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TMI Blog2018 (9) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of goods valued at ₹ 36,000/- from Mustufa Sales Agency, Ahmedabad - Held that:- This fact of clearance of goods on payment of duty under Invoice No.329 dated 19.05.2005 has not been denied by revenue or it is not the caase of the revenue that the goods cleared under the said Invoice No.329 dated 19.05.2005 were different than the goods seized and confiscated. The finding of the Commissioner (Appeals) is erroneous as he has referred to batch number without co-relating with the Invoice and it is not understood as to how it can be concluded from only batch number that the detained goods were not received under Invoice - Confiscation not sustainable and is set aside. Seizure of goods valued at ₹ 4,09,080/- from M/s Balaji Pan Centre, Chennai - Held that:- It is settled law that the serious allegation of clandestine clearance cannot be made merely on the basis of statement which has not been corroborated by any other evidence - confiscation set aside. Seizure of goods valued at ₹ 26,800/- from Nobel Joseph, Chennai - Held that:- The allegations are based only on the statement and entries made in his private records without independent corroboration - Confisc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arance of goods from factory, absence of statement from any employee of ZTPL and no evidence of transportation of the goods, charge of clandestine removal is not proved against M/s ZTPL - Held that:- The ld. Advocate for ZTPL has rightly contended that only on the basis of Gopal Sales letter and statement it cannot be charged that goods more than ₹ 81 Lakhs were removed without invoices. Again, there is no evidence of transportation of these goods from ZTPL to premises of Gopal Sales in Maharashtra - the department has not verified facts and has presumed without evidence that goods worth ₹ 50 Lakhs were given as bonus by ZTPL to Gopal Sales. The position has been clarified by Hari Chand Gidwani, Prop. of Gopal Sales in his Affidavit by affirming that goods of ZTPL were sold by Payal Sales Corporation and Pooja General Stores in his area for which it was binding for ZTPL to give him incentive. In absence of any corroborative evidence, Revenue has not been able to establish charge of clandestine removal of goods to Gopal Sales. There is no independent evidence to show that any goods were removed by ZTPL without payment of duty to any person or firm. This Tribunal has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of seized goods, and also demanding duty of ₹ 11,00,883/- from ZTPL and proposing to impose penalty on ZTPL others. However, after considering submissions by the Appellants, Additional Commissioner vide Order-in-Original No. 55/2008 dated 04.06.2008 confirmed the demand of duty ₹ 2,43,671/-, out of total duty demand of ₹ 11,00,883/-, holding that in respect of the goods involving duty of ₹ 8,57,212/-, identification numbers had been correlated with the duty paying documents. Additional Commissioner had ordered confiscation of the goods involving excise duty of ₹ 2,43,671/- and gave option to respective parties to redeem the same on payment of fine and penalties. 3. M/s ZTPL and 6 others filed appeals against the said Adjudication Order confirming duty of ₹ 2,43,671/- and against R/F and penalties imposed. Similarly, Department also filed one appeal against ZTPL where duty demand of ₹ 8,57,212/-, out of total duty demand of ₹ 11,00,883/-, was dropped by adjudicating authority. Commissioner (Appeals), Ahmedabad vide Order-in-Appeal No. 171 to 178/2008 (Ahd.II)CE/ID/ Commr(A)/Ahd dated 29.12.2008 dismissed all the appeals filed by M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents available on records including synopsis and case laws as well as submissions of both sides. Ld. Departmental representative has reiterated the finding recorded against ZTPL others in the impugned Orders and argued that there are statements showing removal of goods by ZTPL without payment of duty and other evidences and invoices. He also argued that the department is not required to prove such case of clandestine removal with mathematical precision. 8. Briefly stated the facts are that M/s ZTPL is a manufacturer engaged in manufacture of Chewing Tobacco, which they claim to clear on payment of the duty. On the basis of some intelligence, officers of Directorate General of Central Excise Intelligence [DGCEI] searched the factory premises of M/s Zen Tobacco Pvt. Ltd. on 13.02.2006. The officers had also carried out search at the residential premises of shri Rashmin Majiithia Director of M/s ZTPL, dealers persons dealing in their product, Chewing Tobacco, premises of their suppliers and transporters. 