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TMI Blog2017 (12) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... . The statements or records of the brokers/ agent has to be corroborated with the evidences unearthed from the Appellant unit. However there is no evidence of clandestine clearance has been found from the Appellant Unit. No incriminating records or documents showing removal of goods without payment of duty has been found from the Appellant Unit. Without corroboration of any evidence the third party records and their statements cannot be made basis for upholding the demand. The statement of director of Unit on the basis of third party records cannot be basis of demand as corroborative evidence has been brought on record. Also, the adjudicating authority himself has set aside the demand of ₹ 11, 15,930/- holding that no corroborative evidence of raw material or production has been brought on record. The said evidence would apply equally to all demands as nothing incriminating has been found from the Appellants premises. No duty demand can be made against the Appellant Unit and the impugned order dt. 31.01.2007 in as much as it confirms demands and imposes penalty against M/s Sundar Ispat Ltd. is not sustainable - charges against all the remaining Appellants i.e direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that demand of ₹ 2,52,118/- is made on 131.440 Mt of MS Ingots/ Re-Bars on the basis of scribbling pads of Commission Agent Shri A. Ramakrishna wherein the words Sunder was identified by him as of Appellant Unit and his statement dt. 21.08.2004 wherein he stated that the goods were consigned by Appellant to customer directly alongwith the Invoices/ Bills to be shown enroute and after delivery would be taken back. Also statement of Shri Kadaikanchi Shrivas, Proprietor of M/s Sai Divya Steels has been relied upon who stated that the transaction recorded in books of Shri A. Ramakrishna pertained to the goods received by him from Appellant concern. He stated that the transactions are done in cash and the bills accompanying the consignment would be destroyed after delivery of goods. The demand was confirmed on the ground that the director of Appellant company has accepted Shri Ramakrishna as one of the agents through whom the goods were marketed. Shri A. Ramakrishna also on two occasions identified Sunder as Sunder Ispat Ltd and Shri Vinay Kumar did not disputed the version of Shri Ramakrishna. The other parties also admitted that the word Sunder pertains to Appellant and hence d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Madras Othrs Vs. D. Bhoormull - 1983 (13) ELT 2546 (SC) which are not applicable in the present case. The reliance placed upon the aforesaid judgment by the adjudicating authority is wrong and erroneous for the two reasons. Firstly the adjudicating authority ought to have seen that the mere statements or records of third party cannot be a ground to saddle a person with duty liability as has been held in several judicial precedents. Secondly all the cases relied upon by the adjudicating authority pertain to Sea Customs Act wherein the persons were found to be in possession of contraband goods and therefore the onus lies on the person caught with such contraband goods to prove that the same has been procured from legal means and clear title whereas the present case pertains to central excise and it is the department who has made allegations against the Appellant and thus the onus to prove lies upon the revenue. The Ld. Counsel relied upon the judgment of Hon ble High Court of Delhi in case of COMMISSIONER OF CENTRAL EXCISE, DELHI I Vs. VISHNU CO. PVT. LTD. - 2016 (332) ELT 793 (DEL) in support of his contention. He further submits that in the aforesaid order it was also h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co, supra in this regard. He also relies upon following judgments in support of his contention : (i) CONTINENTAL CEMENT COMPANY Vs. UOI - 2014 (309) E.L.T. 411 (All.) (ii) RAMA SPINNERS PVT. LTD. Vs CCU C. EX., HYD-I - 2017 (348) E.L.T. 321 (Tri. - Hyd.) He further submits that only on the basis of statement of Shri Vinay Agarwal, director of the Appellant Units no demand can be made against the Appellant as not a single evidence was found from the business premises or factory. The demand is made solely on that basis of papers seized from alleged brokers and traders who are third party and the same cannot be accepted. The said papers are even not corroborated with any evidence at the Appellant's end. He relies upon judgment in case of VIKRAM CEMENT (P) LTD. Vs. CCE - 2012 (286) E.L.T. 615 (Tri. - Del.) as upheld by the Hon ble High Court as reported in Commissioner Vs. Vikram Cement (P) Ltd. - 2014 (303) E.L.T. A82 (All.) wherein it was held that in the absence of other corroborative evidence on record, the demand cannot be made on the basis of statement of Managing Director of the company. 