2018 (4) TMI 956 – CESTAT NEW DELHI – TMI – Clandestine removal – corroborative evidences – Department has demanded the duty for the reason that there was high electricity consumption and on the basis of invoices / vouchers recovered during the period of search.
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Held that: – Apart from electricity consumption, no other corroborative evidence was collected by the department. No buyer of the finished goods was found or examined. No vouchers pertaining to raw material supply or inputs was found during the course of search. Other evidence regarding inputs, labour, transport were also not collected by the department – the clandestine removal is a very serious charge for which substantial evidence is required.
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Since, the department has not proved the clandestine removal of the finished goods with any corroborative evidence and made out a full proof case, demand cannot be confirmed – appeal allowed – decided in favor of appellant. – Excise Appeal No. 51934 -51935 of 2016 – Final
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material, production and clearance of finished goods. The finished goods of value of ₹ 6,90,000/- in aggregate were seized. A few vouchers were also recovered. On the basis of seized material, the department has made out a case of clandestine removal and demanded the duty along with penalties. Being aggrieved, the appellants have filed the present appeals. 4.. With this background, learned Counsel Shri Sudhir Malhotra, at the strength of written submissions submits that during the search in the premises, a file containing invoices dated 1.2.2011 to 29.3.11 were recovered. On the basis of recovered documents, duty demand of more than ₹ 3 crores was raised by the department but fact remains that the appellant is operating a very small rolling mills in the rented premise. The appellant does not possess any installation capacity to produce such quantity within a period of two months which was presumed by the Department. He also submits that period of dispute is November, 2009
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d it was only due to financial need, the appellant had aggravated their sale value by fabricating sale invoices to prove before the bank that they have high turn over. 9. Regarding the verification from the buyers, he submits that department has conducted inquiry with various parties who have denied any transaction with the appellant. This only proves that maximum invoices were fabricated and department could not unearth any evidence of removal of goods. 10. At the cost of repetition, learned counsel submits that except the sale invoices, no other documents such as purchase invoice or transport document were recovered from their factory, which clearly provides that said invoices were fabricated by them with sole intent to inflate the same for the banking authorities. 11. According to the learned Counsel, the sole basis for making the allegation is high consumption of electricity. He submits that there is heavy fluctuations and break down of the electricity during the relevant period, s
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ied the duty demand along with the penalty. 13. After hearing both the parties at length and on perusal of record, it appears that department has demanded the duty for the reason that there was high electricity consumption and on the basis of invoices / vouchers recovered during the period of search. 14. Regarding the electricity consumption, learned counsel also submitted that there was fluctuation / break down of electricity and each time furnace has to be restarted for which the extra electricity is required. We are satisfied that when there is fluctuation/ break down of electricity, for restarting the furnace, more electricity is required. 15. Regarding the allegation of vouchers, the submission of the department is that these vouchers were genuine. At the same time, the appellants submitted that fake vouchers were generated to show high turn over for obtaining the loan from the Bank. To this effect, the learned Counsel has produced a copy of the letter dated 15.2.2011 which was ad
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