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TMI Blog2017 (4) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... ot available at that time. Physical stock taking of the goods both finished as well raw materials was conducted and were detained vide detention memo dated 09.06.1998 and handed over to appellant for safe custody. The statutory records were produced by the appellant. The records were not found to be pre authenticated as required under Rule 52A and Rule 53 of erstwhile Central Excise Rules, 1944. He further stated that he and his mother were the directors of the company that only directors were authorised signatories of the company for excise purpose, that invoices were issues under his signatures only that he was aware of the fact that the Central Excise records were required to be pre authenticated by the Central Excise officers but he did not get it done. The balance shown in the excise records were not found tallied with the balances recorded on physical stock taking. It was alleged that on scrutiny of various private and other records resumed from the factory premises and registered office of the appellant, the appellants were involved in clandestine clearance of PVC pipes by resorting to parallel invoices with the intention to evade central excise duty. Follow up action was co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further stated that in his statement on 10.12.2001, he stated that he used to give information to Shri. Riazada S.S. Vaid about the affairs of the company. 3. The statement of Shri. Raizada S.S. Vaid father of the Director was recorded who stated that he has running the unit namely M/s Raizo Plasto Pvt. Ltd. at Hansi that his son was financially independent since 1994, that his wife Mrs. Sapna Raizda was also director in M/s Raizo Plasto Pvt. Ltd. But she was not actively involved in the business activities of the company and the entire business activity was being looked after by Shri Surinder Raizada. He further stated that during the search in 1998, some of his private records were also taken away that his wife Mrs. Sapna Raizada was also running a firm in the name and style of M/s Raizada Chemicals under her proprietorship which used to manufacture detergent powder and also trading in chemicals that some of the records resumed by the excise officers also related to that firm that the resumed ledger copy containing 385 pages had been totally written by him and contained his personal records as well as some records of M/s Raizo Chemicals that the said ledger book has nothing to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r clandestine removal. (iv) No penalty imposed for irregularity in records. 6. The said order has not been challenged by the Revenue, therefore, the said order has been attained finality and the same has not been considered by the adjudicating authority in their defence. 7. He further submitted that the basic requirements of evidence to prove clandestine removal of the goods has been examined by this Tribunal in the case of M/s Arya Fibers Pvt. Ltd. Vs. CCE reported in 2014 (311) ELT 529 (tri.) and demand in this case has been raised solely on the basis of statement of the director of the appellant who has stated in some of cases they cleared goods without payment of duty. However, no clearances were put to him in specific or no mode of such removal was got confirmed from him. Therefore, there is no basis as to how much clearance was so called clandestine. He further submitted that there is no evidence with regard to:- (i) the statement of 35 buyers of appellant was recorded and records were resumed, however, none of the said statement or record finds its place in show cause notice or order in original which clearly means that all the buyers has denied any clandestine receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled miserably on this count. Few of the cases on this legal principle are as under: CCE, Meerut Vs. R.A. Castings Pvt. Ltd., 2011 (269) ELT 337 (All.). Upheld by Hon'ble Supreme Court in 2011 (269) ELT A108 (SC). Century Metal Recycling Pvt. Ltd. Vs. CCE, Delhi-IV, 2016 (333) ELT 483 (Tri. Del.) M. Veerabadhran Vs. CCE, Chennai, 2005 (182) ELT 389 upheld by Hon'ble Supreme Court in 2006 (197) ELT A34 (C). 8. He submitted that as the Revenue has failed to prove their case with corroborative evidence, therefore, the impugned order is to be set aside in the light of the decisions of M/s R.A. Castings Pvt. Ltd., 2011 (269) ELT 337 (All.). which has been affirmed by the Hon'ble Apex Court in 2011 (269) ELT A108 (SC), Century Metal Recycling Pvt. Ltd. Vs. CCE, Delhi-IV, 2016 (333) ELT 483 (Tri. Del.) and M. Veerabadhran Vs. CCE, Chennai, 2005 (182) ELT 389 which has been affirmed by Hon'ble Supreme Court in 2006 (197) ELT A34 (C). 9. He further submitted that the demand cannot be raised solely on the basis of statement of the Director as held in the case of M/s Nissan Thermoware Pvt. Ltd. 2011 (266) ELT 45 (Guj), M/s Nachiketa Paper Mills reported in 2008 (225) ELT 194 (P&H) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in order to substantiate that rough/estimated entries were made in the ledger and the entries made there were not at all reflected true and correct picture. 16. On perusal of comparative chart referred above shows that either exact of indicative figures of two records are comparable. In most of the cases the estimated entries made in ledger were cleared by the appellant company after payment of central excise duty. Therefore, the demand of duty confirmed by the adjudicating authority by considering the figures mentioned in the ledger as clandestine removal of pipes manufactured by the appellant is unsustainable in law. 17. It is his further submissions that the adjudicating authority has failed to appreciate that various names such as M/s Khera Chemicals, M/s K.k. Bhinder etc. given in the ledger document were not at all connected with the appellant and during the course of last five years not even a single transaction was carried out which the aforementioned parties. In the light of the fact that it is an admitted fact that entries shown in ledger also pertains to Raizo Chemical, therefore, it is erroneous to assume that all the entries in respect of the parties are of plastic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter is much lower than the quantity of the raw material existing on the existing date during the relevant period. It is not the case of the revenue that the quantity mentioned in the mixing register was over and above the quantity recorded in RG-23A part-1. Therefore, the reliance was placed on mixing register is not indicative in any manner of manufacture and removal of plastic pipes without payment of duty. In absence of any evidence regarding purchase of excess raw material, transportation of excess raw material, manufacture of pipes, removal of pipes and receipt of consideration against alleged removal, it is not correct to hold that quantity reflect in ledger book was manufactured and cleared without payment of duty by the appellant company. 