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TMI Blog2016 (5) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... been manufactured and cleared by Appellant No.1. Current proceedings only convey a strong suspicion against the appellants that they are undertaking clandestine manufacture and clearance of dutiable goods. As already observed by the Courts any suspicion, however grave, can not take the place of an evidence. In the present proceeding certain documents recovered from the residence of Shri Sanatan Maity etc. are the only indicators to raise suspicion that certain goods might have been manufactured and cleared by the Appellants. In the case of Pan Parag India Ltd. vs. Commissioner of Central Excise, Kanpur (supra), relied upon by the Appellants, also there were 719 loading slips indicating clandestine clearance by that Appellant. Therefore, the appeals filed by Appellant No.1 and 2 are rejected with respect to demands of 28,53,835/- and 98,291/- , which shall be payable with interest and equivalent penalty. As no option to pay 25% of reduced penalty under sec. 11 AC has been extended in the Orders-in-Original, therefore, the same is extended to the Appellants if these amounts, alongwith interest and reduced penalty, stand paid within one month of the receipt of this order. In the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Sanatan Maity. Shri Maity in his statements dated 11.08.2006, 04.09.2006 and 05.09.2006, inter alia, stated that papers recovered from his residential premises (Document No.11/DGCEI/SSC/SM ./06) reveal purchase of ingots, production of Rods, Sales of Rods, production and sale of scrap, purchase & consumption of coal and furnace oil by appellant No.1 for the months of February, March and April, 2004. He also confirmed that these documents also reveal sale receipts of Rods from various parties and that these documents are rough working sheets. Statements of Shri Ajay Bansal (Director of appellant No.2 & partner of appellant No.1) were recorded on 11.08.2006, 06.09.2006 & 26.09.2007 as partner of M/s. Shivam Steel Corporation (Appellant No.1). He was shown the documents recovered from the residence of Shri Sanatan Maity when he confirmed in his statement dated 11.08.2006 (Q No.39) that as per these documents and the statements of Shri Sanatan Maity, ingots were shown to be purchased from one Sunderlal but actually the goods were purchasded from Appellant No.2. Sh.Ajay Bansal also stated that he was not aware as to why in the said documents name Sunderlal was mentioned. He also agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pseudo name of appellant No.2. (ii) That during the visit of DGCEI to the premises of appellant No.2 no variations in the raw material stock or finished goods could be detected. That if appellants were indulging in large scale clandestine manufacture and clearances of ingots of re-rolled materials then there were bound to be variations in raw materials and finished goods of Appellant No.2. (iii) That even if it is presumed that Ingots were clandestinely removed by appellant No.2 to appellant No.1 then only quantities equivalent to Ingots supplied by appellant No.2 could be manufactured by appellant No.1. That there is no evidence as to how much quantity of Ingots were supplied by appellant No.2 to Appellant No.1 and what was the mode of transportation of both ingot and re-rolled products respectively manufactured by Appellant No.2 & 1. (iv) That it is a well settled law that allegations of clandestine removal is a serious charge which must be proved by Revenue with corroborative, independent, cogent and concrete evidences. He relied upon the following case laws on this issue in support of his argument:- (a) Melton India (P) Ltd.v.CCE, Noida - [2005 (181) ELT 129(Tri.-Del.)] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Customs, Mumbai [2006 (202) ELT 561(SC)]. (ix) That duty amount of ₹ 98,291/- on 40.860 MT of MS Ingots as per Invoice No.505 dated 11.08.2006 of Appellant No.2 is not disputed as the said document was recovered from the premises of appellant No.1. 2.2 Learned Advocate further argued that out of total demand of ₹ 2,04,30,072/- issued to appellant No.1,Rs.28,17,957/-, pertaining to documents recovered from the premises of M/s.Bajrangbali Steel Industries Pvt.Ltd. drawn under Panchnama dated 11.08.2006, is not disputed. Similarly demand of ₹ 35,878/-, with respect to six parallel invoices recovered from the factory premises of appellant No.1, is not disputed. That reduced penalty of 25% is only required to be paid with respect to admitted duty liability of ₹ 28,17,957/- and ₹ 35,878/- which was paid even before the issue of show cause notice. Further, it was also the case of the learned Advocate that once a penalty is imposed upon the partnership concern then no separate penalty can be imposed upon the partner as per Bombay High Courts Order in the case of CC(E.P.) vs. Jupiter Exports [2007 (213) ELT 641 (Bom.)]. That duty demands ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the documents recovered from the residence of Shri Maity at Kalunga, revealed purchase of Ingots, production of rods (Saria), Sale of rods, etc. of M/s. Shivam Steel Corporation (Appellant No.1). Ld. A.R. made the bench go through para-25 of the Show Cause Notice dt.26.11.07 that the Director of M/s. Bajrangbali Steel Industries (P) Ltd. also confirmed that goods from Appellant No.1 were received sometimes without invoice for which payments were made in cash. That some documents were also recovered from this Customer for which duty liability is admitted by Appellant No.1. That looking to these documentary evidences Adjudicating Authority in para-6.4 of the Order-in-Original dt.29.05.2009 has correctly held that all amounts shown against Sunderlal indicate clandestine manufacture and clearance of goods manufactured by Appellant No.1 and 2. Ld. A.R., therefore strongly defended the Orders-in-Original passed by the Adjudicating Authority and pleaded for rejection of the Appeals filed by the Appellants. 