9. During the course of searches no goods were seized from the factory premises of ZTPL. However, officers seized following cartons of chewing tobacco, from dealers, buyers, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cartons of Chewing Tobacco under their Invoices and GRs to the said M/s Rahul Transport for onward transportation to customers at Wadi in Maharashtra. c) Transport Company, while transporting 654 cartons, had sent invoices issued by the said Shivam Sales Corporation. Some of the invoices, sent by Transport Company did not tally with the identification numbers as mentioned on the cartns when officers visited the premises of Rahul Transport. d) Shri Babubhai C. Mehta godown in-charge of Transport Company has affirmed by his Affidavit dated 31.01.2007 about mishandling of goods and invoices at their end. e) No discrepancy was found in the stock of goods at the business premises of Shivam Sales Corporation which shows that it was not clandestine removal. f) The Panchnama at Rahul Transport, has shown the identification marks of 256 cartons out of 301 cartons. g) M/s ZTPL has shown to the satisfaction of Additional Commissioner that the cartons with those identification marks were removed under cover of invoices and on payment of duty by M/s ZTPL to M/s Shivam Sales Corporation. h) Adjudicating Authority has given finding in Order-in-Original dated 04.06.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moval of goods valued at ₹ 1,08,517/- is not established, Consequently, confiscation of the said goods valued at ₹ 1,08,517/- from Shivam Agency Nagpur is not sustainable and it deserves to be set aside. 10.3 As regards Seizure of goods valued at ₹ 36,000/- from Mustufa Sales Agency, Ahmedabad, I find that the said 10 cartons valued at ₹ 36,000/- were only detained by the officers at premises of Mustafa Sales Agency and there is no evidence or even statement of proprietor of Mustafa Sales Agency that the said goods were removed by M/s ZTPL without invoice and without payment of duty. Appellant ZTPL has clarified that the said 10 cartons were sold to Mustafa Sales Agency under ZTPL s Invoice No.329 dated 19.05.2005 and the said invoice is part of seized documents. This fact of clearance of goods on payment of duty under Invoice No.329 dated 19.05.2005 has not been denied by revenue or it is not the caase of the revenue that the goods cleared under the said Invoice No.329 dated 19.05.2005 were different than the goods seized and confiscated. The finding of the Commissioner (Appeals) is erroneous as he has referred to batch number without co-relating with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement that Prabhat Kumar, Sales Manager of ZTPL was supplying goods to him without bill has been denied by said Prabhat Kumar in his statement recorded under Section 14 of Central Excise Act. (10) Shri Santosh Kumar Dubey, in his cross-examination, has clearly deposed that he had purchased the Chewing Tobacco from Raju Enterprises as well as from open market. He has categorically denied to have received any chewing tobacco from Prabhat Kumar. (11) In any case there is no evidence or any material on record as to how the goods were received by Prabhat Kumar and where he was storing goods at Chennai. (12) In absence of any material showing transportation of goods from Ahmedabad to Chennai, there is no substance in the department s case which deserves to be rejected. (13) In the appeal filed by Department, reference has only been made to the statement of Santosh Kumar Dubey without bringing any material on record to contradict his testimony during cross-examination. (14) It is settled law that the serious allegation of clandestine clearance cannot be made merely on the basis of statement which has not been corroborated by any other evidence. (15) In CC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad to Nobel Joseph s premises at Chennai and thus revenue has not discharged its heavy burden to prove charge. Appellants have placed Reliance on the decision in Rama Shyama Papers Ltd. Vs CCE, 2004 (168) ELT 494 wherein the Tribunal has also set-aside demand of duty as Revenue had not been able to adduce any corroborative evidence to show movement of goods. The learned Advocate also relied upon the decision in CCE Vs Renny Steel Castings Ltd., 2011 (274) ELT 94 wherein the Tribunal has held that since entries made in the private records were not corroborated with the transporters and no authorized person of the Company had admitted to unaccounted production and clearance, there is no case of clandestine removal. (6) Consequently, confiscation of goods valued at ₹ 26,800/- from Nobel Joseph, Chennai is not sustainable and it also deserves to be set aside. 11. As regards the duty Demand amounting to ₹ 30,54,404/- upheld by OIA dated 19.03.2013, On behalf of M/s ZTPL, it is submitted by the Advocate Shri D K Trivedi that the entire case of clandestine manufacture and removal of goods has been made on the basis of seizure of goods/documents from the premises of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,00,000/- 12.1 It is submitted by Advocate regarding (a) above free Stocks received from Shivam ₹ 12,65,500/- that without any basis it has been considered that these goods were supplied to M/s Gopal Sales without payment of duty. The Advocate has also argued that said letter was regarding reconciliation of Scheme Amount and Target Scheme. M/s ZTPL also provide incentive to dealers, like most of Companies. Ld. Advocate has also argued that the free stocks received from Shivam mentioned in the said letter does not mean that the goods were supplied to Gopal Sales without payment of duty. He has argued that in fact 175 cartons were sold by ZTPL to one Geeta Traders, Ahmedabad on payment of duty and as they were not be able to sell those goods completely, 140 cartons were sent to M/s Shivam Agency Nagpur by Geeta Traders