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TMI Blog2020 (9) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue itself that the statement was not produced in the computer which was seized, it is only having the backup data the data originally produced in different computer. As per the department the hard disc of the said computer was destroyed. Therefore it is clear that the computer which was seized, the data was not produced on the seized computer. No evidence was brought on record that the data retrieved from the computer was originally produced on different computer and the hard disc of the same was destroyed. It is only as per the statement of the director which was claimed by the appellant having been taken under duress and threat. As per clause (b) of Sub-section (2) of Section 36B the information must be regularly supplied to the computer during that period - In the present case the period involved is April, 2009 to June, 2012 during that period the computer which was seized was not in use therefore, clause (b) is not satisfied. Similarly, since the seized computer was not in use for the material period clause(c) is also not satisfied. Even the seized computer is not the computer to which the data was supplied in the ordinary course of the said activities, therefore, clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AND HON'BLE MEMBER (TECHNICAL), MR. RAJU Sh. Devashish K Trivedi, Advocate for the Appellant Sh. H K Jain, Assistant Commissioner (Authorised representative) for the Respondent ORDER The brief facts of the case are that the appellant M/S. WILSON PAPER MILLS PVT. LTD. is engaged in manufacture of Kraft paper falling under Tariff Heading 4804. They are registered with Central Excise Department for manufacture of excisable goods. 2. Based on intelligence, a search was carried out at the factory premises of M/S. GAJANAND PACKAGING, Morbi on 17.7.2012 and during the course of investigation and scrutiny of data it appeared to Investigating Officers that noticee no. 1 who were engaged in manufacture of Kraft paper were removing their excisable goods without issuing invoices and without payment of excise duty and thus indulged in evasion of Central Excise Duty by clearing/removing their goods clandestinely. Four dispatch slips were recovered which were kept in file which is marked as Annexure 'A' to the Panchnama dated 17/7/2012. A follow up raid was conducted at the factory of M/S. WILSON PAPER MILLS PVT. LTD. on 20-21/7/2012. Two delivery challans were recovered during search. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls Pvt. Ltd on 20-21/07/2012 b) Four dispatch slips recovered from factory of M/s. Gajanand Packaging, Morbi on 17/07/2012. c) Payment of ₹ 36,600/- in cash towards alleged clandestine clearances of M/s. Wilson Paper Mills Pvt. Ltd from a customer in Rajula, Gujarat. d) Shortage of physical quantity of 22,481 KGs.. of kraft paper, when stock taking was carried out and compared with Daily Stock Register. 4.1 He submits that such huge demand could not be supported by aforesaid four things. Without prejudice to the fact that there was no clandestine clearance at all, it is submitted that if two delivery challans and four dispatch slips, cash receipt of ₹ 36,000/- and shortage of physical quantity of 22,481 KGs.. as alleged is taken into consideration. At the best if at all, quantity of kraft paper as mentioned in the said two delivery challans, four dispatch slips would be 48,813 KGs. valued at ₹ 9,24,110/- and it would attract Central Excise Duty along with Cesses valued at ₹ 58,302/- only. However, by no stretch of imagination such huge demand could be supported. He submits that the statements are not admissible in evidence and could not be relied as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Divyang Paper Mills Pvt. Ltd, Morbi on 12/10/2012 5. Not a single incriminating document was recovered from any of the alleged buyers of alleged clandestinely cleared goods, whose statements are sought to be relied upon. He submits that certain depositions are contradictory in the statements given by various persons therefore such statements which are full of contradictions are not relied upon in evidence when not supported by concrete, tangible, corroborative evidence. This finds support from following judgments: * SULEKHRAM STEELS PVT. LTD. vs. COMMISSIONER OF C.EX., AHMEDABAD-II- 2011 (273) E.L.T. 140 (Tri.Ahmd.) * CUSTOMS Versus MOHAMMAD BAGOUR - 2012 (275) E.L.T. 513 (Del.) * COMMISSIONER OF C.EX., KANPUR Versus MANOJ KUMAR PANI- 2010 (260) E.L.T. 92 (Tri.Del.) * COMMISSIONER OF CENTRAL EXCISE, RAIPUR V/S. ANIL AGRAWAL-2013 (287) ELT 489 (TRI-DEL). 5.1 He also invited our attention to the judgments of Hon'ble Gujarat High Court in case of COMMISSIONER OF CENTRAL EXCISE Vs. SAAKEEN ALLOYS PVT. LTD.