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TMI Blog2018 (8) TMI 1216X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or not, so as to avoid any manipulation and, in case they were sealed, whether any panchnama proceedings were recorded while de-sealing the said records. Cross-examination - principles of natural justice - Held that:- As no opportunity of cross-examine has been given to the appellant, the Commissioner has committed error in law in relying upon the statements. The charge of clandestine clearance is a serious charge and the department is required to prove the allegations of clandestine clearance by producing sufficient positive and cogent evidence - In the present case, the case of the department is based upon certain private records which are seriously disputed by the appellant and, corroborating the same by statements for which the appellant had not been afforded opportunity to rebut. Use of Brand nae of others - Held that:- Since beginning, it is the stand of all the appellants that neither of them nor Shri B.M. Garg or any other individual are owner of the brand names in issue. Shri Adesh Tiwari- Manager of Deepak Hinges, had also confirmed this fact in his statement dated 25.06.14. Nothing has been brought on record by the department to establish that the said brand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have been filed by the appellants, challenging the Order-in-Original No.39/Commissioner/ Noida/2015-16 dated 29.01.2016 passed by CC CE, Noida, confirming duty and penalty jointly and severally along with interest and also against Order-in-Appeal No.NOI-EXCUS-001-APP-0215 to 0223-15-16 dated 30.12.2015 passed by CC CE (Appeals), Noida, upholding duty, redemption fine and penalty on the appellants. As common facts and circumstances are involved in all the appeals being, the entire case of the Department is that, all the Appellant firms/companies are the dummy units of one Shri B.M. Garg (proprietor of Garg industries), - which have been created to fragment and/or bifurcate the total clearances so as to fall within the exemption limit of SSI benefit. For the sake of convenience we are referring to the facts involved in the case of Deepak Hinges Private Ltd (appeal number E/70265/16). So far as other appeals are concerned the facts are similar and the difference is only of duty and penalty amount and further the evidence relied upon in all the appeals is more or less the same arising from the same facts and circumstances and the evidences collected in the search of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N had relied upon statement dated 29.08.13 of Shri Sh. K.D. Shukla (despatch Supervisor of Deepak Hinges). Further, relying upon the alleged statement of Shri Sunil Kumar Security Guard dated 27.08.13, it is the case of department that the term piece mentioned in the recovered documents would mean box and the term box would mean carton . Relying upon the aforesaid, in the SCN demand of Central excise duty from the appellant is calculated in the following manner: Annexure 1 ₹ 15,40,861/- [Period : 2012 02.07.13] Annexure 2 ₹ 2,06,52,363/- [Period : 01.10.12 02.07.13] Annexure 3 ₹ 5,72,788/- [Period : June 2009 June 2013] Annexure 4 ₹ 32,76,162/- [Period : June 2009 June 2013] Annexure 5 ₹ 1,11,60,526/- [Period : June 2009 June 2013] ₹ 3,72,02,700/- 5. The said SCN was adjudicated by the ld. CCE, Noida vide impugned OiO dated 29.01.16 confirming the allegations of clandestine manufacture and removal, as alleged in the SCN and, consequently, confirming the entire duty as proposed in the SCN on the appellant along with interest and imposed penalty of equal amount u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e manner in which the said seal was broken i.e. whether any panchnama proceedings were carried or not. The appellant, in support, relied upon the decision of this Tribunal in the case of Kuber Tobacco Products Ltd. v CCE, Delhi (2013) 290 ELT 545 (T). 8. We find that this Tribunal in the aforesaid case laid down detailed guidelines to be followed by the officers while preparing Panchnama, in order to verify the truthfulness of the case put forth by the Department and the defence sought to be raised by the persons proceeded against. The said guidelines are reproduced hereunder, for ready reference: a. The panchnama has to be specific and clear about the location and the description of the premises irrespective of the fact whether it is in the course of criminal investigation or tax evasion investigation. Thus, the panchnama ought to describe the premises or the location of the premises with reference to the neighbouring surroundings; the interior of the premises; number of accesses available to the premises and whether the premises were accessible or not from any of those accesses before unlocking the rooms. There should be description of the entire building vis-a-vis the po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, in relation to the seizure of documents, it is necessary not only to record that the documents were recovered from the premises but it is also necessary to record a brief description of the exact place where the documents were located in the premises and from where they were seized by the seizing officer. It is further necessary to record as to what steps the seizing officer had taken so as to refrain himself and persons accompanying him from causing any damage to the documents as also to avoid any interpolation or inference in any manner with such documents and contents thereof. It is also necessary to record as to what steps were taken to safeguard the documents and to avoid possibility of any stranger s interference with the seized materials. In other words, when any document is seized, it is necessary to enclose the same in a cover and to seal such cover so that no other person gets opportunity to interfere with such document. 