Famous Ceramic Industries vs Rajkot on 20 November, 2025

[Cites 40, Cited by 0]

Custom, Excise & Service Tax Tribunal

Famous Ceramic Industries vs Rajkot on 20 November, 2025

Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench at Ahmedabad
REGIONAL BENCH-COURT NO. 1

Excise Appeal No. 10153 of 2022-DB

(Arising out of OIA-RAJ-EXCUS-000-APP-055-057-2021 Dated 17.12.2021 passed by Commissioner,
Central Excise, Customs and Service Tax-RAJKOT)

FAMOUS CERAMIC INDUSTRIES ........Appellant
8-A NATIONAL HIGHWAY AT LALPAR
MORBI, GUJARAT
VERSUS
Commissioner of C.E. & S.T.-RAJKOT ........Respondent
CENTRAL EXCISE BHAVAN,
RACE COURSE RING ROAD...INCOME TAX OFFICE,
RAJKOT, GUJARAT-360001
WITH

(i) Excise Appeal No.10154 of 2022-DB (SAVJIBHAI K SANARIA)
(ii) Excise Appeal No.10155 of 2022-DB (RAVIKUMAR R ADROJA)
(iii) Excise Appeal No.10182 of 2022-DB (SUNBEAM CERAMIC PVT LTD)
(iv) Excise Appeal No.10183 of 2022-DB (BHARAT RUGNATHBHAI KASUNDRA)
(v) Excise Appeal No.10222 of 2022-DB (BEJ CERAMIC)
(vi) Excise Appeal No.10223 of 2022-DB (VIJAYBHAI VALLABHBHAI ADROJA)
(vii) Excise Appeal No.10224 of 2022-DB (VALLABHBHAI BECHARBHAI PATEL)
(viii) Excise Appeal No.10225 of 2022-DB (NAVINBHAI B KUNDARIYA)
(ix) Excise Appeal No.10226 of 2022-DB (PRAKASHBHAI G GODHAVIYA)
(x) Excise Appeal No.10227 of 2022-DB (PRASHANT V PATEL)
(xi) Excise Appeal No.10228 of 2022-DB (FAMOUS VITRIFIED PVT LTD)
(xii) Excise Appeal No.10229 of 2022-DB (HIRENBHAI R KANANI)
(xiii) Excise Appeal No.10230 of 2022-DB (PIYUSH SAVJIBHAI SANARIYA)
(xiv) Excise Appeal No.10237 of 2022-DB (ACTIVE CERAMIC PVT LTD)
(xv) Excise Appeal No.10238 of 2022-DB (RAJESHBHAI CHHAGANBHAI BARAIYA)
(xvi) Excise Appeal No.10239 of 2022-DB (PRAYAG JAYANTILAL VANSJALIYA)
(xvii) Excise Appeal No.10240 of 2022-DB (ARVIND LAXMANBHAI
KANKASANIYA)
(xviii) Excise Appeal No.10304 of 2022-DB (LEGEND CERAMIC PVT LTD)
(xix) Excise Appeal No.10305 of 2022-DB (DUSHYANT BHAVJIBHAI PATEL)
(xx) Excise Appeal No.10339 of 2022-DB (ALIVE TILES PVT LTD)
(xxi) Excise Appeal No.10340 of 2022-DB (RAJNIKANT V PANCHOTIYA)
(xxii) Excise Appeal No.10341 of 2022-DB (KISHORBHAI L KANIKASNIYA)
(xxiii) Excise Appeal No.10342 of 2022-DB (CHETANKUMAR HARESHBHAI
SORIYA)
(xxiv) Excise Appeal No.10351 of 2022-DB (ADOR CERAMIC PVT LTD)
(xxv) Excise Appeal No.10352 of 2022-DB (NARESH KESHAVLAL RAJPARA )
(xxvi) Excise Appeal No.10353 of 2022-DB (ANTICA CERAMIC)
(xxvii) Excise Appeal No.10354 of 2022-DB (ASHWIN K DALSANIYA)
2 E/10153/2022-DB & 263 ors.

(xxviii) Excise Appeal No.10369 of 2022-DB (SIYARAM VITRIFIED PVT LTD)
(xxix) Excise Appeal No.10370 of 2022-DB (CHETANBHAI LALJIBHAI KALARIYA)
(xxx) Excise Appeal No.10371 of 2022-DB (JAYESH THAKARSHIBHAI VARSDA)
(xxxi) Excise Appeal No.10374 of 2022-DB (KUSHAL RAMESHBHAI KANJIYA)
(xxxii) Excise Appeal No.10375 of 2022-DB (CHIRAG MANUBHAI UJARIYA)
(xxxiii) Excise Appeal No.10376 of 2022-DB (JAYPRAKASH N BAVARVA)
(xxxiv) Excise Appeal No.10398 of 2022-DB (SURESHBHAI JEEVRAJBHAI PATEL)
(xxxv) Excise Appeal No.10400 of 2022-DB (SEPAL CERAMIC)
(xxxvi) Excise Appeal No.10408 of 2022-DB (HOLLIS VITRIFIED PVT LTD)
(xxxvii) Excise Appeal No.10409 of 2022-DB (JATIN DHARMSHIBHAI KAGATHARA)
(xxxviii) Excise Appeal No.10410 of 2022-DB (DINESHBHAI HANSRAJBHAI
RANGPARIYA)
(xxxix) Excise Appeal No.10411 of 2022-DB (DHARMSHIBHAI BECHARBHAI
KAGATHARA)
(xl) Excise Appeal No.10416 of 2022-DB (BENITO CERAMIC PVT LTD)
(xli) Excise Appeal No.10439 of 2022-DB (NARESHBHAI DEVJIBHAI MERJA)
(xlii) Excise Appeal No.10440 of 2022-DB (BHARATBHAI DEVJIBBHAI MERJA)
(xliii) Excise Appeal No.10441 of 2022-DB (SUDHIRKUMAR HARJIBHAI MERJA)
(xliv) Excise Appeal No.10442 of 2022-DB (RASHMIBHAI DEVJIBHAI MERJA)
(xlv) Excise Appeal No.10445 of 2022-DB (ALPESHBHAI JERAMBHAI PATEL)
(xlvi) Excise Appeal No.10446 of 2022-DB (ANIL PRABHUBHAI SANJA)
(xlvii) Excise Appeal No.10447 of 2022-DB (LALJIBHAI THOBHANBHAI PATEL)
(xlviii) Excise Appeal No.10448 of 2022-DB (CHIRAGBHAI RATANJIBHAI SANJU)
(xlix) Excise Appeal No.10449 of 2022-DB (YOGESH PRABHUBHAI SANJA)
(l) Excise Appeal No.10451 of 2022-DB (MAGNUM CERAMIC PVT LTD)
(li) Excise Appeal No.10452 of 2022-DB (VELJIBHAI KHODABHAI UGHREJA)
(lii) Excise Appeal No.10453 of 2022-DB (MUKESHBHAI N UGHREJA)
(liii) Excise Appeal No.10455 of 2022-DB (FLECTO CERAMIC PVT LTD)
(liv) Excise Appeal No.10456 of 2022-DB (PATEL DAMJIBHAI DEVJIBHAI)
(lv) Excise Appeal No.10457 of 2022-DB (PATEL MANILAL DEVJIBHAI)
(lvi) Excise Appeal No.10458 of 2022-DB (PAIJA NIKUNJ DEVJIBHAI)
(lvii) Excise Appeal No.10459 of 2022-DB (DELPHI CERAMIC)
(lviii) Excise Appeal No.10462 of 2022-DB (ORKEN CERAMIC PVT LTD)
(lix) Excise Appeal No.10463 of 2022-DB (RAMESHBHAI V PATEL)
(lx) Excise Appeal No.10464 of 2022-DB (LAVJIBHAI SHERASIA)
(lxi) Excise Appeal No.10465 of 2022-DB (HARKHJIBHAI D BHORANIYA)
(lxii) Excise Appeal No.10466 of 2022-DB (HASMUKHBAHI H BHORANIYA)
(lxiii) Excise Appeal No.10467 of 2022-DB (KUNVARJI V KALARIA)
(lxiv) Excise Appeal No.10468 of 2022-DB (NAYNABEN M PATEL)
(lxv) Excise Appeal No.10469 of 2022-DB (MANSUKHLAL H PATEL)
(lxvi) Excise Appeal No.10470 of 2022-DB (SMT SAROJBEN H BHORANIYA)
(lxvii) Excise Appeal No.10471 of 2022-DB (PERFECT CERAMICS)
(lxviii) Excise Appeal No.10501 of 2022-DB (ANITLA CERAMIC PVT LTD)
3 E/10153/2022-DB & 263 ors.

(lxix) Excise Appeal No.10507 of 2022-DB (ROSSA TILES PVT LTD)
(lxx) Excise Appeal No.10508 of 2022-DB (NARBHERAM PARSHOTTAMBHAI
NARANIYA)
(lxxi) Excise Appeal No.10509 of 2022-DB (MANHARLAL S PATEL)
(lxxii) Excise Appeal No.10530 of 2022-DB (OSHO SANITARYWARES PVT LTD)
(lxxiii) Excise Appeal No.10535 of 2022-DB (ARROW CERAMICS)
(lxxiv) Excise Appeal No.10536 of 2022-DB (SUNITABEN H FULTARIA)
(lxxv) Excise Appeal No.10537 of 2022-DB (DAYALAL J GHETIA)
(lxxvi) Excise Appeal No.10538 of 2022-DB (MADHUBEN D FULTARIA)
(lxxvii) Excise Appeal No.10539 of 2022-DB (MADHUBEN D GHETIA)
(lxxviii) Excise Appeal No.10540 of 2022-DB (ASHWIN G PATEL)
(lxxix) Excise Appeal No.10541 of 2022-DB (DHARAMSHIBHAI J PATEL)
(lxxx) Excise Appeal No.10542 of 2022-DB (DAMJIBHAI J PATEL)
(lxxxi) Excise Appeal No.10543 of 2022-DB (PRANJIVAN R MAGUNIYA)
(lxxxii) Excise Appeal No.10544 of 2022-DB (AJAY K BHIMANI)
(lxxxiii) Excise Appeal No.10545 of 2022-DB (HITESH D FULTARIA)
(lxxxiv) Excise Appeal No.10553 of 2022-DB (SAHEB CERAMIC PVT LTD)
(lxxxv) Excise Appeal No.10554 of 2022-DB (SURESH HIRALAL AGHARA)
(lxxxvi) Excise Appeal No.10555 of 2022-DB (KRUSHNAKUMAR B BHATASANA)
(lxxxvii) Excise Appeal No.10556 of 2022-DB (ASHOK KUMAR P BHATASNAA)
(lxxxviii) Excise Appeal No.10568 of 2022-DB (OMEX CERAMICS)
(lxxxix) Excise Appeal No.10569 of 2022-DB (JADAVJIBHAI H FEFAR)
(xc) Excise Appeal No.10570 of 2022-DB (BHAVNABEN N FEFAR)
(xci) Excise Appeal No.10571 of 2022-DB (KARSHANBHAI R FEFAR)
(xcii) Excise Appeal No.10572 of 2022-DB (SURESHBHAI K FEFAR)
(xciii) Excise Appeal No.10573 of 2022-DB (RAMESHBHAI V FEFAR)
(xciv) Excise Appeal No.10574 of 2022-DB (DAYABHAI K BHADJA)
(xcv) Excise Appeal No.10575 of 2022-DB (MADHUBEN A PARMAR)
(xcvi) Excise Appeal No.10576 of 2022-DB (HANSABEN M FEFAR)
(xcvii) Excise Appeal No.10577 of 2022-DB (JAYANTIBHAI P SANARIYA)
(xcviii) Excise Appeal No.10580 of 2022-DB (OMEXO TILES)
(xcix) Excise Appeal No.10581 of 2022-DB (RAMNIKLAL BHAGWANJIBHAI
ADROJA)
(c) Excise Appeal No.10582 of 2022-DB (JITENDRABHAI THOBHANBHAI
ADROJA)
(ci) Excise Appeal No.10583 of 2022-DB (PARESH PARSHOTTAMBHAI FALDU)
(cii) Excise Appeal No.10584 of 2022-DB (HARESH CHHAGANBHAI ADROJA)
(ciii) Excise Appeal No.10585 of 2022-DB (MEHUL CHATURBHAI MAKASANA)
(civ) Excise Appeal No.10586 of 2022-DB (SMT ANJANABEN MANISHBHAI ADROJA)
(cv) Excise Appeal No.10587 of 2022-DB (SMT VARSHABEN KANTIBHAI ADROJA)
(cvi) Excise Appeal No.10588 of 2022-DB (SMT BHAVNABEN BHARATBHAI
ADROJA)
4 E/10153/2022-DB & 263 ors.

(cvii) Excise Appeal No.10589 of 2022-DB (MANISHBHAI THOBHANBHAI
ADROJA)
(cviii) Excise Appeal No.10590 of 2022-DB (SMT SAROJBEN JITENDRABHAI
ADROJA)
(cix) Excise Appeal No.10591 of 2022-DB (SMT NAYNABEN RAMNIKLAL ADROJA)
(cx) Excise Appeal No.10592 of 2022-DB (BHARATBHAI THOBHANBHAI ADROJA)
(cxi) Excise Appeal No.10593 of 2022-DB (SMT SARASWATI MANILAL ADROJA)
(cxii) Excise Appeal No.10605 of 2022-DB (LEMON CERAMIC PVT LTD)
(cxiii) Excise Appeal No.10606 of 2022-DB (PRAVINBHAI DAMJIBHAI
MUNDADIYA)
(cxiv) Excise Appeal No.10607 of 2022-DB (KIRTIKUMAR DHANJIBHAI
SANAVADA)
(cxv) Excise Appeal No.10633 of 2022-DB (NELCO CERAMICS)
(cxvi) Excise Appeal No.10634 of 2022-DB (RAJNIBHAI GIRDHARBHAI ADROJA
PARTNER)
(cxvii) Excise Appeal No.10638 of 2022-DB (ORBIT CERA TILES PVT LTD)
(cxviii) Excise Appeal No.10639 of 2022-DB (MAVJIBHAI PARSHOTTAMBHAI
SORIA)
(cxix) Excise Appeal No.10640 of 2022-DB (NEHA CERAMIC INDUSTRIES)
(cxx) Excise Appeal No.10641 of 2022-DB (BALVANTBHAI K SORIA)
(cxxi) Excise Appeal No.10642 of 2022-DB (JAYSUKHBHAI K SORIA)
(cxxii) Excise Appeal No.10643 of 2022-DB (BHAVNABEN JAYSUKHBHAI SORIA)
(cxxiii) Excise Appeal No.10650 of 2022-DB (ADMARK CERAMIC INDUSTRIES)
(cxxiv) Excise Appeal No.10659 of 2022-DB (HILLTOP CERAMICS)
(cxxv) Excise Appeal No.10660 of 2022-DB (TRIGUNBHAI B PATEL)
(cxxvi) Excise Appeal No.10661 of 2022-DB (RANDIPBHAI B PATEL)
(cxxvii) Excise Appeal No.10680 of 2022-DB (SAMRAT SANITARYWARES PVT LTD)
(cxxviii) Excise Appeal No.10681 of 2022-DB (HARSHADKUMAR RAMJIBHAI
AMRUTIYA)
(cxxix) Excise Appeal No.10682 of 2022-DB (DEVENDRABHAI BACHUBHAI PATEL)
(cxxx) Excise Appeal No.10683 of 2022-DB (PRAGJIBHAI BACHUBHAI
CHATROLA)
(cxxxi) Excise Appeal No.10695 of 2022-DB (DELTA TILES LTD)
(cxxxii) Excise Appeal No.10696 of 2022-DB (LALJIBHAI ANANDBHAI PATEL)
(cxxxiii) Excise Appeal No.10697 of 2022-DB (DARSHANBHAI SANGHANI)
(cxxxiv) Excise Appeal No.10698 of 2022-DB (VARMORA GRANITO PVT LTD)
(cxxxv) Excise Appeal No.10699 of 2022-DB (RAMANBHAI JIVRAJBHAI PATEL)
(cxxxvi) Excise Appeal No.10700 of 2022-DB (NARANBHAI HANSRAJBHAI PATEL)
(cxxxvii) Excise Appeal No.10702 of 2022-DB (COMMANDER CERAMICS
INDUSTRIES)
(cxxxviii) Excise Appeal No.10703 of 2022-DB (SHIRISH HIMATLAL THORIYA)
(cxxxix) Excise Appeal No.10704 of 2022-DB (BABULAL DHARAMSHI KOTADIYA)
(cxl) Excise Appeal No.10705 of 2022-DB (NARANBHAI DHARAMSHI KOTADIYA)
5 E/10153/2022-DB & 263 ors.

(cxli) Excise Appeal No.10706 of 2022-DB (VANITABEN DAYARAM CHADAMIYA)
(cxlii) Excise Appeal No.10707of 2022-DB (BHARATKUMAR DHARAMSHI
KOTADIYA)
(cxliii) Excise Appeal No.10708 of 2022-DB (DAYARAMBHAI DHARAMSHI
SHORIYA)
(cxliv) Excise Appeal No.10709 of 2022-DB (PREMJI NARASHIBHAI CHADAMIYA)
(cxlv) Excise Appeal No.10710 of 2022-DB (SHARAD HARAJIVANBHAI MERAJA)
(cxlvi) Excise Appeal No.10711 of 2022-DB (AMBARAM GANESHBHAI KOTADIYA)
(cxlvii) Excise Appeal No.10713 of 2022-DB (REDSTONE GRANITO PVT LTD)
(cxlviii) Excise Appeal No.10714 of 2022-DB (VISHAL PRAVINBHAI RAIYANI)
(cxlix) Excise Appeal No.10715 of 2022-DB (RAMESHKUMAR JIVRAJBHAI
RANIPA)
(cl) Excise Appeal No.10716 of 2022-DB (NILESHKUMAR JAMNADAS BHALODIYA)
(cli) Excise Appeal No.10717 of 2022-DB (ARAVIND BECHARBHAI BHIMANI)
(clii) Excise Appeal No.10727 of 2022-DB (OMSON CERAMIC)
(cliii) Excise Appeal No.10728 of 2022-DB (JITENDRABHAI THOBHANBHAI
ADROJA)
(cliv) Excise Appeal No.10729 of 2022-DB (SAROJBEN JITENDRABHAI ADROJA)
(clv) Excise Appeal No.10730 of 2022-DB (BHAVNABEN BHARATBHAI ADROJA)
(clvi) Excise Appeal No.10731 of 2022-DB (ASHOKBHAI BHAGWANJIBHAI
ADROJA)
(clvii) Excise Appeal No.10732 of 2022-DB (BHARATBHAI THOBHANBHAI
ADROJA)
(clviii) Excise Appeal No.10733 of 2022-DB (ANJANABEN MANISHBHAI ADROJA)
(clix) Excise Appeal No.10734 of 2022-DB (VARSHABEN KANTILAL ADROJA)
(clx) Excise Appeal No.10735 of 2022-DB (SHRI KANTILAL THOBANBHAI ADROJA)
(clxi) Excise Appeal No.10736 of 2022-DB (SHRI MANISH THOBANBHAI
ADROJA)
(clxii) Excise Appeal No.10737 of 2022-DB (SHRI RAMNIKBHAI BHAGVANJIBHAI
ADROJA)
(clxiii) Excise Appeal No.10738 of 2022-DB (OMANO TILES)
(clxiv) Excise Appeal No.10739 of 2022-DB (SMT HINABEN ASHOKBHAI ADROJA)
(clxv) Excise Appeal No.10740 of 2022-DB (NILESH DHIRAJLAL KORINGA)
(clxvi) Excise Appeal No.10741 of 2022-DB (ARJUNBHAI KANTILAL ADROJA)
(clxvii) Excise Appeal No.10742 of 2022-DB (JITENDRA THOBHANBHAI ADROJA)
(clxviii) Excise Appeal No.10743 of 2022-DB (SMT BHAVNABEN BHARATBHAI
ADROJA)
(clxix) Excise Appeal No.10744 of 2022-DB (KANTILAL THOBHANBHAI ADROJA )
(clxx) Excise Appeal No.10745 of 2022-DB (BHARATBHAI THOBHANBHAI
ADROJA)
(clxxi) Excise Appeal No.10746 of 2022-DB (MANISH THOBHANBHAI ADROJA)
(clxxii) Excise Appeal No.10747 of 2022-DB (SMT ANJANABEN MANISHBHAI
ADROJA)
6 E/10153/2022-DB & 263 ors.