- 2014 (308) ELT 655 (Guj.). He submits that the statements were recorded only in respect of seventeen customers, the statements of many more alleged customers were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Billing Clerk and one in chamber of Director. Panchnama dated 20-21/07/2012 states that Girishbhai has stated that ledger account of M/s. GAJANAND PACKAGING, Morbi was maintained in computer lying in his house which was deleted last week. If the case of the department is that Forensic Expert was called, the data was retrieved, the question is why said Forensic Expert was not asked to retrieve data from all three of his computers. He submits that CPU got from the residence of the director was not in regular use on the facts that as per printouts the data was available up to 28/3/2012 whereas invoices were regularly issued up till 30/6/2012 that means the computer was not used after 28/3/2012. He further submits that the investigation would obviously record relevant history of computer i.e. 1. Under whose control 2. Who entered data. 3. On what basis such data was entered. 4. Who deleted data immediately after completion of search. 7. However, all these things are mentioned in the statements dated 1.7.2013 of Girishbhai (i.e. after nearly one year from panchnama dated 20- 21/07/2012) just to fill up the lacuna and clear the lapse. He submits that CPU was not seized in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umit Girishbhai Detroja, son of the director. This cannot be true because first of all it has a metal composition and it cannot be thrown in pulp machine which would damage the pulp machine. Secondly, no statement of Sumit Detroja was recorded. He was not even summoned. He further submits that mere entry in private books could not be used as evidence but there has to be factors such as surreptitious receipt of raw material, utilization of such raw material in clandestine manufacture, manufacture with reference to installed capacity, vehicle/truck intercepted or even in the factory premises loaded with goods, entries of illicit clearance in security gates records, etc. Therefore, since there is no aforesaid evidence the charge of clandestine removal will not sustain. He takes support from the following judgments:- * AARYA FIBRES PVT. LTD. V/s. COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD-II-2014 (311) ELT 529 (Tri.-Ahmd.) * AMBICA CHEMICALS V/S. COMMISSIONER OF CETRAL EXCISE, CHENNAI, 2002 (148) ELT 101 (TRI-CHENNAI) * R.A. CASTINGS PVT. LTD. V/S. COMMISSIONER OF CENTRAL EXCISE 2009 (237) ELT 674 (TRI-DELHI). * SAID JUDGMENT IS UPHELD BY HON'BLE HIGH COURT IN 2011 (269) ELT 337 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods mentioned in the said printouts were not manufactured goods, Except printouts, the investigating officers have not produced any evidence regarding procurement of raw material, power consumption, man power, manufacturing capacity, transportation, receipt of cash towards the sale proceeds to alleged clandestine removal. He placed reliance upon the following judgments:- * HANS CASTINGS PRIVATE LIMITED V/S. COLECTOR OF CENTRAL EXSCISE, KANPUR 1998 (102) E.L.T. 139 (Tribunal) * JAY LAMINART LIMITED v/S. COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD 1998 (102) E.L.T. 402 (Tribunal) * PRABHAVATI SAHAKARI SOOT GIRINI LTD V/s. CCE 1990 (48) E.L.T. 522 (T) * ROXY ENTERPRISES P. LTD. V/s. CCE 1992 (40) ECR 361 (T-NRB) * V.K. THAMPY V/s. COLLECTOR OF CENTRAL EXCISE, KOCHI 1994 (69) E.L.T. 300 (Tribunal) 11. In absence of above evidence merely on the basis of computer printouts the clandestine manufacture and clearance cannot be established. It is his submission that statements of seventeen buyers were arbitrarily taken, this seventeen buyers are said to have admitted the panchnama drawn at premises of M/s. Wilson. It is important because panchnama contains narration pertainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idences is necessary otherwise demand is not sustainable he finds support from the following judgment:- * AMBICA METAL WORKS v/S. COLLECTOR OF CENTRAL EXCISE, CALCUTTA- 1990 (29) ECR 549 * ICYCOLD COMMERCIAL ENTERPRISE V/S. COLLECTOR OF CENTRAL EXCISE, CALCUTTA-I -1994 (69) E.L.T. (Tribunal) * COMMISSIONER OF CENTRAL EXCISE, MADURAI V/s. RATNA FIRE WORKS 2005 (192) E.L.T. 382 (TRI-CHENNAI) * COMMISSIONER OF CENTRAL EXCISE, LUDHIANA V/s. RENNY CASTINGS (P) LTD. 2011 (274) ELT 94 (TRI-DELHI) * SAID JUDGMENT IS AFFIRMED BY HON'BLE PUNJAB & HARYANA HIGH COURT 2013 (288) ELT (P&H). * OUDH SUGAR MILLS LTD. V/s. UNION OF INDIA- 1978 (2) ELT (J172) (SC). * RUTVI STEEL & ALLOYS V/s. COMMISSIONER OF CENTRAL EXCISE, RAJKOT 2009 (243) ELT 154 * BANCO PRODUCTS (INDIA) LTD. V/S. COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, VADODARA-II, 2008 (232) ELT 762 (TRI-AHMD) 12.1 He submits that despite making categorical submission in reply to show cause notice before the adjudicating authority that the appellant have no manufacturing facility and capacity to manufacture such huge quantity of alleged clandestine removal. He submits that the adjudicating authority has brushed aside the same. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RAJASTHAN FASTENERS PVT. LTD.