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TMI Blog2019 (1) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be heard to say that despite all the charges against them, they are still entitled for exemption - perversity is manifast in the order passed by the Tribunal. The materials such as gate passes etc., which were recovered during the search and analysed by the Adjudicating Authority have been totally brushed aside. No proof of prejudice had been shown by the assessee for not making available for cross examination of two of the persons, who were the buyers from the assessee, who had candidly stated about the clandestine transaction. There is also an allegation of destruction of records at the assessee s end after the products were delivered to the buyers. Thus, in our considered view, there was sufficient material to establish that the assessee was guilty of clandestine removal and consequently, is liable for payment of duty, penalty and interest. Thus, the Tribunal wholly erred in reversing the order passed by the Commissioner and as we are satisfied that the order passed by the Tribunal is perverse and we are inclined to interfere with the order. The Adjudicating Authority is right in his conclusion that there are good and sufficient reasons as to why the assessee had effected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring terry towels out of the impugned goods in the power looms, which in any case cannot use hank yarn and no appreciable evidence was brought on record by the defendant before Tribunal that the buyers have deposed to have converted hank yarn into cheese yarns during the cross examination? d) Whether Tribunal was correct in holding that the available (material) evidences should contain all the receipts in chronological order and not couple of cases each randomly for a number of years in the light of the fact that the Tribunal has failed to appreciate the evidences on record in the form of 'in-passes', which were having serial numbers and relevant to the case, so are the sizing records maintained by Muthu Industries, which establish that these records were being maintained regularly and chronologically, further the Tribunal has failed to take note of the fact that a sizing unit is incapable of using hank yarn? 3. The facts which are necessary for the disposal of the appeals could be succinctly culled out as hereunder. The assessee is the manufacturer of cotton yarn falling under Chapter 52 of the Central Excise Tariff Act, 1985, (for brevity 'Tariff Act'). On 19.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se Rules, 1944 (erstwhile) and Rule 25 of Central Excise (No:2) Rules, 2001 (erstwhile); (iv) the interest liable on the duty being demanded as at(i), should not be demanded from them under Section 11AB of the Central Excise Act, 1944; (v) the total duty of ₹ 3,04,750/-. Already paid by them vide TR-6 challan No.6/03-04, dated 27.08.2003, for ₹ 2,01,250/- and No.11/03-04, dated 02.12.2003 for ₹ 1,03,500/-, should not be adjusted against the duty liability detailed in sub para (i) above. 4. The assessee submitted their reply on 27.01.2005, stating that they manufacture cone yarn, cheese yarn and hank yarn. The other allegations made against them were also denied. The Commissioner of Central Excise, Salem, Adjudicating Authority adjudicated the show cause notice after hearing the counsel for the assessee and passed order-in-original, dated 20.06.2005, confirming the demand of ₹ 71,70,347/- under Section 11A(2) of the Act and appropriated the amount already paid and demanded interest under Section 11AB, imposed equivalent penalty under Section 11AC and also personal penalty on the Managing Director and Director. The assessee preferred appeals against such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of business and was unreliable. Thus, the Tribunal concluded by saying that the Commissioner had glossed over several significant controversial aspects and the order is not based on acceptable evidence. Accordingly, the appeals stood allowed. Aggrieved by the same, the Revenue has preferred these Appeals raising the questions of law as mentioned above. 6. We have heard Mr.V.Sundareswaran, learned counsel appearing for the Appellant/Revenue and Mr.Raghvan Ramabadran, learned counsel for M/s.Lakshmikumaran & Sridharan Associates learned counsel for the assessee. 7. The allegation against the assessee is one of clandestine removal by way of removing dutiable product namely cheese/cone yarn in the guise of exempted product-hank yarn to their buyers. The Tribunal faulted the Commissioner for confirming the duty liability on the ground that there was no acceptable evidence available with him and the assessee cannot be charged with the offence of clandestine removal of goods without payment of duty based upon confession statement, which were retracted. Further, the Tribunal opined that the registers were not properly maintained and they were unreliable and there cannot be any demand f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us records which were recovered was completely brushed aside by the Tribunal. Relying upon the decision in the case of CC vs. Bhoormull [1983 13 ELT 1546 (SC)], it is submitted that the department is not required to prove its case with mathematical precision, but what is required is the establishment of such a decree of probability that the prudent man on its basis believe in the existence of the facts in issue. On the above grounds, the learned counsel prayed for interfering with the order passed by the Tribunal and answering the question in favour of the Revenue. 9. Mr.Raghvan Ramabadran, learned counsel's first contention is that the appeal before this Court under Section 35G is not maintainable, since it pertains to the claim for benefit of a notification, which relates to a rate of duty and this Court is barred from deciding it under Section 35G of the Act. In this regard, the learned counsel referred to the decision in the case of Naveen Chemicals Mfg., Trading Co., Ltd., vs. CC, [1993 (68) ELT 3 (SC)] and SRF Limited vs. CESTAT [2017 (350) ELT 33 (Mad)]. The second question canvassed before us is that the Court exercising power under Section 35G of the Act cannot decide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be relied on and has to be treated as unreliable. This findings of the Tribunal is thoroughly perverse, since the provisions of the Central Excise Act mandates the assessee to maintain records, this is more so, if the assessee claims a benefit of an exemption. The onus is on the assessee to establish that they are entitled for the benefit of an exemption notification. There can be no liberal interpretation on this issue and strict compliance is required. Thus, if the Tribunal found that no records have been maintained, it should have drawn adverse inference against the assessee and confirmed the order of the Adjudicating Authority. Thus perversity is writ large on the face of the order passed by the Tribunal. 12. The assessee's contention is that the Court cannot adjudicate on the rate of duty of the product or whether the benefit of a notification relating to a rate of duty could be applicable. We need not travel this far in the instant case, since to avail the benefit of any exemption notification, strict procedures have been laid down and without adhering to the procedures, no assessee registered under the provisions of the Act, is entitled to any relief. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o clandestine removal and the assessee cannot escape from the rigour of law by picking loopholes in the evidence placed by the department. It would be too far-fetched for the assessee to contend that even assuming that there was removal of excisable goods, yet the goods having been used for manufacture of product for export, benefit of exemption notification would be available. The assessee appears to have lost sight of the fact that any exemption from levy of duty is not automatic. Exemptions come along with conditions. Exemptions are either product specific or purpose specific or on other parameters. Exemptions can be conditional or absolute, yet it is an exemption. Therefore, strict interpretation is to be given and a person, who is charged of clandestine removal with sufficient evidence has to establish his innocence, having failed to discharge the burden cast on them and cannot be heard to say that despite all the charges against them, they are still entitled for exemption. 13. As pointed out by us, perversity is manifast in the order passed by the Tribunal. The materials such as gate passes etc., which were recovered during the search and analysed by the Adjudicating Authori ..... X X X X Extracts X X X X X X X X Extracts X X X X
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