(clxxiii) Excise Appeal No.10748 of 2022-DB (SMT SAROJBEN JITENDRABHAI
ADROJA)
(clxxiv) Excise Appeal No.10749 of 2022-DB (SISAM CERAMICS PVT LTD)
(clxxv) Excise Appeal No.10750 of 2022-DB (DILIPKUMAR MAVJIBHAI SHIRVI)
(clxxvi) Excise Appeal No.10751 of 2022-DB (SHAILESHBHAI MAVJIBHAI SHIRVI)
(clxxvii) Excise Appeal No.10753 of 2022-DB (NILESHKUMAR AMARSHIBHAI
SHIRVI)
(clxxviii) Excise Appeal No.10755 of 2022-DB (HIMSUN CERAMIC)
(clxxix) Excise Appeal No.10756 of 2022-DB (SMT NITABEN ASHWINBHAI PATEL)
(clxxx) Excise Appeal No.10757 of 2022-DB (PRAVINBHAI BECHARBHAI PATEL)
(clxxxi) Excise Appeal No.10768 of 2022-DB (ATOM CERAMICS)
(clxxxii) Excise Appeal No.10769 of 2022-DB (SMT LATABEN CHHATROLA)
(clxxxiii) Excise Appeal No.10770 of 2022-DB (SMT SUMITABEN R
CHHATROLA)
(clxxxiv) Excise Appeal No.10771 of 2022-DB (HIRALBEN PINTUBHAI
BARAIYA)
(clxxxv) Excise Appeal No.10772 of 2022-DB (RAJKUMAR D BHORANIYA)
(clxxxvi) Excise Appeal No.10773 of 2022-DB (SAVITABEN D BHORANIYA)
(clxxxvii) Excise Appeal No.10774 of 2022-DB (ATULBHAI RAGHAVJIBHAI
MARVANIYA)
(clxxxviii) Excise Appeal No.10775 of 2022-DB (SMT JAGRUTIBEN SUVARIYA)
(clxxxix) Excise Appeal No.10776 of 2022-DB (MANTHANBHIA D
BHORANIYA)
(cxc) Excise Appeal No.10786 of 2022-DB (LEXUS GRANITO INDIA LTD)
(cxci) Excise Appeal No.10787 of 2022-DB (NILESHBHAI BABULAL DETROJA)
(cxcii) Excise Appeal No.10788 of 2022-DB (BABULAL MAHADEVBHAI DETROJA)
(cxciii) Excise Appeal No.10789 of 2022-DB (ANILKUMAR BABULAL DETROJA)
(cxciv) Excise Appeal No.10790 of 2022-DB (HITESHBHAI BABULAL DETROJA)
(cxcv) Excise Appeal No.10791 of 2022-DB (AQUTOP CERAMIC)
(cxcvi) Excise Appeal No.10854 of 2022-DB (SUNRISE CERAMIC PVT LTD)
(cxcvii) Excise Appeal No.10855 of 2022-DB (VIMAL LAXMANBHAI ZALARIA)
(cxcviii) Excise Appeal No.10856 of 2022-DB (HARDIK LAXMANBHAI ZALARIA)
(cxcix) Excise Appeal No.10920 of 2022-DB (OMEN VITRIFIED PVT LTD)
(cc) Excise Appeal No.10926 of 2022-DB (MANISHBHAI THOBHANBHAI ADROJA)
(cci) Excise Appeal No.10927 of 2022-DB (VIRJIBHAI AMARSHIBHAI ADROJA)
(ccii) Excise Appeal No.10928 of 2022-DB (BHARATBHAI THOBHANBHAI PATEL)
(cciii) Excise Appeal No.10933 of 2022-DB (SUPER CERAMIC)
(cciv) Excise Appeal No.10934 of 2022-DB (RAMESHBHAI B HOTHI PARTNER)
(ccv) Excise Appeal No.10935 of 2022-DB (KANTILAL HARJIBHAI HOTHI)
(ccvi) Excise Appeal No.10936 of 2022-DB (BECHARBHAI KANJIBHAI HOTHI
PARTNER)
(ccvii) Excise Appeal No.10937 of 2022-DB (NAGJIBHAI RAGHAVJIBHAI HOTHI
PARTNER)
7 E/10153/2022-DB & 263 ors.

(ccviii) Excise Appeal No.10938 of 2022-DB (JAGAT MAGANBHAI HOTHI
PARTNER)
(ccix) Excise Appeal No.10940 of 2022-DB (MORBI CERAMIC PVT LTD)
(ccx) Excise Appeal No.10941 of 2022-DB (NATHALAL CHHAGAINBHAI
BAVARVA)
(ccxi) Excise Appeal No.10942 of 2022-DB (SMT SHARDABEN NATHALAL
BAVARVA)
(ccxii) Excise Appeal No.10943 of 2022-DB (SMT GEETABEN JAYPRAKASH
BAVARVA)
(ccxiii) Excise Appeal No.10944 of 2022-DB (JAYPRAKASH NATHALAL BAVARVA)
(ccxiv) Excise Appeal No.10953 of 2022-DB (BHABHA CERAMIC PVT LTD)
(ccxv) Excise Appeal No.10954 of 2022-DB (ANILBHAI G SITAPARA EX
DIRECTOR)
(ccxvi) Excise Appeal No.10955 of 2022-DB (MAHESH KUMAR A. SARDAVA EX
DIRECTOR)
(ccxvii) Excise Appeal No.10956 of 2022-DB (VISHAL KANTIBHAI AGHARA EX
DIRECTOR)
(ccxviii) Excise Appeal No.10957 of 2022-DB (SOMNATH POLYPACK INDUSTRIES)
(ccxix) Excise Appeal No.10958 of 2022-DB (ASHOKKUMAR NARABHERAM FEFAR
PARTNER)
(ccxx) Excise Appeal No.10982 of 2022-DB (SUNFLORA VITRIFIED PVT LTD)
(ccxxi) Excise Appeal No.10983 of 2022-DB (NARENDRA DHARAMSHI BHIMANI)
(ccxxii) Excise Appeal No.10984 of 2022-DB (BIRENDRAKUMAR NARENDRABHAI
DHMANI)
(ccxxiii) Excise Appeal No.10985 of 2022-DB (RAMESH DHARAMSHI BHIMANI)
(ccxxiv) Excise Appeal No.10986 of 2022-DB (DHARAMSHI MOTIBHAI PATEL)
(ccxxv) Excise Appeal No.10987 of 2022-DB (JAYANTI DHARAMSHI BHIMANI)
(ccxxvi) Excise Appeal No.10988 of 2022-DB (SOLENZO CERAMIC PVT LTD)
(ccxxvii) Excise Appeal No.10989 of 2022-DB (SANJAY G ZALARIA)
(ccxxviii) Excise Appeal No.10990 of 2022-DB (DIPAKBHAI MAGANBHAI
PATEL)
(ccxxix) Excise Appeal No.10993 of 2022-DB (FRESCO CERAMIC PVT LTD)
(ccxxx) Excise Appeal No.10994 of 2022-DB (GHANSHYAMBHAI M DHORIYANI)
(ccxxxi) Excise Appeal No.11002 of 2022-DB (GLOSSY CERAMICS PVT LTD)
(ccxxxii) Excise Appeal No.11003 of 2022-DB (DINESH KANTILAL
GHODASARA)
(ccxxxiii) Excise Appeal No.11004 of 2022-DB (RAMNIKLAL KANTILAL
GHODASARA)
(ccxxxiv) Excise Appeal No.10003 of 2023-DB (BOSS CERAMICS)
(ccxxxv) Excise Appeal No.10004 of 2023-DB (VELJIBHAI KHODABHAI HUF)
(ccxxxvi) Excise Appeal No.10005 of 2023-DB (URVIBEN MANOJBHAI
UGHREJA)
8 E/10153/2022-DB & 263 ors.

(ccxxxvii) Excise Appeal No.10006 of 2023-DB (SHARDABEN VELJIBHAI
UGHREJA)
(ccxxxviii) Excise Appeal No.10007 of 2023-DB (MANOJ VELJIBHAI UGHREJA)
(ccxxxix) Excise Appeal No.10008 of 2023-DB (JAYESH VELJIBHAI UGHREJA)
(ccxl) Excise Appeal No.10026 of 2023-DB (ASTON CERAMIC)
(ccxli) Excise Appeal No.10027 of 2023-DB (PINTU N BARAIYA)
(ccxlii) Excise Appeal No.10028 of 2023-DB (JIGNESHBHAI B BHUT)
(ccxliii) Excise Appeal No.10029 of 2023-DB (KALPESHBHAI B AMRUTIYA)
(ccxliv) Excise Appeal No.10030 of 2023-DB (KANTILAL J KACHROLA)
(ccxlv) Excise Appeal No.10031 of 2023-DB (RAMJIBHAI K CHHATROLA)
(ccxlvi) Excise Appeal No.10032 of 2023-DB (HITESHBHAI B SUVARIYA)
(ccxlvii) Excise Appeal No.10033 of 2023-DB (BIPINBHAI M JETAPURIA)
(ccxlviii) Excise Appeal No.10052 of 2023-DB (SERON CERAMICS PVT LTD)
(ccxlix) Excise Appeal No.10053 of 2023-DB (SMT NITIBEN HARSHILBHAI PATEL)
(ccl) Excise Appeal No.10054 of 2023-DB (RAGNATHBHAI AMBARAMBHAI PATEL)
(ccli) Excise Appeal No.10055 of 2023-DB (HARSHILBHAI AMBARAMBHAI
PATEL)
(cclii) Excise Appeal No.10056 of 2023-DB (SMT MANJULABEN DAMJIBHAI
PATEL)
(ccliii) Excise Appeal No.10057 of 2023-DB (SMT SAROJBEN DINESHBHAI PATEL)
(ccliv) Excise Appeal No.10058 of 2023-DB (RAVI RUGNATH PATEL)
(cclv) Excise Appeal No.10062 of 2023-DB (SUNORA CERAMICS INDUSTRIES)
(cclvi) Excise Appeal No.10063 of 2023-DB (DAMJIBHAI RUGNATHBHAI PATEL)
(cclvii) Excise Appeal No.10064 of 2023-DB (SMT ANSOBEN MANSUKHBHAI
PATEL)
(cclviii) Excise Appeal No.10065 of 2023-DB (RANCHHODBHAI RUGNATHBHAI
PATEL)
(cclix) Excise Appeal No.10066 of 2023-DB (MAYUR MANSUKHBHAI
RANGPARIYA)
(cclx) Excise Appeal No.10067 of 2023-DB (SHRI RAMESHBHAI
GANGARAMBHAI)
(cclxi) Excise Appeal No.10068 of 2023-DB (SHRI SAVJIBHAI MOHANBHAI)
(cclxii) Excise Appeal No.10069 of 2023-DB (SMT KALPANABEN NILESHBHAI
PATEL)
(cclxiii) Excise Appeal No.10070 of 2023-DB (SMT JAGRUTIBEN SAVJIBHAI
PATEL)
[(Arising out of OIA-RAJ-EXCUS-000-APP-063-064-2021 Dated 29.12.2021 passed by
Commissioner, Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-
000-APP-072-078-2021-22 Dated 03.02.2022 passed by Commissioner, Central Excise, Customs and
Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-000-APP-069-071-2021-22 Dated 28.01.2022
passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-
EXCUS-000-APP-079-082-2021-2022 Dated 03.02.2022 passed by Commissioner, Central Excise,
Customs and Service Tax-RAJKOT),(Arising out of OIA-RAJ-EXCUS-000-APP-115-116-2021-22 Dated
28.02.2022 passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT), (Arising out
of OIA-RAJ-EXCUS-000-APP-104-107-2021-22 Dated 28.02.2022 passed by Commissioner, Central
Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-000-APP-131-132-2021-
9 E/10153/2022-DB & 263 ors.

22 Dated 25.03.2022 passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT),
(Arising out of OIA-RAJ-EXCUS-000-APP-123-124-2021-22 Dated 25.03.2022 passed by
Commissioner, Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-
000-APP-134-139-2021-22 Dated 31.03.2022 passed by Commissioner, Central Excise, Customs and
Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-000-APP-024-025-2022 Dated 27.04.2022
passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-
EXCUS-000-APP-009-2022 Dated 27.04.2022 passed by Commissioner, Central Excise, Customs and
Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-000-APP-001-004-2022 Dated 28.04.2022
passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-
EXCUS-000-APP-026-2022 Dated 27.04.2022 passed by Commissioner, Central Excise, Customs and
Service Tax-RAJKOT), (Arising out of Order in Appeal RAJ-EXCUS-000-APP-010-014-2022 Dated
27.04.2022 passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT), (Arising out
of Order in Appeal RAJ-EXCUS-000-APP-027-032-2022 Dated 27.04.2022 passed by Commissioner,
Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-000-APP-005-007-
2022 Dated 27.04.2022 passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT),
(Arising out of OIA-RAJ-EXCUS-000-APP-020-023-2022 Dated 27.04.2022 passed by Commissioner,
Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-000-APP-038-
2022 Dated 20.05.2022 passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT),
(Arising out of OIA-RAJ-EXCUS-000-APP-044-052-2022 Dated 20.05.2022 passed by Commissioner,
Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-000-APP-053-055-
2022 Dated 24.05.2022 passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT),
(Arising out of OIA-RAJ-EXCUS-000-APP-056-066-2022 Dated 24.05.2022 passed by Commissioner,
Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-000-APP-069-072-
2022 Dated 31.05.2022 passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT),
(Arising out of OIA-RAJ-EXCUS-000-APP-083-092-2022 Dated 31.05.2022 passed by Commissioner,
Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-000-APP-093-106-
2022 Dated 31.05.2022 passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT),
(Arising out of OIA-RAJ-EXCUS-000-APP-073-075-2022 Dated 31.05.2022 passed by Commissioner,
Central Excise, Customs and Service Tax-RAJKOT), ), (Arising out of OIA-RAJ-EXCUS-000-APP-067-
068-2022 Dated 24.05.2022 passed by Commissioner, Central Excise, Customs and Service Tax-
RAJKOT), (Arising out of OIA-RAJ-EXCUS-000-APP-116-117-2022 Dated 08.06.2022 passed by
Commissioner, Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-
000-APP-107-110-2022 Dated 08.06.2022 passed by Commissioner, Central Excise, Customs and
Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-000-APP-122-124-2022 Dated 08.06.2022
passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-
EXCUS-000-APP-122-124-2022 Dated 08.06.2022 passed by Commissioner, Central Excise, Customs
and Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-000-APP-115-2022 Dated 08.06.2022
passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-
EXCUS-000-APP-128-131-2022 Dated 22.06.2022 passed by Commissioner, Central Excise, Customs
and Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-000-APP-201-203-2022 Dated 14.07.2022
passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-
EXCUS-000-APP-125-127-2022 Dated 22.06.2022 passed by Commissioner, Central Excise, Customs
and Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-218-227-APP-2022 Dated 28.07.2022
passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-
EXCUS-000-APP-239-243-2022 Dated 16.08.2022 passed by Commissioner, Central Excise, Customs
and Service Tax-RAJKOT), (Arising out of OIO-RAJ-EXCUS-000-APP-183-193-2022 Dated 27.06.2022
passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-
EXCUS-000-APP-171-181-2022 Dated 27.06.2022 passed by Commissioner, Central Excise, Customs
and Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-000-APP-197-200-2022 Dated 14.07.2022
passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT), (Arising out of OIA-RAJ-
EXCUS-000-APP-209-211-2022 Dated 14.07.2022 passed by Commissioner, Central Excise, Customs
and Service Tax-RAJKOT), (Arising out of OIA-RAJ-EXCUS-000-APP-162-170-2022 Dated 27.06.2022
passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT), (Arising out of Order in
Appeal No. RAJ-EXCUS-000-APP-204-208-2022 dated 14.07.2022 passed by Commissioner Central
Excise, Customs and Service Tax-Rajkot), (Arising out of Order in Appeal No. RAJ-EXCUS-000-APP-
212-2022 dated 14.07.2022 passed by Commissioner Central Excise, Customs and Service Tax-
Rajkot), (Arising out of Order in Appeal No. RAJ-EXCUS-000-APP-250-252-2022 dated 31.08.2022
passed by Commissioner Central Excise, Customs and Service Tax-Rajkot), (Arising out of Order in
Appeal No. RAJ-EXCUS-000-APP-275-278-2022 dated 31.08.2022 passed by Commissioner Central
Excise, Customs and Service Tax-Rajkot), (Arising out of Order in Appeal No. RAJ-EXCUS-000-APP-
266-271-2022 dated 31.08.2022 passed by Commissioner Central Excise, Customs and Service Tax-
10 E/10153/2022-DB & 263 ors.

Rajkot), (Arising out of Order in Appeal No. RAJ-EXCUS-000-APP-261-265-2022 dated 31.08.2022
passed by Commissioner Central Excise, Customs and Service Tax-Rajkot), (Arising out of Order in
Appeal No. RAJ-EXCUS-000-APP-291-294-2022 dated 12.09.2022 passed by Commissioner Central
Excise, Customs and Service Tax-Rajkot), (Arising out of Order in Appeal No. RAJ-EXCUS-000-APP-
279-280-2022 dated 07.09.2022 passed by Commissioner Central Excise, Customs and Service Tax-
Rajkot), (Arising out of Order in Appeal No. RAJ-EXCUS-000-APP-295-300-2022 dated 19.09.2022
passed by Commissioner Central Excise, Customs and Service Tax-Rajkot), (Arising out of Order in
Appeal No. RAJ-EXCUS-000-APP-258-260-2022 dated 31.08.2022 passed by Commissioner Central
Excise, Customs and Service Tax-Rajkot), (Arising out of Order in Appeal No. RAJ-EXCUS-000-APP-
281-282-2022 dated 07.09.2022 passed by Commissioner Central Excise, Customs and Service Tax-
Rajkot), (Arising out of Order in Appeal No. RAJ-EXCUS-000-APP-272-274-2022 dated 31.08.2022
passed by Commissioner Central Excise, Customs and Service Tax-Rajkot), (Arising out of Order in
Appeal No. RAJ-EXCUS-000-APP-332-337-2022 dated 19.09.2022 passed by Commissioner Central
Excise, Customs and Service Tax-Rajkot), (Arising out of OIA-RAJ-EXCUS-000-APP-319-326-2022
Dated 19.09.2022 passed by Commissioner, Central Excise, Customs and Service Tax-RAJKOT),
(Arising out of OIA-RAJ-EXCUS-000-APP-363-369-2022 Dated 11.11.2022 passed by Commissioner
(Appeals) Central Excise, Customs and Service Tax-RAJKOT( Appeal)), (Arising out of OIA-RAJ-
EXCUS-000-APP-095-103-2021-22 Dated 28/02/2022 passed by Commissioner ( Appeals) Central
Excise, Customs and Service Tax-RAJKOT( Appeal))]

APPEARANCE:
Shri P D Rachchh, Advocate & Shri Parth Rachchh, Advocate appeared for the Appellants
Shri R R Kurup, Superintendent (AR) appeared for the Respondent

CORAM:
HON'BLE MEMBER (JUDICIAL), MR. SOMESH ARORA
HON'BLE MEMBER (TECHNICAL), MR. SATENDRA VIKRAM SINGH

Final Order No. 11083-11346/2025

DATE OF HEARING: 06.10.2025
DATE OF DECISION: 20.11.2025

SOMESH ARORA

1. The present bunch of cases involves 57 matters of various main parties and other

allied parties. The common thread in the factual matrix of the case is that based on

intelligence, the DGGI raided some Shroffs (Local Hawala Operators) and found some

details of cash transactions stated to be of for some manufacturers via dealers. On the

basis of investigation, including searches wherever conducted, the following position as

tabulated below has emerged:-
11 E/10153/2022-DB & 263 ors.