- 2013 (292) ELT 466 (TRI-DEL) * CENTRAL CABLES LIMITED V/s COMMISSIOER OF C.EX., NAGPUR 2011 (272) ELT 735 (TRI.MUMBAI) 12.3 He submits that since all the statements were recorded under the threat and duress and the same were not voluntarily given by the witnesses and the copies of the statements also not supplied at the time of recording the statements and the same was provided along with the Show Cause Notice. Since the appellants were not accepting their statements, the appellants have requested for cross-examination of witnesses before the adjudicating authority in respect of those statements recorded and relied upon in the Show Cause Notice in the appellant's reply dated 28/10/2014 and also in submission dated 11/05/2015. The adjudicating authority has arbitrarily denied the cross examination. He submits that provisions of Section 9D requires for cross examination of person whose statements are relied upon in the Show Cause Notice must be allowed. If the same is not allowed despite that their being a specific request such statements could not be admissible in evidence. He takes support for this submission from the following judgments :- * J & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delivery challan were destroyed. However, all the statements are fabricated and tailor made. The format of all the statements are copy paste therefore, the same could not be true because at no place any goods alleged to have been received without invoice were seized. There is absolutely no seizure either of any document or any goods. The said buyers of alleged clandestine goods have categorically in their respective replies before the Adjudicating Authority as well as in Appeal Memorandum filed before this tribunal that their signatures were obtained forcefully against their will on the statements which were prepared by the officers of the department themselves. He submits that even otherwise the statements could not be true because a perusal of the same could show that all of them were shown panchanama drawn at the factory premises of M/s. Wilson and all of them have admitted the entire panchnama, it means no mention that said buyers are not expected to know and admit the details pertaining to the other parties. Such blind admission itself suggests that the statements are fabricated. 14. In view of the above factual submission of the co-appellants also deserve waiver of penalties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ria. The appellant has wrongly contended the printouts taken from the seized computer cannot be relied upon in accordance with the provision of Section 36B(2) of the Central Excise Act, 1944. He submits that the adjudicating authority has given detailed finding at Para 35.1 to 35.6 wherein it was held that the condition mentioned in section 36B (2) have been fulfilled and the printouts taken from the seized CPU/computer are admissible evidences which are correctly relied upon by the Adjudicating Authority. 16.1 He submits that the adjudicating authority has given detailed finding that the buyers have categorically admitted their role in the clandestine removal of finished goods by the appellant during the relevant time. He also referred to Para 42 &43 of the impugned order. He submits that the order has discussed the establishment of cash flow through clandestine sale of finished goods by the appellant through confessional statement deposed by the person of Angadia firm. The raw material were supplied to the appellant without invoice as per the evidence collected during investigation therefore, the adjudicating authority has rightly imposed penalties under Rule 26 of the Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to discharge initial burden of proof through documents recovered, voluntarily statements given by the assessee's director and statements recorded from buyers thereafter onus is on the assessee to prove by evidences that there are no clandestine removal. In this regard he placed reliance on the following judgments:- * Hon'ble High Court of Madras in the case of C.EX, SALEM reported at 2019 (366) ELT 647 (Mad.) * N.R. SPONGE PVT. LTD. V/s. COMMISISONER OF C.EX, RAIPUR- 2020 (372) ELT 321 (Del.) * RELIANCE CABLE IND. v/S. COMMISSIONER OF CST (East) Delhi- 2019 (365) ELT 788 (Del.) * AAKASH FABRICS V/s. COMMISSIONER OF C.EX. & CUSTOMS, DAMAN- 2019 (368) ELT 22 (Guj.) 17. With his above submission he prays for dismissal of the appeal filed by the appellant. 18. We have heard both the sides and perused the records. The case of the departments is that the appellant have clandestinely manufactured and cleared 1,41,72,571 KGs of kraft paper which was valued at ₹ 24,71,33,466/- by evading excise duty to the tune of ₹ 1,15,72,496 during the period from April, 2009 to July, 2012. The investigating officers have conducted thorough investigation, during the investigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to in sub-section (1) in respect of a computer print out shall be the following, namely:- (a) the computer print out containing the statement was produced by the computer during the period over which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over that period by the person having lawful control over the use of the computer; (b) during the said period, there was regular supply to the computer in the ordinary course of the said activities, information of the kind contained in the statement or of the kind from which the information so contained is derived; (c) throughout the material part of the said period, the computer was operating properly or, if not, then any respect in which it was not operating properly or was out of operation during that part of period was not such as to affect the production of the document or the accuracy of the contents; and (d) the information contained in the statement reproduces or is derived from information supplied to the computer in the ordinary course of the said activities. (3) Where over any period, the function of storing or processing information for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upplied to it in the course of those activities; (c) a document shall be taken to have been produced by a computer whether it was produced by it directly or (with or without human intervention) by means of any appropriate equipment. Explanation.