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TMI Blog2016 (7) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... e merely an after-thought and if the case of the department is just based on the retracted statements, the appellant could possibly have a reasonable case to contest but in the instant case, there have been confessional statements, private registers and those private registers also substantially matched with the shortages. All these factors cumulatively would show that the conclusion arrived at by the authorities cannot be faulted with. While it is true that the burden to prove clandestine removal is on the department, it cannot be expected of the department to prove the same with mathematical accuracy and precision as clandestine removal is a suruptious activity and in such type of cases, direct evidence would very rarely be forthcoming which would prove a case beyond all reasonable doubts. - Demand confirmed - Decided against the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the decision of the Tribunal in the case of Rattan Steel Works Vs. CCE, Chennai 2009(236) ELT 152 (Tri. Chennai.) to support this contention. 3.2. The Ld. Counsel also submits that the appellant had requested for cross examination of third party statement, Mahazar drawn from the officers of the respondent and witnesses, but it was not considered by both the original authority and the Lower Appellate Authority. Though this issue was referred in Page 16, Para 25 of the Order in Original and it was referred in Page.9 , Para 5.7.1 of the Order in Appeal. Non-consideration of the request of the Appellant is in violation of principles of natural justice. He relied on the decisions of Tribunals in the case of Syed Saleem Vs CC, Bangalore - 2001 (128) ELT 276 (Tri. Chennai.) & the decision of the Tribunal in the case of Braco Electricals Vs CCE, Mumbai - 2004 (167) ELT 329 (Tri. Mum). 3.3. He further submits that the investigating officers finding of excess of finished goods and shortage of raw materials in stock was merely by visual examination and not based upon any actual weightment basis. The entire demand based on visual examination for shortage and excess stock of goods witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal at paras 16 & 17 holding that mere statements and private records cannot be relied upon for establishing the clandestine removal without material evidence corroborating the statements. Ld. counsel submits that this case law would squarely apply to the appellant's case. He also referred to the Supreme Court's judgement of CCE, Surat - Vs - Swati Polyester reported in 2015(321) ELT A217 (SC) wherein the Hon'ble Apex court dismissed the SLP filed by Revenue against Hon'ble Gujarat High Court judgement reported in 2015 (321) E.L.T. 423 (Guj.) which upheld Tribunals order involving demand and clandestine production and removal and holding that department failed to establish by any substantive evidence, unaccounted production and clandestine removal of goods and the demand was based only on assumptions, retracted statements and also barred by limitation . 4. The Ld. AR on behalf of the Revenue reiterated the findings of OIO as well as Order-in-Appeal. He explained the sequences of statements and argued that it has been corroborated with the shortages noticed in the account registers. He further stated that parallel set of invoices were found at the time of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere has also been corroboration with the shortages noticed in the raw material account. In the instant case, there have been confessional statements although there has been a retraction of the said statements. It is to be noted that retractions, as rightly observed by the lower authorities were merely an after-thought and if the case of the department is just based on the retracted statements, the appellant could possibly have a reasonable case to contest but in the instant case, there have been confessional statements, private registers and those private registers also substantially matched with the shortages. The Ld. Commissioner (Appeals) has also observed that retractions given by the party were not sent by the appellant by the Registered Post but only under Certificate of Posting. The Hon'ble Supreme Court has held that the Certificate of Posting is not a valid mode of service. This very mode raises suspicion as to whether at all the said retractions were sent to the department. 8. The next grievance of the appellant is that their request for cross-examination were not considered by the lower authorities. The observation by the Commissioner (Appeals) to the effect that the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty can be imposed only when the person has acquired the excisable goods or concerned himself in transporting or removing or depositing or keeping or concealing or selling or purchasing or in any other manner dealing in the excisable goods which he knew or had reason to believe were liable for confiscation under the C.Ex. Act or the Central Excise Rules. No such allegation is made in the SCN to the effect that appellant did any of the above said acts knowingly or he had reason to believe that the Cotton yarn he alleged to have purchased were liable for confiscation. On a perusal of the OIO and even the SCN merely alleges that Shri C. Sundaramurthy had contravened the provisions of Rule 209A of the Central Excise Rules, 1944 inasmuch as he has purchased 50 bags of Cotton Yarn in Cones without invoices from M/s.Lawn Textiles (P) Ltd. and sold the same without raising invoices which is not a good ground for sustaining the penalty. To substantiate this point, I place reliance on the decision of this Bench of the Tribunal in the case of Farwood Industries (P) Ltd. Vs CCE Chennai - 2005 (185) ELT 401 (Tri.-Chennai). The relevant paragraph of the Tribunal's order is extracted below :- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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