4. Heard both sides and perused the case records. Cases of clandestine manufacture and clearances were made against Appellant Nos. 1 and 2. The Show Cause Notices were predominantly ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same time answer to Question No.6 of Sh. Maitys statement dt. 11.08.2006 also conveys that these documents are rough working sheets. By subsequent statement dt. 05.09.2006 Shri Sanatan Maity states that the data on the seized documents was only rough projected calculations done for bank loan purposes. It is not coming out from the Show Cause Notice and the Order-in-Original dt. 30.01.2009 as to from where the raw materials were procured by Appellant No.2 for the manufactured of M.S.Ingots for which duty is demanded. It is also not coming out as to how much quantity of M.S.Ingots were manufactured by Appellant No.2. No shortages/excess in the raw materials/finished goods of Appellant No.2 were noticed by the department. 7. Central Excise duty demand on Appellant No.1, other than amounts mentioned in para-5 above, is solely based on a two page computerized statement recovered from the residence of Shri Sanatan Maity. It is not coming out of these documents as to from which computer these printouts were taken and whether the condition specified u/s 36B(2) and (4) of the Central Excise Act, 1944 were followed. In the case of Anvar Pv vs. V.K.Basheer [Manu/SC/0834/2014] Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner in which the electronic record was produced; (c ) The certificate must furnish the particulars of the device involved in the production of that record; (d) The certificate must deal with the applicable conditions mentioned Under Section 65B(2) of the Evidence Act; and (e) The certificate must be signed by a person occupying a responsible official position in relation to the operation of the relevant device. 15. It is further clarified that the person need only to state in the certificate that the same is to the best of his knowledge and belief. Most importantly, such a certificate must accompany the electronic record like computer printout, Compact Disc (CD), Video Compact Disc (VCD), pen drive, etc., pertaining to which a statement is sought to be given in evidence, when the same is produced in evidence. All these safeguards are taken to ensure the source and authenticity, which are the two hallmarks pertaining to electronic record sought to be used as evidence. Electronic records being more susceptible to tampering, alteration, transposition, excision, etc. without such safeguards, the whole trial based on proof of electronic records can lead to travesty of justice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. "10. All the appeals are based predominantly and essentially on factual matrix. The Tribunal elaborately and very correctly dealt with the details furnished by both the sides and rightly not sustained the demand of ₹ 1.85 Crores, which had no evidences to bank upon. Confessional statements solely in absence of any cogent evidences cannot make the foundation for levying the Excise duty on the ground of evasion of tax, much less the retracted statements. To the extent there existed substantiating material, Tribunal has sustained the levy. No perversity could be pointed out in the approach and treatment to the facts." 8.1. In the present proceedings before us there is no confessional statements, except admissions of certain duty liability made by the Appellants as mentioned in para-5 above. In the case of Palvinder Kaur vs. The State of Punjab (supra) Supreme Court held that a statement has to be read as a whole. Similar view was expressed by P&H High Court in the case of Commissioner of Central Excise, Delhi-IV vs. Rajdoot Cables (P) Ltd. (supra) where following observations were made by Honble High Court in para-3 while dismissing Revenues Appeal. "3. We have gone th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the place of an evidence. In the present proceeding certain documents recovered from the residence of Shri Sanatan Maity etc. are the only indicators to raise suspicion that certain goods might have been manufactured and cleared by the Appellants. In the case of Pan Parag India Ltd. vs. Commissioner of Central Excise, Kanpur (supra), relied upon by the Appellants, also there were 719 loading slips indicating clandestine clearance by that Appellant. It was held , by CESTAT, interalia, that demands are not sustainable on the basis of loose papers/loading slips unless corroborated appropriately by other independent evidence. In para-39 of this case law it is also observed that a statement has to be accepted or rejected in its entirety and part of the same cannot held to be incorrect and another part as acceptable. In this case law, on the issue of raising of demands on the basis of documents recovered from the third partys premises, following observations were made by CESTAT, Delhi by relying upon several case laws including decided by Honble Apex Court and High Courts:- "51. It has been constantly held by various decisions that the charges of clandestine removal cannot be upheld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Tri.-Che.) (v) Minakshi Steels - 2005 (190) E.L.T. 395 (Tri.-Kol.) (vi) Sri Jayajothi & Co. Ltd. - 2002 (141) E.L.T. 676 (Tri.-Che.) (vii) Sharma Chemicals-2001 (130) E.L.T. 271 (Tri.-Kol) (viii) Opel Alloys P. Ltd. - 2005 (182) E.L.T. 64 (Tri.-Del.) Similarly in the case of Paras Laminates P. Ltd. reported in 2005 (180) E.L.T. 73(Tri.); as confirmed by Hon'ble Supreme Court reported in 2006 (199) E.L.T. A.182 (S.C.); Ruby Chlorates P. Ltd. reported in 2006 (204) E.L.T. 607 (Tri.-Che.); D.P.Industries reported 2007 (218) E.L.T. 242 (Tri.-Del); Durga Trading Co. reported in 2002 (148) E.L.T. 967 (Tri.-Del.); Durga Trading Co. reported in 2003(157) E.L.T. A315 (S.C.) and Laxmi Engineering Works reported in 2010 (254) E.L.T. 205 (P&H), it was held that charge of clandestine removal must be corroborated by independent and un-impeachable evidences such as purchase of consignees mentioned in invoices/payment to the manufacturers; that the charge of clandestine removal is a serious charge which must be proved by the department by a adducing sufficient and tangible evidences and demand of duty cannot be confirmed on the basis of assumptions and presumptions and surmises & conje ..... X X X X Extracts X X X X X X X X Extracts X X X X
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