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TMI Blog2018 (9) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of the respondent/assessee, a show cause notice for clandestine removal of dutiable goods was issued on 30.08.2007. The assessee resisted the notice contending that no incriminating material was discerned. The show cause notice relied upon certain recoveries made from the premises or the third parties as well as recoveries such as pen-drive and computer hard drive from the premises of one Ms. Janki Sharma. Her statement too was recorded. This formed the basis of the order-in-original of the Commissioner dated 30.03.2009. The order-in-original sought to analyse the data extracted from the electronic material recovered from the premises of Ms. Janki Sharma. 3. The relevant part of the discussion of the Adjudicating Authority is extracted below:- "38.4 The scrutiny of the printouts as aforementioned, and duly corroborated by the statement dated 18.11.2005 of Smt. Janki Sharma, reveal that it contains the details of transactions of ATM (and SHIVA), which is abbreviated to mean Ashutosh Metal Industries, and Shri Jatinder Kumar Aggarwal is the proprietor of M/s. ATM. The papers of ATM are page numbered from 1 to 165. Shri Manish Sethi, however, retracted his statement vide his let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 16.09.05. 39.2 From scrutiny of the documents in the made up file page numbered 1 to 56 showing 9th transaction details of clandestine removal of copper ingots/rods, purchase of scrap and payments & receipt on account of clandestinely removed goods from M/s ATM, it is seen that these details were written by hand on small chits/kachhi parchi by Smt. Janki Sharma, who entered such transaction in a computer generated ledger as well as in pen drive. Both the Kachhi parchi/chits and pen drive were given by the Proprietor of M/s. ATM to Smt. Janki Sharma to create two accounts. Some transactions of M/s.ATM are entered in 'ATM' account and the remaining transactions of M/s. ATM are entered in a fictitious account named "SHIVA". In fact Smt. Janki Sharma was found entering the data in a computer with the help of attached pen drive when the officers visited her residence and conducted searches. The co-relation between some data in the kachhi Parchies (page from 1 to 56) with some entries in the printouts generated from computer clearly indicated that the data contained in kachhi Parchies were actually entered in computer to create a ledger data base. 39.3 The payment received on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory deduced by the Revenue Authorities in the order-in-original in the form of a chart, which was the basis of the duty liability, was entirely fanciful. The CESTAT thereafter elaborately analysed both the digital material and the evidence as well as the statement of Ms. Janki Sharma. The CESTAT thereafter pointed out the improbabilities in the conclusions arrived at by the Adjudicating Authority and observed as follows:- "11. It is settled law that documents recovered from a third party can be used against the manufacturer to prove clandestine removal only when these are supported with corroborative evidences. The Revenue has alleged that huge quantity of finished products have been manufactured and cleared clandestinely without payment of Central Excise duty. The computer printout of data recovered from the house of Smt. Janki Sharma, no doubt, gives rise to suspicion that these are details relating to clandestine clearance of the goods. However, clandestine manufacture and clearance alleged against the appellant is a very serious charge which needs to be proved by Revenue by producing tangible and reliable evidences. For clandestine clearance of such huge quantities of finished ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ymers (P) Limited vs. CCE, Chennai - 2004 (165) ELT 291 (Tri. Chennai.) and Hon'ble Allahabad High Court decision in the case of Continental Cement Company vs. UOI- 2014 (309) ELT 411 (All.). We have gone through the above case laws which support the arguments of the appellant. 14. In view of the discussions in above paragraphs, we find that the evidences produced by the Revenue for sustaining the duty demand has not been corroborated by detailed investigation. The allegation of clandestine manufacture and clearance cannot be sustained on the basis of such flimsy evidences. Accordingly, the impugned order is set-aside and the appeal is allowed. Miscellaneous application also disposed of." 5. Learned counsel for the Revenue urged that the Tribunal erred in interfering with the finding of fact that in the absence of any concurrent material connecting the assessee with the recoveries made, duty liability could not be imposed. It is submitted that the statement of Ms. Janki Sharma clearly implicated the assessee and in fact she had deposed that she left the job of one K.C. Electricals, one of the partners of which company was also a partner in the respondent's firm. It was also s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y @ 2% (Rs.) Total Duty Recover able (Rs.) 1. ATM 2.3.05 to 06.5.05 18,22,35,30 3.30 15,66,67,214 2,50,66 754.22 5,01,335.08 2,55,68,089.3 2. SHIVA 07.5.05 to 16.9.05 35,02,87,88 9.00 30,11,41,5 82.70 4,81,82 653.23 9,63,653. 07 4,91,46, 306.3 3. ATM 17.9.05 to 21.9.05 77,80,242.00 66,88,653.71 10,70,18 4.59 21,403.70 10,91,588.29 4. ATM 22.9.05 to 12.11.05 5,16,58,179.00 4,44,10,401.47 71,05,66 4.25 1,42,113.28 72,47,777.53 TOTAL 59,19,61,613.30 50,89,07,851.88 8,14,25,2 56.29 16,28,505.13 8,30,53,761.42" 7. The inference that the Revenue sought to draw a reference to "ATM"; the link it sought to make by the statement of Ms. Janki Sharma. As observed earlier, there was no scrap of paper or evidence linking the assessee with any allegations levelled against it vis-à-vis excess production and clandestine removal. On the other hand, the CESTAT noticed that the assessee's installed capacity was the production of five ton of copper ingots. Apparently, the assessee was able to function only half the month i.e. for about 15 days. Given this established and known capacity, the mere circumstance that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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