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TMI Blog2024 (1) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... sion as to how the shortages and alleged production and removal of clandestine manufactured goods took place. When the alleged value of the clandestinely removed finished goods is more than Rs. 50 crores, it is surprising that no effort whatsoever has been made by the Department to gather any corroborative evidence on relevant issues. The allegation of clandestine manufacturing/clearance is a serious allegation and the Department cannot merely rely on the recorded Statements alone and the quantification cannot be done based on the assumptions and presumptions without proper corroborative evidence in the form of evidence towards purchases, sales, movement of goods, electricity consumption, recorded statements of alleged purchasers and sellers etc. - In the present case, the Department has not made any efforts whatsoever on these counts. Even the recorded statement of Mr. A. K. Ladia has been retracted by him. Thus it loses its evidentiary value as held by Hon ble Chhattisgarh High Court in the case of M/S HI TECH ABRASIVES LIMITED VERSUS THE COMMISSIONER, CENTRAL EXCISE AND CUSTOMS RAIPUR [ 2018 (11) TMI 1514 - CHHATTISGARH HIGH COURT] . There are also force in the argument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired to furnish all the documents, the same were not given to them. Though the Appellant has filed a letter on 13/02/2008 clearly stating that the required documents have not been made available to them, still the Commissioner has erroneously held that all the documents have been made available to the Appellant. He draws our attention to the list of relied upon documents given at Page 4 of the Show Cause Notice dated 27/07/2004. He submits that the Tendered document Nos. 1 to 11, 16, 18, 19, 21 to 24, 30(1) to 30(8), 38, 39(1) to 39(7), 40 to 42 dated 01.09.2001 have not been provided to the Appellants at the time of Denovo Adjudication. He draws our attention to the letter dated 13/02/2008 (Page No. 288-289 of the Appeal Paper Book) wherein, they have stated that the documents provided are not the ones which are sought by them. Then he takes us to Para 5 of the OIO (Page 8 of the OIO) wherein, there is no mention about the Appellant s letter dated 13/02/2008. Therefore, the Learned Counsel submits that the Denovo Proceedings have been completed without the Appellant Company being handed over the documents which were actually directed by the earlier Bench to be handed over to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the confirmed demand is required to be set aside on merits. 7. He further submits that though the officials visited the Appellant s factory on 1st September 2001 and recorded the statement of A. K. Ladia on the same day, and also gathered various documents subsequently within the next few months, still the Department has issued the Show Cause Notice only on 27/07/2004. From the list of documents relied upon at Page No. 4 of SCN, he draws our attention to the fact that all the recordings of statements were completed by 29/4/2002 itself. Therefore, when the Department had all the relevant documents with them, there is no justification in waiting for more than two years to issue the Show Cause Notice on 27/07/2004. Therefore, he submits that entire demand is barred by limitation. 8. The Learned AR reiterates the findings of the lower authority. He submits that the Commissioner has clearly recorded the fact that the documents were properly handed over to the Appellant and only after that the adjudication proceedings were taken up for Denovo proceedings. He justifies the detailed findings of the Adjudicating Authority for confirming the demand. 9. Heard both sides and perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly removed finished goods is more than Rs. 50 crores, it is surprising that no effort whatsoever has been made by the Department to gather any corroborative evidence on the above issues. 12. The Tribunal in the case of Ambica Iron Steel Pvt. Ltd. Vs. Commr. of C. Ex., Cus. St, Rourkela cited supra has held as under:- 14 . The clandestine manufacture and removal of excisable goods is to be proved by tangible, direct, affirmative and incontrovertible evidences relating to (i) Receipt of raw material inside the factory premises, and non-accounted thereof in the statutory records; (ii) Utilization of such raw material for clandestine manufacture of finished goods; (iii) Manufacture of finished goods with reference to installed capacity, consumption of electricity, labour employed and payment made to them, packing material used, records of security officers, discrepancy in the stock of raw materials and final products; (iv) Clandestine removal of goods with reference to entry of vehicle/truck in the factory premises , loading of goods therein, security gate records, transporters documents, such as L.Rs., statements of lorry drivers, entries at different check posts, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Cement Company v. Union of India [2014 (309) E.L.T. 411 (All.)] - Para 12 Balashree Metals Pvt. Ltd. v. UOI [2017 (345) E.L.T. 187 (Jhar.)] - Para 5(vi) CCE, Meerut-I v. R.A. Castings Pvt. Ltd. [2012 (26) S.T.R. 262 (All.) = 2011 (269) E.L.T. 337 (All.)] Popular Paints and Chemicals v. CCE Customs, Raipur [2018 (8) TMI 473 (Tri. - Delhi)] - Para 17 18 . The Learned Commissioner has asserted in the impugned order that the demand based on the Kacha Chithas and the statement of Director is sustainable and that no further corroboration was required in view of the clinching nature of the oral and documentary evidence establishing clandestine production and removal of finished goods at para 17.2 of the Order-in-Original is clearly contrary to the judicial precedents cited supra. 19 . We further find that the contention of the Learned Commissioner in the impugned Order-in-Original that it is neither feasible nor desirable to cause enquiry at all possible points concerning the clearances at Para 17.5 of the impugned order itself clarifies that the demand has been raised solely on the basis of assumptions and presumption and no corroborative evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra has held as under:- 9.4 The legislative scheme, therefore, is to ensure that the statement of any person which has been recorded during search and seizure operations would become relevant only when such person is examined by the adjudicating authority followed by the opinion of the adjudicating authority then the statement should be admitted. The said provision in the statute book seems to have been made to serve the statutory purpose of ensuring that the assessee are not subjected to demand, penalty interest on the basis of certain admissions recorded during investigation which may have been obtained under the police power of the Investigating authorities by coercion or undue influence. [Emphasis supplied] 15. The High Court of Calcutta in the case of Commr. of Central Excise, Kolkata-II, Vs. Sai Sulphonate Pvt. Ltd., cited supra, has held as under:- 5. The assessee has filed appeal before the Tribunal challenging the said order and explained that their manufacturing activities as to how they were engaged in manufacture for themselves as well as they have been carrying on conversion job for another third party. After noting the facts the Tribunal held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 1978 (2) E.L.T. J172 (S.C.) and CESTAT s in the case of Punalur Paper Mills Ltd. v. CCE - vide Final Order Nos. 996-997/2008, dated 26-8-2008. The Hon ble High Court in the case of Continental Cement Company (supra) has inter alia observed as under : 13. .. to prove the allegation of clandestine sale, further corroborative evidence is also required . For this purpose no investigation was conducted by the Department.... 14. . 15. When there is no extra consumption of electricity, purchase of raw materials and transportation payment, then manufacturing of extra goods is not possible 7. Considering above discussions and the case laws cited above, we conclude that the Revenue has failed to reasonably prove suppressed production and clandestine clearance on the part of the appellants. Consequently, the impugned order in respect of confirmation of duty for alleged suppressed production, and imposition of fine and penalty on the appellant No. 1 and imposition of personal penalty of Rs. 40 lakhs on Shri Agarwal who is appellant No. 2 are hereby set aside. The appellants will get the relief accordingly. 17. From the above decisions, it gets clarifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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