2019 (2) TMI 567 – CESTAT NEW DELHI – TMI – Clandestine removal – MS Bars – demand based upon the recovery of kutcha slips, private ledger and the data available in the computer CPU and pen drive – Held that:- The entire case of the Revenue is based upon recovery of the so called incriminating evidence from the residential premises of one of the Directors. They have not adduced any evidence to connect these documents with the activities of the manufacturing unit. No further investigations stand made by them from the persons concerned with the production of the goods in the assessee’s factory and their clearances. Further, there is no identification of the transporters or the recipient of the goods, thus establishing that the appellant had actually cleared the goods in a clandestine manner.
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Though, Revenue is not expected to prove its case of clandestine activities to the hilt but the evidences produced by the Revenue should be, at least, to an extent so as to inspire confidence
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acture of MS bars. Their factory was visited by the Central Excise officers on 3.8.2010, who conducted various checks and verifications. Nothing incriminating was found. 2. However, the residential premises of one of the Directors Shri Rajesh Natani was also put to search on the same day and certain loose documents, kacchi parchi, private ledgers as well as computer laptop, pen drives and broken data card etc. were recovered. The same were seized under a Panchnama dated 3.8.2010 and a statement of Shri Rajesh Natani was recorded wherein he admitted the clandestine removal of the finished goods without payment of duty and also deposited an amount of ₹ 5 lakhs towards duty liability. The said statement was subsequently retracted by Shri Rajesh Natani on the next day itself. 3. The matter was further investigated and based upon the recovery of kutcha slips, private ledger and the data available in the computer CPU and pen drive, Revenue came to a conclusion that the appellant had in
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ty and has nothing to do with the manufacturing activities of the appellant. They also produced the ledger account of M/s Sanjog Steels to impress upon their stand that the entries in the ledger recovered from the residential premises were of M/s Sanjog Steels. It was further contended that in the appellant s premises, no stock taking of the final product or the raw materials was conducted so as to corroborate the charge of clandestine removal. Further, they submitted that the Revenue has not produced any evidence to show that the appellant had manufactured excess final product and has cleared the same in a clandestine manner. By referring to various judicial decisions, it was submitted that the clandestine removal allegations are required to be based upon production of positive and tangible evidence and cannot be upheld on the basis of assumptions and presumptions. 6. I find that the Commissioner (Appeals), though recorded all the above submissions of the assessee, observed that the o
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o identification of the transporters or the recipient of the goods, thus establishing that the appellant had actually cleared the goods in a clandestine manner. Though, Revenue is not expected to prove its case of clandestine activities to the hilt but the evidences produced by the Revenue should be, at least, to an extent so as to inspire confidence in the prosecution s case. In the present case, I note that no further investigations except the recovery of certain incriminating documents from the residential premises of the assessee s director read with his retracted statement, stand made. The findings of the clandestine activities cannot be upheld on the said documents, which were not even recovered from the premises of the manufacturing unit and as such has to be treated in the nature of third party documents. The same required corroboration, which the Revenue has failed to. 8. In view of the foregoing, I find no justification in upholding the impugned order. Accordingly, the same i
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