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TMI Blog2020 (2) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... er have not dealt with the stand of appellant, do not have manufacturing capacity to manufacture the goods as alleged by the department. With respect to documents relied upon by department, the author of the said documents has not been identified and examined - In view of the law laid down by the Hon ble High Court of Chhattisgarh in the case of Hi-Tech Abrasives Ltd. Vs CCE Customs, Raipur, [ 2018 (11) TMI 1514 - CHHATTISGARH HIGH COURT ], the said documents cannot be relied upon. The department has also not enquired at the end of the buyers and there is no positive evidence adduced by the department. The demand has been confirmed on the basis of assumption and presumption - Therefore, demand of ₹ 44,06,966/- on alleged 2118.733 MT of SS Ingots clandestinely cleared for the period 18.08.2002 to 16.12.2002 is hereby set aside. Further, the stock taking has been conducted on eyes estimation basis, as can be seen from the Panchnama drawn at the factory premises. However, the director Mr. Raman Bhatia and the Authorized Signatory Mr. Rajesh Sharma had expressed satisfaction and agreed with the shortage computed - demand on the alleged shortages is confirmed, but penalties set as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit of ₹ 64,244 availed on the strength of invoices were no goods allegedly were received in the factory of the appellant. 3. The appellant filed reply dated 17.08.2007 to the show cause notice denying all allegations, however the learned Commissioner vide order-in-original dated 22.05.2008 confirmed the demand of ₹ 50,47,635/- along with interest and equivalent penalty without appreciating the submissions of the appellant and denying a proper opportunity of hearing. The appellant challenged the said order before this Tribunal in Appeal No. E/2082-83/2008, wherein this Tribunal held (Final order dated 19.09.2016) that the case of the department is not based only on the documents, and they are relying on various statements recorded under Section 14 of the Central Excise Act. Relying upon the decision of Hon ble High Court of Punjab and Haryana in the case of G-Tech Industries Vs UOI, 2016 (339) ELT 209 (P H), directed the learned Commissioner to follow the procedure set out n Section 9D of the Central Excise Act and guidelines as explained by the Hon ble High Court of Punjab and Haryana, after setting aside the said order. In the remand proceedings, the learned Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the learned Commissioner have relied upon the statements of Sh. Rajesh Sharma, Auth. Signatory of the appellant, Sh. Satish Kumar, Prop of M/s Haryana Punjab Transport Co and Sh. Rajendra Kumar- Driver, Sh. Subey Singh-gatekeeper, to confirm the details mentioned in the said note books. It is submitted that since the learned Commissioner had not followed the procedure set out in Section 9D of the Central Excise Act, as directed by this Tribunal, therefore the said statements have to be eschewed/ignored from evidence. Therefore, the said statements cannot be relied upon as held by the Hon ble High Court of Punjab and Haryana in the case of G-Tech Industries Vs UOI, 2016 (339) ELT 209 (P H). 4.7 It is respectfully submitted that the huge demand has been confirmed merely on the basis of some vague records, without adducing any other corroborative evidence. It is well settled law, as held by the Hon ble High Court of Allahabad in the case of Continental Cement Company Vs Union of India, 2014 (309) ELT 411 (All.), the department is required to adduce clinching evidence of the nature of purchase of raw material, use of electricity, sale of final products, payment, realization of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Sh. Raman Bhatia, Director of the appellant in his statement, has only accepted the shortages of goods and nothing else. It is further submitted that shortages can happen on account of improper accounting, manufacture of sub-standard goods, wastage in the process of manufacture or theft by workers. It is not possible for the appellant to daily weigh verify the stock in order to avoid the afore-stated possibility. It is also submitted that no reliance can be placed on the statement of Sh. Rajesh Sharma, as the learned Commissioner has not followed the procedure set out in Section 9D of the Central Excise Act. 4.12 It is therefore submitted that various courts including High Court and Tribunal have held that mere shortages do not lead to inevitable conclusion of clandestine removal of goods. The appellant places reliance on the following judgments rendered by Hon ble High Court and Tribunal: - i. B.K. Rolling Mills Pvt. Ltd, Others Vs CCE, Raipur, 2018 (2) TMI 1557 ii. CCE, Kanpur Vs. Minakshi Castings, 2011 (274) ELT 180 (All.) iii. CCE ST, Ludhiana Vs. Anand Founders Engineers, 2016 (331) ELT 340 (P H) iv. Shahi Exports Pvt. Ltd. Vs. CCE ST, Ghaziabad, 2017 (347) ELT 310 (Tri-De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, on perusal of the impugned order passed by the learned Commissioner, we find that the he has neither followed the provisions of Section 9D of the Central Excise Act, 1944, nor the law laid down by the Hon ble Punjab and Haryana High Court. We therefore find that, statements recorded under Section 14 of the Central Excise Act, cannot be relied upon and hence has to be eschewed from the evidence. We further find that the ld. Commissioner have not dealt with the stand of appellant, do not have manufacturing capacity to manufacture the goods as alleged by the department. We further find that with respect to documents relied upon by department, the author of the said documents has not been identified and examined. In view of the law laid down by the Hon ble High Court of Chhattisgarh in the case of Hi-Tech Abrasives Ltd. Vs CCE Customs, Raipur, 2018 (362) ELT 961 (Chhattisgarh), the said documents cannot be relied upon. The Hon ble High Court held as follow:- 12.2 We have gone through the detailed order passed by the adjudicating authority and we find that so far as the demand of challenge in the present case is concerned it rested only on two materials. One was the so called ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation. Therefore, demand on the alleged shortages is hereby confirmed. However, relying upon the decision of the Hon ble High Courts in the case of CCE, Kanpur Vs. Minakshi Castings, 2011 (274) ELT 180 (All.) and CCE ST, Ludhiana Vs. Anand Founders Engineers, 2016 (331) ELT 340 (P H). We therefore set aside the penalty of ₹ 5,76,425/-, on alleged shortages found in finished goods and raw materials. 9. We further find that Cenvat credit of ₹ 64,244 has been denied only the basis of statement of transporter and Sh. Rajesh Sharma (Authorized Signatory). We find that, the said statements has to be eschewed from evidence inasmuch provisions of Section 9D has not been followed. Therefore, the denial of cenvat credit of ₹ 64,244 is not legally sustainable and hereby set aside. 10. From the report dated 05.03.2019 of the range superintendent, we find that pursuant to remand, denovo proceedings commenced by issue of notice for PH on 18/19-4-17, without following the direction of this Tribunal, i-e, summoning the withnesses of Revenue and examining them and then offering them for cress examination have not been done. Further, RUD s, were not provided, although specific pra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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