S Main Appeal Nos. Shroff Name Shroff/ Angadiya Name of Name of Whether Whether
R Appellants at Rajkot i.e. person(s) to persons as per buyers statement of
Middleman/Brok whom cash said private records statement partners or
er Name at to have been of s were directors of
Morbi given as per Middlemen/brok recorded? appellant
Middleman/Broke er who is said to recorded?
r's statement have received
cash from
Middlemen/brok
er
1 Famous E/10228- K N Brothers Pravinbhai Piyush Piyush No 1. Adroja
Vitrified Pvt. 10230/2022 Shirvi, Morbi Rajeshbhai
Ltd. Hiralal dated
18.03.2019
2. Piyush
Sanaria dated
13.04.2019
3. Ghodasara
Ashwinbhai
Talsibhai
dated
22.04.2019
2 Famous E/10153- K N Brothers Pravinbhai Hitesh (Ravi) Shri Ravi No 1. Savjibhai
Ceramic 10155/2022 Shirvi, Morbi Sanaria dated
Indstries 12.03.2016
2. Ravikumar
R. Adroja
dated
08.04.2019
3 Varmora E/10698- K N Brothers Sarvodaya Shroff Varmora Group of Varmora Group No No
Granito Pvt. 10700/2022 & Companies
Ltd. PC (Niket)
Enterprise
4 Delta Tiles E/10695- K N Brothers Kasundra Kaka Delta, Parth & Parth No No
Ltd 10697/2022 & Maruti Darshan
Enterprise

5 Perfect E/10463- Shri Ambaji Sarvodaya Shroff Perfect Ceramic Perfect Ceramic No No
Ceramics 10471/2022 Enterprise, P Jivandeep
C Enterprise
&KN
Brothers

6 Hilltop E/10659/202 K N Brothers Kasundra Kaka Hilltop Ceramic & H202 Jagdish, 1. Raja No
Ceramic 2 & Maruti Hitesh & Code H202 Sanjay, Marketing
Enterprise used H202 H202 Anil, ,
H202A Hyderaba
d dtd
28.05.19
7 Sunbeam E/10182- Shri Ambaji Pravinbhai Sunbeam Ceramic Sabi (in Gujarati) No Yes,
Ceramic Pvt. 10183/2022 Enterprise & Shirvi, Morbi & Sabi Bharatbhai
Ltd. K N Brothers Rugnathbhai
Kasundra dtd
24.04.19

8 Rossa Tiles E/10507- Shri Ambaji Sarvodaya Shroff Sarvodaya -Rosa Rossa Tiles/ No 1. Nitin M.
Pvt. Ltd. 10509/2022 Enterprise, K & Thakarsi Tiles & Rehan Rossa/Divyesh Naramiya dtd
N Brother, Premji Kasundra Thakarsibhai - No (written in 14.06.19,
Maruti name given Gujarati) Auth.
Enterprise & Representativ
PC e'
Enterprise

9 Sepal National Nashir Ali Sepal Ceramic, Spil/ Spil Ashok No No
Ceramic E/10400/202 Enterprise, Code Ashok (in Gujarati)
2 Morbi
12 E/10153/2022-DB & 263 ors.

1 Boss E/10003- Shri Ambaji Sarvodaya Shroff Sarvodaya - Boss Sarvodaya Shroff No No
0 Ceramic 10008/2023 Enterprise, & Nashir Ali Ceramic Navilbhai -Boss Ceramic in
National Nashir Ali -Boss Gujarati
Enterprise, P Ceramic- Nashir Ali -Boss
C Enterprise Meghjibhai Code- in Gujarati
&KN Boss
Brothers

1 Nelco E/10633- K N Brothers Satishbhai, Nelco Ceramics & Nelco No No
1 Ceramics 10634/2022 & Maruti Morbi Mansigh
Enterprise

1 Super E/10933- Shri Ambaji Sarvodaya Shroff As per Super Ceramic in No No
2 Ceramic 10938/2022 Enterprise, P Sandipbhai & Shaileshbhai - Gujarati
C Enterprise Shileshbhai Super Ceramics
&KN Kishanbhai
Brothers As per Sandipbhai
- No name

1 Legend E/10304- Shri Ambaji Kasundra Kaka L D Ceramics L D , L D Ankit, L 1. Sharma 1. Dushyant
3 Ceramic Pvt. 10305/2022 Enterprise, K Dushyant D Hasubhai, L D Tiles Pvt. B. Patel dtd
Ltd. N Code - L D Jino, L D Aarif Ltd. 20.01.2016
Brothers,Rajk Driver, L D JYS, Chennai
ot etc. (After L D dtd
name in 04.06.19
Gujarati)
1 Benito E/10416/202 Shri Ambaji Satishbhai, Benito Ceramic Amrish Benito in No No
4 Ceramic Pvt. 2 Enterprise, Morbi Amrishbhai Gujarati
Ltd. Satish, K N
Brothers

1 Sunora E/10062- K N Brothers, Satishbhai, As per Satishbhai- Viraj in Gujarati 1. No
5 Ceramic 10070/2023 Maruti Morbi & Sanora Floor Tiles Badweshv
Indsries Enterprise & Sarvodaya Shroff & Bhaskar ar
PC As per Sarvodaya Mahadev
Enterprise Shroff-Sanora Tiles dtd
Floor Tiles & 22.06.19
Bhaskar

1 Antica E/10353- Shri Ambaji Pravinbhai No name given Bholu in Gujarati No No
6 Ceramic 10354/2022 Enterprise Shirvi, Morbi

1 Samrat E/10680- K N Brothers Pravinbhai Samrat Sanitary Pragji 1. Patel 1.
7 Sanitarywar 10683/2022 & Maruti Shirvi, Morbi Sale Depot Harshadkuma
es P Ltd. Enterprise dtd r Amrutiya
29.05.19 dated
13.05.19
2. Laljibhai
Bachubhai
Chatrola
dated
13.06.19
1 Active E/10237- Shri Ambaji Sarvodaya Shroff As per As per 1. Raja No
8 Ceramic Pvt. 10240/2022 Enterprise, P Shaileshbhai - Shaileshbhai - Marketing
Ltd. C Enterprise, Active Ceramic Active Ceramic ,
K N Brothers Chetanbhai in Gujarati Hyderaba
d dated
28.05.201
9
2. Mittal
Marbel &
Tiles,
Kolkata
dated
21.06.201
9
3.
Amarnath
Marbel
dated
22.06.201
9
13 E/10153/2022-DB & 263 ors.

1 Alive Tiles E/10339- K N Brothers Kasundra Kaka No name given Alive 1. Raja No
9 Pvt. Ltd. 10342/2022 & Maruti Alive Vishal Marketing
Enterprise Alive Chandresh ,
all in Gujarati Hyderaba
d dated
28.05.201
9
2. Vijay's
Tiles Hub
dated
01.06.201
9
3. Classic
Marbel
dated
22.06.201
9
4. Mittal
Marbel &
Tiles Pvt.
Ltd. dtd
21.06.19
5.
Amarnath
Marbel
dtd
22.06.19
2 Aston E/10026- Shri Ambaji Sarvodaya Shroff Astron Ceramic Astron in No No
0 Ceramic 10033/2023 Enterprise, P Himanshu Gujarati
C Enterprise,
K N Brothers

2 Lemon E/10605- Shri Ambaji Sarvodaya Shroff Lemon Ceramics Lemon Ceramic 1. Mittal No
1 Ceramic Pvt. 10607/2022 Enterprise, P Ravibhai in Gujarati Marbel &
Ltd. C Enterprise, Tiles
K N Brothers Pvt.Ltd.
Kolkata
dtd
21.06.19
2.
Amarnath
Marbel
dtd
22.06.19
3. Sharma
Tils Pvt.
Ltd.
Chennai
dtd
04.06.19
2 Orken E/10462/202 Shri Ambaji Kasundra Kaka No name given Kishor - Hemraj No No
2 Ceramic Pvt. 2 Enterprise & Kishorkaka
Ltd. K N Brothers

2 Omano Tiles E/10738- K N Brothers, Kasundra Kaka Omano Tiles Omn.V, Omn. T No No
3 10748/2022 Maruti Nileshbhai Pankaj, Omn.D,
Enterprise Code - Omn.t Omn. Hiren,
Omn. Jayesh-
Kalpesh
2 Omson E/10727- - Kasundra Kaka Omson Oms.B 1. Classic No
4 Ceramic 10737/2022 Anilbhai Marbel
Code-Oms dtd
22.06.19
2 Flecto E/10455- Maruti Kasundra Kaka No name given Nikunj in 1. No
5 Ceramic Pvt. 10458/2022 Enterprise, K Satishbhai Gujarati .S Rainbow
Ltd. N Brothers Ceramics,
Hyderaba
d dtd
27.05.19
2 Atom E/10768- KN Satishbhai Atom Ceramic Atom, Pravin in No No
6 Ceramic 10776/2022 Enterprise Dhruvbhai Gujarati Atom in
(Lalitbhai) English
2 Antila E/10439- K N Brothers, Satishbhai Antilla Ceramic Antila No No
7 Ceramic Pvt. 10442/2022 Maruti bharatbhai
Ltd. & Enterprise
14 E/10153/2022-DB & 263 ors.

E/10501/202
2

2 Aqutop E/10791/202 K N Brothers, Kasundra Kaka Aquatop Atp- (in English) No No
8 Ceramic 2 Maruti Nimeshbhai Kanabhai in
Enterprise Gujarati
Atp- (in English)
Babu in Gujarati

2 Arrow E/10535- K N Brothers, Kasundra Kaka Arrow Ceramic Damji.Ajay No No
9 Ceramics 10545/2022- Maruti Damji Damji.Deep both
SM Enterprise Code-Damji in Gujarati

3 Magnum E/10451- National Nashir Ali Magnum Ceramic Harshad in No No
0 Ceramics P. 10453/2022- Enterprise, Harshadbhai Gujarati .M (in
Ltd. SM Morbi Code-Harshad M English)

3 Siyaram E/10369- PC Sarvodaya Shroff No name given Type written No No
1 Vitrified Pvt. 10371, Enterprise & sheet in English
Ltd 10374- K N Brothers but Siyaram
10376/2022- Vitrified,
SM Siyaram Granito
hand written in
Gujarati
3 Bhabha E/10953- K N Brothers Thakarshi Premji No name given Bhabha in No No
2 Ceramic Pvt. 10956/2022 & Maruti Kasundra Gujarati
Ltd. Enterprise Bhabha in
Gujarati V,
Bhabha Jigar in
Gujarati
3 Saheb E/10553- K N Brothers Kasundra Kaka Saheb Ceramic Niren-Jetha- 1. No
3 Ceramics 10556/2022- Niren Padmin, Viren- Badweshv
Pvt. Ltd. SM Vishal, Viren- ar
Mahesh-Jetha all Mahadev
in Gujarati Tamples
dtd
22.06.19
3 Osho E/10445- Shri Ambaji Sarvodaya Shroff Osho Typed Statement No No
4 Sanitarywar 10449/2022- Enterprise, P Sanitaryware prepared in
es P Ltd SM, C Enterprise Yogeshbhai English but hand
E/10530/202 &KN written name in
2-SM Brothers Gujarati Osho
Sanitary

3 Ador E/10351- Shri Ambaji Kasundra Kaka Ador Adr in English - 1. Statement of
5 Ceramics 10352/2022 Enterprise, K Yogeshbhai Nilesh in Harkrishna Directors
Pvt. Ltd. N Gujarati Tiles
Brothers,Rajk Adr in English . Agency,
ot Hardik in Gujarti Hyderaba
Adr.N ,Adr.Y d dated
Adr in English- 28.05.19
Sailesh in 2. Raja
Gujarati Marketing
Hyderaba
d dated
28.05.19
3. Vijay's
Tiles Hub,
Banglore
dated
01.06.19
3 Himsun E/10755- K N Brothers Kasundra Kaka No name given Himje in Gujarati No No
6 Ceramic 10757/2022 & Maruti D in English
Enterprise Him in Gujarati
D in English

3 Neha E/10640- K N Brothers Thakarshi Premji Naya Ceramic Neha.Kanti in No No
7 Ceramic 10643/2022 & Maruti Kasundra Kantibhai Gujarati
Inds. Enterprise Code-Naya

3 Omex E/10568- - Kasundra Kaka No name given Omx No No
8 Ceramic 10577/2022
15 E/10153/2022-DB & 263 ors.

3 Glossy E/11002- Shri Ambaji Sarvodaya Shroff Glosy Typed Written in No No
9 Ceramics 11004/2022 Enterprise, P Pravinbhai English -Glossy
Pvt. Ltd. C Enterprise Ceramic in
&KN Gujarati
Brothers

4 Somnath E/10957- K N Brothers Thakarshi Premji No name given Som.Poly in No No
0 Polypack 10958/2022 & Maruti Kasundra Gujarati
Inds. Enterprise

4 Omexo Tiles E/10580- K N Brothers Kasundra Kaka No name given Omx in English - No No
1 10593/2022- Dilip in Gujarati
SM Omxo in English -
Vivek in Gujarati

4 Hollis E/10408- Shri Ambaji Satishkumar Hollis Ceramics Holis No No
2 Vitrified Pvt. 10411/2022 Enterprise, K (HLS)
Ltd. N Vijaybhai
Brothers,Rajk
ot

4 Delphi E/10459/202 K N Brothers Satishkumar No name given Pankaj Delphi in No No
3 Ceramics 2 & Maruti Gujarati
E/10398/202 Enterprise
2
4 Orbit Cera E/10638- K N Brothers Satishbhai Orbit Ceramic Orbit No No
4 Tiles Pvt. 10639/2022 Mukeshbhai
Ltd.,
4 Bej Ceramic E/10222- Maruti Kasundra Kaka Bej Ceramic Bej in Gujarati 1. Noble No
5 10227/2022 Enterprise, K Pranshant , Anil then PD, AD in Tile World
N Brothers Code- Bej English, dtd
Bej in Gujarati 20.06.19
AD-Dilip
4 Admark E/10650, K N Brothers Satishkumar Admark Ceramics Trigun in No No
6 Ceramic 10660- & Maruti Bharatbhai Gujarati with
Inds 10661/2022- Enterprise addition Admark
SM in English

4 Omen E/10920, Maruti Kasundra Kaka no name given Omn.V, Omn. T 1. No
7 Vitrified Pvt. 10926- Enterprise but entry of Omnt Pankaj, Omn.D, Badveshw
Ltd. 10928/2022- Nileshbhai is Omn. Hiren, ar
SM given Omn. Jayesh- Mahadev
Kalpesh Tiles,
Kolkata
dtd
22.06.19
4 Sisam E/10749- Shri Ambaji Sarvodaya Shroff Sisam Ceramic English typed No No
8 Ceramic Pvt. 10751, Enterprise, P Nishant statement in
Ltd. 10753/2022 C Enterprise Gujarati Sisam
&KN Ceramic name
Brothers added

4 Morbi E/10940- National Nashir Ali No name given Balaji in Gujarati No No
9 Ceramic Pvt. 10944/2022 Enterprise, Sunil, Arido, R,
Ltd. Morbi Arido Sunil,
Pawan all in
Gujarati

5 Sunflora E/10982- PC Sarvodaya Shroff Sunflora Ceramic In English typed No No
0 Vitrified Pvt. 10987/2022 Enterprise & Dhaval statement in
Ltd. K N Brothers gujarati suflora
vitrified added
5 Sunrise E/10854- Shri Ambaji Sarvodaya Shroff No name given sunraj ceramic in No No
1 Ceramic Pvt. 10856/2022 Enterprise & but entry sunraj Gujarati
Ltd. K N Brothers Ceramics which is
separate pvt. Ltd.
situated at diff.
address
16 E/10153/2022-DB & 263 ors.

5 Fresco E/10993- Nitinbhai Kasundra Kaka No name given polo aditya, polo No No
2 Ceramic Pvt. 10994/2022 Maruti Amrut, polo dr,
Ltd Enterprise Hydp/Jayesh/pol
o (Hydp in
English and
others in
Gujarati)
5 Solenzo E/10988- Shri Ambaji Sarvodaya Shroff Solenzo Ceramic English typed No No
3 Ceramic Pvt. 10990/2022 Enterprise, P Jaydipbhai statement in
Ltd. C Enterprise Gujarati Solenzo
&KN Ceramic name
Brothers added

5 Seron E/10052- Shri Ambaji Sarvodaya Shroff Seron Ceramic In gujarati No No
4 Ceramics 10058/2023 Enterprise, P Arunbhai handwritten
Pvt. Ltd. C Enterprise Divyeshbhai statement seron
&KN ceramic name
Brothers added with
different hand
writing
5 Commander E/10702- Shri Ambaji Sarvodaya Shroff No name given In Gujarati typed No No
5 Ceramics 10711/2022- Enterprise, P statement
Industries DB C Enterprise commander
&KN ceramic added
Brothers in different hand
writing
In English typed
statement
Commander
ceramic name
added with
different hand
writing
5 Redstone E/10713- Shri Ambaji Sandipbhai of No name given In Gujarati typed No No
6 Granito Pvt. 10717/2022- Enterprise, P Sarvodaya Shroff statement
Ltd. DB C Enterprise Redstone
&KN ceramic added
Brothers in different hand
writing
In English typed
statement
Redstone
ceramic name
added with
different hand
writing
5 Lexus E/10786- Shri Ambaji Sarvodaya Shroff Lexus Ceramics In Gujarati hand No No
7 Granito 10790/2022- Enterprise, P Dharmeshbhai written - Lexus
India Ltd. DB C Enterprise Ceramic, Lexus
&KN Vitrified
Brothers

* Searches were conducted in respect of appellants at Sr. No.2 (M/s. Famous Ceramic

Industries), Sr. No.13 (M/s. Legend Ceramic Pvt. Ltd.) and Sr. No.35 (Ador Ceramics

Pvt. Ltd.).

1.1 On the basis of records, which were the bank statements of different banks in

which cash transactions were mentioned and in front of which certain abbreviated

names were mentioned, statements of Shroffs were recorded that the same were

payments to brokers who in turn later paid to the manufacturers. As per the appellants,

in majority of the cases, statements of Directors were not recorded and even searches

were not conducted at the premises in Morbi etc. The department on the basis of

investigation alleged that the appellants who are providing bank account details of
17 E/10153/2022-DB & 263 ors.

Shroffs like M/s. K N Brothers, Rajkot and Others to their buyers for depositing the cash

for clandestine sales in these accounts of the Shroff/ Hawala Operators. Shroffs after

confirming the deposits would withdraw cash after deducting the commission and

handling over to the brokers/ middlemen whose name(s) were found in the record in

the abbreviated form as indicated in reproduction of specimen (infra). These brokers

would then deliver cash to the Tiles Manufacturers after deducting their commissions.

The manufacturers used their authorised persons and the record found from the Shroffs

was of such transactions. Statements of the brokers were also recorded in certain cases

but in number of cases, they were not available despite summons. The same was the

situation with majority of the Directors. Critical statements later on at the stage of show

cause notice were stated to be retracted on affidavits but same as per the department

were belated. As per the department, the evidence of recorded statements along with

bank statements recovered from the Shroffs completed the link showing, "receipt of

cash in respect of goods clandestinely removed." The department was also of the view

that out of 186 manufacturers investigated by them, 61 had admitted their guilt and

paid the dues and therefore, they were not part of the bunch.

2. Since all 57 appeals of main appellants viz. tiles manufacturers and 207 co-

appellant viz. partners & directors of the tile manufactures are based on common

investigation done by the DGGI/DGCEI officers by way of carrying out search at the

premises of Shroffs based at Rajkot in whose banks accounts amounts were said to have

been deposited by the buyers of tiles manufacturers of Morbi situated pan India and

after withdrawal from their bank accounts, they handed over cash to the

Angadias/Middlemen based at Morbi, who have in turn paid cash to the persons of the

tile manufacturers. Therefore, common submission for all the appeals is being made by

taking lead matter of M/s. Famous Vitrified Pvt. Ltd. The appellant submitted as under:-

2.1 Except in few cases, no search was carried out nor any statement of any of the

partner or Director of the tile manufacturers was recorded but SCNs were issued merely

on the basis of records said to have been recovered from the premises of shroffs at

Rajkot and Angadias/Middlemen at Morbi and their statements only. There is no other
18 E/10153/2022-DB & 263 ors.

evidence except so called evidence of receipt of cash by the tile manufacturer(s)

through Angadias/middlemen via shroffs and that too, without identifying the buyers of

the goods, quantity of goods supplied by the manufacturer and received by the buyers,

evidence of manufacture of extra tiles, procurement of extra raw materials, deployment

of extra staff, transportation of goods from factory premises to buyers premises,

payment to such raw material suppliers, transporters etc. In addition to already

recorded transactions in the books of accounts/excise records, no other transaction or

parallel accounts were found. Identification of the persons who had collected cash from

the angadias/middlemen on behalf of tile manufacturers and given to (i.e. name of the

person in the tile manufacturing unit) was not done. No inculpatory statements of

anyone from the manufacturers etc. are on record. Though tiles were notified under

Section 4A of the Central Excise Act, 1944 and duty of excise was payable on Maximum

Retail Sale Price (MRP) less permissible abatement @ 45%, the demands were raised

and confirmed on the alleged cash said to have been received by the tiles manufacturer,

without ascertaining the declared MRP and without extending 45% abatement in the

declared MRP. Thus, the impugned orders confirming demand of Central Excise duty,

with interest and equal amount of penalty and penalty upon the Directors/ partners,

etc are liable to be quashed and set aside, as it was based on lot of assumptions and

presumptions and in any case on the premise that one link of cash received (though far

from established) from being a third party was not sufficient to discharge burden of

clandestine removal on the department.

