Customs, Excise and Gold Tribunal - Bangalore
S.V.G. Granites (P) Ltd. vs Commissioner Of Cus. And C. Ex. on 14 December, 2006
ORDER S.L. Peeran, Member (J)
1. This appeal arises from Orders-in-Appeal Nos. 39 & 40/2006 dated 13-6-2006 by which the Commissioner (Appeals) has confirmed the OIO confirming the demands under Rule 9(2) of CE Rules on the allegation that there was shortage of Granites. Penalty has also been imposed. The Commissioner (Appeals) has reduced the penalty to Rs. 10,000/-.
2. None appeared for the appellant despite specific date given in the Stay Order. At the time of hearing the stay application, the Counsel submitted that mere shortage of 568.745 sq. mtrs. of Polished Granites cannot be considered as a case of clandestine removal. The officers took measurement of the stock of the Granites and as there was shortage found, the department proceeded to consider such shortage as a result of clandestine removal. The plea raised by the appellant is that there was loss due to breakage and as a result, the shortage occurred. This has not been accepted and no findings have been recorded. The learned Counsel submitted at the time of hearing the stay application that mere shortage found by measuring the Granites cannot be considered as a case of clandestine removal as held in the following rulings:
(a) Modipon Ltd. v. CCE, Meerut
(b) Motilal Padampat Udyog Ltd. v. CCE, Khanpur
(c) Shamsons (I) Ltd. v. CCE, Khanpur
(d) Plastic Duniya v. CCE, New Delhi
(e) P. S. P. Appliances (P) Ltd. v. CCE, Delhi-I 2005 (186) E.L.T. 128 (Tri.-Del.)
(f) Geekay Wires Pvt. Ltd. v. CCE, Hyderabad 2006 (200) E.L.T. 86 (Tri.-Bang.) He had submitted that there has to be evidence of removal of goods to transporters. There has to be evidence of purchasers and other corroborative evidences to establish the charge of clandestine removal. The same has not been produced by Revenue and the assumption raised that the measurement taken up of the granites shows shortage and the same has been removed clandestinely is not a correct conclusion.
3. The learned JDR submits that on taking of the physical stock, shortage was found and this has clearly led to the conclusion that the granites have been removed and, therefore, the confirmation of demands is justified. He submits that the Commissioner (Appeals) has already given the benefit in reducing the penalty.
4. On a careful consideration, it is seen that the appellants were engaged in manufacture and export of Polished Granite Slabs. While polishing the Granite slabs in terms of the manufacturing process, several pieces emerge as waste. The appellants explained that this shortage was as a result of waste which generated during the process of polishing the Granites. However, their plea has not been accepted. In order to establish clandestine removal, mere measurement of the stock of Granite slabs and finding some shortage cannot lead to a conclusion that there was clandestine removal. There has to be corroborative evidence of removal of Polished Granites, which is the final product to uphold the plea of clandestine removal. Both the orders have taken a view that the assessee has cleared Polished Granites and not the breakage/damaged pieces. Their plea has been rejected. In order to uphold the allegation of clandestine removal, the Revenue has to bring in corroborative evidence of clearance of the items without payment of duty to specific buyers. The evidence of transporters and receipt of payment is also another factor which has to be established. The judgments cited supra have clearly laid down the principles guiding the confirmation of demands in clandestine removal without payment of duty. These principles have not been satisfied in the present case. Therefore, the impugned orders are required to be set aside by allowing the appeal. The Stay Order No. 1341/2006 dated 27-11-2006, after due consideration, granted waiver of full pre-deposit on account of lack of evidence in the matter. There is no reason to take a different view in the matter as expressed in the Stay Order already. There is no merit in the impugned orders and are set aside by allowing the appeals with consequential relief, if any.
(Pronounced and dictated in open Court)