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TMI Blog2025 (1) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... and grades - demand based on statements of various persons - admissible evidence or not - HELD THAT:- The said demand is on the basis of the details available in the estimates/debit memos recovered from Appellant s Mumbai and Delhi office and statements recorded by the investigating officers. It is noticed that in the said matter appellant requested for cross-examination of witnesses which was rejected by the Ld. Adjudicating authority. Further the director of Appellant s company has also retracted his statement by filing affidavits. It was on records that Appellant have raised the dispute on statements of witness recorded during the course of investigation by investigating officers. Therefore the said statement cannot be relied upon as admissible evidence in terms of the provisions of Section 9D of the Act. Reliance is placed on the ruling of the Hon ble Punjab Haryana High Court in the case of Jindal Drugs (Infra) [ 2016 (6) TMI 956 - PUNJAB HARYANA HIGH COURT] wherein the Hon ble High Court laid down the detailed procedure, inter alia, providing for cross-examination of the witness of the Revenue by the Adjudicating Authority and thereafter, if the Adjudicating Authority is sati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued to the Appellants asking them to pay the central excise duty of Rs. 4,24,48,496/- under proviso to Section 11A of the Central Excise Act, 1944. Penalty under Section 11AC of the Central Excise Act 1944 and Rule 25 of the Central Excise Rules 2002 has also been proposed. The SCN also proposes penal action on Shri Ganpatbhai D. Patel under Rule 26 of the Central Excise Rules, 2002. In adjudication the demands were confirmed by the adjudicating authority vide impugned order. Aggrieved, the appellants have filed the present appeals. 2. The Ld. Advocate, Shri Devashish K. Trivedi appearing for the appellants submits that as far the issue of mis- declaration of MRP prior to 01.03.2008, the same was decided in favour of assessees. He placed reliance on the case of Acme Ceramic Vs. Commissioner of Central Excise, Rajkot reported at -2014(304)ELT 542 (Tri. Ahmd.) 2.1 He also submits that said decision in the case of Acme Ceramic was consistently followed amongst other in the following cases. (i) Suzuki Ceramics Vs. Commissioner of C.Ex. ST., Rajkot - 2016 (334) ELT 169 (Tri. Ahmd.) (ii) Commissioner of Central Excise, Rajkot Vs. Citizen Ceramic - 2016 (339) ELT 105 (Tri. Ahmd) (iii) Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. (i) Andman Timber Industries Vs. Commr. Of C.Ex., 2015 (324) ELT 641 (SC) (ii) Jeen Bhavani International Vs. Commissioner of Customs, Nahva Sheva III (2023) 6 Centax 11 (Tri. Bom) (iii) Commr. Of C.Ex., Ahmedabad II Vs. Gujarat Cypromet Ltd. 2017 (345) ELT 520 (Guj) (iv) J K Cigarattes Ltd. Vs CCE 2009 (242) ELT 189 (Del.) (v) CCE Vs. Govind Mills Ltd. -2013 (294) ELT 361 (All) 2.6 He further argued that the statements of Director of the appellant was retracted by way of affidavit before Notary Public. Same was informed to the Adjudicating authority. Without prejudice to the same, even otherwise, it is settled law that the statement alone in absence of the corroborative evidence cannot be made a basis of confirming allegation of clandestine clearance. He placed reliance on the following judgments. (i) Godhavat Pan Masala Products Ltd. Vs. Commissioner of C.Ex. Pune -2004 (175) ELT 182 (Tri. Mumbai) (ii) Radheshyam Kanoria Vs. Commissioner of Central Excise. Thane II -2006 (197) ELT 130 (Tri. Mumbai) (iii) Pioneer Industries Vs. Commissioner of Central Excise, Mumbai II -2006 (193) ELT 506 (Tri. Mumbai) (iv) Chandan Tobacco Company Vs. Commissioner of Central Excise, Vapi -2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the boxes cleared from their factory premises. It is also undisputed that the appellant assessees are selling their final product ex-factory. 4.2 We find that the entire case of the Revenue as adjudicated by the Ld. Commissioner confirming the demand based upon the evidences such as the statements of various dealers who had stated that the tiles which are manufactured and cleared by the appellant are sold at a price more than the MRP declared on such tiles; statements of various shroffs/angadiyas who had stated that the appellants were handed over an amount in cash which were collected from various dealers and that the appellant-assessee have increased their prices of the final product. The issue involved in this case is regarding the demand of differential Central Excise duty under the provisions of Section4A of Central Excise Act, 1944 as it applies to the period in question. We find that the issue has been decided by larger Bench of this Tribunal vide order No.01-23/2024 dt. 23.01.2024 in the case of Ocean Ceramics Ltd. and subsequently on the answer given by the larger bench the division bench in the case of Ocean Ceramics others vide final order No. 12088-12113/2024 dtd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... answered in the following manner: (i) It is not permissible to ascertain the retail sale price of goods removed from the place of manufacture, without declaring the retail sale price of such goods on the packages or declaring a retail sale price which is not the retail sale price or tampering with, obliterating or altering the retail sale price declared on the package of such goods after their removal from the place of manufacture, in respect of clearances made prior to 01.03.2008, on which datethe Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 came into force; (ii) In view of the answer to the first question, there is no necessity of answering the second question; and (iii) It is not necessary to answer the third question as both learned counsel for the appellant and the learned special counsel appearing for the department have stated that this question may not be answered by the Larger Bench. 