied Aluminum were released during investigation itself. Shri Bansal had stated in his statement that he was doing private trading and also booking the truck for others in the name of AAPL and was pocketing the differential freight as his profit since AAPL was getting a concessional freight rate. 42.2 Further, two employees of main transporter of AAPL, Shri Matangi Transport Co., were examined and cross-examined during Personal Hearing. Shri Chetan Mehta, an employee who was working for the company during 1995-2000 and who had left the company thereafter, had stated that he was not nominated by the company when the letter was sent to send the nominee for examination a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emoved in clandestine manner. Shri Jayesh Sharma, employee of Allied Aluminum/Vinviv had clearly admitted that he was accounting for only 40% of the goods and he was also sending scrap which was not accounted. The statement of Shri Bansal, Shri Vijay Agarwal, who has signed in token of having seen records and statement, and. Shri Jayesh Sharma coupled with transporter s documents who are independent and who do not have vested interest, show that there was clandestine removal of Sections. Another claim made by the appellant was that the transporters stated that their driver would not accept any goods without invoice. The case of the department is that no Central Excise invoice was issued. It is not the case that no invoice was issued. Invoices can always be issued but without accounting for it anywhere in the books. The statement of the transporter that invariably goods were transported with invoices would not help the appellant unless they are able to show the relevant invoices. The appellants have contended that the department has relied upon memo book and register of transporter only and they are not reliable in view of the statement of Shri Chetan Mehta during cross-examination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will not tally with each other and the goods can be seized by any of the enforcement agencies such as Sales Tax, Excise, etc. Just as in case of Taj Hotel, which cannot show the name of the friend of the advocate as person staying in the room, the transporter also cannot afford to show the LR in AAPL s name and get the invoice from someone else. It would be violation of law. 42.5 The defence of private trade by Shri Bansal is unbelievable. Assuming that Director did not knew about private trade, question arises as to what a normal prudent person have done as soon as he came to know that 4.58 lakh KL of oil was sold in private trade. In this case, Shri Bansal has put the company in trouble by violating Explosives Act and has saddled the company with a demand for duty of ₹ 2.47 crores. He does not even know or able to identify a single existing firm to whom he sold furnace oil or he did private trade to the Commissioner during PH thereby he has rendered the whole defence of private trade and sale of furnace oil as unbelievable. When enquired, Shri V. Agarwal, stated that he did not take action since Shri Bansal s father was unwell. Even during hearing before us, the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not have a system for accounting for billets at all, which is required as per law. Therefore, their confiscation also has to be upheld. The fact of finding excess billets and excess Sections also supports the findings of illicit removal by the Commissioner. 45. The department also has found that there were several records of purchase of raw material like aluminum scrap, foils, raw material mentioned in the files recovered from their office and residential premises of Shri Bansal located near to the factory, which have not been accounted for in the statutory records or books of accounts. The invoices of Allied Aluminum, a firm owned by Shri Vijay Agarwal, were used to account for scrap purchased from the market and used by them to manufacture and clear the aluminum Sections clandestinely, is corroborated by the statement of Shri Bansal and recovery of blank invoices book of Allied Aluminum from the premises of AAPL. Further, Shri Jayesh Sharma also admitted that he was sending unaccounted aluminum scrap. 46. Summing up what we find is that appellants have not been able to explain what happened to 4.58 lakhs KL of furnace oil sent to them by oil companies. The defence of capa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence. It should also be borne in mind that it will be humanly impossible to establish every link in the chain of clandestine activity. 