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TMI Blog2018 (8) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable rate has also been held to be imposed at the applicable rate under Section 11AB of the Act. The adjudication order also imposed penalty under Section 26 (1) of Rules on the various co-noticees. 2. Facts of the case are that acting on the information, a search was conducted by the officers of Central Excise Anti Evasion Unit in the factory premises of M/s. Lakhotia Metalizers (Appellant in appeal No. 70135/2013). During the course of searches, private and statutory records and documents were recovered. The departmental officer also seized a CPU (Central Processing Unit) of computer from the factory of the appellant- M/s. Lakhotia Metalizers from which 565 pages of print outs were taken (page No. 1 to 565) in presence of the representatives of the appellant. The print outs were taken after 03 months of the seizure of CPU. Thereafter, on the basis of the investigation conducted on the basis of statement recorded and the computer print out including other corroborative documents, the show cause notices were issued to the appellants which culminated into above adjudication order, which is challenged before us. Period involved in this show cause notice is from 1/11/2008 to 13/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hind the back of the petitioner could not be relied upon being violative of the principle of natural justice. It was submitted by the appellant that this is well settled law that any statement taken behind the back without giving opportunity of rebuttal, the entire proceedings becomes void on account of being in violation of principles of natural justice; that the investigating officer has only relied upon the statement of four customers out of 130 and concluded that they indulge on unaccounted sales; that the statement of four customers cannot be relied upon as conclusive proof without taking the statement of remaining 126 customers. The appellant further stated that in para 3.1 (iii) of the show cause notice, they relied upon the receipt of the material and payment thereof to M/s. S.R. Enterprises/ M/s. Purv Flexipack Pvt. Ltd. but no record of such transaction found in their books of account and therefore contended that they usually made the payment in cash; that M/s. S.R. Enterprises is closed since 2005, which is also affirmed by statement obtained from Mr. Rajeev Goenka, in-charge of the unit. The appellant also stated that from the scrutiny of the private record marked as 03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at no verification was conducted on the premises of the parties whose names were figuring in the challans/private documents/CPU print outs; that the statements were prepared in some of the cases for inflated quantity and entering into many duplicate entry. The clandestine removal cannot be based on the private record/ documents. There was no excess or shortage of goods, in the factory, also no finding was recorded for the purchase of excess raw materials or excess consumption of electricity or excess payment made to the workers; that there is also no finding that there was mismatch in the value of the goods and value of the clearance as shown in the Central Excise record. 3. The appellants have relied upon the following case laws : (i) Commr. of Central Excise Vs. Universal Polythene Industry- [2001 (130) ELT 228] - In this case, Hon'ble Tribunal, Kolkata has held that the clandestine removal and clearance is a serious charge against the manufacturer which is required to be discharged by the Revenue by production of sufficient and tangible evidence -Standard of proof in such cases has to be on the basis of absolute proof and not on the basis of preponderance of probabilities. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal in the number of cases that the payment made towards the investigation cannot be termed as the voluntary if the same has been done without a routine demand under the law. 5. The appellant has also submitted the following statements: i) Statement, marked 'A', showing entries mentioned more than once ii) Statement, marked 'B' showing entries do not have any material description and the value. The demand on this count cannot sustain being no basis. iii) Statement, marked 'C', showing entries do not have any name of the party, therefore, cannot be alleged clearance of any goods. iv) Statement, marked 'D', showing entries derived from plain paper sheets described as challan. There are about 196 entries taken from alleged challan book Nos. 1 to 21, calculating assessable value of Rs. 4,26,13,733/-. The said so-called challan books are nothing but loose plain sheets without any details of consignee, description of goods, customer's name, address, date, value etc. The said loose paper sheets cannot be utilized for demanding duty as discussed in foregoing paras. (v) Statement, marked 'E' showing customer's name LML/LSC, that is, self. There are about 26 transactions where de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le laid down by the Apex Court. 6. In view of above, the appellant finally stated that they summed up that they are not liable to pay any duty as demanded as they have not indulged into any clandestine removal and Department has not proved conclusively clandestine removal as proposed in the show cause notice and held by the adjudicating authority. 7. We also heard the Ld. Consultant at the time of hearing who reiterated the grounds contained in the Appeal memorandum which has been extracted above and also submitted the copies of the register viz. 03/LMPL/10- copies of the sales and purchase register and also 4/LMPL/10 for our perusal. The Ld. Advocate submits that the Department has not provided the cross examination to the various persons whose statements were recorded under Section 114 of the Central Excise Act. He relied upon the various decisions wherein it is held that the benefit of cross examination by the witness is violation of principles of natural justice. These decisions are as under: i)Andaman Timber Industries Vs. Commr. of Central Excise Kolkata-II [2015 (324) ELT 641 (S.C.) ii) Jindal Drugs Pvt. Ltd. Vs. Union of India [2016 (340) ELT 67 (P&H) iii) Commr. of Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the adjudicating Authority/Appellant. In this regard we refer and rely the case of Jindal Drugs Private Ltd. Vs. Union of India [2016 (340) ELT 67(P&H) and Commissioner of Central Excise, Delhi-I Vs. Kuber Tobacco India Ltd. [2016 (338) ELT 113 (Tri.-Delhi)] wherein it is held in a categorical terms that the statement recorded during the investigation is required to be admissible as evidence only when the maker is examined by the Adjudicating Authority as per the procedure prescribed as per Section 9D of the Central Excise Act. Having not done so, the statements recorded from the various person have no evidentiary value. 10. The computer print outs and the names appeared in the registers maintained by the Department has not been shown to Shri Sanjoy Lakhotia, M.D. of the appellant and statement has not obtained his comments on each and every narration as to whether and how the sales has been made and how the payment has been received. This is obviously not done and the statements which has been taken is of general in nature. Some of the purchasers of the finished products are well known manufacturers for which no conclusive inference can be drawn namely J.K. Masala, Priya Cream ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w material proportionately and that from the perusal of the record it is seen that the department has not obtained evidence of such consumption of the raw material also. Further the consumption of electricity , required for the manufacture of such huge quantity of excisable goods has also not been verified by the Department. Considering the totality of the circumstances, we are of the view that the adjudicating authority has not considered the arguments advanced by the Appellant and confirmed the demand in a routine manner. Therefore, the same is not sustainable. The D.R. has relied upon the ratio laid down in the case of Somani Iron and Steel Ltd. Vs. CESTAT [2011 (270) ELT-189 (All)] regarding private record found in the factory showing the suppression of production, it is for the Appellant to prove that they are wrong and did not belong to them. In this case the appellant are not disputing the existence of private record but says that the entries made there is regarding the order obtained but against which no supply has been made for the quantity which is as per statutory record. The Revenue has not conducted investigation regarding the supply made to the person whose name is fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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