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TMI Blog2018 (1) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant s contention. Further, the documents available in record (weighment slips/register entries/etc) pertaining to clandestine clearances made to TUL, discussed in the notice, would prove beyond doubt that the appellant had the practice of clearing the ingots clandestinely, which fact not disputed by the appellant. The department had adduced evidence in the form of scrap and sponge iron (raw materials for manufacture of ingots) purchased from M/s Archana Iron Trades and M/s Sheetal Shipping respectively, as discussed at para 5.3.2 and 5.3.3. of the notice - The department cannot be expected to unearth every piece of evidence which is in the domain knowledge of the manufacturers engaged in such activity to prove the case with mathematical precision. Therefore, in cases of clandestine clearances, as the one before me, the preponderance of probabilities, in the face of evidence collected and statements recorded, the charge against the appellants held to be as proved. Shri Ramanuj Agarwal and Ambika Prasad who were the partners of the M/s Raghava Ispat had admitted the clandestine clearances and these statements were never retracted. The partners of the M/s Raghava Ispat, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, an appeal was preferred before the First Appellate Authority. The First Appellate Authority after extending an opportunity of personal hearing upheld the order against the appellant firm M/s Raghav Ispat Ltd., and also against Shri Ambika Prasad but reduced the penalty on Shri Ambika Prasad of an amount of ₹ 24,88,770/- to ₹ 1,00,000/-. These two appeals are directed against the same. 5. Learned Counsel after taking the Bench through the case records, submits as under: The demand emanates from the cash receipt entries in respect of 6 parties. No quantification of the MS ingots towards manufacture and clearance has been attempted by the Dept, while issuing the SCN. They have taken the total receipts and treated the same as receipt on account of sale proceeds towards clandestinely cleared goods, arrived at the Assessable Value and quantified the Excise Duty demand amount. [Para 10 of SCN - Page 18 of SCN] Substantial portion of the demand (Rs.15.19 lacs) pertains to sale transactions with Tirupati Udyog Ltd during the period 25.11.2009 to 26.1.2010. The allegation was that ₹ 1,99,58,865 was received from them pertains to M S Ingots cleared to them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ured further 780 MTs [for TU] + 498 MTs [for others], i.e they have clandestinely manufactured and cleared additional 1296 MTs during this period. The Dept. never ascertained the production capacity, capital equipments deployed, the electricity consumption to verify as to whether the appellant had the capacity to produce such excess quantity or has actually manufactured this quantity. When even the basic production capacity has not been ascertained and compared with the allegation, the entire proceedings can be said to be presumptuous and not based on any facts. Further, the Dept. has only come out with allegation of Cash purchase of Raw Materials for hardly ₹ 51,00,000 from two Vendors, which cannot prove manufacture and clearance of goods valued at over ₹ 3.26 crores. The appellants were also into the business of trading in MS scrap and explained their cash transactions with Nav Durga. The documentary evidence in the form of Purchase and Sales Invoices and VAT records were produced before the Authorities [Page 173-180, 225-230]. The Commissioner (A) admits to producing of such evidence. But still holds that the proceeds received are only towards M S Ing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t any concrete / corroborative evidence to fasten the duty liability. On the other hand, the appellant has produced all the evidence on hand and tried to explain the cash transactions, which have been completely ignored by the lower authorities. The appellant relies on case law cited in the Grounds of Appeal, wherein it has been held that unless the allegations are backed by corroborative evidence, the demands cannot be legally sustained. Admittedly Mr Ambika Prasad is an employee of the company. The Dept. has not come out with any clinching evidence that he was actively involved in the alleged clandestine removal, which itself does not stand proved by the Dept., as explained supra. Hence, the personal penalty of ₹ 1,00,000 imposed on him may be set aside. To Summarize: (a) No corroborative evidence brought in by the Dept. (b) The documentary evidence towards sale of MS Ingots and receipt of cash against such clearance ignored by lower authorities. (c) The documentary evidence towards Trading [Sale] of MS Scrap and receipt of proceeds by way of cash, backed up by the Sales Invoices, VAT records ignored by lower authorities. He would submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the scrap sales made to respective parties, with relevant ledger extracts maintained by them, even to consider their submissions. In view of this, I cannot agree with the appellant s contention that the subject cash receipt entries were related to their trading activity. 10. As regards the cash entries relating to M/s TUL, the appellant submit that they were in fact relating to the MS ingot sales made to TUL under the cover of central excise invoices on which central excise duty and VAT were paid. I have gone through the statement containing the details of 24 invoices mentioned in the said statement and annexure to the notice containing the date wise details of case receipt entries made in the small note book, I find there is no matching/correlation of even single entry to get convinced by the appellant s contention. Further, the documents available in record (weighment slips/register entries/etc) pertaining to clandestine clearances made to TUL, discussed in the notice, would prove beyond doubt that the appellant had the practice of clearing the ingots clandestinely, which fact not disputed by the appellant. Moreover, the buyer (TUL) had admitted purchasing of MS ingots f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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