91. The papers may now be placed before the Division Bench of the Tribunal for deciding the appeal. It is apparent that the interim order removes the doubts raised by this bench with respect to the decision in case of Acme Ceramics (surpa). Consequently, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the truth of the facts which it contains, - (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable; or (b) when the person who made the statement is examined 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 provision of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this Act, other than a proceeding before a Court, as they apply in relation to a proceeding before a Court. 4.5 The above Section deals expressly with the circumstances in which a statement recorded before a gazetted officer of Central Excise (under Section 14 of the Act) can be treated as relevant for the purposes of proving the truth of the contents thereof. Reliance is placed on the ruling of the Hon ble Punjab Haryana High Court in the case of Jindal Drugs (Infra),2016 (340) E.L. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tine manufacture and clearances, would not be possible. What one could, however, say with some certainty is that inferences cannot be drawn about such clearances merely on the basis of estimates/ debit memos maintained. In the present matter the statements were not recoded of any buyer whose name is mentioned in said alleged estimates/debit memos. In the present matter there is no proof that Appellant has used 100% of its capacity for production of Tiles. Except for these private records, there is no substantial material to show that such a huge quantity of Tiles has been cleared to customers without payment of duty. There is no proof of purchase of raw materials for such huge quantity of Tiles. No evidence has been led by the Revenue to show that Appellant had actually produced alleged qty. of tiles supplied by them clandestinely. There is no evidence of transportation of tiles from factory. Undoubtedly, huge quantities of raw material would be required for manufacturing such a huge quantity of alleged cleared qty, of tiles. No evidence has been brought either in the SCN or in the Adjudication Order to show that raw materials have been purchased by Appellant for manufacture of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lished. Tribunal relied on the tabulated list of citations furnished by the Counsel that unless there is clinching evidence on the nature of purchase of raw material, use of electricity, sale and mode of flow back of funds, demands cannot be confirmed solely on the basis of note books maintained by some workers. (iii) In Hilton Tobacco v. CCE [2005 (183) E.L.T. 378], certain private documents maintained in the factory were seized under which it appeared that the appellant had not accounted for raw material procured by him. Tribunal held that an inference cannot be based on certain private documents only when there is no corroborative evidence recorded. Investigation had not found out at least a few buyers who had received the goods cleared clandestinely. There was no evidence of excessive consumption of electricity. When the unit was visited there was no unaccounted stock of raw material. Charges were based purely on theoretical working out based on private document which are not statutory. Relying upon the earlier decision of the Tribunal, it was decided that clandestine removal cannot be sustained. The source of procurement of raw material had not been established, buyers of fini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uppliers of raw material, except in respect of one of the raw materials. His cross examination has also been rejected. In the absence of any other tangible evidence to show that other major raw materials had been procured without recording the same in books of accounts, this Tribunal did not accept the contention of the Revenue that finished goods had been clandestinely manufactured and cleared. After referring to several earlier decisions of the Tribunal on the subject, the Tribunal held that the charge of clandestine manufacture was not established. This decision was taken by the Commissioner of Central Excise in appeal before the Hon ble High Court of Gujarat which was dismissed by the Hon ble High Court [2013 (287) E.L.T. 243 (Guj.)]. The Hon ble High Court quoted with approval paragraph Nos. 12, 13 16 of the order of the Tribunal which were extracted, stating that from findings of the Tribunal, it is clear that the appellant had not made any clandestine manufacture which he had removed clandestinely and on which duty was payable. In view of the above judgments facts of which are similar to that of the present case, the demand of Central Excise duty of Rs. 19,36,539/- on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o prove the allegation of clandestine sale, further corroborative evidence is also required. For this purpose no investigation was conducted by the Department. 4.10 The recovery of said unofficial ledger by department does not establish actual clearances of goods by the appellant. No evidence of actual clearance has been brought on record by Revenue. Further, as held by Hon ble Allahabad High Court that clinching evidence of the nature of purchase of raw material, use of electricity, sale of final products, clandestine removal and the more flow back of funds are required to be established in the case of clandestine removal. Such aspects have not been investigated into and therefore, the ruling by Hon ble Allahabad High Court in the case of Continental Cement Co. (supra) are applicable in the present case. We, therefore, hold that manufacture of such quantity of goods on which Central Excise duty of Rs. 17,05,961was demanded is not established. 4.11 Without prejudice, we also find that alleged clandestine clearance are completely based on the estimates/ debit memos/ challans retrieved from two computer CDs and also unofficial ledger maintained in computer. The allegation on the basi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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