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TMI Blog2016 (3) TMI 667X X X X Extracts X X X X X X X X Extracts X X X X ..... ed except to an extent of duty liability of ₹ 1,73,043/- and equal amount of penalty - Decided partly in favour of assessee - Excise Appeals Nos.1767, 1814 and 1815 of 2007-EX(DB) - Final Order Nos.50236-50238/2016 - Dated:- 19-2-2016 - SHRI S.K. MOHANTY, MEMBER (JUDICIAL) AND SHRI B. RAVICHANDRAN, MEMBER (TECHNICAL) For the Petitioner : Shri K.K. Anand, Advocate For the Respondent : Shri R.K. Grover, DR ORDER PER B. RAVICHANDRAN: These three appeals which are filed against order dated 31.03.2007 of Commissioner of Central Excise, Delhi-II. 2. The brief facts of the case relevant to the present appeals are that the appellants are engaged in the manufacture of gutka liable to central excise duty. Based on the certain intelligence, the central excise officers intercepted a vehicle on 10.10.2002 and thereupon conducted detailed investigation regarding the unaccounted non-duty paid clearance of gutka by the main appellant. (M/s. PNG Auromatics). On conclusion of the investigation, show cause notice dated 28.05.2004 was issued to demand central excise duty of ₹ 1,31,51,268/-. Penalties under various provisions of Central Excise Act were propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004 that they have never supplied any laminations to the appellant without payment of duty. Further, the evidence regarding other raw materials such as tobacco, katha, lime, perfume, etc., which are essential for the manufacture of gutka, is not at all adduced. The entire case is based on the allegations that the goods were being cleared clandestinely on the invoices of M/s. S.R. Packers through transport companies viz. Harsh Transport Company and G.G. Transport Company, but no documents of such transport could be recovered or produced. Thus, the whole case is based on the statement and no evidence of corroboration. The clearance of 100 consignments without payment of duty is pure assumption with no evidence. (vi) Various case laws are relied upon to reiterate that the present case of clandestine manufacture and clearance could not be sustained in the absence of any tangible corroborative evidence. 4. Ld. AR supported the findings of the Original Authority. He submitted that the vehicle intercepted by the officers had 25 bags of gutka and a cash/credit memo No.51 dated 10.10.2002 was recovered. On follow-up, it was found another cash memo with the same serial number but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51 dated 9.10.2002 and Bill No.51 dated 10.10.2002 (seized goods) were added to arrive at the total demand of ₹ 1,31,51,268/-. The said amount has been confirmed against the appellant. Without going into any detailed analysis of other aspects of the case, a preliminary look at the contents of the above Annexure-A will make it clear that the whole demand is simply made on fictitious, presumptive calculation. It is not clear as to how based on an average of various bills which themselves are presumed in nature, a duty calculation can be arrived at for demand. Further, it is seen that goods under 100 such bills were presumed to have been cleared clandestinely and accordingly, the average amount is multiplied by 100. We are unable to appreciate that such summary, arbitrary calculation without any supportive evidence, reason or logic or legal principle can stand scrutiny as per law. 9. The reason followed for above mentioned summary calculation of duty demand is indicated by the Adjudicating Authority as the party had failed to provide the details of goods clandestinely removed by them . Hence, he observed that the only option left with the Department is to calculate the duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught to be justified as most reasonable is actually arbitrary and presumptive without any legal basis whatsoever. Further, the Original Authority relied on the Hon ble Supreme Court s decision in the case of CC Vs. D. Bhoormull - 1983 (13) ELT 1546 (SC) to the effect that the Department need not prove the case with mathematical precision. He further added that what is required is to accept a degree of probability and there is no need to produce threadbare evidences in all cases. We find that this reasoning is mis-conceived and without any legal merit. The method adopted for calculating duty and the basis of such calculation will not fall under any reasonable basis. The question of preponderance of probability also does not arise in this case. The suspicion howsoever strong cannot substitute for evidence to support a demand for clandestine removal. We find in this case except for seizure of two invoices/bills, bearing no.51 dated 9.10.2002 and 10.10.2002, no other evidence has been resumed to corroborate the clandestine removal and thereby the demand for duty. As far as these two bills, the appellants have already accepted the liability and duty has been paid. We find that projectin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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