Custom, Excise & Service Tax Tribunal
Cce, Chennai Ii vs M/S. Rawf Re-Rollers on 25 September, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
E/509, 510 and 512/2002
(Arising out of Order-in-Appeal No. 53-55 & 71/2002 (M-II) dated 21.06.2002, passed by the Commissioner of Central Excise (Appeals), Chennai).
For approval and signature
Honble Shri P.K. DAS, Judicial Member
Honble Shri R. PERIASAMI, Technical Member
_______________________________________________________
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Departmental Authorities? ______________________________________________________
CCE, Chennai II : Appellant
Vs.
M/s. Rawf Re-rollers : Respondent
Appearance Ms. Indira Sisupal, AC (AR), for the appellant None for the respondent CORAM Honble Shri P.K. DAS, Judicial Member Honble Shri R. PERIASAMI, Technical Member Date of Hearing : 25.09.2014 Date of Decision: 25.09.2014 FINAL ORDER No. 40967-40969/2014 Per: R. PERIASAMI Revenue filed all the three appeals against the impugned order passed by the Commissioner (Appeals). Hence all the appeals are taken up together for disposal.
2. The brief facts, of the case, are that the respondents M/s. Rawf Re-rollers (RR) are engaged in the manufacture of M.S. Rounds falling under Chapter 72. On the investigation carried out by the DGAE, (SZU), it was revealed clandestine removal of 830.633 MTs of MS Rounds from M/s. Rawf Re-Rollers without payment of duty under the cover of bill traders invoice during the period 01.04.1996 to 17.08.1996. After detailed investigation statements were recorded from the appellants, SCN was issued to M/s. Rawf Re-Rollers proposing duty on MS Rounds manufactured and cleared by them and also proposed to impose penalty on the appellants as well as on others. The adjudicating authority in his order confirmed the demand and also imposed equivalent penalty under Section 11 AC of the Act. He also imposed penalty of Rs. 1,00,000/- on the appellants under Rule 173Q and also imposed personal penalty of Rs.1,00,000/- on Shri Mohammed Khan, Managing partner of the appellant Company and imposed a penalty of Rs. 1,00,000/- on Shri Abbas Khan, Proprietor of M/s. Rawf Industries (RI) an also imposed a penalty of Rs. 50,000/- each on Shri R. Murali. Broker, and on Shri Chander Sekar Sharma, Bill Trader, under Rule 209A of the Rules and also appropriated an amount of Rs.1,50,000/- paid by the appellants.
3. The Ld. AR appearing on behalf of the appellants reiterated the grounds of appeal and submits that the demand was rightly based under statements which were duly admitted by the individuals, managing partner of the RR. Since the respondents were never appeared for personal hearing, the question of allowing cross-examination does not arise. None appeared on behalf of the respondents. Sufficient opportunities were given to the respondents on several occasions. The matter case has been adjourned on 8/9/10, 23/11/10, 19/3/14, 8/7/14, 25/9/14 etc.
4. After hearing the Ld. AR, we have carefully considered the submissions, the grounds of appeal and perused the records. The Revenue preferred appeals against the impugned order passed by the Commissioner (Appeals) on the grounds that the Lower Appellate Authority set aside the adjudication order only on the grounds that the allegation of clandestine removal of M.S.Rounds is not supported by any corroborative evidence other than statements. Revenue also stated the statements recorded for the Brokers, Bill traders, Managing partners of both RR and RI are sufficient to establish the clandestine removal of finished goods.
5. On perusal of the show cause notice and adjudication order, prima facie, we find that the investigating officers conducted search on the appellants factory premises, three residence of individuals and drawn mahazar and recorded documents and also recorded statements from several individuals including the managing partners of the firms. However, there is not even a single record or document brought on record to correlate the allegation of illicit removal of M.S.Rounds from the appellants factory to establish evasion of duty of Rs. 10,63,530/-.
6. As rightly held by the Commissioner (Appeals) in his impugned order the findings of the Adjudicating Authority is cryptic and no cogent evidences brought to establish the clandestine removal and solely relied the statements of the persons. To establish clandestine clearance and evasion of excise duty, it is obligatory on the part of the Revenue to establish in clear terms with corroborated evidence, statutory records, financial transaction of the appellants or from the buyer etc.
7. There are several judicial pronouncements of the Honble Apex Court and High Courts and Tribunal wherein it has been consistently held that in the case of clandestine manufacture and removal of excisable goods, Revenue has to prove it beyond doubt. We rely on the Honble High Court judgment in the case of COMMISSIONER OF CENTRAL EXCISE Vs. BRIMS PRODUCTS - 2011 (271) E.L.T. 184 (Pat.) 8. Facts emanating from the records, disclose that the Central Excise authority itself has held with regard to two consignments out of four, that the investigation is incomplete and has been carried out only at the transporters end, thus, does not reveal actual purchase by the buyers. The authorities with regard to the aforesaid two consignments have also extended benefit of doubt to the respondent. We are of the opinion that there could not have any reason for arriving at different conclusion with regard to the remaining two consignments.
9. In our opinion, since the charge was for clandestine manufacture and surreptitious removal of finished final product, the same is required to be proved beyond doubt by the Revenue. One has to keep in mind that, though being the main ingredient, betel-nut is not the only raw material which is used in manufacture of Pan Masala. That apart, since the investigation has been carried only at the transporters end, no presumption could be drawn with regard to manufacture and removal of the final product. Presumptions and assumptions cannot take place of positive legal evidence, which are required for proving the charge. Even if, it is assumed that some raw materials were received at the factory of the respondent during the said period, the same cannot become conclusive proof of production and clandestine sale to different parties. Due to lack of positive evidence, benefit of doubt will always go in favour of the assessee.
10. Accordingly, we answer the reference against the Revenue and in favour of the assessee and it is held that the receipt of one of the raw materials, does not conclusively prove clandestine manufacture and surreptitious removal of finished final product. Further, since the charge is regarding clandestine manufacturer and removal of finished product for evading excise duty, the same cannot be held to be proved on the basis of principle of preponderance of probabilities and the Revenue has to prove the same beyond doubt. The reference is answered accordingly.
8. The above case law squarely applicable to the facts of the present case. As already discussed in the preceding paragraphs, the department had demanded excise duty on MS.Rounds, alleging that the respondents have clandestinely removed the goods by relying on the oral statements and without any corroborative evidence either from the respondents premises or from the Customer, Traders documents etc. Therefore, we find that the Commissioner (Appeals) has discussed issues at length and has given a detailed order while setting aside the order of the adjudicating authority. By respectfully following the Honble High Court judgment, we hold that there is no infirmity in the impugned order. Accordingly, we uphold the impugned order and reject all the three appeals filed by the Revenue.
(Operative part of the Order pronounced in the Open Court on 25.09.12)
(R. PERIASAMI) (P.K. DAS)
TECHNICAL MEMBER JUDICIAL MEMBER
BB
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