Custom, Excise & Service Tax Tribunal
Shri Ashok Verma vs Commissioner Of Central Excise & St, ... on 11 July, 2017
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SCO 147-148, SECTOR 17-C, CHANDIGARH 160 017 COURT NO. I Appeal No. E/60444/2016, E/60005,60362/2017-SM Date of Hearing/ Decision : 11.07.2017 [Arising out of Order-in-Appeal No. OIA-06-CE-COMMR-HG-RTK-2016-17 dated 31.05.2016 passed by the Commissioner (Appeals) Central Excise & ST., Rohtak] For approval and signature: Honble Mr. Ashok Jindal, Member (Judicial) Shri Ashok Verma : Appellant Shri Kishore Agarwal M/s. Kimberley Foods Pvt. Limited vs. Commissioner of Central Excise & ST, Rohtak : Respondent
Appearance:
Shri M.K. Gupta & Shri S.K. Gupta, Advocates for the Appellant(s) Shri Tarun Kumar, A.R. for the Respondent(s) CORAM:
Honble Mr. Ashok Jindal, Member (Judicial) Final Order No. 61255-61257 / 2017 Per : Ashok Jindal The appellants are in appeal against the impugned order wherein demand has been confirmed against them on the allegation of clandestine removal of goods, on the basis of statement given by Shri Kishore Aggarwal, one of the appellant here, and the data retrieved from the Laptop of Shri Lalit Agarwal and Shri Vikas Varshney, CA/Accountant of the firm owned by Shri Kishore Aggarwal.
2. The facts of the case are that the appellant is engaged in the manufacture of packaged drinking water in 20 Litres jars under the brand name of Kimberley, which is owned by them. The appellant is also manufacturing packaged drinking water in the brand name Kingfisher which is owned by M/s. UB Limited. On their own manufactured goods, the appellant is not paying duty by availing the benefit of SSI exemption but on the goods manufactured in the brand name Kingfisher the appellant is paying duty and clearing the goods on payment of duty. M/s. Iceberg Foods Limited (IFL for short) and M/s. Deo Pvt. Limited which relates to one of the appellant Shri Kishore Aggarwal was given franchisee of Kingfisher to which M/s. UB Limited was supplying materials like caps, stickers and empty jars etc. to the appellants through their distributors. The case of the Revenue is that investigation was conducted at end of M/s. IFL and M/s. Iceberg Aqua Pvt. Limited (IAPL for short), wherein incriminating documents were recovered and statements were recorded. On the basis of those incriminating documents and statements, the case was booked against all the persons dealing with IFL and IAPL. In that series of cases, the appellants case is also booked. On the basis of computer printouts recovered from CA/Accountant of M/s. IFL and M/s. IAPL, no investigation was conducted at the end of appellants except Shri Kishore Aggarwal. Only on the basis of these computer printouts, the show cause notice was issued to the appellants to demand duty on the ground of clandestine removal of goods during the period January 2007 to June 2009. The matter was adjudicated, demand of duty along with interest was confirmed and penalties were also imposed on the appellants. Aggrieved from the said order, the appellants are before me.
3. Ld. Counsel appearing for the appellants submits that the sole evidence on which the case made against the appellants is the computer printouts from the Hard Disk/ pen-drive recovered from the possession of Shri Lalit Aggarwal and Shri Vikas Varshney, CA/ Accountant of M/s. IFL/ M/s. IAPL. He submits that no procedure under Section 36B of the Central Excise Act, 1944 has been followed, therefore, the said documents cannot be relied upon to demand duty. Moreover, the demand cannot be confirmed on the basis of the documents recovered from a third party, without any corroborative evidence, therefore, the impugned order is required to be set-aside. To support these contentions, ld. Counsel relied on the decision of this Tribunal in the case of Modern Laboratories vs. CCE, Indore 2017-TIOL-1827-CESTAT-DEL. He also relied on the decisions in the case of Shivam Steel Corporation vs. CCE, BBSR-II 2016 (339) ELT 310 (Tri. Kolkata), Arya Fibers Pvt. Limited vs. CCE, Ahmd. 2014 (311) ELT 529 (Tri. Ahmd.), CCE, Raipur vs. Shree Harekrishna Sponge Pvt. Limited 2015 (329) ELT 422 (Tri. Del.).
4. On the other hand, ld. AR opposed the contentions of the ld. Counsel and submits that in this case the investigation was conducted at the end of IFL and IAPL wherein incriminating documents were recovered and they have admitted that they were indulged in the activity of manufacturing and clearing the goods without payment of duty and those admitted documents were made basis to allege the clandestine removal of goods against the appellant and relied upon by the adjudicating authority in the impugned order. Moreover, the existence of these documents have not been denied by M/s. IFL/ IAPL and admitted that these goods (packaging material) have been supplied to the appellants without payment of duty and the appellants have also not shown the same recorded in their record. He further submits that IFL/ IAPL have gone before the Settlement Commission and paid the duty as per the documents recovered from their possession. In that circumstance, he submits that the demands are to be confirmed against the appellant.
5. Heard both sides and considered the submissions. On careful consideration of the submissions made by both sides, I find that in the case in hand, it is admitted fact that the documents which have been relied upon to confirm the demand of clandestine removal of the goods against the appellants are based on the computer printouts from the hard disk/ pen drive recovered from the possession of Shri Lalit Gupta, CA and Shri Vikas Varshney of M/s. IFL/IAPL. It is also a fact on record that no investigation was conducted at the end of the appellant and the transporters were also not investigated to reveal the truth whether the clandestinely removed goods from IFL/ IAPL were transported up to the place of appellants. As the evidence of clandestine removal of packaging material from the premises of IFL/IAPL, up to the place of appellant are missing, therefore, charge of clandestine removal is not sustainable against the appellant. Moreover, no evidence has been put-forth by the Revenue that the packing material supplied by IFL/IAPL were used in the excess manufactured goods by the appellant. In fact, the duty is payable on the goods manufactured by an assessee. As the evidence of excess manufacture of goods is absent, the charge of clandestine removal is not sustainable. Moreover, the demand sought to be confirmed in the impugned order is on the basis of documents recovered from a third party, which have not been supported with any evidence. In that circumstance, I hold that demand against the appellant is not sustainable and the same is set-aside. As the impugned order is not sustainable, the question of imposing penalty on the appellants does not arise, the same is also set-aside.
6. With the above observations, the impugned order is set-aside, the appeals are allowed with consequential relief, if any.
(Order dictated and pronounced in the court) Ashok Jindal Member (Judicial) KL 5