49. In this case, Department can only prove that furnace oil was sold to appellant and was transported to the factory which has been done by the evidence of oil company records, examination of IOCL Manager and statement of transporter. Thus, the burden to show what happened to it shifts to appellants since as observed in the above case. Department cannot recover documentary evidence of such diversion. Same principle applies to transport of aluminum sections. The observations of Hon ble Supreme Court in case of Collector of Customs, Madras v. D. Bhoormull, 1983 (13) E.L.T. 1546 (S.C.) is also of relevance in view of the fact that in this case, Revenue has produced positive evidence to show that the clandestine removal has taken place and the burden is shifted to the appellants to prove the same otherwise which they have not discharged. It is to be noted that even in cases where copies of LRs have been recovered by Department relating to transport of Aluminum Sections, appellants have not given any explanation. The observations are extracte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inable, the law, accepts for it, probability as a working substitute in this work-a-day world. The law does not require the prosecution to prove the impossible. All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue. Thus legal proof is not necessarily perfect proof often it is nothing more than a prudent man s estimate as to the probabilities of the case. 31. The other cardinal principle having an important bearing on the incidence of burden of proof is that sufficiency and weight of the evidence is to be considered to use the words of Lord Mansfield in Blatch v. Archar - (1774) 1 Cowp. 63 at p. 65 According to the proof which it was in the power of one side to prove and in the power of the other to have contradicted . Since it is exceedingly difficult, if not absolutely impossible for the prosecution to prove facts which are especially within the knowledge of the opponent or the accused, it is not obliged to prove them as part of its primary burden. I feel that Revenue has met the standards of evidence required to be produced to enable a person to reach a conclusion beyo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to lead a cynical disregard of the law, and this in turn leads to a public demand for harsher legal presumptions against indicted persons and more severe punishment of those who are found guilty. Thus, too frequent acquittals of the guilty may lead to a ferocious penal law, eventually eroding the judicial protection of the guiltless. For all these reasons, it is true to say, with Viscount Simon, that a miscarriage of justice, may arise from the acquittal of the guilty no less than from the conviction of the innocent... In short, our jurisprudential enthusiasm for presumed innocence must be moderated by the pragmatic need to make criminal justice potent and realistic. A balance has to be struck between chasing chance possibilities as good enough to set the delinquent free and chopping the logic of preponderant probability to punish marginal innocents. 35. A person has, no doubt, a profound right not to be convicted of an offence which is not established by the evidential standard of proof beyond reasonable doubt. Though this standard is a higher standard, there is, however, no absolute standard. What degree of probability amounts to proof is an exercise particular of ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . v. Krishna Gopal [1988 (4) SCC 302]. 51. It may be seen that even in criminal cases and prosecution, what required is proof beyond reasonable doubt according to the Hon ble Court and not beyond doubt. These observations when read with the decision in Bhoormull s case, clearly show that standards required in quasi-judicial proceedings are definitely a level lower. In this order, I have attempted to do what Hon ble has desired should be done in the last sentence of Para 26.6 ibid. (Extract of Supreme Court judgment) and I have also kept observations in Para 36 of the judgment of the Supreme Court cited above. 52.1 In view of the above discussion, I uphold the order of the Commissioner demanding duty of ₹ 2,47,37,745/- with interest as applicable and imposing a penalty of ₹ 2,47,37,745/-. In view of the fact that total amount of duty evaded is more than ₹ 2.47 crores, penalty imposed on individuals by Commissioner is not excessive and I also agree with the conclusions of Commissioner regarding their role and hence uphold penalties imposed on individuals in para 11.1.4 of the impugned order. I also uphold the order of the Commissioner in Para 11.2 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by learned Member (Judicial). (iv) Whether non-confiscation of goods available with Vinviv Mumbai supports the case of the appellant as held by learned Member (Judicial) or it has no bearing on the case as held by Member (Technical). (v) Whether defence of private trading and scrap by an employee claimed by the appellant has to be accepted as held by learned Member (Judicial) or the same has to be rejected as held by Member (Technical). (vi) Whether confiscation of excess billets and aluminum sections has to be upheld as done by Member (Technical) or is required to be set aside as held by learned Member (Judicial). (vii) Whether the department s contention that scrap accounted in the name of Allied Aluminum was in fact meant for the appellant has to be accepted as held by Member (Technical) or the same has to be held as received by M/s. Allied Aluminium as held by learned Member (Judicial). (Pronounced in Court on 17-9-2010) Sd/- (B.S.V. Murthy) Member (Technical) Sd/- (Archana Wadhwa) Member (Judicial) 57. [ Per : M.V. Ravindran, Member (J) ]. - This Difference of Opinion is listed before me as per the orders of Hon ble President for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is his submission that in the line of manufacture of the appellant, the final product Aluminum Sections, Aluminum billets are required to