2.2 M/s. Famous Vitrified Pvt. Ltd. (hereinafter referred to as Appellant) without

admitting anything and without prejudice to submissions made in the grounds of appeal

submits that it is the case of alleged clandestine removal of vitrified tiles solely based

on third party private records viz. Daily Sheet of Angadia/Middlman/Broker namely Shri

Pravin Shirvi, (of Morbi) and Bank Statements of Shroff M/s. K N Brothers/Ambika

Enterprise as well as statement of the concern persons of middleman/broker, Shroff,

Directors of appellant and Piyush S. Sanaria.
19 E/10153/2022-DB & 263 ors.

2.3 Appellant submits that the demand is computed in the SCN running into 18 pages

with 885 entries quantifying the duty demand of Rs. 1,67,13,094/- said to have been

prepared on the basis of documents viz. Bank Statements of M/s. K N Brothers/Ambika

Enterprise and daily sheets of Shri Pravinbhai Shirvi, Middleman/Broker who might have

handed over cash to "Piyush". In fact, no search was carried out at the business premises

of the appellant but investigation was carried out at appellant's end only on the basis of

summons proceedings.

2.4 Though search was carried out at the business premises of K N Brothers, Shroff

no such bank statements were withdrawn under panchnama nor proprietor of shorff nor

the person who was handling office of the shroff had handed over Bank Statements.

Thus, it is clear that Bank Statements were neither seized nor produced by any one and

therefore, its source of procurement is unknown. In absence of the proof of recovery

or source of production of such bank statements, entire base to compute the demand

in the SCN is a mystery. No such evidence is available and furnished to the appellant

nor relied upon, quantification of demand in the SCN cannot be done? The investigation

failed to furnish proof of entries mentioned in column No. 2 to 8, especially bank

accounts showing credit of the amounts on specific dates, question of payment of such

amounts by the shroff to the middleman does not arise at all. When the evidence of

origin and receipt of cash is neither available nor relied upon, demand cannot survive.

2.5 In the same way, it clearly reveals from the Bank Statements reproduced at page

8 to 15 of the SCN, the name of Pravin Shirvi is nowhere mentioned. However,

investigation without any base inserted name of Pravinbhai Shirvi against many entries

where someone had manually/ hand written "PS". All these entries against name of

Shri Pravin Shirvi were inserted baselessly by the investigation against the word "PS"

but none of these entry is finding place in the Annexure - A to the SCN. It means that

there is no co-relation of the entries made on the basis of records of M/s. K N Brothers

and of Shri Pravinbhai, Morbi in Annexure - A to the SCN.

2.6 Even the documents seized from the business premises of Shri Pravin Shirvi,

Middleman/Broker based on which Annexure - A to the SCN computing demand is
20 E/10153/2022-DB & 263 ors.

prepared neither bears such file number and page numbers etc stated in the said

Annexure nor the signature of panchas and of the, officers who had seized/withdrawn

as well as Shri Pravin Shirvi.

2.7 According to the statements of Shri Pravin Shirvi, Middleman/Broker for one of

the pages of said daily account sheets, left side shows the amount received by him and

the right side shows the cash disbursed to the respective persons of the tile

manufacturers. However, while preparing Annexure - A to the SCN, the investigation

has taken entries from either side i.e. right and left side of such sheets, without any

base. As per the statements of Shri Pravin Shirvi, figures mentioned on the left side is

the amount received by him and there is no corresponding entry of payment to the

person of appellant on right side of said daily account sheet on particular date or nearby

date. In the same way, there is no corresponding entry of payment received by Shri

Pravin Shirvi on left side for the 10 entries at Sr. No. 7 to 16 of Annexure - A to the

SCN. These are just examples and many more such entries are there. It means that

there is no proof of receipt of such amount by Shri Pravin Shirvi and so question of

handing over cash to the person of the appellant does not arise at all.

2.8 Appellant submits that the entire demand is confirmed based on the statements

of shroffs, angadia/middlemen, its directors and Shri Piyush Sanaria without allowing

cross examination of them, contrary to the specific provisions of Section 9D of the

Central Excise Act, 1944. The statements can be relied upon only when the persons

whose statements are relied upon, are examined as witness in the case by the

adjudicating authority as provided under Section 9D of the Central Excise Act, 1944.

There is no other evidence relied upon except oral evidence and once same deserves to

be eschewed in absence of cross examination, there is no ground to consider

unauthentic, unsigned third party private records viz. Daily Account Sheets prepared by

Shri Pravin Shirvi as evidence. In absence of the evidence, in impugned order

confirming demand of Central Excise duty is liable to be set aside. Reliance is placed

on following decisions:-
21 E/10153/2022-DB & 263 ors.

• Andaman Timber Industries Versus Commissioner of C. Ex., Kolkata-II -

2015 (324) E.L.T. 641 (S.C.)

• J.K. Cigarettes Ltd. vs. CCE, 2009 (242) ELT 189 (Del)

• M/S Jindal Drugs Pvt Ltd and Another Vs Union of India and another-2016 (340)

E.L.T. 67 (P & H)

• M/S Ambika International & others Vs Union of India and another - 2018 (361)

E.L.T. 90 (P & H)

• M/S. G-Tech Industries Vs. Union of India - 2016 (339) E.L.T. 209 (P & H)

• Flevel International Versus Commissioner of Central Excise - 2016 (332) E.L.T.

416 (Del.)

• M/S Pms International Pvt Ltd & Others Vs Commissioner of Central Excise,

Ludhiana-2014-Tiol-1669-Cestat-Del.

• Basudev Garg Versus Commissioner of Customs: 2013 (294) E.L.T. 353 (Del.)

• Rajam Industries (P) Ltd. Versus Addl. D.G, D.C.E.I., Chennai - 2010 (255) E.L.T.

161 (Mad.)

• Parmarth Iron Pvt. Ltd. Versus Commissioner of Central Excise - Meerut-I, - 2010

(255) E.L.T. 496 (All.)

2.9 Appellant further submits that the shroff and middleman/broker and other

departmental witnesses are not jointly tried with the appellant as abettor. For the sake

of argument, it presumed that cash were collected by the Shroff and handed over to

middleman/broker for onward payment to the tile manufacturers including appellant

then it amounts to abatement in evasion of duty of excise. However, they are not made

co-noticees in the present proceedings. They might have been given clean chit on the

ground that if they give the confession against the appellant, they will not be penalized.

It is also settled position of law that statements of the co-accused can be relied upon

only when they are jointly tried with. For their stated commissions earned, they have
22 E/10153/2022-DB & 263 ors.

not even been subjected to service tax demand indicating lack of truth by the

department in its own version. They rely on the following cases:-

• Union Of India Versus Lal Chand - 2016 (335) E.L.T. 416 (Mad.)

• Central Bureau of Investigation v. V.C. Shukla (1998) 3 SCC 410

"...... Secondly, a statement made by an accused person is admissible against others who
are being jointly tried with him only if the statement amounts to a confession. Where the
statement falls short of a confession, it is admissible only against its maker as an
admission and not against those who are being jointly tried with him. Therefore, from
the point of view of Section 30 of the Evidence Act also the distinction between and
admission and a confession is of fundamental importance."

As stated in para supra, demand is confirmed based on the statements of co-accused

viz. Shroff and Middleman/broker only. There is no other evidence adduced by the

investigation and "Piyush S. Sanria" who is jointly tried, his statement is exculpatory.

Statement of Hiren R. Kanani is not recorded at all. Therefore, demand based on

confession of co-accused liable to be set aside.

2.10 Appellant submits that as submitted in para supra since the departmental

witnesses were not examined and cross examined, their statements cannot be relied

upon as evidence. Now, only socalled evidence available on record is third party

unauthenticated and unsigned "Daily Account Sheets" said to have been maintained by

Shri Pravin Shirvi, (Middleman/Broker) who might have handed over the cash to the

person of the appellant. Annexure - A to the SCN is said to have been prepared on the

basis of "Bank Account Statements" of Shroff M/s. K N Brothers and Ambaji Enterprise

and "Daily Account Sheets" maintained by Shri Pravin Shirvi, Middleman/Broker. The

bank statements are neither recovered from the said Shroff nor furnished with the SCN

nor relied upon in the SCN, and therefore, same cannot be considered as valid piece of

evidence. Even otherwise, from the copy of bank statements re-produced in the SCN,

entries therein cannot be co-related with the entries made in the "Daily Account Sheet"

prepared by the said middleman/broker, nor investigation as well as adjudicating

authorities are able to furnish and co-relate the same. Therefore, only so called

evidence remains is "Daily Account Sheets" prepared by Shri Pravin Shirvi which are

loose papers only, without anybody's signature including "Pravin Shirvi", or the seizing
23 E/10153/2022-DB & 263 ors.

officer or the Panchas etc. Therefore, same also cannot be considered as evidence.

Even in absence of oral evidence, as in absence of cross examination of its author Shri

Pravin Shirvi, no one can interpret the content of the said sheets which are written in

Gujarati with two sides Credit and Debit with certain figures might be amount with name

in short may be first name or middle name etc. with some name in bracket may be

name of place and date. In absence of such statement, it cannot be considered that

the amount mentioned therein were received by Shri Pravin Shirvi and handed over to

the person of appellant. In any case as per settled position of law in the case of CBI Vs.

V.C. Shukla (cited supra) such loose papers cannot be considered as "book" and also

same alone cannot take place of evidence, especially when the author of the book is not

jointly tried with the appellant.

2.11 Appellant submits that there is no other evidence adduced by the investigation

other than above referred third party evidences which cannot be considered as evidence

as submitted above. There is no evidence adduced to the effect that procurement of

raw materials, transportation of raw materials, payment to raw material suppliers and

payment to transporters of raw materials, use of power/gas, manpower, manufacture

of goods, transportation of finished goods, buyers of goods etc in addition to actual data

available in the books of accounts/excise account. It is settled position of law that in

absence of other evidence, demand cannot be confirmed solely on the basis of third

party private records.

• Synergy Steels Ltd. Vs. CCE., Alwar - 2020 (372) ELT 129 (Tri. - Del.)

• Savitri Concast Ltd. Vs. CCE., Jaipur - 2015 (329) ELT 213 (Tri. - Del.)

• Aswani & Co. Vs. CCE., Delhi-I - 2015 (327) ELT 81 (Tri. - Del.)

• CCE, Jaipur-I Vs. Shiv Prasad Mills Pvt. Ltd. - 2015 (329) ELT 250 (Tri. - Del.)

• Shree Maruti Fabrics Vs. CCE, Ahmedabad - I - 2014 (311) ELT 345 (Tri. - Ahmd.)

• Parot Power Pvt. Ltd. Vs. CCE, Rajkot - Final Order No. 10344-10351/2024 dated

07.02.2024 of Hon'ble CESTAT, Ahmedabad
24 E/10153/2022-DB & 263 ors.

• Final Order No. 11724-11728/2024 dated 06.08.2024 of CESTAT, Ahmedabad in

the case of Shri Mehulbhai Rasikbhai Raithatha (Wintop Vitrified Pvt. Ltd.) Vs. CCE

& ST, Rajkot

• Final Order No. 11713-11719/2024 dated 06.08.2024 of CESTAT, Ahmedabad in

the case of Sober Ceramics Vs. CCE & ST, Rajkot

• Arya Fibres Pvt. Ltd. Vs. Commissioner of C. Ex., Ahmedabad - II - 2014 (311)

ELT 529 (Tri. Ahmd.)

• Bhushan Steel & Strips Ltd. Versus Commissioner of C. Ex., Ghaziabad - 2015

(329) E.L.T. 625 (Tri. - Del.)

• Raj Ratan Industries Ltd. Versus Commissioner of Central Excise, Kanpur - 2013

(292) E.L.T. 123 (Tri. - Del.)

• Kuber Tobacco Products Ltd. Versus Commissioner of C. Ex., Delhi - 2013 (290)

E.L.T. 545 (Tri. - Del.)

• Hindustan Machines Versus Commissioner of Central Excise, Delhi - 2013 (294)

E.L.T. 43 (Tri. - Del.)

• Ruby Chlorates (P) Ltd. Versus Commissioner of C. Ex., Trichy: 2006 (204) E.L.T.

607 (Tri. - Chennai)

• Commissioner of Central Excise, Chennai Versus R.V. Steels Pvt. Ltd.: 2009 (243)

E.L.T. 316 (Tri. - Chennai)

• Sulekhram Steels Pvt. Ltd. Versus CCE, Ahmedabad-II - 2011 (273) E.L.T. 140

(Tri. - Ahmd.)

• Indo Green Textile Pvt. Ltd. Versus CCE., Thane, Mumbai: 2007 (212) E.L.T. 343

(Tri. - Mumbai)

• K. Harinath Gupta V. CCE - 1994(71) ELT 980(T-Srb)

• Krishna & Co V. Collector of Central Excise, Jaipur - 1998(97) E.L.T. 74 (Tribunal)

• Ganga Rubber Industries V. CCE- 1989(39) E.L.T. 650, 655(T-Nrb)
25 E/10153/2022-DB & 263 ors.

• Gurpreet Rubber Industries V. Collector Of C.Ex., Chandigarh - 1996(82) E.L.T.

347(Tribunal)

• Kashmir Vanaspati (P) Ltd. V. Collector of Central Excise - 1989(39) E.L.T. 655(T);

• Ahwin Vanaspati Industries P.Ltd. V. Cce - 1992(59) E.L.T. 175(Tribunal)

• CCE V. R.G.Electronics - 1992(60) E.L.T.121 (T-Srb)

• Hans Castings Private Limited V. Collector of C.Ex., Kanpur - 1998(102) E.L.T.

139(Tribunal)

• Jay Laminart Limited V. Commissioner of C.Ex., Ahmedabad - 1998(102) E.L.T.

402(Tribunal)

• Prabhavati Sahakari Soot Girini Ltd. V. CCE Reported In 1990(48) E.L.T. 522(T);

• Roxy Enterprises P.Ltd. V. Cce - 1992(40) Ecr 361(T-Nrb)

• V.K.Thampy V. Collector of Central Excise, Kochi - 1994(69) E.L.T. 300(Tribunal)

2.12 The issue is already settled in similar cases booked by the DGGI at or about the

same time on the basis of common investigation against M/s. Ramoji Granite Pvt. Ltd.

& Others Vs. Commissioner, CE & ST, Rajkot by this Tribunal. Vide Final Order No. 12987-

12988/2024 dated 03.12.2024, Hon'ble Bench after detailed findings held that,

"4.5 We further note that the allegations of clandestine removal are required to be
established by production of positive and tangible evidences and should not be arrived at
on the basis of assumptions and presumptions. It does not require the support of any
judicial pronouncement to observe that the charges of clandestine removal being quasi-
criminal are required to be proved sufficiently and such findings cannot be arrived at the
assessee in the realm of the conjunctions and surmises. Case of the Revenue in the
present matter is only based upon the records of Shroff and Broker/middleman which
even do not contain the name of the appellant and statements which are not supported
by any independent corroborative evidence. The whole demand is theoretical.

5. In view of the above discussions, the impugned order cannot be sustained and
accordingly the same is set aside. The appeals are allowed with consequential relief as
per law."

2.13 Appellant further submits that the department could not establish the allegation

that it was involved in clandestine manufacture and supply. That clandestine removal is
26 E/10153/2022-DB & 263 ors.

a positive act, onus is on the department to prove this. The conjunctures and surmises

cannot be the basis for making allegation of clandestine manufacture and supply and

therefore, demand on this basis is not maintainable in the eyes of law therefore, liable

to be set aside. Following judgments are relied by which appellate authorities have

endorsed the same views:

• Triveni Engineering & Industries Ltd. Vs. Commr. of C. Ex., Allahabad - 2016 (334)

E.L.T. 595 (All.)

• Aswani & Co. Vs. Commissioner of Central Excise, Delhi-I - 2015 (327) E.L.T. 81

(Tri. - Del.)

• Ambica Metal Works Vs. Collector of Central Excise, Calcutta - 1990(29) ECR 549

• Icycold Commercial Enterprise Vs. Collector of C.Ex., Calcutta-1 - 1994(69) E.L.T.

337(Tribunal)

• Union Of India Vs M.S.S. Foods Products Ltd. 2011 (264) E.L.T. 165 (M.P.)

2.14 Appellant further submits that "Ceramic Glazed/Vitrified Tiles" are notified vide

Notification No. 49/2008-CE(NT) dated 24.12.2008 as amended (Sr. No. 58 and 59)

issued under Section 4A of the Central Excise Act, 1944. As per this Section read with

the said notification, duty of excise was payable on the retail sale price less permissible

abatement @ 45% of MRPs. However, the department for the reasons best known to

them has not given any abatement and demanded the central excise duty on the whole

amount said to have been received by the appellant from the said middleman/broker,

which by any means is not correct. The contention of the revenue is that Central Excise

duty should be calculated on sale proceeds received by the Tile manufacturers in terms

of provisions of Section 4A ibid read with Rule 4 ibid. Neither Section 4A nor the said

Rule 4 provide for determination of duty of excise on the total value of sale proceeds.

As per Section 4A read with the relevant rules prescribed thereunder, RSP has to be re-

determined and then assessable value has to be arrived by reducing permissible

abatement from the RSP. They are placing reliance on following decisions:-
27 E/10153/2022-DB & 263 ors.

• Ravi Foods Pvt. Ltd. Vs Commissioner of C. Ex., Hyderabad - 2011 (266) E.L.T.

399 (Tri. - Bang.)

• Acme Ceramics Vs Commissioner of Central Excise, Rajkot - 2014 (304) E.L.T. 542

(Tri. - Ahmd.)

• Final order No. 12088-12113 /2024 dated 23.09.2024 in the case of Ocean

Ceramics Ltd. & Others Vs. Commr. of C.Ex., Rajkot.

2.15 Appellant submits that in view of the above, impugned Order-in-Appeal confirming

demand of Central Excise duty, with interest and equal amount of penalty upon appellant

and co-appellant is liable to be set aside.

2.16 Appellant without admitting anything further submits that penalty is imposed upon

one of the Director Shri Hiren R. Kanani, whose statement is not recorded by the

investigation under Section 14 of the Central Excise Act, 1944. Therefore, in absence

of any statement not to speak of inculpatory statement, it cannot be presumed that he

has reasons to believe that the goods were liable to be confiscation. As per Rule 26 of

the Central Excise Rules, 2002, penalty can be imposed only when a person deals with

the goods in the manner stated in the said Rule 26(1)ibid with knowledge or has reason

to believe that the goods are liable to confiscation under the Act or the Rules, then he

is liable to penalty under the said Rule 26(1)ibid. In absence of knowledge or such

belief about goods liable to confiscation, the order imposing penalty upon him is liable

to be set aside. He relies on the following case laws:-

• Dabesh Prasad Nanda Vs Commissioner of C. Ex., New Delhi - 2016 (332) E.L.T.

733 (Tri. - Del.)

• Commissioner of C. Ex., Ahmedabad-I Vs Shree Narayani Textile Mills - 2010 (259)

E.L.T. 66 (Tri. - Ahmd.)

• Shakil Patel Vs Commissioner of Customs (General), Mumbai - 2018 (361) E.L.T.

382 (Tri. - Mumbai)
28 E/10153/2022-DB & 263 ors.

• Warren Trading Pvt. Ltd. Vs Commissioner of Customs, Kandla - 2008 (222) E.L.T.

313 (Tri. - Ahmd.)

• Apart from above cases, Tribunal in the case of Milano Papers Pvt. Ltd. Vs.

Commissioner, C. Ex., Rajkot while passing Order No. A/13568-13569/2017 dated

20.11.2017 has held that:-

"8. With regard to penalty imposed on Shri Bachubhai B. Agola (Appellant No. 2) no
statement during the course of investigation was recorded and no role of the appellant
has been specified in the show cause notice. In that circumstance, no penalty can be
imposed on the appellant without specifying the role for confiscation of the goods.
Therefore, penalty imposed on appellant No. 2 i.e. on Shri Bachubhai B. Agola is also set
aside."

