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TMI Blog2018 (6) TMI 1421X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant has cleared 154.580 MT of M.S. Ingots. The entire demand is based upon the records recovered from Sh. S.K. Pansari proprietor of M/s. Monu Steel. The law as to whether the third party records can be adopted as an evidence for arriving at the findings of clandestine removal, in the absence on any corroborative evidence, is well settled. Only on the basis of statement of third party no demand could be made. The penalty imposed on the Sh. Pawan Kumar Agarwal, Director is also set aside. Appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... andestine removal of goods without payment of duty. (iv) Penalty should not be imposed upon them under the provisions of Rule 25 of Central Excise Rules, 2002 for contravention of Rule 4, 6, 8, 10 and 11 of Central Excise Rules. 4. In the 2nd show cause notice dated 14.06.2010, at the end of paragraph 8.7 (after Chart 'B') it has been specifically mentioned that "the Central Excise duty involved in the suppressed production and clandestine removals of 154.580 MT M.S. Ingots as detailed in Annexure-A involving Central Excise duty amounting to ₹ 4,65,570/- BED ₹ 4,56,441/- (+) Ed. Cess Rs/ 9, 129/-) removed during the year 2006-07 by Noticee No. 1, through Noticee no. 2 as recorded in the diaries recovered from M/s. Monu Steels, Raipur, prop Shri. S.K. Pansari, by the officers of Central Excise on 15.01.2007 as discussed in the foregoing paras [as detailed in Annexure-A], is included / involved in the total Central Excise duty evaded by Noticee No. 1 during 2006-07 worked above." Meaning thereby that the Central Excise duty amounting to ₹ 6,38,05,258/- (for production of 20745.926 MT of M.S. Ingots) is inclusive of Central Excise duty of ₹ 4,65,570/- (for p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Power Pvt. Ltd., Raipur and that day they accepted their irregularity and admitted the duty liability and therefore on the basis of the same dairy entry the department is justified in proceedings against the appellants in the present matter. 8. Since some of the manufactures i.e. M/s. Sh. Shyam Ingot and Casting Pvt. Ltd. and M/s. Nutan Ispat & Power Pvt. Ltd., Raipur, whose names were also found in the dairy recovered from Sh. S.K. Pansari proprietor of M/s. Monu Steel, accepted their irregularities and admitted the duty liability therefore no corroboration was required in those cases. But in the present case the appellant did not admit the liability and the same is recorded in para 6.6 of show cause notice dated 25.11.2009: "6.6. Shri Pawan Kumar Agarwal was also made aware of the fact that in the diary of Shri. S.K. Pansari the names of several Steel manufacurtres have been mentioned and that some of the manufactures have accepted these transactions as genuine and have discharged their duty liability, establishing thereby the auhteticity of the of diary contents/ entries. In spite of such clear evidences of the authenticity of diaries of Noticee no.2 indicating therein tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hird party records can be adopted as an evidence for arriving at the findings of clandestine removal, in the absence on any corroborative evidence, is well settled. Only on the basis of statement of third party no demand could be made. The Hon'ble High Court of Judicature at Allahabad in the matter of Continental Cement Company Vs. Union of India; 2014 (309) ELT 411 (All.) and also this Tribunal in the cases of Raipur Forging Pvt. Ltd. Bs. CCE, Raipur, 2016-(335) ELT 297 (Tri.-Del.), CCE & ST Raipur Vs. P.D. Industries Pvt. Ltd.- 2016 (340) ELT 249 (Tri.-Del.) and CCE & ST, Ludhiana Vs. Anand Founders & Engineers- 2016 (331) ELT 340 (P&H), have categorically held that the findings of clandestine removal cannot be upheld based upon the third party documents unless there is clinching evidence of clandestine manufacture and removal of the goods. 12. In an identical matter this tribunal vide its order dated 04.04.2018 in Appeal No. E/50526-50527/2018 -SM titled as, Shree Consultants Pvt. Ltd Vs. C.C.E. & S.T. Raipur set aside the demand which was also made only on the basis of the entries made in the records of M/s. Monu Steel and held as under: "xxx xxx xxx 4. I find that the ent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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