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TMI Blog2018 (9) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the ld. CESTAT has grossly erred in law in setting aside the penalties on the Director and General Manager of the Company who were actively engaged in clandestine removal of the goods? 4. Any other question of law as the Hon'ble High Court may formulate and decide the same in terms of sub section (3) & (5) respectively of Section 35G of the Central Excise Act, 1944. 3. However, taking into consideration, the observation made by the Tribunal which reads as under: 6. Revenue has challenged the dropping of demand to the extent of Rs. 30.85 lakhs. The demand of about Rs. 60 lakhs was proposed in the show cause notice on the basis of the quantification relying on 32 kachha parchis recovered during search proceedings. The assessee contended during the course of adjudication that out of 32 slips, 25 slips of various dates were of different despatches, which correlate and reconcile with the excise invoices issued to the respective parties. They have further claimed that all the clearances were duty paid and there was no clandestine clearance. The adjudicating authority has carefully gone through the said 25 slips alongwith the connected invoices and other documents submitted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough the impugned order, we note that the adjudicating authority has not given due consideration to the submissions made by the appellant. The allegation of clandestine removal has been upheld in respect of goods mentioned in the seven parchis only on the basis of inculpatory statements given by Sh. J.D. Pant, General Manager and Sh. P.C. Jain, Director. We find from the record that Revenue has not undertaken any verification either with the buyers or even with the transporters. No investigation appeared to have been carried out to prove that such goods were manufactured in the factory but not accounted for. 9. Clandestine clearance is a serious allegation and needs to be established on the basis of tangible evidence. It is well established fact that only on the basis of the inculpatory statement, the charges of clandestine clearance cannot be upheld. The inculpatory statements given by the General Manager and Director also do not specifically cover the seven parchis. In the absence of any corroborative evidence to indicate that the goods covered by seven parchis were cleared by the appellant, we are of the view that the charge of clandestine clearance and demand of duty cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing routine and constant monitoring, formats have been introduced in the Monthly Performance Report for all field formations to send monthly reports regarding status of withdrawal of appeals in the MPR (refer table M/ M-1). Details of the said cases should also be available in a separate register for further perusal by the Board as and when required. Tables are in the Annexure - A attached. The description of the Tables in brief is provided below: (a) Table M: Position of withdrawal with reference to raised monetary limits SC/HC/CESTAT (as per instruction dated 11/07/2018) b) Table M- 1: Remaining to be filed/withdrawn SC/HC/CESTAT. (Ranjana Jha) Joint Secretary (Review) Annexure -A &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned order dated 19.5.2009. The department confirmed the duty demand along with interest for the period of five years alleging suppression of clandestine removal of the final product and also imposed penalty mainly based on the production approximation and on the statement of Director of the unit, Shri Agarwal, who is one of the appellants in this case. 6.2 The department has not gone beyond the approximation and the statement of Shri Agarwal. Any prudent person would not so conclude on extra production by approximation and by a mere statement of the Director of the company. Unless there are further corroborations in the form of documentary evidences, which could be like despatch details for the production, receipt details of the said material, transactions of the sale money, transportation details of such goods, details of additional consumption of electricity for such suppressed production a prudent individual would not agree with the present conclusions of the Revenue. There is nothing on record from the Revenue side to come to a reasonable conclusion to say that there has been preponderance of probability of such suppressed production on the part of the appellant. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V/s. Mr. Arun Jain, D.B. Central Excise Appeal No.2/2018 decided on 14.3.2018 wherein it has been held as under: Now the controversy involved in the appeals is covered by the decision of this Court in case of Commissioner of Central Excise vs. Tara Chand Naresh Chand (DB Central/Excise Appeal No. 120/2017) decided on 6th December, 2017 wherein it has been held as under:- "5. Counsel for respondent contended that there is no substantial question of law. It is appreciation of fact and in view of decision by this Court reported in 2008 (221) E.L.T. 180 (Raj.), Union of India vs. Jain Plas Pack (P) Ltd., wherein it has been observed as under:- "2. In appeal is the order passes by the Customs Excise and Service Tax Appellate Tribunal dated 3.8.2005 allowing the appeal of the respondent No. 1 by setting aside the demand of Rs. 72,707/- as the duty adjudicated on alleged removal of the fabric from the factory and like amount of the penalty levied by the Adjudicating Officer. 4. The manufacturer's case from the beginning was that the register found during the visit of Excise Authorities in question was not a register maintained for recording production but was a document maintained for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erior to the disposal of the appeal by the second respondent, it would be unfair and not in consequence with the principles of natural justice to ignore the said decision and penalise the petitioner by the imposition of the penalty. He places reliance on certain pronouncements of this Court, which I shall presently refer to. The submission of the learned Counsel for the petitioner that the judgment of the Criminal Court was on merits and on identical facts and charges is tenable because as I could see from the copy of the judgment in the criminal case, there has been a relevant and appropriate consideration of the factual materials, which are identical and in respect of identical charges and the Criminal Court has categorically opinion that the petitioner could not be found guilty of the charges. In D'Silva v. Regional Transport Authority 65 LW 73 , a bench of this Court observed as follows : "We have no hesitation in making it clear that a quasi-judicial Tribunal like the Regional Transport Authority or the Appellate Tribunal therefrom cannot ignore the findings and Orders of competent Criminal Courts in respect of an offence, when the Tribunal proceeds to take any action on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be demanded under Section 11A of the Act, as well as, as to why mandatory penalty and penal interest should not be imposed. 5. As can be seen from the order made by the adjudicating authority, before the adjudicating authority, the Assessee had contended that the shortage of fabrics shown in the panchnama was not correct as they had produced the documents to show that the fabrics in question had not been cleared without payment of duty, but the officers who drew the panchnama did not take into consideration their request and did not even physically verify the stocks. Shri Rajnikant Agarwal, Director of the Assessee-Company submitted an affidavit wherein it was clearly mentioned that the stock verification was not conducted physically and was not compared with the recorded balance thereof. It was contended that the statements and panchnama were both recorded forcibly and the factual position of stock was not ascertained. He had, therefore, by affidavit dated 20-7-2003 retracted the facts mentioned in the panchnama and the statements. 9. Thus, all the authorities below viz., the adjudicating authority, Commissioner (Appeals) as well as the Tribunal have concurrently found that ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing aspects: (i) To find out the excess production details. (ii) To find out whether the excess raw materials have been purchased. (iii) To find out the dispatch particulars from the regular transporters. (iv) To find out the realization of sale proceeds. (v) To find out finished product receipt details from regular dealers/buyers. (vi) To find out the excess power consumptions. 13. Thus, to prove the allegation of clandestine sale, further corroborative evidence is also required. For this purpose no investigation was conducted by the Department. 14. In the instant case, no investigation was made by the Department, even the consumption of electricity was not examined by the Department who adopted the short cut method by raising the demand and levied the penalties. The statement of so called buyers, namely M/s. Singhal Cement Agency, M/s. Praveen Cement Agency; and M/s. Taj Traders are based on memory alone and their statements were not supported by any documentary evidence/proof. The mischievous role of Shri Anil Kumar erstwhile Director with the assistance of Accountant Sri Vasts cannot be ruled out. 5. Commissioner of Central Excise, Ludhiana vs. Nexo Products (Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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