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TMI Blog2017 (12) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... .R. for the revenue ORDER Per : Ashok Jindal Both sides are in appeal. 2. The facts of the case are that the assessee namely, M/s. Komal Impex Industries are manufacturer of knitted readymade garments. For manufacture of the said goods they required yarn, which was converted into fabrics by processing in the circulating machines and thereafter readymade garment are made-out, which were ultimately exported by the assessee. On 17.06.2014, a search was conducted at the factory premises of the assessee. As nobody was available, the search continued till 19.06.2014 and physical stock verification was conducted which was found to be as per the statutory records maintained by the assessee. To investigate the matter further, opening balance as on 01 April 2003 was taken, thereafter the purchase of raw material namely yarn or fabric was considered and it was also taken that how much quantity the assessee has sold out to arrive at the closing balance. On the basis of all these calculations, it was concluded that finished goods are found short. Consequently, it is alleged that the same has been cleared goods clandestinely. Later on, a show cause notice was issued to asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re sustainable in the facts and circumstance of the case, on account of clandestine removal or not Admittedly, the show cause notice has been issued to the assessee on the basis of wastage as per SION norms and not on the actual basis. Further, during the course of investigation neither any discrepancy in the statutory records is found nor any shortage or excess of the goods were detected. In that circumstances, without any corroborative evidence, demands against the assessee are not sustainable in the light of the decision in the case of Davinder Sandhu Impex Limited (supra) , wherein this Tribunal observes as under:- 6. In this case during the course of investigation, the statement was recorded and the statement given by Shri Baldev Singh, Managing Director admits that there is a shortage of 10 to 15% for manufacturing the final product and it is also admitted by Shri Baldev Singh that they have cleared certain goods without payment of duty, but the said statement was retracted by Shri Baldev Singh who claims to be that same has been recorded under influence and duress, thereafter, another statement was recorded on 3rd May, 2005 which was also retracted on the same day, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty. The said show cause notices while quantifying the demand, worked out the demands based upon the wastage that could be permitted to the appellants which was pegged at 7.5% (based upon percentage of wastes in other factories) and input-output ratio in the Handbook of Procedures of the EXIM Policy and concluded that the reasonable wastage that could be allowed to the appellants is in the range of 7.5%, while the actual percentage of waste is more than that. Coming to such a conclusion, a demand was raised on all the appellants. . 7. In these set of facts, this Tribunal has observed as under :- 5.1 As regards the merits of the case, we find that the impugned orders have proceeded on the ground that the appellants had shown excess percentage of waste and by showing such excess percentage of waste, they had cleared the HDPE/PP granules clandestinely without reversal of Cenvat credit or without paying any duty. It is undisputed that there is no evidence of any sought whatsoever in all these appeals, as to who is the purchaser of so-called clandestinely removed HDPE/PP granules. The entire Orders-in-Original only proceeds on the ground that the appellants could not have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made the basis of clandestine removal. The appellants have also challenged that the statement of the authorized signatory as also by the partner do not stand corroborated with sufficient evidence as they are against the record and cannot be made the sole basis for holding against them. I agree that the veracity of the statements has to be gauged from the accompanying circumstances and has to be corroborated by way of same independent evidences, which is fully absent in the present case. As such, I am of the view that in the light of various decisions relied upon by the appellant in their memo appeal, such statements which are inconsistent with the documentary evidences, only raises a doubt, but cannot take the place of an evidence. As such, I am of the view that the impugned order is required to be set aside in totality and the appeal is required to be allowed. 16. On perusal of the Order-in-Original and Order-in-Appeal, I find that the appellant has taken a consistent stand before both the lower authorities that the burden of proof as regards allegation of clandestine removal is on the Department. It is seen from the records that the entire charge of clandestine removal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. 18. In view of the foregoing and there being no concrete evidence (as agreed by both the Members) of clandestine removal of the goods, the appeals are required to be allowed as held by Hon ble Member (Judicial). I have concurred with her views . 10. Further, we find that the Hon ble Gujarat High Court in the case of CCE v. Saakeen Alloys Pvt. Ltd. (supra), the Hon ble Gujarat High Court has observed as under :- 7. As can be noted from the decision of the Tribunal, it has extensively dealt with the entire factual matrix presented before it. The Tribunal rightly concluded that in the case of clandestine removal of excisable goods, there needs to be positive evidences for establishing the evasion, though contended by the Revenue. In absence of any material reflecting the purchase of excessive raw material, shortage of finished goods, excess consumption of power like electricity, seizure of cash, etc., the Tribunal noted and held that there was nothing to bank upon except the bare confessional statements of the proprietor and of some of the persons connected with the manufacturing activities and such statements were retracted within no time of their ..... 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