under commercial invoice. A copy of Geeta Traders letter dated 10.02.2006 under which they had sent 140 cartons to Shivam Agency had been submitted to the Department along with Journal Voucher which had been ignored by the Department as well as by the ld Commissioner (Appeals). Advocate has also argued that as Shivam Sales also could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Gopal Sales letter does not suggest that the goods worth ₹ 50 Lakhs were supplied by ZTPL to Gopal Sales that too without payment of duty. He has also argued that the factual position in this regard is that two firms, namely Pooja General Stores and Payal Sales Corporation, falling within area of Gopal Sales, had sold goods of ₹ 49,18,410/- which was rounded to ₹ 50,00,000/- for purposes of bonus. The learned Commissioner has termed explanation as an afterthought merely because of rounding off figure. The ld. Counsel contended that Rashminbhai Majithia in his statement dated 15.06.2006 has stated that the said bonus amount represents sale effected in the area of Gopal Sales. Thus it can t be said that explanation was an afterthought at all. In this connection, I further find that shri Hari Chand Gidwani has affirmed in his Affidavit that Bonus from you was in respect of sale effected by Payal Sales Corporation and Pooja General Stores in his area and he was, therefore, eligible for incentive. I also find that there is no independent evidence to show movement of alleged goods worth ₹ 50 Lakhs from factory of ZTPL at Ahmedabad to Chandrapur. The ld. Counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the present matter, these are no evidence on the basis of which such a serious charge of clandestine manufacture and clearance can be established. 12.5 It is argued by Advocate that there is no evidence on record, not even any statement, that goods were cleared without payment of duty by ZTPL to the said M/s Shiv Enterprises Surendra Nagar. The amount of ₹ 16,840/- was received as the same was payable by the said Shiv Enterprises for the goods supplied to them earlier on payment of duty. The Advocate also referred to the grounds wherein it has been contended that ZTPL had neither received any excess tobacco nor any laminates. 13. In respect of the penalty imposed on Rashminbhai Majithia, Director of ZTPL, It is argued by the Advocate that no penalty is imposable since there has been no clandestine removal. In any case, penalty under first SCN dated 09.08.2006 cannot be imposed as he was never put to notice as to why penalty should not be imposed upon him. Thus, Additional Commissioner (Appeals) travelled beyond the scope of SCN in imposing penalty of ₹ 20,000/- on Rashminbhai Majithia. Further, the ld. Commissioner (Appeals) has also acted without any jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confessing about the manufacture of excess goods and their removal from the factory without payment of duty. In similar case, Division Bench of this Tribunal has observed in Vishwa Traders Pvt. Ltd. Vs CCE, 2012 (278) ELT 362 (Tri-Ahmd) that the charge of clandestine manufacture and removal has to be proved beyond doubt and there is nothing to prove that the Appellants had clandestinely manufactured and cleared the final product. The Hon ble Gujarat High Court has also dismissed the appeal filed by Revenue, by observing that since the stock of raw material and finished goods tallied with the recorded goods, the Assessee had not clandestinely manufactured or removed the goods. This order in Vishwa Traders is upheld by Gujarat High Court and supreme Court in 2013(287)ELT.43 (Guj) and 2014(303)ELT.A24(SC) respectively. 15. The case of Revenue is that goods were clandestinely removed to some cities. However, there is no evidence brought on record to show their transportation from ZTPL s factory at Ahmedabad to those cities. Not a single statement of truck driver has been brought on record who had allegedly transported clandestinely removed goods to Nagpur, Chennai, Chandrapur etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Payal Sales Corporation and Pooja General Stores in his area for which it was binding for ZTPL to give him incentive. In absence of any corroborative evidence, Revenue has not been able to establish charge of clandestine removal of goods to Gopal Sales. 18. I find there is no independent evidence to show that any goods were removed by ZTPL without payment of duty to any person or firm. This Tribunal has been consistently holding that the charge of clandestine removal cannot be proved merely on the basis of statement. In this regard reference is made to the decision in CCE VS Anil Agarwal 2013 (287) ET 489 (T-Del) has held as follows: The Hon ble Delhi High Court in decision in the case of Commissioner of Income Tax v. Dhingra Metal Works - 2010 (101) E.L.T. 603 (Del.) has held that though a confessional statement is important piece evidence but it cannot be held to be conclusive. As such the sole reliance of the revenue on the statement of Sh. Agarwal without any other evidence to reflect upon the clandestine activities of the respondent is not proper and just. Even for applying the ratio of decision of Hon ble Supreme Court in the case of D. Bhoormull, there has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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