2.17 As regard to penalty upon Shri Piyush Savjibhai Sanariya, his exculpatory

statements was recorded under Section 14 of the Central Excise Act, 1944 wherein he

had denied about receipt of cash other than on 4-5 occasions. Therefore, order imposing

heavy penalty upon him is liable to be set aside in view of the various relied upon

decisions. Further, his statement is not discarded by any other directors or author of the

private records Shri Pravin Shirvi, therefore, in any case, penalty under Rule 26 ibid

cannot be more than the duty of such goods which are liable to be confiscated.

Therefore, at the most penalty equal to 4-5 transactions can be imposed upon him and

not more than that, which by any means cannot be equal to penalty of Rs. 50,00,000/-

already imposed vide impugned order.

2.18 Appellant submits that since issues involved in the rest of all the appeals are

similar in view of the above submissions the other impugned Order-in-Appeals

confirming demand of Central Excise duty, with interest and equal amount of penalty

upon main appellants and co-appellants (Co-noticees) are liable to be set aside.

3. Further written submissions as follows were made by the Advocate after personal

hearing held on 06.10.2025, as permitted to both sides by this bench.

3.1 In continuation of submissions made at the time of hearing on 06.10.2025,

appellant submits that out of 57 appeals of main appellants viz. tiles manufacturers,

statement of directors/partners etc were recorded only in 7 cases listed at Sr. No. 1, 2,

7, 8, 13, 17 and 35 of the synopsis submitted at the time of hearing.
29 E/10153/2022-DB & 263 ors.

3.2 In case of M/s. Famous Vitrified Pvt. Ltd., statement of their Director Shri Adroja

Rajeshbhai Harilal, was recorded on 18.03.2019 wherein, he deposed that Shri

Hirenbhai Rasikbhai Kanani, Director is the main person who is looking after work of

overall administration of the company, finance as well as sales, marketing and work

relating to Banking Transactions of the company; that he looks after production and

does not know about the cash. In the same way, statement of Shri Ghodasara

Ashvinbhai Talshibhai Director of M/s. Famous Vitrified Pvt. Ltd. was recorded on dated

22.04.2019 wherein, he stated that about the receipt and payment between Shri Pravin

Shirvi and Shri Piyushbhai Savjibhai Sanriya, only Piyushbhai can say better in this

regard. Statements of Shri Piyush Sanariya trader of M/s. Famous Vitrified Pvt. Ltd. was

recorded on 13.04.2019 wherein he deposed that he had collected cash on 4-5 occasions

on behalf of M/s. Famous Vitrified Pvt. Ltd. Shri Hiren R. Kanani, main director had

affirmed on oath by way of notarized Affidavit dated 04.07.2020 after receipt of the SCN

to the effect that during the period under dispute or prior to that, Piyush was not working

in his company nor for the company but was doing his business of commission agent;

that no amount as salary or otherwise was paid to him during the period under dispute

nor received any amount stated in the Annexure - A to the SCN read with so called page

number of loose papers referred therein.

3.3 In case of M/s. Famous Ceramic Industries inculpatory statement of Shri Savjibhai

Sanariya was recorded on 12.03.2016 by the officers who later retracted his statement

at the earliest opportunity on 18.03.2016 and deposed that his signature was taken on

the papers without allowing him to read and signature was taken under duress and

pressure of arrest. An inculpatory statement of Shri Ravikumar Ramjibhai Adroja,

Partner of M/s. Famous Ceramic Industries was recorded on 08.04.2019 by the officers

during the period under dispute. He executed Notarised Affidavit dated 04.07.2020

inter alia stating that he had never manufactured and cleared goods clandestinely nor

received any amount in cash as stated in Annexure - A to the SCN read with so called

page number of loose papers referred therein.
30 E/10153/2022-DB & 263 ors.

3.4 In case of M/s. Sunbeam Ceramic Pvt. Ltd., exculpatory statement of one of the

directors Shri Bharatbhai Rugnathbhai Kasundra dated 24.04.2019 was recorded by the

officer wherein he had deposed that "I know the said Shri Pravinbhai of Morbi but I have

not received any cash from him."; that "I am the owner of mobile number 9825052244.

However, I do not know who is known as 'Sabi'. In our office nobody is known by the

name of 'Sabi'.; that "From the copy of the said documents, I have seen certain entries

made in the name as 'Sabi'. However, I would like to again state that I am not aware

of any such cash receipts by our company from Shri Pravinbhai as we have never dealt

him."; that "At this juncture I am not in a position to state the names of dealers at these

places. However, I state that against the supply of goods to all our dealers, we receive

the payments through Cheques/RTGS/NEFT through Bank of India, Morbi Branch."; that

"I have seen the copy of documents shown by you and put my dated signature in token

of having seen the same. However, I would like to reiterate that I had never dealt with

Shri Pravinbhai. We came to know that a search was conducted by the department at

the business premises of certain shroff sometimes back and had withdrawn the

documents. Since we had not dealt with Shri Pravinbhai, we had not taken it seriously

and hence no action was initiated against him."; that "I have seen the said

worksheet/Annexure. But I am sorry, I do not agree with the said work sheet as the

same was prepared based on the statements and documents of Shri Pravinbhai with

whom we had never dealt with in the course of business."

3.5 In case of M/s. Rossa Tiles Pvt. Ltd. statement of the Director was not recorded

however, affidavit executed by one of the directors to the effect that during the period

under dispute or prior to that, no person in the namely "Rehman" etc. (whether as

correct name or as nick name) was working in his company nor any salary was paid to

any person with such name during the period under dispute nor received any amount

as stated in the Annexure - B to the SCN read with so called page number of loose

papers referred therein. Even exculpatory statement of Shri Nitin M. Naraniya,

Authorised representative was recorded on 14.06.2019 by the officers wherein he

deposed that "I have gone through the statements of Shri Sandipbhai Bachubhai
31 E/10153/2022-DB & 263 ors.

Sanariya dated 24.12.2015 and having seen the same, I put my dated signature on the

body of the said statement but I would like to mention here that I do not know anything

about the said statement."; that "I do not know the said Shri Sandipbhai of Morbi and

we have not received any cash from him."; that "I do not know owner of mobile number

7574811511. However, I assure to gather the said information and will let you know

about the same. In our office, according to my understanding, nobody is known in the

name of 'Rehan'." I would like to state that I do not know Rehan. However, we will

enquire into the same with our office and let you know the details by 17.06.2019."; that

"I am the person dealing with and supervising the account matters of Rossa Tiles and

collection of cash. Apart from this, we have employed Shri Manishbhai Patel as

accountant for Rossa Tiles."; That "from the copy of the said documents, I have seen

certain entries made in the name of 'Rehan', 'Divyesh', Mehul', 'Shrikanth' etc. However,

I would like to again state that I am not aware of any such names and cash receipts by

our company."; that "I have seen copy of the documents and put my dated signatures

in token of having seen the same. However, I would like to reiterate that I do not know

Shri Sandipbhai Bachubhai Sanariya and have never dealt with him. Since we were

unaware of such statement, we did not take any action against him."; that "I have seen

the said work sheet/Annexure, but , I do not agree with the same as the said work sheet

was prepared based on the statement and documents of Shri Sandipbhai Bachubhai

Sanariya with whom we had never dealt with in the course of business."

3.6 In the case of M/s. Legend Ceramic Pvt. Ltd. statements of one of the Directors

Shri Dushyant B. Patel, was recorded on 20.01.2016. He had executed Affidavit before

the Notary on 20.08.2020 inter alia deposing that "there was no manufacture and

clearance of floor tiles without payment of duty of excise and without issue of invoice.

I submit that my statements dated 20.01.2016 recorded by the investigation is not

correct and is as typed by them in computer and my signatures were simply taken on

certain papers. I do not know the content of the said statements till receipt the copy of

the same with letter dated 16/26.08.2016. Even copy of Annexure - A referred to in
32 E/10153/2022-DB & 263 ors.

my statement was also not shown to me but simply my signature was taken on the

same."

3.7 In case of M/s.Samrat Sanitarywares P. Ltd., an exculpatory statement dated

13.05.2019 of Shri Harshadkumar Amrutiya, Director was recorded by the officer

wherein he deposed that "after reading answer to question no. 4 of the statement of

Shri Pravinbhai Shamjibhai Shirivi, I state that no such cash was given by Shri

Pravinbhai Shamjibhai Shirivi to M/s. Samrat Sanitarywares Pvt. Ltd."; that "As far as I

know, in between Shri Pravinbhai Shamjibhai Shirvi and Shri Pragjibhai no such payment

and receipts of cash were occurred, nor any one has made any indication of payment

and receipts."; that "After observing the worksheet prepared by the DGCEI on the basis

of documents of Shri Pravinbhai Shamjibhai Shirvi, I put my dated signature. However,

as far as my knowledge, there was no such payment and receipt made amongst Shri

Pravinbhai Shambjibhai Shirvi to Shri Pragjibhai." An exculpatory statement of Shri

Pragjibhai B. Chatrola, Shareholder dated 13.06.2019 shows that he had deposed that

"After reading answer to question No. 4 of Statement dated 24.12.2015 of Shri

Pravinbhai Shamjibhai Shirvi, I states that no such cash were given by Shri Pravinbhai

Shamjibhai Shirvi to M/s. Samrat Sanitarywares Pvt. Ltd. or if it is given, then I am not

aware as same were not received by me. If it is received by other partner, then also I

am not aware."; that "There was neither such payment and receipt occurred between

Shri Pravinbhai Shamjibhai Shirvi nor anyone has indicated so."; that "After observing

worksheet prepared by the DGCEI on the basis of documents of Shri Pravinbhai

Shamjibhai Shirvi, I put my dated signature. However, I am not aware about such

payment and receipt between Shri Pravinbhai Shambjibhai Shirvi and me." ; that "After

reading answer to question 10 of the statement dated 29.05.2019 of Shri Pravin Patel,

Partner of M/s. Patel Sales Depot, Hyderabad, I state that such cash payment if any

made by the partner of M/s. Patel Sales Depot, Hyderabad to M/s. Samrat Sanitaryware

then I am not aware. Shri Harshad Kumar Ramjibhai Amrutiya may be knowing as he is

looking after sales, marketing, taxation and bank for the company." Thus, these two
33 E/10153/2022-DB & 263 ors.

statements are totally exculpatory and therefore, inference drawn by the investigation

as discussed in para supra is totally erroneous.

3.8 In case of M/s. Ador Ceramics Pvt. Ltd., statements of Shri Naresh K. Rajpara,

Executive-Director was recorded wherein he stated that "I had handled or received cash

from any one not to speak of from middlemen brokers Shri Kasundra Kaka. Name

"Yogeshbhai" to whom cash is said to have been given by Shri Kasundra Kaka is one of

the Directors but his statement was not recorded by the department. There was no

manufacture and clearance of wall tiles without payment of duty of excise and without

issue of invoice. I submit that my statement dated 15.03.2016 recorded by the

investigation is not correct but as typed by them in computer and my signatures were

simply taken on certain papers. I did not know the content of the said statement till

receipt of a copy of the same with letter dated 03.06.2020.Even copy of Annexure - A

referred to in my statement is also not furnished with the SCN. Therefore, all the

allegations made in para 9.4 are totally baseless and out of imagination of the

investigation only. Once, I had not handled the cash nor aware about any sale of goods

without invoice and without payment of duty, question of my reasonable belief that

goods were liable to confiscation does not arise. In absence of inculpatory statement,

question of imposition of penalty upon me does not arise at all." The Director Shri

Yogeshbhai had executed affidavit before Notary on 21.07.2020 to the effect that they

have not manufactured and cleared Ceramic Wall Tiles as mentioned in the Show Cause

Notice F. No. DGGI/AZU/Gr-C/36-170/2019-20 dated 25.11.2019 without issue of

Central Excise Invoice and without payment of duty; that neither he nor other directors

or his company has received any cash as mentioned in Annexure - B to the SCN from

anyone; that there are no other persons whose names are discussed in this interim reply

to the SCN and loose papers furnished with the SCN as their authorised person to collect

cash from anyone; that they never authorised any person nor staff or anyway concerned

or related in collecting cash of/for M/s. Ador from any one including Shri Kasundra Kaka

of Morbi; that they have never supplied any tiles in addition to boxes mentioned in the

invoice to anyone including M/s. Harekrishna Tiles Agency, Hyderabad, M/s. Raja
34 E/10153/2022-DB & 263 ors.

Marketing, Hyderabad and M/s. Vijay Tiles Hub, Bangalore nor received any cash from

them for such extra boxes.

3.9 In remaining 50 cases, no statements of any of the Director/partner or anyone

from the tile manufacturer was recorded. In view of the above, in most of the cases

out of 7 cases, statements were exculpatory or retracted by way of affidavit at the

earliest possible opportunity.

3.10 Learned Advocate further submitted that the entire demand is confirmed based

on the statements of the shroffs, angadia/middlemen, directors/partners etc without

allowing cross examination of them, contrary to the specific provisions of Section 9D of

the Central Excise Act, 1944. It is submitted that statements can be relied upon only

when the persons whose statements are relied upon are examined and cross examined

by the adjudicating authority as provided under Section 9D of the Central Excise Act,

1944. There is no other evidence relied upon except oral evidence and once, same is

eschewed in absence of cross examination, there is no ground to consider unauthentic,

unsigned third-party private records viz. Daily Account Sheets prepared by middlemen

as evidence. In absence of the evidence, impugned order(s) confirming demand are

liable to be set aside. Even otherwise, as per the settled position of law, in absence of

examination and cross examination of department's witnesses, any inculpatory

statement has no evidential value at all.

3.11 Learned Advocate further submitted that the shroff and middleman/broker and

other departmental witnesses are not jointly tried with the appellant as abettor. For the

sake of argument, if it presumed that cash was collected by the Shroff and handed over

to the middleman/broker for onward payment to the tile manufacturer(s) including

appellant, then it amounts to abetement in evasion of duty of excise but they are not

made co-noticees in the present proceedings. They might have been given clean cheat

on the ground that if they give confession against the appellant, they will not be

penalized. It is also settled position of law that statements of co-accused can be relied

upon only when they are jointly tried with. Reliance is placed on the decision in the case

of Union of India Vs Lal Chand - 2016 (335) E.L.T. 416 (Mad.).
35 E/10153/2022-DB & 263 ors.

4. Learned AR, on the other hand, apart from relying upon the evidences brought to

light during the investigation, which have been found sustainable through the

adjudication process in relation to the same Shroff, i.e., M/s. K.N. Brothers, and taking

brief of M/s. Famous Vitrified Pvt. Ltd., as lead brief submitted as follows:-

4.1 Based on intelligence, the Directorate General of GST Intelligence (DGGI),

Ahmedabad, unearthed a widespread modus operandi adopted by numerous Tiles

manufacturers in Morbi for evading Central Excise Duty. Tiles manufacturers (Appellant

No.1) would provide bank account details of Shroffs (M/s. K.N. Brothers, Rajkot) to their

buyers who would deposit cash for clandestine sales into these Shroff accounts. Shroffs,

after confirming the deposits, would withdraw cash after deducting their commission

and hand it over to the Brokers/Middlemen i.e. Shri Pravin Shirvi, Morbi. These Brokers

would then deliver the cash to the Tiles manufacturers after deducting their commission,

using authorized persons i.e. Appellant No.2, Shri Piyush Sanariya, for Appellant No.1.

Therefore, searches on 22.12.2015 and 23.12.2015 were conducted at the premises of

Shroffs and Brokers which led to seizure of incriminating private records, including bank

statements and daily sheets detailing cash transactions. Statements recorded u/s 14 of

the Central Excise Act, 1944, of the Shroff, Shri Lalit Gangwani, the Broker Shri Pravin

Shirvi, and the Directors of Appellant No.1 Shri Rajesh Adroja and Shri Ashwin

Ghodasara corroborated the modus operandi and specifically implicated Appellant No.1.

Shri Piyush Sanariya, Appellant No.2 admitted that the name and mobile number

mentioned in the broker's statement belonged to him and that he had collected cash on

4-5 occasions for Appellant No.1. Based on the evidence, the SCN dtd. 04.05.2019 was

issued to the appellant No.1 for demanding central excise duty of Rs. 1,67,13,094/-

from them alongwith interest and penalties. OIO dtd 08.12.2020 confirmed the above

demand alongwith interest and imposed equal penalty on the Appellant-1 and also

imposed Penalty of Rs.50 Lakhs on both the Directors under Rule 26 of the Central

Excise Rules, 2002. Vide OIA 28.01.2022, the Commissioner (Appeal) upheld the said

OIO, leading to the present appeal before the CESTAT by the appellants.

4.2 He further submitted as follows :
36 E/10153/2022-DB & 263 ors.

• The statements of Shri Pravin Shirvi (Broker), Shri Lalit Gangwani (Shroff), and

the Directors of Appellant No.1 were recorded voluntarily u/s 14 of the Act which

were never retracted. There is no allegation of duress, threat, or coercion during

recording of their statements.

• The statements of the third parties (Shroff & Broker) are strongly corroborated by

the statements of the Directors of Appellant No.1, Shri Rajesh Adroja and Shri

Ashwin Ghodasara who also admitted that Shri Piyush Sanariya was involved in

the sales and cash transactions of the company.

• Shri Pravin Shirvi (Broker) in his statements specifically named "Famous Ceramics

(Vitrified Tiles) - Piyush - 9727770092" as one of the manufacturers to whom he

had handed over cash. He

• Shri Piyush Sanariya (Appellant No.2) admitted that the name "Piyush" and mobile

number- 9727770092 mentioned in the statement of Shri Pravin Shirvi (Broker)

belonged to him.

• Director of Appellant No.1 Shri Rajesh Adroja confirmed that "Piyush" is the cousin

of another shareholder and works with Appellant No.1.

• Director of the Appellant No.1 Shri Ashwin Ghodasara also admitted that Shri

Piyush Sanariya was handling sales rates and cash transactions for Appellant No.1

during the disputed period.

Thus, evidence of linking the cash received by the Shroff to the Broker and finally to the

Appellant No.1 through Appellant No.2 is clearly established.

4.3 Admission by the Appellant No.2 (Shri Piyush Sanariya) that he collected cash on

4-5 occasions for Appellant No.1 is a crucial inculpatory piece of evidence that

substantiates the modus operandi, even if he tried to limit the number of occasions. He

handled the cash.

4.4 In cases of clandestine removal, it is unrealistic to expect the department to

unearth every single piece of evidence with mathematical precision. The appellants

themselves designed the modus operandi to avoid creating a paper trail. The burden

shifts to the appellant once a prima facie case is established. Further, as per para 11.2
37 E/10153/2022-DB & 263 ors.

of the OIO "Para 11.2 : The DGGI investigated 186 manufacturers who were using similar

modus operandi, and 61 of them admitted their guilt and paid the duty. This reinforces the

probability and existence of the alleged evasion mechanism."

4.5 Regarding Inapplicability of Section 4A, the Appellate Authority correctly analysed

Section 4A and the Legal Metrology Act, 2009, to hold that the requirement to declare

RSP arises only when goods are sold to retail customers. The appellant has produced

no evidence to show that the clandestinely cleared goods were sold to retail customers.

Therefore, transaction Value is the Correct Basis for assessment in absence of any

declared RSP and as the goods sold in wholesale/clandestine manner, the value realized

by the manufacturer (the transaction value) is the correct basis for determining the

assessable value u/s 4 of the Central Excise Act, 1944. The department has rightly taken

the cash amount received by the manufacturer as the value for duty calculation. Further,

the appellant has failed to demonstrate how their case falls under clauses (a), (b), or

an MRP, the fallback mechanism of Rule 4 does not apply.

4.6 The very act of clandestine removal of finished goods by routing sale proceeds

through a complex web of Shroffs and Brokers to evade duty is a quintessential act of

"suppression of facts" with "intent to evade payment of duty." Therefore, extended

period has correctly been invoked in this case to demand evaded duty for the larger

period alongwith interest and penalty. Further the Appellant No.2 was directly involved

in the act of collecting illicit cash out of sale of clandestinely removed goods. Also, the

Appellant No.3, as the main director looking after finance and sales, was unquestionably

aware of and responsible for the clandestine activities of the company. Hence, appellant

have correctly been imposed penalties u/Rule 26 of the Central Excise Rules, 2002.

4.7 Reliance is placed on following case laws:-

• International Cylinders Pvt Ltd vs. CCE, 2010 (255) ELT 68 (H.P.)

1983 (13) E.L.T. 1631 (S.C.) Shah Guman Mal Versus State Of Andhra Pradesh.

• Ramachandra Rexins Pvt. Ltd. vs. CCE, 2013 (295) ELT 116 (Tri. - Bang.)