-For the purposes of this section,- (a) "computer" means any device that receives, stores and processes data, applying stipulated processes to the information and supplying results of these processes; and (b) any reference to information being derived from other information shall be a reference to its being derived therefrom by calculation, comparison or any other process." 19. As per the above section printed material produced by the computer shall be admissible as evidence only when the condition mentioned in Sub-section (2) and other provision contained in the said section 36B are satisfied. As per the condition laid down in subsection (2) the statement of computer printout must be produced by the computer during the period for which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over that period by the person having lawful control over the use of the computer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulfilment of certain conditions, detailed therein. The condition in respect of the computer print out laid down in that Section, as is evident from the reading of its clause (ii), is that, the computer print out containing the statement was produced by the computer during the period over which the computer was used regularly to store or possess the information. In the instant case, the print outs were not produced by the computer. Peripherals were picked up by the Officers from the Head Office-cum-Sale Depot of the appellants and they were inserted into the computer, and that too, not all but certain informations from the part of two zip discs were taken in the absence of the appellants. Certain zip discs were copied out by the Officers in the computer of the Department and that too without associating any authorized person of the appellants' company. As observed above, when the appellants wanted to have access to the peripherals and requested for obtaining the information or data from those peripherals, some floppies were found blank while some even could not run on the computer. The hard disc even could not be opened for the reason best known to the Department as all these periph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned as a witness in the case before the Court and the Court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub- section (1) shall, so far as may be, apply in relation to- any proceedings under this Act, other than a proceeding before a Court, as they apply in relation to a proceeding before a Court." 24. As per the above section even if the person against whom the statements of witnesses are used as evidence does not ask for cross-examination. The adjudicating authority if wish to rely upon such statement he must examine the witness before adjudication of case. In the present case despite the specific request by the appellant the adjudicating authority denied the cross-examination. The adjudicating authority also contended that none of witnesses who gave the statements has retracted their statement at any point of time. We find that copy of all the statements were not supplied by the department to the persons whose statements were recorded. The appellant have lodged their retraction while filing reply to Show Cause Notice as the statement copies were supplied only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... request stand rejected by the adjudicating authority on the ground that cross examination of 35 persons have been sought but no justification for the same has been given. He also rejected the request for cross-examination on the ground that no statement made by the said suppliers stand retracted. We do not find any justification for denial of such request. If the statements of traders (whether retracted or not) is sought to be relied upon in the show cause notice it was incumbent on the part of the Revenue to tender the above witnesses for cross examination. The statements of traders being in the nature of statement of coaccused, cannot be relied upon without putting the same through the test of cross examination. However, we do not feel inclined to remand the matter on this ground inasmuch as all the traders appearing before us have again reiterated their stand that no goods were actually supplied by them to M/s. A.S. CORPORATION under the cover of invoices raised by them and it was only bills which were issued against which payments were received by them by cheque from M/s. A.S. CORPORATION." 25. From the above judgment it is clear that even if there is no retraction of the wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not established against the appellant. We also find that except the above inadmissible evidences there is no evidence on the following:- i.) No evidence of physical manufacture of alleged clandestinely removed goods. ii.) There is no evidence of transportation of such removals. iii.) No evidence of receipt of cash against the alleged supply of huge quantity of goods valued at ₹ 24,71,33,466/- In absence of any of the above evidence the clandestine removal is not established. 