6. He submits that Similarly a demand of ₹ 5,60,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Appellant Unit which was not even disputed in the show cause notice or by the adjudicating authority whereas the clandestine removal of 3929. 220 Mts is more than the production for the period Jan 2001 to September 04 and it is not possible to manufacture such quantum of goods over and above the recorded production. 8. That a demand of ₹ 33,44,829/- given in Annexure D3 of SCN has been confirmed on the basis of scribbling pad of broker Shri V.K. Sihotia and note book of broker Shri Rameshwar Rathi. These documents were received by the department from Hyderabad-I Commissionerate and alleged to be containing details of clearance from the Appellant firm to M/s Shalini Steels and M/s Dhanlakshmi Rolling amongst others who admitted that the goods pertained to the Appellant. Reliance was also placed upon statement dt. 20.08.2005 of Shri Vinay Agarwal, director of the Appellant Unit. The adjudicating authority confirmed demand on the ground of documents and statements of alleged recipients and brokers and also held that the brokers in their cross examination had claimed that they had purchased goods from M/s Sunder Steels whereas the said firm was closed in year 2001 and theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner, he submits that the demand was correctly dropped as there was no corroborative evidence of removal of alleged short recorded quantity or any corroborative evidence. 11. Ld. AR on the other hand would submit that the findings given by the adjudicating authorities are correct. It is his submission that department has proved that the goods were cleared without payment of duty and the director accepted such clearances. He also reiterates the ground of appeal filed by the revenue in their appeal. 12. I have considered the submissions made at length by both sides and perused the records. The issue to be decided in this case is whether the papers/ records of third parties can be considered as evidence of clandestine clearance against the Appellant unit. I find that the demands were made on the basis of records of brokers/ commission agents. Similarly statement of 2 -3 alleged customer has been relied upon. The revenue ahs also relied upon the statement of director of Appellant Unit who when shown the details of such records/ papers of accepted the clearances without payment of duty. I find that it has been alleged that the Appellant Unit were clearing goods under the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atements cannot be relied as it is. 13. I further find that the statements or records of the brokers/ agent has to be corroborated with the evidences unearthed from the Appellant unit. However I find that no evidence of clandestine clearance has been found from the Appellant Unit. I find that no incriminating records or documents showing removal of goods without payment of duty has been found from the Appellant Unit. Without corroboration of any evidence the third party records and their statements cannot be made basis for upholding the demand. No independent evidences in the form of Transportation of finished goods from the Appellant's factory to any of the alleged customer/ traders, receipt of consideration towards clandestine removal, receipt of excess raw material, production records of any excess goods then that shown in records, any evidence of clearance of goods clandestinely from the Appellant's factory or any corroborative evidence or any transportation record or statement of transporter showing alleged removal or any transportation record has been brought on record. Also there is no statement or evidence of any employee who was preparing invoice/ bills for clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he custom cases for confirming demand. However I am of the view that demand cannot be based as the revenue has to prove its case as it the department who has made allegation. No incriminating paper or record has been found from the Appellant's possession and hence as held in case of M/s Vishnu Co. (supra) the onus of showing evidence is on revenue. I thus find that the demand raised against Appellant Unit is not sustainable. Similarly for the above reasons I am of the view that the appeal filed by the revenue is not sustainable as the adjudicating authority has rightly held that the revenue could not find any unaccounted physical stock or evidence related to sale of goods, unaccounted purchase of raw material or production of finished goods. 15. Thus in view of my above findings and facts I hold that no duty demand can be made against the Appellant Unit and the impugned order dt. 31.01.2007 in as much as it confirms demands and imposes penalty against M/s Sundar Ispat Ltd. is not sustainable. I therefore allow the appeal filed by M/s Sundar Ispat with consequential reliefs and dismiss the appeal filed by the revenue. 16. As I have allowed the appeals filed by M/s Sunder ..... X X X X Extracts X X X X X X X X Extracts X X X X
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