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TMI Blog2025 (2) TMI 1053X X X X Extracts X X X X X X X X Extracts X X X X ..... . The averment by the learned Authorized Representative that some of the supplies made may be fake is of no help at this stage. It was open to the Department to collect all the evidences and make precise allegations while issuing the Show Cause Notice. The bus having been missed, Revenue cannot open a new front to continue the litigation on the facts and records which were not part of the impugned proceedings. The charge of clandestine removal is a grave one. It has to be leveled with accuracy though mathematical precision cannot be expected.
Co-ordinate Bench of the Tribunal, in the matter of Nova Petrochemicals v. CCE, Ahmedabad-II, [2013 (11) TMI 626 - CESTAT AHMEDABAD] held 'There should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions.'
Appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... demand duty and proposing to recover fraudulently availed rebate/ refunds. Many such cases travelled up to the Tribunal; Tribunal has consistently held that the allegations leveled by the Department are not sustainable. He relies on the following cases: * Arora Aromatics, Sambhal Final Order No.71939 -71959/2017 dated 01.11.2017 (Tri. All.) * Neeru Enterprises, Salim Manzil, Rampur & Others 2019 - TIOL 3071 CESTAT CHANDIGARH. * Nanda Mint and Pine Chemicals Ltd. 2019 TIOL 743 - CESTAT CHANDIGARH. * M/s G Tech Industries, Jammu Final order No.63602-63606/2018 2018 (12) TMI 1234 CESTAT Chandigarh * Nectar Lifesciences Ltd. Final O rder No.63193 63196/2018-CESTAT CHD * SB Aromatics and others 2018 (11) TMI 830 (T). * Vaishno International and others 2018 TIOL 3999 CESTAT-CHD. * M/s Rajdhani Aromatics 2019 TIOL 2224 CESTAT CHD 3. Learned Counsel further submits that the impugned order has been passed without appreciating the documentary evidence submitted on record; evidence in the form of purchase invoices, related GRs showing proof of passing through various check-posts from J&K; sales tax returns, ledgers of input suppliers, factory store accounts, details of credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad an occasion to decide the case of V.S Industries and others, a case involving the same set of facts and evidences, vide Final Order No.60328-60330/2023 dated 31.08.2023. This Bench after analyzing the facts and evidences available on record and the decisions of the Tribunal in this regard has found the following: 8. After carefully considering the submissions of both the parties and perusal of material on record, we find that as per the allegation in the show cause notice, the investigation were undertaken by the Merrut Commissionerate and it was found that the suppliers of raw-material to the appellant were non-existent. Further, we find that the demands have been confirmed only on the basis that there was no alternative source of electricity generation which is factually incorrect. Further, we find that on the basis of the same investigation, the demands were confirmed against many parties and some of the decisions have been rendered by this Tribunal on the same allegations and the demands have been dropped. The issue involved in the present appeals is no more res-integra as this Tribunal as well as the Tribunal at Allahabad has consistently set-aside the demands by consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods. We further take note of the fact that the during the period of investigation itself, the appellants were allowed continue their activity by procuring inputs from UP based supplier and selling goods manufacturing to their buyers. During the course of investigation, itself shows that the allegation is only on the basis of the assumption and presumption, therefore, it cannot be held that the appellants were not manufactured the goods during the impugned period. Moreover, as per the report of Jurisdictional Commissioner to Chief Commissioner dated 21.05.2010 reveals as under: " 5. Thus the officers of Merrut-II Commissionerate, instead of selecting the consignments where no excisable goods were manufactured/supplied, have generalized that all the purchases of crude Mentha oil by these Mentha units located at Jammu were bogus units, these units did not have any infrastructure to manufacture the said products, were nonfunctional and Transporters who did not tum up for tendering statements were declared non-existent etc. however, on close scrutiny of the records, the following facts emerges: (i) Most of the consignments Most of the consignments of raw material were f raw materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Commissioner of Central Excise, Merrut is not sustainable. 8. Further, we take note of the fact that during the period of investigation itself, the appellant continued their activity by procuring inputs from U.P and selling the goods after manufacturing to the U.P based buyers and the Department allowed to continue the same during the course of investigation which shows that the allegation on the basis of investigation conducted at the end of Commissioner of Central Excise, Merrut is not sustainable that the appellant is not manufacturer the goods. Admittedly, duty is payable on the manufacture of goods and as per the report of the Commissioner of Central Excise, Jammu dated 25.02.2010, it has been revealed as under: " 5. Thus the officers of Merrut-II Commissionerate, instead of selecting the consignments where no excisable goods were manufactured/supplied, have generalized that all the purchases of crude Mentha oil by these Mentha units located at Jammu were bogus units, these units did not have any infrastructure to manufacture the said products, were non-functional and Transporters who did not tum up for tendering statements were declared non-existent etc. however, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal of the facts on record, we find that the basic allegations in the Show Cause Notice was that M/s Arora Aromatics did not receive inputs on which they availed Cenvat credit basically on the contention of Revenue that M/s Ruchi Infotech System, Jammu did not have facility to manufacture the inputs received by M/s Arora Aromatics and that the goods did not move from Jammu & Kashmir to the appellants factory and therefore, Cenvat credit was not admissible. The evidence submitted by the appellant inthe form of Order-in-Original passed by Commissioner of Central Excise, Jammu on 31/03/2008, wherein it was held that M/s Infotech System, Jammu was manufacturing the goods was not accepted by the Original Authority stating that the said Commissioner, Jammu did not see himself that the goods have been manufactured. If such a logic is accepted then the basic system of assessment by Authorities under tax statute needs to be concluded to have been not properly understood by the Adjudicating Authority. The present system of assessment in Central Excise is record based. The Officer assessing the duty is not required to be present when the goods are being manufactured to witness the process of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant, therefore, on the basis of evidences available on record, we hold that the appellant were manufacturing unit in the state of Jammu & Kashmir is entitled for benefit of the exemption Notification No. 56/2002-CE dated 14.11.2002 and claimed the refund of duty paid through PLA. In view of this, we set aside the impugned order and allow the appeal with consequential relief if any." 12. In view of the above analysis, we hold that the appellant M/s Abhay Chemicals was the manufacturer during the impugned period and paid the duty on the goods manufactured by them, therefore, duty cannot be demanded on the allegation that the appellant was not a manufacturer. Consequently, the cenvat credit can't be denied to the recipient of goods located in the State of U.P i.e. M/s Siddhant Chemicals and M/s Neeru Enterprises. Therefore, no penalty is imposable on the appellants. In view of the above, we set aside the impugned orders and allow the appeals with consequential relief." 7. We find that the evidence available in this regard has already been discussed by the Tribunal in the series of cases and it has been concluded that the evidences are not enough to sustain the demands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... damental criteria have to be established by Revenues which mainly are the following: (i) There should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions; (ii) Evidence in support thereof should be of: (a) Raw materials, in excess of that contained as per the statutory records; (b) Instances of actual removal of unaccounted finished goods (not inferential or assumed) from the factory without payment of duty. (c) Discovery of such finished goods outside the factory (d) Instances of sales of such goods to identified parties. (e) Receipt of sale proceeds, whether by cheque o by cash, of such goods by the manufacturers or persons authorized by him; (f) Use of electricity for in excess of what is necessary for manufacture of goods otherwise manufactured and validity cleared on payment of duty (g) Statements of buyers with some details of illicit manufacture and clearance; (h) Proof of actual transportation of goods, cleared without payment of duty (i) Links between the documents recovered during the search and activities being carried on in the factory of production; etc." 9. In view of the above, both ..... X X X X Extracts X X X X X X X X Extracts X X X X
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