9. We find force in the submission of the counsel for the appellant. Upon perusing the Panchnama, we find that the same does not give any description of the documents recovered and, instead uses the expression file containing misc. loose pages wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la, Shri Ramesh Chander, and Shri Rakesh Kumar Tiwari, all dated 4.7.2013;File no.1 allegedly containing 659 pages; File no. 12 allegedly containing 253 pages;File No. 10 and 11 allegedly containing 261 and 381 pages respectively; Statements of 11 employees, in total 17 statements; Statements of 20 customers; Statements dated 6.7.2013 and 5.9.2013 of Shri V.P.Garg;Statements dated 27.8.2013 of Shri Sunil Kumar and Shri Adesh Tiwari; Quantification charts (Annexure-1 and 2 to the SCN) for computation of central excise duty proposed to be demanded on the basis of Files nos. 1, 10 and 11;Statement dated 19.7.2013 and 2.8.2013 of Shri Sunil Kumar 11. On the issue of cross-examination, we find that the assessee cannot as a matter of right ask for cross examination and it is only in case the department wants to rely upon the statements that the opportunity to cross- examine needs to be afforded in compliance of the principles of natural justice as held by the Apex Court in the case of Andaman Timber Industries v CCE, Kolkata - 2015 (324) ELT 641 (SC) as well as the Allahabad High Court in the case of CCE v Kurele Pan Products Pvt. Ltd. 2014 (307) ELT 42 (All). As no opportunity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voices recovered by the department from the factory premises of the appellant, clearly shows the manufacture and clearances of such variety. This itself shows that quantification of demand cannot be based relying upon statements and the same is without any basis. There is clear assumption and presumption by the department regarding alleged clandestine activities. In the absence of any positive evidence brought on record by the department except for private record the authenticity of which have been doubted and the statements which we have already held to be not voluntary, the allegations of clandestine clearance cannot be upheld in the present case. On this issue we are guided by the principles laid down by the Apex Court in the case of Oudh Sugar Mills Ltd. v Union of India, 1978 (2) E.L.T. J172 (S.C.) which has been consistently followed by the Tribunal. 14. Another issue raised in these appeals relates to availability of SSI benefit under Notification No. 8/2003-CE as amended. As all the appellants firms/companies have availed the benefit of SSI exemption except M/s Garg Industries, the SCN had proposed to deny the benefit of the said Notification on grounds viz., use of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent identity, as held by this Tribunal in the case of Punjab General Manufacturing Works Vs. CCE, Lucknow, 2017-TIOL-1837-CESTAT-ALL, and in the case of Bentex Industries v CCE, New Delhi 2003 (151) ELT 695 (T) affirmed by the Apex Court reported in 2004 (173) ELT A79 (SC). Further, the issue is also covered by the decision of the Allahabad High Court in the case of CCE, Noida-I versus M/s Garg Industries C. Ex. Appeal No. 281 of 2015 decided vide order dated 06.11.15 pertaining to parties before us wherein it has been held, under identical facts, that merely because Shri B.M.Garg is the person behind all the companies/firms, including the appellant, cannot be a ground to club the clearances of all the companies/firms in question and further held that merely because the proprietor of Garg Industries has interest in the other six units (Pvt. Ltd. Companies) does not entitle the department to club all the shares of the assessee in other units. Further, the earlier OiO dated 31.03.13 has already been set aside by this Tribunal vide Final Order dated 71748- 71756/2017-Ex (DB) dated 8.6.2017, reported as 2018-TIOL- 651-CESTAT-ALL. 18. For the purpose of denying SSI benefit, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nothing has been brought on record by the department to establish that during the relevant period, the said dealers were dealing only with the goods of the appellants and no other goods. In the absence of any such evidence, we hold that the demand based on Annexure 5 cannot be confirmed merely on assumption and presumption. (b) Duty Demand in terms of Annexure 4 is calculated on the basis of clearances made by M/s D.P. Garg Sons. The basis of Annexure 4 is File No. 12 private record, recovered from the Harola premises (office) during the course of search proceedings recorded in Panchnama dated 03/04.07.13. The Commissioner held that File No. 12 contained invoices of M/s D.P. Garg Sons on which clearances were shown to have been done, whereas actually the goods were manufactured and cleared by the named companies/firms including the appellant. Quantification of each company/firm including the appellant has been done relying upon statement of Shri K.D. Shukla. However, it is admitted position that goods relating to Annexure 4 were cleared on the invoices which is a statutory document. We find that the said invoices clearly bore the name of the buyers. However, no in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere transported. However, the appellant has placed on record Form 47 of the Transport department of UP, as per which the Gross Vehicle Weight i.e. the maximum weight the said vehicle can carry is 7490 kgs only. Thus, it was not even possible to transport 10,440 kgs of hinges. This further gives strength to the stand of the appellant that the private records are not genuine and do not show clearances as alleged. (e) Duty Demand in terms of Annexure 1 has been calculated on the basis of entries shown in File No. 1.Even though the Annexure 1 of the SCN had taken the entries relating to appellant as nil , however, still demand was proposed and confirmed against the appellant which, therefore, is not sustainable. 20. We find that all the units are entitled to get benefit of SSI notification in view of the discussions made in preceding paragraphs, therefore, there is no requirement to maintain statutory records. Once, they are not entitled to maintain statutory records, the allegation that goods were found in short and/or excess, is legally not sustainable and liable to be set aside. We further find that learned Commissioner (Appeals) has also relied upon various statements, b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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