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TMI Blog2019 (1) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... srea is not required to Order confiscation under Rule 25. Whether the documents recovered vide Panchnama dated 01.06.2016 and the statements of the Company’s Director allegedly being an admission are sufficient for proving the alleged clandestine removal? - Held that:- Though mere irregularity and even illegality in case of search and seizure cannot by itself render the documents seized in the case of such search or seizure to be inadmissible in evidence but the fact of the present case is that the Panchnama merely records that the officers on search found certain records which does not give the description of so called record except saying that the same are described in the annexure to SCN. All this information was absolutely necessary to give credibility to the Panchnama particularly when the entire proceedings in that record are sought to be challenged and disputed and also particularly when the permission to cross examine the witnesses of Panchnama was sought however was not granted for. Further basis of confirming the confiscation has been the evidence as that of eye estimation for determination of stock but it has been a settled principle that the allegations of clandestine r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resultantly, a SCN No. 3718 dated 28.11.2016 was served alleging the clandestine clearance of goods during the month of February to May 2016 and proposing the aforesaid seized stock to be confiscated under provisions of Rule 25 of Central excise Rules 2002 with the imposition of redemption fine in view of the said confiscation and the penalty under Rule 25 of Central Excise Rules, 2002 was also proposed. The said SCN was initially adjudicated by Assistant Commissioner vide Order No. 11 dated 29.09.2017. Being aggrieved an Appeal before Commissioner (Appeals) was filed who vide Order under challenge i.e. one bearing No. 427 dated 22.01.2018 has upheld the demand thereby rejecting the Appeal. Resultantly, the Appeals are before this Tribunal. 2. I have heard Mr. Anil Mishra, Ld. Advocate for the appellant and Mr. S. Nunthuk, Ld. DR for the Department. 3. IT is submitted that the adjudicating authority below has passed the Order based on presumption and surmises as there is no other evidence on record proving the alleged clandestine removal of the finished goods of the appellant. It is submitted that Panchnama itself is vitiated for want of the witnesses proving the same. No opport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve to be looked into: Rule 25 of Central Excise Rules 2002 defines as under: (1) Subject to the provisions of section 11AC of the Act, if any producer, manufacturer, registered person of a warehouse or a registered dealer, - (a) Removes any excisable goods in contravention of any of the provisions of these rules or the notification issued under these rules; or (b) Does not account for any excisable goods produced or manufactured or stored by him; or (c) Engages in the manufacture, production or storage of any excisable goods without having applied for the registration certificate required under Section 6 of the Act; or (d) Contravenes any of the provisions of these rules or the notifications issued under these rules with intent to evade payment of duty, Then, all such goods shall be liable to confiscation and the producer or manufacturer or registered person of the warehouse or a registered dealer, as the case ay be, shall be liable to a penalty not exceeding the duty on the excisable gods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or [rupees tow thousand], whichever is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra Cement Ltd. (supra) wherein para 17 it was observed as under: "17. It is also to be borne in mind that Rule 25 starts with the word "Subject to the provisions of Section 11AC…..". Section 11AC of the Central Excise Act deals with penalty for short levy or non-levy of duty in certain cases. It says that where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded by reasons of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the Rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (2) of section 11ac, shall also be liable to pay a penalty equal to the duty so determined. For the purpose of invoking Section 11AC of the Act, the condition precedent is that the duty has not been levied, or paid or short-levied or short-paid or the refund is erroneously granted by reasons of fraud, collusion or any wilful misstatement or suppression of facts. If these ingredients are not present, penalty under Section 11AC cannot be levied. Since Rule 25 can be invoked subject to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson gets opportunity to interfere with such document. All these things can of course be recorded briefly, but precisely. This aspect gains more importance once there is objection regarding veracity of the panchanama and the contents of the documents stated to have been seized in the course of such panchanama. A Panchnama should disclose proper description of the premises and the things found in the premises. The information in this regard assumes more importance when there is serious dispute about the articles alleged to have been recovered and seized from such premises and such articles are sought to be linked with the activities of the concerned party. The Panchnama and the proceedings in relation thereto should not leave any room to entertain any doubt as such and for the possibility of planting any article and/or document by third person or of the scope for interference by strangers with the documents or contents thereof. Obviously, therefore, any article or document seized from any premises is required to be properly sealed after being packed with necessary wrapper or envelope or covering, as the case may be, so as to avoid any possibility of third party interference with su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T 595 wherein it was held that since the excess of stock was found merely on eye estimation and no physical stock taking or done the allegation of excess stock found and that the same has not been recorded in the statutory record were held not sustainable. 8. Finally, qua the alleged admission of the Director of appellant, I am of the opinion that allegations of clandestine removal are serious in nature and the clandestine activities are quasi criminal hence the revenue alleging the same is required to prove it by sufficient corroborative evidences. The Principle Bench, CESTAT in the case of Raj Ratan Industries Vs. CCE Kanpur 2013 (298) ELT 111 has held that the shortage detected at the time of visit of officers cannot admittedly lead to the findings of clandestine removal in absence of the evidences. It was also clarified that even if at the time of visit of officers, the appellant accepts the shortages but the said acceptance cannot be considered as acceptance of clandestine removal of finished goods by the appellant. In the present case also, the only contention of the Revenue is that the excess stock was admitted by Shri Bharat Shukla Director of the appellant however I obser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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