• A.N. Guha & Co. vs. CCE, 1996 (86) ELT 333 (Tri.)
38 E/10153/2022-DB & 263 ors.

• S.M. Steel Ropes vs. CCE, 2014 (304) ELT 591 (Tri. - Mumbai)

• K.I. Pavunny vs. Asst. Collector, 1997 (90) ELT 241 (S.C.)

• CCE, Mumbai vs. Favourite Industries vs. CCE, 2013 (289) ELT 3 (S.C.)

• CCE, Mumbai vs. Kaheri Foods India Pvt. Ltd., 2011 (270) ELT 643 (S.C.)

• Lawn Textile Mills Pvt. Ltd. vs. CCE, 2018 (362) ELT 559 (Mad.)

• Patel Engineering Ltd. vs. UOI, 2014 (307) ELT 862 (Bom.)

On Clandestine Activities:

• 1983 (13) ELT 1546 (SC) Collector of Customs, Madras vs. D. Bhoormull

• Apurva Aluminium Corporation vs. CCE, 1996 (261) ELT 515 (Tri. - Ahmd.)

2017 (351) E.L.T. 264 (M.P.) R.S. Company Versus Commissioner of Central Excise

• 2018 (360) E.L.T. A255 (S.C.) R.S. Company v. Commissioner - AFFIRMED

• 2004 (165) E.L.T. 136 (S.C.) Commissioner Of C. Ex., Madras Vs Systems &

Components Pvt. Ltd

• 2014 (314) E.L.T. 176 (Tri. - Mumbai) Umesha Textiles Pvt. Ltd. Versus CCE,

Mumbai

• 2005 (184) E.L.T. 263 (Tri. - Bang.) Gulabchand Silk Mills Pvt. Ltd. vs CCE HYD-II

• EXTENDED PERIOD : Rajasthan Spinning & Weaving Mills vs. CCE, 2009 (238) ELT 3 (S.C.).

5. Further submission vide letter dt.03.11.2025 were made by the learned AR which are as follows:-

5.1 A total of 57 main appellants and 205 co-appellants have filed appeal before the Hon'ble CESTAT. The main appellants are ceramic/vitrified tiles manufacturers from the Morbi/Wankaner region who were found by the department to have indulged in clandestine removal of finished goods without payment of Central Excise duty.

These 57 main appellants are bifurcated as follows:

a) In the case of 11 appellants, Statement of the partners or Directors of the appellant and the Buyers were recorded.

39 E/10153/2022-DB & 263 ors.

b) In the case of 03 appellants, Statement of the partners or Directors of appellant were only recorded.

c) In the case of 40 appellants No Statement of the partners or Directors of appellant were recorded and the statements of the Buyers were recorded.

d) In the case of 02 appellants, Statement of the partners or Directors of appellant and the Buyers were recorded, and the premises were searched.

e) In the case of 01 appellants, Statement of the partners or Directors of the appellant were recorded and premises were searched but no statements of the buyers were recorded.

The issue is Clandestine removal of excisable goods without payment of duty. Use of Shroffs and Brokers to route sale proceeds via cash deposits in the bank accounts. The adjudicating authority had relied upon statements of Shroffs/Brokers and private records seized during searches and confirmed the excise duty demand, interest, and penalties under Section 11 AC of the Central Excise Act, 1944, and Rule 26 of the Central Excise Rules, 2002 . In appeal, the Commissioner(A) also upheld the OIOs. Category wise submission is as under:-

a) Case of 11 MAIN APPELLANTS : M/S. OMEN VITRIFIED PVT. LTD. E/10920/2022 AND other 10 appeals. Para 7.4/ 8.2 & 11.2 of the OIA : The clandestine removal is proven not just by 28 seized diaries from the premises of the shroffs and Brokers, but is corroborated by external evidence as one of the customers M/s Badveshvar Mahadev Tiles, Kolkata admitted about receiving different grades of tiles and paying a differential amount in cash (Para 10.3). The opportunity for cross-examination was provided, and even if it wasn't fully executed, the Department possesses external, and independent corroboration in the form of admission from a buyer regarding payment of differential amount. The customer admission stands independent of the broker's statement and solidifies the clandestine removal. Denial of cross-

examination does not necessarily vitiate the proceedings if the facts are proved by other documentary evidences i.e 28 seized diaries and further strengthened by the admission by the buyer.

40 E/10153/2022-DB & 263 ors.

b) (3 MAIN APPELLANTS) M/S. SUNBEAM CERAMIC PVT LTD (E/10182/2022) AND 2 OTHER APPELLANT On appellant's contention that these is no direct link between the cash and removal of finished goods, it is submitted that the link is established through the proven use of Shroffs/Middlemen to receive cash against sale of clandestinely removed excisable goods. The lower authorities confirm the nexus between the money received by the key personnel of Sunbeam and clandestine removal.

PARA 9.1 OF THE OIA: The Adjudicating authority has given his findings at Page 41 of the impugned order which is reproduced below: In this regard, on verification of Table 'C' of the SCN issued to M/s. Sunbeam Ceramics Pvt. Ltd., relevant statements of Shri Pravinbhai Shirvi and images of daily sheets at Page No. 23 to 33 of the SCN, it is noticed that in Table-C of the Show Cause Notice at Sr. No. 8 under the columns 2 & 3, "Sabi" and "Short name of M/s. Sunbeam Ceramics Pvt. Ltd." respectively are written. Shri Pravinbhai Shirvi in his statement, in answer to Q. No.4, has given the details of Ceramic Tile manufacturers to whom he gave cash received from Shroff and he has specifically mentioned the name of Ms. Sunbeam Ceramic P. Ltd. therein. He has also given the mobile number of the person to whom he has made cash payment which is 9825052244. The said mobile number is Owned by Shri Bharatbhai R. Kasundra, Director of M/s. Sunbeam Ceramic P. Ltd. which has been admitted by him in his statement dated 24.04.2019. Thus, there is clear correlation of the tile manufacturer with the person to whom cash received from Shroff has been given by the middleman/broker i.e. Shri Pravinbhai Shirvi. Therefore, no contradiction is noticed as stated by the Noticee."

c) (40 MAIN APPELLANTS) M/S VARMORA GRANITO PVT LTD (E/10698/2022) AND 39 OTHERS I. On appellant's contention that Private records are unauthenticated and lack statutory value, it is submitted that Para 9.1 of the OIA mentions that The records are not standalone; they were decoded and explained by the 41 E/10153/2022-DB & 263 ors.

middleman, Shri Sandipbhai B. Sanarlya, in his statement. This process elevates the private records into corroborative evidence. II. On contention that statements were obtained under coercion and are inadmissible as cross-examination was denied, violating Section 9D. Para 13.1 of the OIA: The Commissioner (Appeals) specifically found the statement to be voluntary, spontaneous, and un-retracted during the recording process. The subsequent retraction made without sufficient proof of coercion holds no evidential value in a quasi-judicial proceeding that the statement was voluntary and un-retracted initially The Department does not solely rely on the statement, as it also relies on the fact that the statement decodes seized private documents. Thus, the statement acts as a key to the documents, and denial of cross-examination does not strip the documents of their evidentiary value. The voluntary nature of the statement and its direct nexus with the decoded private records override the technical defense of Section 9D as taken by the appellant.

III. On the contention that demand is based on suspicion/assumption Para 9.2 of the OIA: Appellant No. 1 had devised such a modus operandi that it was almost impossible to identify the buyers of goods or transporters who transported the finished goods. The Appellant No. 1 used to inform M/s K.N. Brothers, Rajkot, Shroff, or Shri Sandipbhai Bachubhai Sanariya, broker/Middlemen, about deposit of cash in bank accounts of Shroff on receipt of communication from their buyers and such cash amount would reach to them through middlemen/brokers. When cash amount was deposited by the buyers of the goods in bank accounts of Shroff, the same was not reflected in bank statements, as emerging from the records. So, there was no details of buyers available who had deposited the cash amount in bank accounts of Shroff. This way the Appellant No. 1 was able to hide the identity of the buyers of illicitly removed goods. It is a basic common sense that no person will 42 E/10153/2022-DB & 263 ors.

maintain authentic records of the illegal activities or manufacture being done by it. It is also not possible to unearth all evidences involved in the case.

d) (02 MAIN APPELLANTS) (E/10351-10352/2022) ADOR CERAMICS PVT. LTD AND 1 OTHER.

Para 8.1 of OIA: The Director of the Appellant company, Shri Divyesh Gordhanbhai Kaila, himself agreed with the statement of the broker Shri Thakarsi Premji Kasundra statement which is a direct admission of the Director establishing the company's knowledge and involvement.

Para 28.9 of the OIO: The most substantive evidence is the categorical admission by the Appellant's own Director Shri Hardik K. Adroja and other key personnel Shri Divyesh G. Kailla & Shri Naresh K. Rajpara They admitted to the facts of the investigation and the company's involvement in illicit transactions. Statements recorded from the buyers (dealers) located in various states confirmed that they received Ceramic Tiles from the Appellant without the cover of Central Excise Invoice and/or received an "extra quantity" of tiles. This proves physical movement of the clandestinely cleared goods from the manufacturer to the buyer. Appellants contention on "No evidence of dispatch/receipt of goods. Para 8.2 of OIA: The Appellant No, 1 had devised such a modus operandi that it was almost impossible to identify buyers of goods or transporters who transported the goods. The Appellant No. 1 used to inform M/s K.N. Brothers, Rajkot / Shree Ambaji Enterprise, Rajkot, Shroffs, or Shri Thakarshi Premji Kasundra, Morbi, Middlemen, about deposit of cash in bank accounts of Shroff on receipt of communication from their buyers and such cash amount would reach to them through middlemen/brokers. When cash amount was deposited by the buyers of the goods in the bank accounts of Shroff the same was not reflected in bank statements, as emerging from the records. So, there was no details of the buyer(s) available who had deposited cash amount in the bank accounts of Shroff. This way the Appellant No. 1 was able to hide identity of the buyers of illicitly removed goods. It is a basic common sense that no 43 E/10153/2022-DB & 263 ors.

person will maintain authentic records of the "illegal activities or manufacture being done by it. It is also not possible to unearth all evidences involved in the case. The adjudicating authority is required to examine the evidences on record and decide the case. The Hon'ble High Court in the case of International Cylinders Pvt Ltd reported at 2010 (255) ELT 68 (H.P.) has held that once the Department proves that something illegal had been done by the manufacturer which prima facie shows that illegal activities were being carried, the burden would shift to the manufacturer. The above finding is based on the financial flow of unaccounted cash against sale of finished goods. Since the cash flow through Shroffs and Brokers has been established, physical removal of goods for that cash is a natural and reasonable inference which the Appellant has failed to rebut Statements recorded have not been retracted The Appellant's contested that they were not allowed to cross-examine the Shroffs/Brokers and also the statements are inadmissible under Section 9D. OIA Para 11.1. "It is also on record that the statements of the Directors and employees of Appellant No. 1 recorded during the investigation process, have not been retracted nor is there any allegation of duress or threat during recording of Statements." It has been held that admitted facts need not be proved. I rely on the Order passed by Hon'ble CESTAT, Mumbai wherein it has been held that... in the present case, we find that there is no retraction of the confessional statement"

Para 8.1: The finding that the Director agreed with the broker's statement acts as an independent admission of the facts, making a lengthy debate on the broker's cross-

examination redundant. Compliance with Section 9D becomes secondary when the key evidence is the corroboration by the Appellant's own Director, Shri Divyesh Gordhanbhai Kalla. His agreement with the contents of the broker's statement establishes the truth of the transaction through the Appellant's own representative.

E) Only one main appellant- M/S SAMRAT SANITARYWARES PVT. LTD. (E-10680- 2022)

44 E/10153/2022-DB & 263 ors.

The case is built on the fact that DGCEI's investigation encompassed seizure of incriminating records and statements from multiple Shroffs and middlemen. This evidence consistently detailed a mechanism for receiving cash from across India against the Appellant's goods. The Modus operandi proves that the Appellant's management, specifically Shri Pragjibhai, was involved in receiving unaccounted cash, establishing the direct link between the seized financial records and the clandestine removal of finished goods from the factory.

On appellant's contention regarding Inadmissibility of Statements and Section 9D Para 11.1 of the OIA: I find that none of the Statements of Shroff/ Middlemen/Brokers recorded during investigation have been retracted nor is there any allegation of duress or threat during such recording of Statements. Further, Shroff/Middlemen/broker have no reason to depose before the investigating officers something which is contrary to facts. It is also pertinent to mention that the present case was not one of the cases involving clandestine removal of goods by the Tile manufacturers of Morbi. It is on record that DGCEI had simultaneously booked offence cases against 186 such manufacturers for evasion of Central Excise duty who had adopted similar modus operandi by routing sale proceeds of illicitly cleared finished goods through Shroffs /Middlemen/brokers. It is also on record that out of said 186 manufacturers, 61 had admitted and had also paid duty evaded by them. So, the documentary evidences gathered by the investigating officers from the premises of Shroffs / middlemen contained trails of illicitly removed finished goods and preponderance of probability is certainly against Appellant No. 1. It has been consistently held by the higher appellate fora that cross examination is not mandatory and it depends on facts of each and every case.

The above findings of the Commissioner(A) notes that the statements from the Shroffs and middlemen are admissible evidence because they are consistent across multiple Independent parties and are corroborated by the seized private records. In quasi-judicial proceedings, the courts have consistently held that such a convergence 45 E/10153/2022-DB & 263 ors.

of evidence constitutes "substantial evidence" proving the truth of the transaction, regardless of provision of Section 9D of the Central Excise Act, 1944. VALUATION UNDER SECTION 4A AS PER APPELLANTS CONTENTION Appellants have not produced any evidences that the goods were sold to retail customers. Further, as discussed above, Appellant had adopted such a modus operandi that identity of buyers could not be ascertained during investigation. Since, applicability of provisions contained in Legal Metrology Act, 2009 itself is not confirmed, it is not possible to extend benefit of abatement under Section 4A of the Act. Even if it is presumed that all the goods sold by the Appellant were to retail customers then also, what was realised through Shroff/Middlemen cannot be considered as MRP value for the reason that in cases when goods are sold through dealers, the dealer price (i.e. realised value) is less than the MRP. PENALTY ON DIRECTORS/PARTNER UNDER RULE 26 The penalty on the Directors/ PARTNERS in all the appeals is justified as the modus was established through consistency of various recorded statements and documents seized from the premises of Brokers/Shroffs/middlemen, confirming that unaccounted cash was channelled to the persons operating under the Directors/partners authority.

5.2 The department has also taken the following grounds:-

The Appellant's contention is about retraction of statements by the partners/directors:-

• Statements of Shri Ravikumar Ramjibhai Adroja, Partner of M/s. Famous Ceramic Industries, were recorded on 08.04.2019. These statements provided all the details about the modus operandi and the receipt of cash from the middleman, Shri Pravin Shirvi. The retraction by Shri Ravikumar Ramjibhai Adroja via Notarised Affidavit was executed much later on 04.07.2020, almost after 15 months and after receiving the Show Cause Notice. This retraction after a gap of 15 months is clearly an afterthought. Both the lower authorities 46 E/10153/2022-DB & 263 ors.

confirm that liability is fixed by the corroborated evidence of the modus and the involvement of a key person.

• The trader of Famous Vitrified Shri Piyush Sanariya himself deposed that he collected cash on 4-5 occasions on behalf of the company. This admission, supported by the seized documents, cannot be negated by a subsequent defensive affidavit.

• The demand does not rest solely on the statements. The statements explain and authenticate the primary documentary evidence, i.e. the incriminating loose papers/worksheets seized from the premises of the Shroffs/Brokers. The fact is that the Broker, Shri Pravin Shirvi, deciphered the seized records and specifically identified the cash recipient, "Shri Ravi of M/s Famous Ceramic Industries", which creates an irrefutable link that cannot be broken by a subsequent affidavit.

• The statement of Shri Bharatbhai R. Kasundra's Director was exculpatory and he denies dealing with Shri Pravinbhai or agreeing with the worksheets. The Commissioner (Appeals) held that the key person of the Appellant was "directly Involved in clandestine removal. This finding confirms that the evidence of overall financial trail, seized documents, and corroboration was sufficient to prove the Appellant's knowledge and involvement, despite the Director's attempts to evade responsibility or disagree with the worksheet years later. • No Director's statement was recorded, and the Authorized Representative's statement was exculpatory, denying knowledge of 'Rehan' or Shri Sandipbhai B. Sanariya, and refusing to agree with the worksheet.

• A statement from a Director is not a mandatory prerequisite for confirming duty demand or penalty. In the present case, modus is established by the nexus created by seized records and third-party statements. The denial by the representative does not break the evidentiary chain established by the documents and the statements of the Shri Sandipbhai B. Sanariya which quantify the evasion. The refusal to agree with the worksheet does not negate the existence and content of the original incriminating documents. 47 E/10153/2022-DB & 263 ors.

• Appellant contest that Director Shri Naresh K. Rajpara denies handling cash and alleges that his 2016 statement was coerced/typed by the officers. Director Shri Yogeshbhai with the help of affidavit executed in 2020 denies clandestine clearance or cash collection.

• The subsequent, notarized affidavit in the year 2020 is a self-serving afterthought made years after the initial 2016 statements and that to after receipt of the Show Cause Notice. Both the lower authorities have confimed that liability is fixed by the corroborated evidence of the modus and the involvement of a key person.

• The Appellant alleges violation of Section 9D of the Central Excise Act, 1944, claiming that the entire demand is based on the statements without cross- examination.

• The evidence is not solely based on the Broker's or Shroff's statements. The case is squarely established on the admission of the Appellant's own Directors, which are then corroborated by the broker's diaries and the financial trail. The denial of cross-examination of third parties becomes inconsequential when the accused parties themselves have admitted to the facts. The appellate authority has correctly relied on the CESTAT decision in S.M. Steel Ropes, which held that "admitted facts need not be proved." The un-retracted admission of the Directors, who are the prime accused, that they received cash from the broker for clandestine sales of finished goods, are admitted facts. The legal requirement to prove the case is satisfied by these admissions alone. • Section 9D deals with admissibility of a statement. Since the documents recovered from the Shroffs /Brokers stand proved by their detailed explanations and the initial concurrence of the Appellant, the requirement of cross-examination is substantially met or rendered non-fatal to the case, as the case is built on material evidence and not just oral evidence. • The Department relies on the finding in the Order-in-Appeal which conclusively links the Appellant to the modus operandi and the evidence at the following para.

48 E/10153/2022-DB & 263 ors.

• Para 8.1 of the (Order-In-Appeal No. RAJ-EXCUS-000-APP-055 to 057-2021 dated 17.12.2021): "On examining the Statements of Shri Lalit Ashumal Gangwani, owner of M/s KH Brothers, Rajkot, and Shri Pravin Shirvi, Morbi, it is apparent that the said Statements contained plethora of facts, which are in the knowledge of the deponents only. For example, Shri Pravin Shirvi deciphered the meaning of each and every entry written in the private records seized from his premises. He also gave details of when and how much cash was delivered and to which Tile manufacturer and even the concerned person who had received the cash amount. He deposed that he used to hand over cash received from Shroff to Shri Ravi of M/s Famous Ceramic Industries and also gave the mobile number of Shri Ravi. These facts have been corroborated during investigation and found to be true as both Appellant No. 2 and 3 have concurred with the contents." Reliance placed on decision of Hon'ble Gujarat High Court in the case of POOJA TEX PRINTS PVT. LTD. VS ADDL. COMMR OF C. EX. & CUS & ST., SURAT reported at 2019 (365) ELT 42 (Guj.). this order was further affirmed by the Apex Court as reported at 2019 (367) E.L.T. A322 (SC). It was held that, " Demand - Clandestine removal of goods - Evidence Statement of Director of Company-Partial retraction of statement much later-Both Commissioner (Appeals) and Tribunal of opinion that statements of director recorded were in terms of Section 108 of Customs Act, 1962 and admissible in evidence [para 4]."

6. In rejoinder, the appellant(s) also submitted their grounds which are as follows:-

6.1 Appellants with reference to additional unsigned written submissions received by email dated 03.11.2025 with forwarding letter F. No. E/10228/2022 dated 03.11.2022 of the Superintendent (AR), CESTAT, Ahmedabad and in continuation to submissions made at the time of hearing on 06.10.2025 and further submissions dated 16.10.2025 without prejudice to submissions made till date and without admitting anything further submits that Central Excise duty is demanded from 57 appellants who are tile manufacturers/sanitaryware manufacturers etc with interest and equal amount of penalties. Further, penalty is imposed upon 205 49 E/10153/2022-DB & 263 ors.