be first manufactured and then converted into Sections. It is his submission that the capacity of the appellant for manufacturing of Aluminum Sections is undisputed, and the factual position is not in challenge by the Department in any form before the Tribunal. It is his submission that the reliance placed by the Revenue on the balance sheet to show production capacity of the appellant 600 MT of Aluminum Sections is only an installed capacity and ought not to be accepted, as Chartered Engineer s certificate indicate that the appellant could not manufacture more than 430 MT of Aluminum Sections, based upon the factual verification of the capacity of the machine, age and the working hours of the appellant. It is his submission that the Chartered Engineer considered the age of the machinery which was purchased by the appellant to come to such a conclusion. It is also his submission that the adjudicating authority had himself come to same conclusion after asking officers to visit to appellant s premises and had the capacity verified and confirmed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repared therein. It his submission that none of the said LRs which were relied upon for arriving at the clandestine removal of the goods were acknowledged and nor there are any LR which bears any acknowledgement from any consignee regarding actual delivery of the material. It is his submission that the transporters have, during the cross-examination, explained that on many occasions, when the booking is cancelled, or if any someone else s material is carried, the same may not reflect in the transporter s copy of the LR kept in godown. It is his submission that on this backdrop, the Revenue s case that the LRs issued by the transporter company invariably mention the appellant as consignor and various other parties as its consignees, is not borne out from the facts and that the transporter in his statement categorically recorded that all the goods transported by them were covered by valid Central Excise invoice. It is his submission that the Revenue has not charged or nor is there any finding that the appellant was issuing duplicate or parallel invoices, hence the only logical conclusion which plays from the said statement is that the goods which were carried by the transporter were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along been stating that the only quantity the appellant had purchased payment is made through account payee cheque and only that quantity has been consumed by them and accordingly reflected in the books of account. It is his submission that so called unaccounted purchases of furnace oil were done by making payments through demand drafts. It is his submission that in the earlier round of litigation, this Tribunal directed the investigating authority to examine the factual matrix as to who made the payment through demand drafts and who procured the material, in remand proceedings also, the respondents has not called for any such enquiry and had proceeded on the presumption that the entire quantity has been ordered for and used by the appellant themselves. It is his submission that the finding of the adjudicating authority is also erroneous inasmuch as Shri G.G. Bansal, during cross-examination categorically stated that the furnace oil being a restricted commodity, requiring explosive licence, it was not available to all, and he was unofficially trading in furnace oil along with his partner Shri Sonu Singh and Mr. Iqbal. It is his submission Shri Sonu Singh filed an affidavit before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s based upon the details of the truck bookings made M/s. Aum Aluminum Pvt. Ltd. (AAPL for short) as shown in bills collection register, booking register/memo book for the relevant period seized from the premises of 4 transport companies. It is his submission that the said memo books, booking registers and bill collection registers were properly scrutinized and the statements of the employees of the transport companies along with statements of various persons of appellant AAPL, clearly indicate that there was a clandestine removal. It is his submission that the production capacity of the plant of AAPL is undisputedly accepted as 4 MT of manufacture of billets and considering 25 working days in a month, the said production capacity of billets is approximately 1000 MT per annum. It is also his submission that AAPL was not only manufacturing the aluminum sections manufactured in his factory at Kalol, but also getting the billets converted into aluminum sections through job workers and hence the manufacturing of aluminum sections to the tune of 1000 MT per annum is not impossible. It is his submission that therefore, the evidences of clandestine clearances in the form of transport compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uminum Sections dispatched by AAPL. It is his submission that the fact like existence of documents showing the booking of consignment of aluminum sections with AAPL as consignor and their consignment agents as consignees and coupled with the fact that the payment for the bookings have been made by AAPL to transport companies, these bookings have not been denied by the transport companies nor by the director of employees of companies, gives rise to the