27. The above position was considered by this tribunal in identical case which was upheld by the Hon'ble Gujarat High Court in the case of VISHWA TRADERS PVT. LTD. V/S. COMMISSIONER OF C.EX, VADODARA-2013 (287) ELT 243 (GUJ). The relevant order portion is reproduced below:- "7. The Tribunal in Paragraph Nos. 12, 13 and 16 has recorded clear finding that when the premises of the respondent were visited, the stock of raw-material and finished goods were tallying with the recorded goods. Further, nothing on record was found by the authority, which showed that unrecorded raw-materials were purchased or consumed by the respondent or that the respondent had clandestinely manufactured or removed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. VTPL, in the peculiar facts and circumstances of this case, we hold that the impugned order which confirms the demand on the appellant M/s. VTPL and imposes penalty on them is not sustainable and is liable to be set aside and we do so." 8. From the aforesaid findings of the Tribunal, it is clear that the appellant has not made any clandestine manufacture, which he has removed clandestinely and on which the duty was payable. 9. It is well settled that the findings of the Tribunal can be interfered only if it is perverse or some material evidence is ignored. In such circumstances, only the Court may exercise jurisdiction on issue which may give rise to any substantial question of law. In this appeal, no substantial question of law arises for consideration of this Court. 10. We agree with the view taken by the Tribunal, and the appeal is devoid of any merits. Both the questions raised by the appellant do not involve any substantial question of law and therefore, the appeal is dismissed." 28. The above judgment of the Hon'ble High Court has been upheld by the Hon'ble Supreme Court reported as VISHWA TRADERS PVT. LTD. V/S. COMMISSIONER OF C.EX,- 2014 (303) ELT A24 (SC). Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh and the company for engaging Shri Avtar Singh as contractor. In view of the matter as above, the authorities below have rightly held that the private records said to have been maintained by them cannot be relied upon. 6.3 It is not the case of the department that these entries were got explained by the authorized signatory or the director or any other responsible person of the company. It is also not the case of the department that the entries mentioned in the private records were corroborated by conducting investigation with the transporters or the recipient of allegedly clandestinely removed goods. It is not the of the department that evidence was produced in respect of any particular invoice that consignments have been cleared more than once such invoice. The department having recovered private documents, in our considered opinion, failed in conducting investigation in the relevant direction. 6.4 It is not a case that any authorised persons of the company admitted to unaccounted production and clandestine removal and therefore the officers felt that there was no need for further investigation. The authenticity of the documents seized and the veracity of the entries made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said that the department did not have any evidence regarding production capacity of the appellant's unit. 30. We find strong force in the submission of the appellant that they did not have production capacity of more than 10,000 MT P/A. Accordingly, the allegation of clandestinely manufactured and clearance over and above the production capacity is beyond imagination. The submission of the appellant is not much in dispute on the following points:- i) No investigation to find out how alleged surreptitiously procured raw material was transported there is nothing on record for illicit receipt of raw material. ii) The appellant has no production capacity of plant and machinery for the manufacture of alleged clandestine. iii) There is no excess electricity consumption iv) No employment of excess labour. v) There is no evidence of transportation of finished goods. vi) Cash flow back from buyers or cash payment of suppliers. 31. Accordingly, no credible independent evidence found therefore, the allegation of clandestine clearance is not sustainable. This is supported by the following judgments:- * RAJ RATAN INDUSTRIES LTD. v/S. COMMISSIONER OF CENTRAL EXCISE, KANPUR- 2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of presumptions and assumptions. Suspicion however grave cannot replace the proof. As rightly pointed out by the Hon'ble President with detailed findings, the link between the documents recovered in search and the activities of the appellants in their factory is required to be proved. However, I find that due to various reasons as recorded above, the Revenue has failed to prove the same. 136. The loose sheets, Kachcha Challans and hisaba books were not recovered from the factory of the appellant-company or from any of their office or residential premises. I find that for considering the same as relevant and credible material, on one hand a series of assumptions and presumptions are to be made, and on the other hand various fatal objections regarding veracity of the panchnama and the contents of these documents stated to have been seized in the course of panchnama, as correctly recorded in the detailed