Partners/Directors of the appellant(s) solely on the basis of third party hand written private records said to have been recovered from the middlemen viz. shroffs/angadias mostly based at Morbi and Bank Statement of Shroffs/Angadias based at Rajkot and oral evidences. The copy of such Bank Statements are neither relied upon nor furnished with the SCNs evenafter repeated requests. Even looking at the copy of such bank statements of shroffs/angadias situated at Rajkot reproduced in the SCNs, there is no link established between those bank statements and the said private record of the third party middlemen viz. Shroffs/angadias at all. Thus, link of payment received by shroffs/angadias at Rajkot and payment to middlemen Shroffs/Angadias at Morbi and further payment to appellants are not established at all. In the same way there is no evidence in the entire SCN about who had deposited such amounts in the bank accounts of shroffs/angadias at Rajkot. It is also not clear that which buyer of the appellants had deposited the amount in the account of shroffs/angadias. There is no other evidence nor any allegation about clandestine manufacture, supply, transportation of finished goods, transportation of raw materials for manufacture of such goods, installed capacity to manufacture additional such goods, use of excess manpower, electricity, gas, payment to transporter, receipt of payment if any against such supply etc. from the specific buyer of the goods. There are no details about manufacture and supply of how many boxes of tiles etc by the appellants to whom and who had paid such amounts to appellants. 6.2 Appellants submits that merely based on uncorroborated and unsubstantiated statements of such shroffs/angadias based at Rajkot and middlemen shroffs/angadias at Morbi which are recorded by the officers as per their whims under Section 14 of the Central Excise Act, 1944, demands are raised and confirmed. As discussed in the grounds of appeals, submission made at the time of PH and further submissions after PH, even general statements of few directors/partners were recorded by the investigation as per their whims, and many of the statements are either exculpatory or self contradictory. Even so called confession taken by the investigation are of such partners/directors who were not looking after or dealing 50 E/10153/2022-DB & 263 ors.

with sales, receipt of payment etc. Even name of the appellants and their persons written in the said third party private records are not matching or even not decoded by the author of such private records. Appellants submit that though in very few cases statements of directors/partners were recorded and wherever these were recorded, same were retracted at the earliest opportunity viz. as and when content of the statement came to their knowledge i.e. when copy of the same were received with the SCN. Question of retraction of statements by the shroffs/angadias at Rajkot and Middlemen shroffs/angadias at Morbi and/or few buyers does not arise as they are not jointly tried with the appellants. The statements implicating appellants must have recorded with an assurance that if they give statements against the appellants there will not be any proposal to impose penalty upon them. If their statements are considered as true in that case it has to be considered that they had abetted appellant in evasion of duty of excise but for the reasons best known to the investigation, they are not jointly tried. So only option before the appellants was to request for cross examination of them so as to bring on record truth and correct contents of the statement by examination and cross examination by and before the adjudicating authorities but same were summarily rejected without appreciating the provisions of Section 9D(2) of the Central Excise Act, 1944 and settled position of law. Therefore, such few statements have also lost the evidential value.

6.3 Appellants submit that hardly few buyers who statements were recorded under Section 14 of the Central Excise Act, 1944. As stated by the learned AR that one of such buyers had said to have accepted receipt of different grade of goods, it may be a case of undervaluation and not of clandestine removal but demand is based on alleged clandestine removal and not of mis-declaration of value. 6.4 Appellants submit that in any case, in the present case as such no evidence is relied upon for alleged clandestine removal except unauthenticated, unsigned (not signed by anyone - Panchas, the person in whose presence same were recovered and even the officer who is said to have seized) third party private records that too without any evidence from where and in whose presence the same were recovered 51 E/10153/2022-DB & 263 ors.

and oral evidence in the form of statements of shroffs/angadias based at Rajkot and middlemen Shroffs/Angadias based at Morbi and few statements of directors/partners and buyers.

6.5 Appellants submit that the learned Commissioner (Appeals) has heavily relied upon those statements amongst other of shroffs/angadias based at Rajkot and middlemen Shroffs/Angadias based at Morbi to upheld the orders of the adjudicating authority in sheer disregard to very clear provisions of examination of such persons/witnesses under Section 9D(2) of the Central Excise Act, 1944 and settled position of law. As per Section 9D(2) ibid, statement recorded under Section 14 of the Central Excise Act, 1944 by the Central Excise officer of a gazetted Rank is relevant for the purpose of proving an offence under the Central Excise Act, 1944, the truth of the facts which it contained only when the person who made the statement is examined as a witness in the case before the adjudicating authority, then the such statement can be admitted in evidence in the interests of justice. Since, none of the person whose statements are relied upon was examined as witness and cross examined, such statement cannot have any relevancy for the purpose of an offence under the Central Excise Act, 1944. Once, such statements are eschewed from evidence in absence of examination and cross examination, the other evidences including unauthenticated third party private record have also lost evidential value as same become uncorroborated, unexplained etc. 6.6 In one of the recent decisions of Principal Bench of CESTAT, New Delhi in the case of Saurabh Kapoor Vs. Pr. Commr. of Customs, New Delhi vide Final Order No. 51624/2025 dated 29.10.2025 has held after referring host of decisions of Hon'ble High Courts, as under:

"12. The case of the department is mainly based on the printouts of the seven proforma invoices that the department claims were taken from the email account of the appellant during the course of the making of the statement by the appellant under section 108 of the Customs Act. A perusal of the said statement indicates that printout of pages from 1 to 163 were taken. These 163 pages have not been made a Relied Upon Document and, therefore, it is not possible to ascertain whether the seven proforma invoices which have been made Relied Upon Document No. 5 to the show cause notice are those proforma invoices of which the 52 E/10153/2022-DB & 263 ors.

printouts were taken. The department had to substantiate that the seven proforma invoices were printouts taken from the e-mail account of the appellant when the statement under section 108 of the Customs Act was recorded. It cannot be assumed that these seven proforma invoices are those very proforma invoices of which printouts were taken.

13. The impugned order also places reliance on the statement made by the appellant under section 108 of the Customs Act on 2/3.08.2019 that the prices mentioned in the proforma invoices were correct and were much higher than the commercial invoices. It is from these facts that a conclusion has been drawn that the valuation of the goods in the 14th live consignment was undervalued. It is for this reason that the valuation of the goods was rejected and re-determined under the provisions of the 2007 Valuation Rules.

14. Section 108 of the Customs Act would, therefore, have to be examined.

15. Section 108 of the Customs Act deals with power to summon persons to give evidence and produce documents. It provides that any Gazetted Officer of customs shall have the power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under the Customs Act.

16. Section 138B of the Customs Act deals with relevancy of statements made under section 108 of the Customs Act and it is reproduced below:

"138B. Relevancy of statements under certain circumstances. (1) A statement made and signed by a person before any Gazetted Officer of customs during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains, -- (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the court and the court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-

section (1) shall, so far as may be, apply in relation to any proceeding under this Act, other than a proceeding before a court, as they apply in relation to a proceeding before a court."

17. It would be seen that section 108 of the Customs Act enables the concerned Officers to summon any person whose attendance they consider necessary to give evidence in any inquiry which such Officers are making. The statements of the persons so summoned are then recorded under these provisions. It is these statements which are referred to section 138B of the Customs Act. A bare perusal of sub-section (1) of section 138B makes it evident that the statement recorded before the concerned Officer during the course of any inquiry or proceeding shall be relevant for the purpose of proving the truth of the facts which it contains only when the person who made the statement is examined as a witness before the Court and such Court is of the opinion that having regard to the circumstances of the case, the statement should be admitted in evidence, in the interests of justice, except where the person who tendered the statement is dead or cannot be found. In view of the provisions of sub-section (2) of section 138B of the Customs Act, the provisions of sub-section (1) shall apply to any proceedings under the Customs Act as they apply in relation to proceedings before a Court. What, therefore, follows is that a person who makes a statement during the course of an inquiry has to be first examined as a witness before the adjudicating authority and thereafter the adjudicating authority has to form an opinion whether having regard to the circumstances of the case the statement should be admitted in evidence, in the 53 E/10153/2022-DB & 263 ors.

interests of justice. Once this determination regarding admissibility of the statement of a witness is made by the adjudicating authority, the statement will be admitted as an evidence and an opportunity of cross-examination of the witness is then required to be given to the person against whom such statement has been made. It is only when this procedure is followed that the statements of the persons making them would be of relevance for the purpose of proving the facts which they contain.

18. Section 9D of the Central Excise Act is almost identical to the provisions of section 138B of the Customs Act.

19. It would now be appropriate to examine certain decisions interpretating section 138B of the Customs Act and section 9D of the Central Excise Act.

20. In Ambika International vs. Union of India - 2018 (361) E.L.T. 90 (P&H) decided on 17.06.2016, the Punjab and Haryana High Court examined the provisions of section 9D of the Central Excise Act. The show cause notices that had been issued primarily relied upon statements made under section 14 of the Central Excise Act. It was sought to be contended by the Writ Petitioners that the demand had been confirmed in flagrant violation of the mandatory provisions of section 9D of the Central Excise Act. The High Court held that if none of the circumstances contemplated by clause (a) of section 9D(1) exist, then clause (b) of section 9D(1) comes into operation and this provides for two steps to be followed. The first is that the person who made the statement has to be examined as a witness before the adjudicating authority. In the second stage, the adjudicating authority has to form an opinion, having regard to the circumstances of the case, whether the statement should be admitted in evidence in the interests of justice. The judgment further holds that in adjudication proceedings, the stage of relevance of a statement recorded before Officers would arise only after the statement is admitted in evidence by the adjudicating authority in accordance with the procedure contemplated in section 9D(1)(b) of the Central Excise Act. The judgment also highlights the reason why such an elaborative procedure has been provided in section 9D(1) of the Central Excise Act. It notes that a statement recorded during inquiry/investigation by an Officer of the department has a possibility of having been recorded under coercion or compulsion and it is in order to neutralize this possibility that the statement of the witness has to be recorded before the adjudicating authority. The relevant portions of the judgment are reproduced below:

"15. A plain reading of sub-section (1) of Section 9D of the Act makes it clear that clauses (a) and (b) of the said sub-section set out the circumstances in which a statement, made and signed by a person before the Central Excise Officer of a gazetted rank, during the course of inquiry or proceeding under the Act, shall be relevant, for the purpose of proving the truth of the facts contained therein. 16. Section 9D of the Act came in from detailed consideration and examination, by the Delhi High Court, in J.K. Cigarettes Ltd. v. CCE, 2009 (242) E.L.T. 189 (Del.). Para 12 of the said decision clearly holds that by virtue of sub-section (2) of Section 9D, the provisions of sub-section (1) thereof would extend to adjudication proceedings as well.

22. If none of the circumstances contemplated by clause (a) of Section 9D(1) exists, clause (b) of Section 9D(1) comes into operation. The said clause prescribes a specific procedure to be followed before the statement can be admitted in evidence. Under this procedure, two steps are required to be followed by the adjudicating authority, under clause (b) of Section 9D(1), viz. (i) the person who made the statement has to first be examined as a witness in the case before the adjudicating authority, and (ii) the adjudicating authority has, thereafter, to form the opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. 23. There is no justification for jettisoning this procedure, statutorily prescribed by plenary parliamentary legislation for admitting, into evidence, a statement recorded before the gazetted Central Excise Officer, which does not suffer from the handicaps contemplated by clause (a) of Section 9D(1) of the Act. The use of the word "shall"

in Section 9D(1), makes it clear that, the provisions contemplated in the sub- 54 E/10153/2022-DB & 263 ors.

section are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory.

24. The rationale behind the above precaution contained in clause (b) of Section 9D(1) is obvious. The statement, recorded during inquiry/investigation, by the gazetted Central Excise Officer, has every chance of having been recorded under coercion or compulsion. It is a matter of common knowledge that, on many occasions, the DRI/DGCEI resorts to compulsion in order to extract confessional statements. It is obviously in order to neutralize this possibility that, before admitting such a statement in evidence, clause (b) of Section 9D(1) mandates that the evidence of the witness has to be recorded before the adjudication authority, as, in such an atmosphere, there would be no occasion for any trepidation on the part of the witness concerned. 25. Clearly, therefore, the stage of relevance, in adjudication proceedings, of the statement, recorded before a gazetted Central Excise Officer during inquiry or investigation, would arise only after the statement is admitted in evidence in accordance with the procedure prescribed in clause (b) of Section 9D(1). The rigour of this procedure is exempted only in a case in which one or more of the handicaps referred to in clause (a) of Section 9D(1) of the Act would apply. In view of this express stipulation in the Act, it is not open to any adjudicating authority to straightaway rely on the statement recorded during investigation/inquiry before the gazetted Central Excise Officer, unless and until he can legitimately invoke clause (a) of Section 9D(1). In all other cases, if he wants to rely on the said statement as relevant, for proving the truth of the contents thereof, he has to first admit the statement in evidence in accordance with clause

(b) of Section 9D(1). For this, he has to summon the person who had made the statement, examine him as witness before him in the adjudication proceeding, and arrive at an opinion that, having regard to the circumstances of the case, the statement should be admitted in the interests of justice. 26. In fact, Section 138 of the Indian Evidence Act, 1872, clearly sets out the sequence of evidence, in which evidence-in-chief has to precede cross-examination, and cross-examination has to precede re-examination. 27. It is only, therefore, -

(i) after the person whose statement has already been recorded before a gazetted Central Excise Officer is examined as a witness before the adjudicating authority, and (ii) the adjudicating authority arrives at a conclusion, for reasons to be recorded in writing, that the statement deserves to be admitted in evidence, that the question of offering the witness to the assessee, for cross-examination, can arise. 28. Clearly, if this procedure, which is statutorily prescribed by plenary parliamentary legislation, is not followed, it has to be regarded, that the Revenue has given up the said witnesses, so that the reliance by the CCE, on the said statements, has to be regarded as misguided, and the said statements have to be eschewed from consideration, as they would not be relevant for proving the truth of the contents thereof." (emphasis supplied)

21. The Punjab and Haryana High Court in Jindal Drugs Pvt. Ltd. vs. Union Of India

- 2016 (340) E.L.T. 67 (P & H) that was decided on 21.06.2016 also held that unless and until one of the circumstances contemplated by clause (a) of section 138B(1) of the Customs Act applies, the adjudicating authority is bound to strictly follow the procedure contained in clause (b) of section 138B(1) of the Customs Act, before treating a statement recorded under section 108 of the Customs Act as relevant.

22. In Hi Tech Abrasives Ltd. vs. Commissioner of C. Ex. & Cus., Raipur - 2018 (362) E.L.T. 961 (Chhattisgarh) decided on 04.07.2018, the Chhattisgarh High Court also examined the provisions of section 9D of the Central Excise Act. The allegation against the appellant was regarding clandestine removal of goods without payment of duty and for this purpose reliance was placed on the statement of the Director of the Company who is said to have admitted clandestine removal of goods. The contention of the appellant before the High Court was that the 55 E/10153/2022-DB & 263 ors.

statement of the Director could be admitted in evidence only in accordance with the provisions of section 9D of the Central Excise Act. After examining the provisions of sub-sections (1) and (2) of section 9D of the Central Excise Act, and after placing reliance on the judgment of the Punjab and Haryana High Court in Ambika International, the Chhattisgarh High Court held:

"9.3 A conjoint reading of the provisions therefore reveals that a statement made and signed by a person before the Investigation Officer during the course of any inquiry or proceedings under the Act shall be relevant for the purposes of proving the truth of the facts which it contains in case other than those covered in clause

(a), only when the person who made the statement is examined as witness in the case before the court (in the present case, Adjudicating Authority) and the court (Adjudicating Authority) forms an opinion that having regard to the circumstances of the case, the statement should be admitted in the evidence, in the interest of justice. 9.4 The legislative scheme, therefore, is to ensure that the statement of any person which has been recorded during search and seizure operations would become relevant only when such person is examined by the adjudicating authority followed by the opinion of the adjudicating authority then the statement should be admitted. The said provision in the statute book seems to have been made to serve the statutory purpose of ensuring that the assessee are not subjected to demand, penalty interest on the basis of certain admissions recorded during investigation which may have been obtained under the police power of the Investigating authorities by coercion or undue influence.

9.5 ***** The provisions contained in Section 9D, therefore, has to be construed strictly and held as mandatory and not mere directory. Therefore, unless the substantive provisions contained in Section 9D are complied with, the statement recorded during search and seizure operation by the Investigation Officers cannot be treated to be relevant piece of evidence on which a finding could be based by the adjudicating authority. A rational, logical and fair interpretation of procedure clearly spells out that before the statement is treated relevant and admissible under the law, the person is not only required to be present in the proceedings before the adjudicating authority but the adjudicating authority is obliged under the law to examine him and form an opinion that having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. Therefore, we would say that even mere recording of statement is not enough but it has to be fully conscious application of mind by the adjudicating authority that the statement is required to be admitted in the interest of justice. The rigor of this provision, therefore, could not be done away with by the adjudicating authority, if at all, it was inclined to take into consideration the statement recorded earlier during investigation by the Investigation officers. Indeed, without examination of the person as required under Section 9D and opinion formed as mandated under the law, the statement recorded by the Investigation Officer would not constitute the relevant and admissible evidence/material at all and has to be ignored. We have no hesitation to hold that the adjudicating officer as well as Customs, Excise and Service Tax Appellate Tribunal committed illegality in placing reliance upon the statement of Director Narayan Prasad Tekriwal which was recorded during investigation when his examination before the adjudicating authority in the proceedings instituted upon show cause notice was not recorded nor formation of an opinion that it requires to be admitted in the interest of justice. In taking this view, we find support from the decision in the case of Ambica International v. UOI rendered by the High Court of Punjab and Haryana." (emphasis supplied).

23. In Additional Director General (Adjudication) vs. Its My Name Pvt. Ltd. - 2021 (375) E.L.T. 545 (Del.) decided on 01.06.2020, the Delhi High Court examined the provisions of sections 108 and 138B of the Customs Act. The department placed reliance upon the statements recorded under section 108 of the Customs Act. The Delhi High Court held that the procedure contemplated under section 138B(1)(b) has to be followed before the statements recorded under section 108 of the 56 E/10153/2022-DB & 263 ors.

Customs Act can be considered as relevant. The relevant paragraphs of the judgment of the Delhi High Court are reproduced below:

"76. We are not persuaded to change our view, on the basis of the various statements, recorded under Section 108 of the Act, on which the Learned ASG sought to rely. Statements, under Section 108 of the Act, we may note, though admissible in evidence, acquire relevance only when they are, in fact, admitted in evidence, by the adjudicating authority and, if the affected assessee so chooses, tested by cross-examination. We may, in this context, reproduce, for ready reference, Section 138B of the Act, thus : ***** A Division Bench of this Court has, speaking through A.K. Sikri, J. (as he then was) held, in J & K Cigarettes Ltd. v. Collector of Central Excise [2009 (242) E.L.T. 189 (Del.)] that, by virtue of sub-section (2), Section 138B(1) of the Act would apply, with as much force, to adjudication proceedings, as to criminal proceedings. ***** We express our respectful concurrence with the above elucidation of the law which, in our view, directly flows from Section 138B(1) of the Act - or, for that matter, Section 9D of the Central Excise Act, 1944.

77. The framers of the law having, thus, subjected statements, recorded under Section 108 of the Act, to such a searching and detailed procedure, before they are treated as relevant in adjudication proceedings, we are of the firm view that such statements, which are yet to suffer such processual filtering, cannot be used, straightaway, to oppose a request for provisional release of seized goods. The reliance, in the appeal before us, on various statements recorded during the course of investigation in the present case cannot, therefore, in our view, invalidate the decision, of the Learned Tribunal, to allow provisional release of the seized 25400.06 grams of gold jewellery, covered by Bill of Entry No. 107190, dated 20th April, 2019." (emphasis supplied)

24. In M/s. Drolia Electrosteel P. Ltd. vs. Commissioner, Customs, Central Excise & Service Tax, Raipur - 9. Excise Appeal No. 52612 of 2018 decided on 30.10.2023 decided on 30.10.2023, a Division Bench of the Tribunal examined the provisions of section 9D of the Central Excise Act and after placing reliance upon the decision of the Punjab and Haryana High Court in Jindal Drugs, observed that if the mandatory provisions of section 9D(1)(b) of the Central Excise Act are not followed, the statements cannot be used as evidence in proceedings under Central Excise Act. The relevant portions of the decision of the Tribunal are reproduced below:

"14. Evidently, the statements will be relevant under certain circumstances and these are given in clauses (a) and (b) of subsection (1). There is no assertion by either side that the circumstances indicated in (a) existed in the case. It leaves us with (b) which requires the court or the adjudicating authority to first examine the person who made the statement and form an opinion that having regard to the circumstances of the case, the statement should be admitted in evidence. Of course, the party adversely affected by the statement will have to be given an opportunity to cross examine the person who made the statement but that comes only after the statement is, in the first place, after examination by the adjudicating authority, admitted in evidence. This has not been done in respect of any of the 35 statements. Therefore, all the statements are not relevant to the proceedings.

