9911796707
Advanced Search 
TMI Blog2023 (9) TMI 563X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.10.2007, wherein the appellants were permitted to use the Kamdhenu Trade Mark for sale of TMT Bars in the State of Jharkhand on a royalty of Rs.150/- per MT + Service Tax. 2.2 The appellants intimated the same to the Revenue vide letter dated 23.02.2008 with a copy of Agreement. 2.3 On 12.11.2008, a search was conducted on the premises of M/s Kamdhenu Ispat Limited (KIL) including the purported secret accounts office at J-1200, Palam Vihar, Gurgaon resulting in recovery of various incriminating records along with three laptops and two pen drives showing evasion of Central Excise duty as well as Service Tax, which, inter alia, showed that royalty was being collected by KIL from their franchise unit by use of "Kamdhenu" brand name without declaring it in their accounts. The receipt of such royalty amount from the Franchisee Manufacturers of KIL in the name of a firm, Jai Ambey, which is not existing and fictitious. 2.4 The statement of employee of KIL was recorded. A hard disk was seized from the various premises of KIL were sent for Forensic analysis to GEQD, Hyderabad. Further, the statement of official of KIL was recorded. 2.5 A show -cause notice dated 24.10.2011 was issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of third party record, the demand against the appellants is not sustainable. 3.3 He submits that in case one of the other franchisee of M/s KIL, the identical matter came for consideration before this Tribunal in the case of Giriraj Irosteel Company Private Limited Vs. Commissioner of Central Excise, Meerut II reported in 2019 (370) ELT 1649 (Tri. All.). In the said case, this Tribunal has dropped the proceedings against franchisee holding that the charge of clandestine removal is not sustainable on the basis of the records recovered from the possession of KIL. 3.4 With regard to shortage of 72 MT of M.S.Bars, it is his submission that on the date of visit, around more than 32000 bundles of MS Bars were found in stock and on the basis of one bundle of each size has been weighted and on the basis of it, it has been alleged that there was a shortage of 72 MT whereas whole of the stock as per books was 1704.28 MT and as per the said weighting method, it works out 1632.003 MT. The said weighment is done only on only one bundle each size. In such huge quantity of stock, shortage cannot be ascertained and it is only an eye estimation. Therefore, there is no shortage of stoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficers on 5-5-2012. At the time of visit statements of Shri Jagdish Prasad Jindal, Manager and Shri Deepak Maheswari, Accountant were recorded. In his statement dated 5-5-2012 Shri Jagdish Prasad Jindal, Manager stated that they used the brand 'Kamdhenu' since 2007-08 and paid royalty @ Rs. 200 per MT after the end of the month and the payments were made through cheques and no payment was ever made in cash. In respect of the difference between the details of royalty payment provided by him and available in the retrieved data, he informed that he had no knowledge about the same and stated that the appellant had paid royalty and service charge as per the chart provided by him which tallied with their ledger and bills raised by M/s. KIL. In his statement dated 5-5-2012 Shri Deepak Maheswari, Accountant stated that the payments to M/s. KIL were made through bank only and no cash payment was ever made in respect of royalty. On the basis of difference between royalty payments reflected in the books of account of appellant and those in the retrieved statement, it appeared to Revenue that appellant had paid royalty both through cheque and cash and total royalty paid if calculated would re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of royalty charges, Revenue has calculated the quantity of goods on which such royalty charges were paid and compared the said quantity with the quantity reflected in the records of the appellant and on the balanced quantity demanded Central Excise duty. For demand of such Central Excise duty, Revenue has not produced any evidence about the excess production of final product nor produced any evidence in respect of procurement of excess raw material. There is no evidence on record about the dispatch of excess quantity of goods through the transporters. Further, customers were also not identified and the consumption of power was also not taken into consideration. We note that Hon'ble Allahabad High Court in the case of Continental Cement Co. (supra) in paras 12 & 13 has held as follows :- "12. 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 flowback of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by producti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants. In the absence of of those evidences, merely alleging that franchisee has received over and above as declared by the appellants, the charge of clandestine removal is not sustainable as held by this Tribunal in the case of Giriraj Irosteel Company Private Limited (supra). 9. Therefore, following the decision of this Tribunal in the case of Giriraj Irosteel Company Private Limited (supra), we hold that the demand alleging clandestine removal on the basis of payment of royalty recorded in the books of M/s KIL, is not sustainable. Issue (b) 10. The shortage found during the course of stock taking on 01.04.2013, we find that more than 32000 bundles were lying in stock and on the basis of one bundle of each size, it is taken the basis for weightment, but it is not coming out from the facts that how more than 32000 bundles were counted ? These are only an eye estimation as no counting has been placed on record by the Revenue to allege the shortage of 72 MT in stock of more than 1700 MT. Therefore, as held by this Tribunal in the case of Sada Shiv Steel Mills Vs. CCE, Chandigarh I reported in 2017 (357) ELT 481 (Tri.-Chan), wherein this Tribunal has observed as under : "12. We ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