22. Further, the veracity of contents of ledger book is also in doubt, as the various entries reflected therein such as bank transaction pertaining to various banks are not matching with the bank statements for the respective period. Appellant produced bank statements before the adjudicating authority to show that the contents of ledger book are not reflecting correct picture as thre is variation even in transaction such as bank loan figu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods may be cleared clandestinely. At the same time, it is relevant to note here that the said statement was taken after a gap of almost 3 years and without having access to records. Therefore, the said statement is not reliable. He further submitted that while calculating the demand in regard to weighment slips, the value has been taken of Rs. 40/- per Kg which is totally arbitrary and without any basis. The value of goods cleared by the appellant during that period is Rs. 20 per kg, especially when the appellant has produced the evidence. Moreover, the weighment slips did neither bear any name or particular of appellant nor details of the goods. The truck number mention on the said slips have not been investigated by the Revenue. Two slips out of 10 slips were of Ghazibad and Hissar which cannot have any relation with appellant. Nothing is on record to show whether the slips related to sale or purchase. If the slips pertained to purchase of raw material, there cannot be any demand in respect of the same. 26. With regard to demand based on loose sheets: It is the submissions of the Ld. Counsel is that on the basis of loose copies of ledger folio recovered during the search and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h or the statements of 35 buyers. Thus, the original invoices cannot be resumed from buyers also. It is admitted that no record was resumed from buyers, therefore, there is no source of said compared invoices which has no evidentiary value. The appellant took specific plea that in some of the invoices, issuing persons are not their employees but the same was brushed aside by adjudicating authority. In the show cause notice names of the alleged buyers have been mentioned but no enquiries has been made with such buyers. The chart of alleged 13 invoices is mentioned relates to the period of which no invoices were resumed in panchnama dated 09.06.1998. as per said panchnama invoice number 176 to 225 were resumed relating to the year 1997-98 invoice mentioned at sr. No. 4,5 & 8 also does not match with the so called resumed invoices. Thus, it is only one invoice no. 190 dated 26.02.1998 involving duty of Rs. 8,080/- which falls within the resumed record as per panchnama., therefore, no evidence of clandestine removal. The cutting in invoices will not have any significance. 28. There was one demand of paper marked A/c cleared up to 21.11.1997 involving duty of Rs. 91370/-. The directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention, but clandestinely removal of goods. The Ld. Counsel has questioned their recovery and relied on various decisions, it is stated that their existence is not challenged anywhere. He relied on the case of Columbia Electronics ltd. reported in 202 (143) ELT 635 (Tri. Del.). (b) He further submits that the demand on account of weighment slips of the Dharamkant were recovered showing weighment of PVC pipes by the appellant without accounting for same in their statutory records. The existence of the GRs have also never been challenged and Shri Surinder Raizada, Director admitted the clearance without payment of duty in his statement and the statement was never retracted, therefore, the demand is to be confirmed. (c) With regard to ledger book 385 pages:- He submits that ledger book was admittedly maintained by the father of Sh. Surinder Raizada, who has admitted that he was keeping a track of the financial positions and liabilities of the company by maintain these accounts with the help of Shri. Surinder Raizada, who conveyed the details and some of the sale details mentioned in the ledger were tallied with the details in ledger records but some were not denied. The adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase of raw material or removed of finished goods, how the said finished goods sold outside the factory, to whom sold how received the sale proceeds, use of electricity for excess manufacture of goods. No investigation was conducted with regard to above discussed issue. Moreover, the statement of buyers were recorded but the same has not been relied and not provided the copies of the same to the appellant, shows that those statements of buyers were in favour of the appellants. As no contrary evidence in support of the allegedly recovered ledger has been produce by the Revenue. Therefore, the charge of clandestine removal is not sustainable on the basis of the ledger book. 35. The Ld. AR has relied on the various case laws to say that as the appellant has admitted clandestine removal of the goods, therefore, the duty can be demanded. I find that the appellant had made inculpatory statement but merely the statement is not sufficient to allege the charge of clandestine removal of goods. In fact, that statement should be corroborated by some evidence which revenue have failed to do so. Therefore, the demand on the basis ledger book or ledger /loose sheets recovered during the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence to corporate that these weighment slip pertains to the clandestine removal of the goods by the appellant. In the absence of any positive evidence the demand on the basis of weighment slip cannot be confirmed against the appellant. 38. On going through the impugned order, I find that the demand sought to be confirmed against the appellant on the basis of investigation was conducted and documents recovered, but no proper investigation was conducted and the adjudicating authority tried to make out the case of clandestine removal of goods on the basis of assumption and presumption that without bringing the positive evidence on record. Therefore, the demand against the appellant is not sustainable. 38. Further, I find that initially the show cause notice was issued to the appellant on account of shortage of raw material as well as finished goods but the said allegation was turned down by this Tribunal and no appeal has been filed by the Revenue against the said order. In that circumstances, the show cause notice was issued for clandestine removal of goods is not sustainable in the absence of any corroborative evidence. With these observations, I hold that the demand of duty ..... 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