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TMI Blog2020 (6) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... oose papers/rough papers. Further no evidence has been placed on record to show that excess raw materials were purchased or there was excess power consumption to corroborate the fact that there was clandestine removal. To prove the allegation of clandestine sale, further corroborative evidence was also required but no investigation was conducted by the Department - there is no evidence to support the allegations against the appellants. The adjudicating authority below has wrongly confirmed the demand despite there was no evidence to prove the alleged clandestine removal of goods by the appellants - appeal allowed - decided in favor of appellant. - Excise Appeal No. 51925 of 2017 [SM] & Excise Appeal No. 51927 of 2017 [SM] - FINAL ORDER No.50686-50687/2020 - Dated:- 10-6-2020 - HON BLE MRS. RACHNA GUPTA, MEMBER (JUDICIAL) Shri Manish Saharan, Advocate for the Appellant Shri K. Poddar, Authorised Representative for the Respondent ORDER The present order disposes of two appeals, the order in appeal bearing No. BHO-EXCUS-002-APP-172-17-18 dated 05.09.2017 being common and both the appellants being co-noticees. 2. The facts in brief for the purpose are as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovered along with interest at appropriate rate and proportionate penalties. 2.8 The Ld. Joint Commissioner vide its order in original dated 28.03.2016 confirmed the demand of Central Excise Duty of ₹ 39,24,978/- along with interest and penalty. Also imposed ₹ 5,00,000/- penalty on Shri. JP Agarwal under Rule 26 of Central Excise Rules, 2002. Further Commissioner Appeals upheld the adjudication order vide order dated 05.09.2017. Hence the present Appeals before this Tribunal. 3. I have heard Mr. Manish Saharan, learned Counsel for the Appellant and Mr. K. Poddar, learned D.R for the department. 3.1 It is submitted on behalf of the Appellant that the Ld. Commissioner in the impugned order merely on assumptions and presumptions basis has considered the shortage in stock due to non-accountal of clearances without payment of duty. In the impugned matter he ignored the statement of Shri. JP Agarwal, Director of Company, in his statement dated 27.12.2012, which has clearly explained the circumstances resulting into difference between the physical stock and the recorded balance in their books. 3.2 The reason given by JP Agarwal has nowhere been disputed by the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver the revenue officer did not find the author of said loose paper/rough paper, there is no any other evidence available to corroborate the charge of the show cause noticee. The department did not verify the contents of the said loose papers with any alleged buyer of the said goods or recorded the statements of the said buyers or transporters who transported the said goods. In the absence of such corroborative evidence, no reliance can be placed on the said loose papers/rough papers. Further no evidence has been placed on record to show that excess raw materials were purchased or there was excess power consumption to corroborate the fact that there was clandestine removal. 4.2 Hon ble High Court of Allahabad in the case of Continental Cement Co. Vs Union of India reported as 2014 (309) ELT 411 (Allahabad) had earlier laid down the criteria of investigation to prove the allegation of clandestine sale in following words: Further, unless there is clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f eye estimation and not to be the basis for quantifying demand for deciding charge of clandestine removal. 4.7 In case, clandestine removal/ shortages is alleged after stock verification by Department, it is Department only who has to discharge burden to establish the charges of shortages and clandestine removal as appears from Rules 9(1) and 173Q of Central Excise Rules 1944. Also errors may creep in the eye estimation of huge quantity of stock when there is no corroborative evidence regarding clandestine removal of goods, charge of clandestine removal stands un-established. In the name of corroboration department has emphasized upon the statement of Shri JP Agarwal alleging it as admission of shortage in stock and of clandestine removal. Payment of ₹ 4,06,081/- without protest is also emphasized as sufficient corroboration, but I observe that on being asked Mr. JP Agarwal has explained the reason of shortage as: On the date of physical verification of stock on 19.01.12 huge quantity of raw material and finished goods were lying in the factory. In physical verification, the stock has been determined on the basis of sectional weight of the goods which is not the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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