M/s Paragon Extrusions P. Ltd Versus Commissioner, CGST, Ghaziabad
Central Excise
2018 (8) TMI 1390 – CESTAT ALLAHABAD – TMI
CESTAT ALLAHABAD – AT
Dated:- 24-8-2018
Appeal No. E/70513/2018-EX[DB] – Final Order No. 72001/2018
Central Excise
Hon'ble Mrs. Archana Wadhwa, Member ( Judicial ) And Hon'ble Mr. Anil G. Shakkarwar, Member ( Technical )
Shri Rajesh Chhibber ( Adv ) for Appellant
Shri Sandeep Kumar Singh, Deputy Commissioner ( AR ), for Respondent
ORDER
Per: Archana Wadhwa
After hearing both the sides duly represented by Shri Rajesh Chhibber for appellant and Shri Sandeep Kumar Singh, A.R. for Revenue, we find that the appellant's factory, who is engaged in the manufacture of Aluminium Profiles (hollow) of various sizes and specifications, was visited by the Central Excise Officers on 14.05.2015, who conducted various checks and verifications. It was found that Daily Stock Register (RG-1) was written only up to 30.04.2015. On being questioned, Shri Jagdi
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sixty four thousand six hundred and eight rupees). Statement of Shri Jagdish Prasad, Authorised Signatory was recorded wherein he deposed that entries in the note book appears to have been made by the packing and dispatch staff of his company and related to the details of material packed along with details of dispatch of the material and the figures reflected against the entries T.B.L. denotes the total balance quantity available on a particular date after dispatch and the figures reflected against the entries T. Dispatch denotes the total dispatch quantity up to the date of particular month. Further, on being confronted with certain loose papers resumed by the officers, he deposed that the entries therein were entries by the dispatch staff of his company. On further pointing out to certain print out of loose papers, he submitted that some quantity might have been cleared by them without invoices and without payment of Central Excise duty.
2. On the above basis proceedings were initia
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of the Company who were looking after day to day work of the Company and were responsible for the functioning. As such by referring to various decisions he observed that the non-confessional statement of Shri Jagdish Prasad cannot be made the sole basis for upholding the allegations of clandestine removal unless such allegations are proved by the Revenue with corroborative, independent, cogent and concrete evidences. Accordingly, he vacated the show cause notice by observing as under:-
“On an overall view, I find that the case has been made out only on the basis of the statement recorded of Sh. Jagdish Prasad, Authorised Signatory of the unit and no other evidence in the form of raw material, payment received for clandestine removal of goods, how the goods were transported has been brought on record by the Authorities or the investigation team, therefore, relying on the said decision cited herein above I find that the charge of clandestine removal is not proved in the absence of any
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se papers and writing pads, he observed that such contentions of the assessee is deprived of any merit as it was always open to him at the time of the proceedings to deny that the said papers did not belong to the unit or were not made by his staff of the unit. As such he observed that based upon the statement of Shri Jagdish Prasad, Authorised Signatory, it has to be held that assessee has indulged in clandestine removal. Accordingly, he set aside the Order of the Original Adjudicating Authority and confirmed the demand of Rs. 5,60,088/-in respect of shortages detected in the stock of finished goods and of Rs. 64,64,608/- in respect of clandestinely manufactured and cleared finished goods along with confirmation of interest. He also imposed penalty of Rs. 70,24,696/- on the appellants under Rule 25(1) of the Central Excise Rules, 2002 read with Section 11(AC) of the Central Excise Act along with imposition of penalty of Rs. 1,00,000/- in terms of Rule 26 in the Central Excise Rules.
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. appears to be in the handwriting of dispatch and packing staff. Revenue has made no further efforts to get in touch with the said dispatch and packing staff or to find out who actually is the writer of the entries in the note pad. No enquiry stand made even from the Directors or from any other person/staff of the assessee. The entire case of the Revenue is based upon the not so confessional statement of Shri Jagdish Prasad.
Apart from the fact that the statement of Shri Jagdish Prasad was not confessional, we observe that even if the said statement is held to be confessional statement accepting clandestine removals the same cannot be made the sole basis for upholding the allegations of clandestine activity of the appellant. The deponent of the said statement was never put to Examination-in-Chief or cross examination and as such veracity of his statement has never been tested. Otherwise also it is well settled law that clandestine removal allegations cannot be upheld on the basis of
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e required to be produced by the Revenue upon whom the burden is cast heavily. To the same effect is the Tribunal's decision in the case of Commissioner of Central Excise, Ludhiana V/s Raj Lakshmi Dyeing & Printing Mills reported as 2014 (312) E.L.T. 379 (Tri.-Del.) as also in the case of Commissioner of Central Excise, Ludhiana V/s Renny Steel Castings (P) LTD. reported as 2011 (274) E.L.T. 94 (Tri.-Del.), as confirmed by the Hon'ble Punjab & Haryana High Court reported as Commissioner of Central Excise, Ludhiana V/s Renny Steel Castings (P) Ltd. reported as 2013 (288) E.L.T. 45 (P & H).
In view of the forgoing we find that the Revenue has failed to produce any evidence to establish clandestine removal on the part of the appellant. The Order of Commissioner (Appeals) lacks merits and is accordingly set aside and the order of the Original Adjudicating Authority is restored.
5. Similarly in respect of the shortages, it is well settled that mere shortages cannot lead to the allegation
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