presumption that bills/LRs/Memos were for Aluminum Sections manufactured by AAPL, had been transported to their consignment agents/dealers/customers and there are no Central Excise invoices and the dispatches have not been reflected in Central Excise records maintained by the appellant company. It is also his submission that during the relevant period, the AAPL has purchased the furnace oil from IOCL, HPCL and M/s. Gujarat Oil Chemical, Bhavnagar. It is his submission that the records of IOCL, HPCL clearly indicate that the appellant had purchased the substantive quantity of furnace oil, while the appellant AAPL, in their records shown only purchase of 2,67,000 ltrs of furnace oil and the balance 4,05,878 ltrs of furnace oil has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority, Shri Bansal was specifically asked to mention the names of the parties to whom the furnace oil and aluminum scrap purchased by him in the name of AAPL have been sold and also the names of the parties to whom the goods have been transported in the truck booked in the name of AAPL, but he failed to give the names, stating that he does not remember. It is his submission that Shri V.N. Agarwal, during the course of cross-examination, submitted a list of the names of the parties, with whom Shri Bansal was doing private business. It is his submission that this statement came up during cross-examination of Shri V.N. Agarwal, is nothing but an afterthought and desparate attempt introduced as an evidence favourable to him. It is his submission that during cross-examination, Shri V.N. Agarwal gave the names of the parties with whom Shri G.G. Bansal was allegedly having private business and it was noticed that all the industries were, during the relevant period, were either closed or not doing any business. It is his submission that looking at the circumstances of the case and the evidence against AAPL, the retraction of the statement by Shri G.G. Bansal, Shri V.N. Agarwal, Shri J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld by Hon. Member (Technical). It is his submission that in view of the foregoing, the order of Hon. Member (Technical) merits acceptance. 60. I have considered the submissions made by both sides and perused the records. 60.1 The allegation against the assessee is of clandestine removal. It is necessary to ascertain whether in the peculiar facts of the case, there was sufficient cogent, unimpeachable, relevant and credible material evidence so as to establish the case against the appellant company applying the test of preponderance of probability. Although every link of the process is not required to be proved for the said purpose, however the Revenue is not relieved altogether of the burden of producing some credible evidence in respect of the fact in issue. 60.2 Plethora of case law has been cited by both the sides, and ratio of these case laws has been duly considered by me. To arrive at a finding as to whether there has been clandestine removal and undervaluation, essentially peculiar facts of the case and the evidence relied upon in the background facts, have been seen. 60.3 As rightly observed by the Hon ble Member (J), it should not be forgotten that the charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards the unaccounted manufacture and or receipt of the huge quantities of raw materials. There is also no cogent evidence about any freight payment for any such movement. 60.8 I do not find cogent evidence of disproportionate and unaccounted receipt and consumption of the raw materials required for manufacturing alleged quantity of unaccounted finished goods. I do not find tangible proof of unauthorized payment for procuring such unaccounted raw material and packing material. I do not find cogent evidence of disproportionate power consumption, capacity utilization and labour employed, or any cogent evidence of clandestine manufacture of unaccounted quantity alleged as clandestinely removed. I find that unaccounted production in the factory of the appellant company has not been established. In Ruby Chlorates (P) Ltd. v. Commissioner of C. Ex., Trichy - 2006 (204) E.L.T. 607 (Tri.-Chennai), it was held that :- 21 The settled legal position is that when several raw materials are involved, when a case of clandestine production and clearance is built on clandestine use of raw materials, the same should be proven with reference to unaccounted use of all such major raw matei1als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial available on record, it is not possible to state that the Tribunal has committed any legal error in giving benefit of doubt to the assessee. (Emphasis supplied) The above ratio, as laid down by Hon ble High Court of Gujarat, would squarely cover the issue before us. 16. In the absence of any tangible evidence which would indicate that there was clandestine manufacture and clearance of the goods from the factory premises of M/s. VTPL, in the peculiar facts and circumstances of this case, we hold that the impugned order which confirms the demand on the appellant M/s. VTPL and imposes penalty on them is not sustainable and is liable to be set aside and we do so. I also find that the ratio of the judgment in the case of Tej Dye Stuff Industries (supra), as upheld by Hon ble High Court of Gujarat is also holding the view that the demand of duty cannot be based on assumptions and presumptions. 