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TMI Blog2024 (11) TMI 1220X X X X Extracts X X X X X X X X Extracts X X X X ..... ng scrap arising out of Kilns being fabricated and installed in the factory. Coming to the evidence on account of the data of sales said to be obtained from the CPU and based on the emails [forensically inspected], there is no clarity as to when the CPU was seized, and if seized, whether Panchanama was prepared towards the same is not coming out anywhere - The date of signing and date of printing gives raise to serious doubt towards the very veracity of the Revenue s claim. Added to this is the fact is the issue of retraction of the initially recorded statement of the officers of the appellant. The Electricity consumption used for arriving at the clandestine manufacture has been countered by the appellant to make their submission that since Kilns were being fabricated and installed in the factory premises, the electricity was being used. The Dept has not come out with any detailed analysis to negate the claim of the appellant. The proceedings are purely based on presumptions and assumptions without proper back up corroborative evidence. The issues raised by the Revenue have been answered satisfactorily by the appellant, thereby shifting the onus to prove the clandestine manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been issued towards these six trucks on 16 March 2018, so far no adjudication process has been taken up. (vii) He further submits that in the present case, all the recorded statements have been retracted by the persons who had given the statement. (viii) He submits that though the CPU was seized on 23.2.2017, it is recorded that the Statement that were printed out on 21.3.2017. Therefore, the retraction is correctly done by the persons who had recorded the statements. (ix) In view of this, he submits that there is no evidentiary value in the documents presented by the revenue. 4. He further submits that except for recording that there was substantial electricity consumption, there is no other corroborative evidence coming in from the Revenue side towards raw-materials purchase on cash basis, that production was undertaken and the same was cleared by way of various vehicles or the same was cleared to some parties whose statement was not recorded on the ground that they were buying the goods on cash basis and no private records have been seized towards the cash flow of the transactions. 5. Thus, he submits that there is absolutely no corroborative evidence brought in by the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 06.07.2016 with a closing stock of 99.371 MT. However, after receiving a complaint on 10.03.2017 that the unit was still running and goods were being manufactured and cleared clandestinely, investigation was taken up on 20.03.2017. (2). Six Trucks duly loaded with the materials were found to be ready for dispatch and the same was detained after due process. (3). E Mail IDs were investigated and the data was collected regarding the production and clearance details. These detailed investigation revealed that the manufacture and clearance was being carried throughout the period 06.07.2016 to 20.03.2017. (4). Corroborative evidence has been produced in the form of : (a) Electricity Consumption not having any significant change even during the closure period. (b) Joint analysis report was made for 6 days in September and October 2016, to show that the goods were cleared to four buyers. (c) Forensic analysis report dated 16.05.2018 of the CPU showed the traces of the e mail ID being used. (d) The stock report given to Punjab National Bank showed closing stock of 599.37 MT as on 31.01.2017, whereas on the date of closure the stock was shown as 99.371 MT. (5). Reliance has been place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew Kilns were already functional, whether they were already being used for the manufacturing purposes. 16. Even in respect of 6 trucks seized, the Revenue is yet to adjudicate the case. Hence, as on date the veracity of the claim by the Revenue that these trucks were containing finished goods for the purpose of clandestine removal, remains unverified, basically because of the fact that the proceedings in respect of this issue, is not yet adjudicated. 17. Coming to the evidence on account of the data of sales said to be obtained from the CPU and based on the emails [forensically inspected], there is no clarity as to when the CPU was seized, and if seized, whether Panchanama was prepared towards the same is not coming out anywhere. In the OIO and the written submission, the word used is resumed when speaking of the CPU, which we are constrained to interpret as seized . In such a case, non-preparation of Panchanama clearly showing the date and time at which the CPU was resumed does not help the cause of the Revenue. More particularly, when the appellant has claimed that the documents were printed elsewhere and after bringing the same back to the factory, the appellant s officers were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to check as to whether the factory was closed or was in working condition. 22. All these would lead us to conclude that the Revenue has proceeded basically on assumptions and presumptions, placing very heavy reliance on the stated CPU and E Mail data alone (that has been vehemently contested), and without making any effort to gather corroborative evidence towards purchase, vehicle movement, sales, cash transactions towards purchase / sales, statement from the purported sellers of raw materials and buyers of finished goods etc. 23. We also note that while the investigation started on 20.03.2017 and even the forensic report on the CPU was received by the Revenue in 2018, but still without any further investigation being carried out in the intervening period, the Show Cause Notice was issued on 26.03.2021, i.e after more than 4 years from the date of the visit of the officials and after nearly 3 years after the forensic results were obtained. This would again show that the Revenue was unable to take concrete steps to fortify its claim by obtaining further corroborative evidence, before issuing the Show Cause Notice. Tribunals have been consistently holding that such delayed issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be possible. As held by this Tribunal and Superior Courts, it would depend on the facts of each case. What once could, however, say with some certainty is that inferences cannot be drawn about such clearances merely on the basis of note books or diaries privately maintained or on mere statements of some persons may even be responsible official of the manufacture or even of its Directors/partners who are not even permitted to be cross-examined, as in the present case, without one or more of the evidence referred to above being present. 27. This decision has been affirmed by the Madras High Court as reported in - 2022 (380) E.L.T. 151 (Mad.), wherein it has held as under; The Tribunal also noted that if the assessee had to manufacture such huge quantity of Acid Slurry, it would require huge storage capacity of not only the raw materials, but also the finished products and the spent acid, which is a by-product, which is released during the manufacturing process and the same cannot be thrown out without clearance. Therefore, the Tribunal held that based on statements and private records, the demand of excise duty of clandestine removal cannot be sustained without corroborative evide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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