findings of the Hon'ble President are to be ignored. I agree with the reasons and findings recorded by the Hon'ble President that entire proceedings had lost their credibility and serious doubt arises about the credibility of the materials stated to have been collected in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on the contents of loose chits of uncertain authorship. Department has not produced evidence of use of inputs to prove that there was manufacture of unaccounted finished product. No statements have been obtained to show as to from whom raw materials were purchased. No evidence has been obtained for the use of electricity or receipt of sale consideration by the assessee to prove clandestine manufacture and sale. The department had obtained a statement from M/s. Dhanalakshami Traders, dealer in Potassium Chloride to the effect that the assessee herein had obtained from them on payment of commission, bills for having purchased raw material without purchasing any raw material. These bills covered a significant portion of the raw material involved in the unaccounted production determined. This statement on record does not support a conclusion of clandestine production based on the allegation of clandestine procurement and use of raw material. (This initial statement was retracted by the dealer, later). 23. A unit under physical control is visited by the officers of the department regularly and clearance of the goods is effected in their presence. In such a situation, it is not und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eover, the investigation has not found out at least a few buyers who have received the goods cleared clandestinely. There is no evidence of excessive consumption of electricity. When the officers visited the unit, they had not found out any unaccounted stock of cut tobacco. In the present case, the charges are based purely on a theoretical working out based on the private documents, which are not statutory. The Hon'ble CEGAT, in the case VST Industries Ltd. (cited supra), has held that the charges of clandestine removal cannot be based on assumptions and presumptions. In the Godfrey Philips case, the Tribunal has held that duty is not demandable on assumed productions. In the Sangamitra Cotton Mills case, it was held that in the absence of evidence of use of electricity, receipt of sale consideration to prove the event of manufacture and clearance of goods, clandestine removal cannot be sustained. In the Harinath Gupta case, it was held that the clandestine removal charge is not sustainable as the source of procurement of raw material has not been established, buyers of finished goods had not been contacted and the receipt of sale proceeds has not been proved. This is a case where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transporter. The Department could not identify and obtain a statement from the person who maintained the register of the transport company showing transport of raw material to the respondents. As these witnesses were not allowed to be cross-examined by the respondents their depositions could not have been relied on by the original authority. We find that in the instant case Revenue could not produce any evidence for receipt of the raw material and sale of the clandestinely cleared goods. There is no evidence of receipt of cash against unaccounted clearances. There was no attempt to ascertain any discrepancy in the stock of raw material or finished goods at the premises of the respondents. All these go to show that the finding of clandestine removal is based on assumption and presumption. Therefore, the Commissioner (Appeals) passed the impugned order vacating the order of the original authority based on sound grounds. We do not find that Revenue has raised any valid ground in the appeal and that the impugned order calls for any interference by us. 4. The case of the Revenue was that SSL diverted imported scrap violating provisions of law and had knowingly dealt with excisable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atio of the cited judgments, the assessee's appeal is allowed." (iii) In Chennai M.T.K. Gurusamy v. CCE, Madurai - 2001 (130) E.L.T. 344 (T), it was held that quantity of excisable goods clandestinely removed calculated on basis of transport companies' records was not sustainable. (iv) In Sanket Food Products Pvt. Ltd. v. CCE - 2005 (188) E.L.T. 107, the Tribunal held that when the proceedings against supplier of raw material was dropped evidence of such person in finding of supply of raw material for production and clearance of unaccounted goods could not be relied on. In the same decision the Tribunal had held that evidence of witnesses not available for cross-examination could not be used against the assessee. (v) In Premium Packaging Pvt. Ltd. v. CCE - 2005 (184) E.L.T. 165 (Tri. - Del.), the Tribunal held that charge of clandestine removal of dutiable goods had to be proved by the Department by adducing cogent, convincing and tangible evidence and not on assumptions and presumptions. It was also held that statements of Director and authorized signatory regarding receipt of raw material in a clandestine removal and manufacture of finished goods therefrom was not conclusiv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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