60.10 There was no recovery of any unaccounted sales proceeds in substantial cash from the factory or office premises or anywhere else in the control of the appellant company, backed by any confirmation oral or written from the person giving such cash against goods removed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minum Sections . It is presumed that the appellant had procured furnace oil and not accounted the same and has also procured aluminum scrap for the purpose of manufacturing of aluminum billets from which further manufacturing of aluminum sections took place. The adjudicating authority has relied upon the evidences of procurement of furnace oil from IOCL/HPCL. The said evidences does not carry the case of the Revenue any further as the furnace oil which was allegedly purchased and unaccounted by the appellant was from IOCL/HPCL. It is common knowledge that IOCL/HPCL effects the delivery of the furnace oil on advance payment and such advance payment has to be made by demand draft. In the first round of litigation before Tribunal, the Tribunal has noted this point and directed the adjudicating authority to verify and call for the records of payments made for the furnace oil cleared in the name of appellant. In these de novo adjudication proceedings, I find that the adjudicating authority has not given effect to the direction given by the Tribunal. Suffice it to say that the said direction would have given some evidence to arrive at proper conclusion, I find that the adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remises. In the entire case of records, I find that, though the adjudicating authority has based his findings on presumption of manufacturing of aluminum sections at job worker s premises, there is no evidence regarding the name of the job worker, premises of the job worker, and the undertaking given by the appellant, if any, for manufacturing such finished goods from the job workers and giving a declaration to discharge the duty liability. It is also to be recorded that there is no inculpatory statement of any of the persons regarding the clandestine manufacturing of aluminum sections from job worker. In the absence of any evidence, this presumption is totally erroneous and cannot be held against the appellant. (iv) It is assumed by the adjudicating authority that the appellant s activity of not recording the furnace oil and isolated purchases of aluminum scrap and not accounting the same in books of records, has resulted in manufacturing of aluminum sections, which were clandestinely removed. This is again an assumption without any evidence. It is the findings in the Order-in-Original by the adjudicating authority that for manufacturing of aluminum sections, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese are only tentative indication of requirement of the vehicle for movement of the goods. It is also seen that all the transporters have in their statements, categorically stated that the goods transported by them from the appellant s factory were covered by valid Central Excise invoices and it has not been disputed by the Revenue, nor it is the case of the Revenue that the appellant was issuing duplicate/parallel invoices. It is also to be noted that the transporters were paid by the appellant only way of account payee cheque, which were duly recorded in the books of account and there is no finding. Co-relating such payments made to the transporters to the clearances which were sought to be allegedly clandestinely affected by the appellant. I find that the Hon. Member (Judicial) was correct in relying upon the judgment of Raj Petroleum Products, Durga Trading Co. (supra), Brims Products (supra). Raj Sundeep Co. Gian Singh (supra), for the proposition that the transporter s records are not relevant for the purpose of proving allegations of clandestine removal of the goods. It is also to be admitted that there is no presumption under Section 36A regarding truth and accuracy of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d concur with the Hon ble Member (J). Reference ordered accordingly. Registry is directed to place this file before Bench for appropriate action. Sd/- (M.V. Ravindran) Member (Judicial) MAJORITY ORDER (i) In view of the majority order, the demand confirmed against M/s. Aum Aluminum P. Ltd. on the charges of clandestine removal is set aside along with setting aside the penalty of equivalent amount imposed upon them u/s 11AC of the Act. Penalties imposed upon Shri G.G. Bansal, Shri V.N. Agarwal and M/s. Vinviv Holding Trading Co. P. Ltd. are also set aside. (ii) The confiscation of the section seized from factory of M/s. Aum Aluminum P. Ltd. for their non-accountable is upheld, however, redemption fine is reduced from ₹ 8 lakhs to ₹ 75,000/- and penalties imposed on M/s. Aum Aluminum P. Ltd. on this account is reduced from ₹ 1 lakh to ₹ 50,000/-. Separate penalties of ₹ 1 lakh imposed upon Shri G.G. Bansal and Shri V.N. Agarwal for non-entry under Rule 209A for non-entry in RG-1 are set aside. All the appeals are allowed in above terms. Sd/- (B.S.V. Murthy) Member (Technical) Sd/- (Archana Wadhwa) Membe ..... 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