15. It has been held in a catena of judgments including Jindal Drugs Pvt. Ltd. versus Union Of India [2016 (340) E.L.T. 67 (P&H)] that section 9D is a mandatory provision and if the procedure prescribed therein is not followed, statements cannot be used as evidence in the proceedings under Central Excise Act. ***** 16. Therefore, the 35 statements relied upon in the SCN are not relevant and hence also not admissible." (emphasis supplied)

25. It, therefore, transpires from the aforesaid decisions that both section 138B(1)(b) of the Customs Act and section 9D(1)(b) of the Central Excise Act

57 E/10153/2022-DB & 263 ors.

contemplate that when the provisions of clause (a) of these two sections are not applicable, then the statements made under section 108 of the Customs Act or under section 14 of the Central Excise Act during the course of an inquiry under the said Acts shall be relevant for the purpose of proving the truth of the facts contained in them only when such persons are examined as witnesses before the adjudicating authority and the adjudicating authority forms an opinion that the statements should be admitted in evidence. It is thereafter that an opportunity has to be provided for cross-examination of such persons. The provisions of section 138B(1)(b) of the Customs Act and section 9D of the Central Excise Act have been held to be mandatory and failure to comply with the procedure would mean that no reliance can be placed on the statements recorded either under section 108 of the Customs Act or under section 14D of the Central Excise Act. The Courts have also explained the rationale behind the precautions contained in the two sections. It has been observed that a statement recorded during inquiry/investigation by officers has every chance of being recorded under coercion or compulsion and it is in order to neutralize this possibility that statement of a witness has to be recorded before the adjudicating authority, after which such a statement can be admitted in evidence.

26. Thus the statement made by the appellant under section 108 of the Customs Act cannot be considered as relevant as the procedure contemplated under section 138B of the Customs Act had not been followed.

27. It is only because of the statement made by the appellant under section 108 of the Customs Act that the amount mentioned in the seven proforma invoices have been preferred over the amount mentioned in the commercial invoices, whereas it is the amount mentioned in the commercial invoices that is arrived at after negotiations that has to be taken into consideration. The amount mentioned in the seven proforma invoices cannot, therefore, be considered for valuation purposes.

28. What is also important to notice is that after the statement under section 108 of the Customs Act was made on 2/3.08.2019, the appellant retracted the statement immediately on 03.08.2019 and the retraction has been reproduced above. The appellant clearly stated that he was made to sit in the inspection office of Special Investigation and Intelligence Branch from evening till morning and when he was given a typed statement to sign he was told that if he refused to sign he would be arrested with his family members. He further stated that to save himself from arrest and to save his family members from harassment, he signed the typed statement without even reading it. He also stated that he had signed some other documents, the contents of which he does not even know.

30. It is important to notice that the printouts alleged to have been taken during the course of statement made by the appellant under section 108 of the Customs Act were not recorded under a panchnama and nor was the procedure contemplated under section 138B of the Customs Act followed.

31. The decision of the Supreme Court in Additional Director General, Adjudication Directorate of Revenue Intelligence vs. Suresh Kumar And Co. Impex Pvt. Ltd. & Others10 would, therefore, not come to the aid of the department." 6.7 Appellants submit that as per settled position of law including above as well as judgements cited therein that any statement recorded under Section 14 of the Central Excise Act, 1944 can be admitted as evidence only when its authenticity is established under provisions of Section 9D(1) of the Act, ibid as held by Hon'ble High Court of Delhi in the case of J.K. Cigarettes Ltd. vs. CCE, 2009 (242) ELT 189 (Del). 58 E/10153/2022-DB & 263 ors.

Para 12 of the said decision clearly holds that by virtue of sub-section (2) of Section 9D, the provisions of sub-section (1) thereof would extend to adjudication proceedings as well.

"There can, therefore, be no doubt about the legal position that the procedure prescribed in sub-section (1) of Section 9D is required to be scrupulously followed, as much in adjudication proceedings as in criminal proceedings relating to prosecution."

Further in CWP No.12614 of 2016 in the case of M/s JINDAL DRUGS PVT LTD AND ANOTHER Vs UNION OF INDIA AND ANOTHER as reported at 2016 (340) E.L.T. 67 (P & H) involving identical issue of cross examination wherein appellants had filed petition before Hon'ble High Court of Punjab and Haryana against the Order-in- Original passed by the adjudicating authority confirming demand of duty and imposing penalty without granting permission for cross examination of makers of the statements, it was inter alia held by Hon'ble High Court that:

"15. Once discretion, to be judicially exercised is, thus conferred, by Section 9D, on the adjudicating authority, it is self-evident inference that the decision flowing from the exercise of such discretion, i.e. the order which would be passed, by the adjudicating authority under Section 9D, if he chooses to invoke clause (a) of sub- section (1) thereof, would be pregnable to challenge. While the judgment of the Delhi High Court in J&K Cigarettes Ltd. (supra) holds that the said challenge could be ventilated in appeal, the petitioners have also invited attention to an unreported short order of the Supreme Court in UOI and another vs. GTC India and others in SLP (C) No. 2183/1994 dated 03/01/1995 wherein it was held that the order passed by the adjudicating authority under Section 9D of the Act could be challenged in writ proceedings as well. Therefore, it is clear that the adjudicating authority cannot invoke Section 9D(1)(a) of the Act without passing a reasoned and speaking order in that regard, which is amenable to challenge by the assessee, if aggrieved thereby.

16. If none of the circumstances contemplated by clause (a) of Section 9D (1) exists, clause (b) of Section 9D (1) comes into operation. The said clause prescribes a specific procedure to be followed before the statement can be admitted in evidence. Under this procedure, two steps are required to be followed by the adjudicating authority, under clause (b) of Section 9D (1), viz.

i) the person who made the statement has to first be examined as a witness in the case before the adjudicating authority, and

ii) the adjudicating authority has, thereafter, to form the opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice.

17. There is no justification for jettisoning this procedure, statutorily prescribed by plenary parliamentary legislation for admitting, into evidence, a statement recorded before the gazetted Central Excise officer, which does not suffer from the handicaps contemplated by clause (a) of Section 9D(1) of the Act. The use of the word "shall" in Section 9D (1), makes it clear that, the provisions contemplated in the sub-Section are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory.

59 E/10153/2022-DB & 263 ors.

18. The rationale behind the above precaution contained in clause (b) of Section 9D(1) is obvious. The statement, recorded during inquiry/investigation, by the gazetted Central Excise officer, has every chance of having been recorded under coercion or compulsion. It is a matter of common knowledge that, on many occasions, the DRI/DGCEI resorts to compulsion in order to extract confessional statements. It is obviously in order to neutralize this possibility that, before admitting such a statement in evidence, clause (b) of Section 9D(1) mandates that the evidence of the witness has to be recorded before the adjudicating authority, as, in such an atmosphere, there would be no occasion for any trepidation on the part of the witness concerned.

19. Clearly, therefore, the stage of relevance, in adjudication proceedings, of the statement, recorded before a gazetted Central Excise officer during inquiry or investigation, would arise only after the statement is admitted in evidence in accordance with the procedure prescribed in clause (b) of Section 9D(1). The rigour of this procedure is exempted only in a case in which one or more of the handicaps referred to in clause (a) of Section 9D(1) of the Act would apply. In view of this express stipulation in the Act, it is not open to any adjudicating authority to straightaway rely on the statement recorded during investigation/inquiry before the gazetted Central Excise officer, unless and until he can legitimately invoke clause (a) of Section 9D(1). In all other cases, if he wants to rely on the said statement as relevant, for proving the truth of the contents thereof, he has to first admit the statement in evidence in accordance with clause (b) of Section 9D(1). For this, he has to summon the person who had made the statement, examine him as witness before him in the adjudicating proceeding, and arrive at an opinion that, having regard to the circumstances of the case, the statement should be admitted in the interests of justice." (Underline provided) It was further held at para 22 of the said order by Hon'ble High Court that:

"22. Clearly, if this procedure, which is statutorily prescribed by plenary Parliamentary legislation, is not followed, it has to be regarded, that the Revenue has given up the said witnesses, so that the reliance by the CCE, on the said statements, has to be regarded as misguided, and the said statements have to be eschewed from consideration, as they would not be relevant for proving the truth of the contents thereof."

Similar view was taken by P & H Hon'ble High Court in the case of M/s AMBIKA INTERNATIONAL & OTHERSVs UNION OF INDIA AND ANOTHER as reported at 2018 (361) E.L.T. 90 (P & H)/2016-TIOL-1238-HC-P&H-CX and in the case of M/s. G-Tech Industries Vs. Union of India - 2016 (339) E.L.T. 209 (P & H)/2016-TIOL-2749HC- P&H-CX.

6.8 In the case of FLEVEL INTERNATIONAL Vs COMMISSIONER OF CENTRAL EXCISE - 2016 (332) E.L.T. 416 (Del.), Hon'ble Delhi High Court held that:-

Cross-examination of witness whose statement relied upon in adjudication order - Denial of - No serious attempts made to secure presence of witness in adjudication proceedings

- Department failed to show existence of any of extraordinary circumstances under Section 9D of Central Excise Act, 1944 to justify denial of right to cross-examine the witness - Such activity on part of Department was a serious infraction which initiated the adjudication order - Simply stating that cross-examination of large number of persons would have taken the case to a non-ending process, cannot be a justified reason within Section 9D ibid to deny that opportunity to appellant - Authority wrongly proceeded on the basis that there was no right of cross-examination overlooking the circumstances mentioned in Section 9D of Central Excise Act, 1944. [paras 42, 43, 44, 45, 46] 60 E/10153/2022-DB & 263 ors.

6.9 Their contention is also supported by many other such decisions of higher appellate forum which also include following judgments:

a) M/s PMS INTERNATIONAL PVT LTD & OTHERS Vs COMMISSIONER OF CENTRAL EXCISE, LUDHIANA-2014-TIOL-1669-CESTAT-DEL.

b) BASUDEV GARG Versus COMMISSIONER OF CUSTOMS: 2013 (294) E.L.T. 353 (Del.)

c) RAJAM INDUSTRIES (P) LTD. Versus ADDL. D.G, D.C.E.I., CHENNAI - 2010 (255) E.L.T. 161 (Mad.) "Show cause notice - Evidence - Reliance on statements - Statements from various persons obtained during preliminary investigation in the absence of person concerned can be relied upon for issuance of SCN - Presence of person concerned not necessary when statements of other persons obtained during preliminary investigation - Statements obtained during preliminary investigation only for making prima facie case and not means such documents would be used against person concerned - Section 11A of Central Excise Act, 1944 - Section 108 of Customs Act, 1962. [paras 38, 39] Natural justice - Violation of - Show cause notice pre-judging issue - Cross-examination of persons giving statements to be given in such case - Natural justice violated in present case as cross-examination not given. [para 58] Natural justice - Document copies, providing of - Concept of natural justice relating to show cause notice includes providing documents relied on in SCN - Party cannot be expected to give effective reply unless copies of relied upon documents furnished. [para 54]

d) PARMARTH IRON PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE -I, -

2010 (255) E.L.T. 496 (All.) "Natural justice - Documents, relied on and non-relied upon, supply of - Assessee asking for Photostat copies of relied upon documents - Apex Court in 1997 (92) E.L.T. 467 (S.C) holding that non-return of documents may severely prejudice right of party to offer proper explanation - Obligatory on part of Revenue to return non-relied documents - Relied documents or copies thereof must also be furnished - Revenue directed for same. Petitioners further permitted to inspect original documents and materials sought to be used against them.

Natural Justice - Cross Examination, denial of - Cross-examination sought of witnesses where statements relied by Revenue in show cause notice - Natural that person facing enquiry to have opportunity to cross-examination authors of document or person who deposed against him - In absence of such opportunities, petitioner may not be in position to render proper assistance to Department - Assessee allowed opportunity to cross- examine. "s 6.10 Appellant submit that all these decisions were brought to the notice of the learned Commissioner (Appeals) but he has given findings contrary to the above. Appellants further submit that entire demand is confirmed based on the statements of shroffs, angadia/middlemen, directors/partners etc without allowing cross 61 E/10153/2022-DB & 263 ors.

examination of them, contrary to the specific provisions of Section 9D of the Central Excise Act, 1944. It is submitted that the statements can be relied upon only when the persons whose statements are relied upon are examined and cross examined by the adjudicating authority as provided under Section 9D of the Central Excise Act, 1944. There is no other evidence relied upon except oral evidence and once same is eschewed in absence of cross examination, there is no ground to consider unauthentic, unsigned third party private records viz. Daily Account Sheets prepared by middlemen as evidence. In absence of the evidence order confirming demand is liable to be set aside. Even otherwise as per settled position of law, amongst other number of decisions cited in the grounds of appeal and written submissions, in absence of examination and cross examination of department's witnesses, inculpatory statement has no evidential value at all. Therefore, in view of the provisions of Section 9D of the Central Excise Act, 1944 and above judgments, findings of the learned Commissioner (Appeals) based on the said statements are required to be struck down.

6.11 Appellants submit that even otherwise Hon'ble Apex Court in the case of ANDAMAN TIMBER INDUSTRIES Vs COMMISSIONER OF CENTRAL EXCISE, KOLKATA- II - 2015-TIOL-255-SC-CX has held as under:

"Central Excise - Adjudication - Cross Examination - not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected . The order of the Commissioner was based upon the statements given by the two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. It was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination.

62 E/10153/2022-DB & 263 ors.

If the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the two witnesses was the only basis of issuing the Show Cause Notice."

6.12 Appellants further submit that the shroff and middleman/broker, and other departmental witnesses viz. buyers are not jointly tried with the appellants as abettor. For the sake of argument it presumed that cash were collected by the Shroff and handed over to middleman/broker for onward payment to tile manufacturer including appellants then it amounts to abetement in evasion of duty of excise. However, they are not made co-noticees in the present proceedings. They might have been given clean cheat on the ground that if they give the confession against the appellant they will not be penalized. It is also settled position of law that statements of co-accused can be relied upon only when they are jointly tried with. • UNION OF INDIA Versus LAL CHAND - 2016 (335) E.L.T. 416 (Mad.) • Central Bureau of Investigation v. V.C. Shukla (1998) 3 SCC 410 "...... Secondly, a statement made by an accused person is admissible against others who are being jointly tried with him only if the statement amounts to a confession. Where the statement falls short of a confession, it is admissible only against its maker as an admission and not against those who are being jointly tried with him. Therefore, from the point of view of Section 30 of the Evidence Act also the distinction between and admission and a confession is of fundamental importance."

6.13 Thus, the department's submissions are devoid of merit and required to be rejected. Even reliance placed on the decision of Hon'ble High Court of Gujarat in the case of Pooja Tex Prints Pvt. Ltd. Vs. Addl. Commr. of C. Ex. & Cus. & ST, Surat- I - 2019 (365) ELT 42 (Guj.) read with Apex Court decision dismissing Special Lave Petition - 2019 (367) ELT A322 (SC) are totally misplaced as there is no direct confession similar to the said case. Even in few cases where statement of directors/partners were recorded at all and there is no other corroborative evidence adduced for alleged clandestine removal of the goods by the appellants except third party unauthenticated private records and unsubstantiated oral evidences. Therefore, ratio of the same is not applicable in the present case. Apart from that, 63 E/10153/2022-DB & 263 ors.

in fact provisions of Section 138B of the Customs Act, 1962 were not brought to the notice of Hon'ble High Court and therefore, in any case ratio of the said decision based on statement of directors under Section 108 of the Customs Act, 1962 is not applicable in the facts and circumstances of the case.

Findings:-

7. In the instant case, the department has alleged clandestine removal on the part of various tile manufacturers (Appellants) mainly on the basis of details of cash deposited in the accounts of Shroffs etc., which were considered as clandestine sale in the records of certain Shroffs of Rajkot who confirmed that the records pertain to Tile dealers of Morbi who were allowed to withdraw the cash after transferring same to the middlemen of the Morbi manufacturers after deducting their commission and that the person who would collect such cash were the authorised persons of the Tile manufacturers at Morbi. The entries as reproduction of both books show (reproduced infra) were written by someone not established as the author. Raids were conducted by DGGI in the premises of some of the Tile manufacturers. Except in few cases which are stated to be seven by the defendants, no search was carried out nor any statements were recorded of the manufacturers or their partners or Directors. The show cause notice was issued on the basis of bank statements, said to have been recovered from the premises of Shroffs at Rajkot and Angadiyas, Middlemen at Morbi on the basis of their statements only and the buyers of goods, quantity of goods supplied by the manufacturer and received by the buyer(s), evidence of manufacture of surplus tiles, procurement of extra raw material, deployment of extra staff, transportation of finished goods (i.e. Tiles) from factory premises to buyer premises, payment for such extra raw materials to their suppliers, transporter etc. in addition to that already recorded in the books of accounts and excise records, identification of the persons who had collected the cash from the Angadiyas, Middlemen on behalf of the manufacturers and given cash to the manufacturer or inculpatory statements of manufacturers were generally not recorded as per the defendants to make out case even as per preponderance of evidence as standard of proof. We find that

64 E/10153/2022-DB & 263 ors.

allegation of clandestine removal has to be proved by the department as burden lies on it as has been held in 2018 (362) E.L.T. 411 (Mad.) in the matter of CCE, Coimbatore Vs. SVA Steel Re-Rolling Mills Ltd. and also as it is also trite law by now. This standard of proof is the preponderance of probability but the same cannot be based merely on the suspicion or assumptions and presumptions. As suspicion however grave cannot take place of tangible evidence, as held by this bench in 2014 (312) E.L.T. 479 (Tri. - Ahmd.) in the matter of Chandan Steel Ltd. Vs. Commissioner of Central Excise & S.T., Vapi. Even the Larger Bench of this Tribunal in the matter of Kuber Tobacco Products Ltd vs. CCE., Delhi reported in 2013 (290) E.L.T. 545 (Tri. - Del.), by the decision which was given by majority after difference of opinion, held that clandestine removal is a serious accusation which has to be established by sufficient, cogent and unimpeachable, relevant and credible material evidence by applying test of prudent man's estimate of preponderance of probability. Conclusion should be logical borne out from the records and not figments of imagination. There cannot be mere presumptions. Though mathematical precision is not warranted, revenue is not relieved altogether of burden of producing some credible evidence in respect of the facts in issue. Again the Division Bench of this Tribunal by majority in 2012 (282) E.L.T. 234 (Tri. - Ahmd.) in the matter of Shreeji Aluminum Pvt. Ltd. Vs. Commissioner of Central Excise, Vapi held that the burden of proof in clandestine removal matters is on revenue and is required to be discharged by adducing strong, sufficient and positive evidence. Assumptions and presumptions leading to doubts against the manufacturers, are not sufficient. It was also held that the standard of proof though is not beyond doubt, should have more than 50% chance that proposition is true on basis of facts and evidences available. The above decisions only echoes the ancient, legal wisdom contained in Latin Maxims like "Conjectura non probat" (conjecture does not prove) or "Conjectura et praesumptio non sunt probatio" (assumptions and presumptions are not proof). In 2019 (366) E.L.T. 659 (All.), the Hon'ble Allahabad High Court while deciding the matter of Commissioner of C. Ex., Lucknow vs. Premier Alloys Ltd. held that statement recorded under Section 9D of the Central Excise Act, 1944 cannot be taken as conclusive evidence without 65 E/10153/2022-DB & 263 ors.

proper examination so as to base findings with regard to fiscal liability only on the basis of that statement. Again in the matter of Commissioner of C. Ex., Meerut-II vs. Vam Organic & Chemical Ltd reported at 2016 (342) E.L.T. 174 (All.), it was held that mere statement of shortage etc. by the Vice President of the unit cannot be treated as admission or sufficient evidence of clandestine removal without corroborative material or other statements or admission of clandestine removal which remain undetected coming on record. In 2019 (367) E.L.T. 916 (Mad.) in the matter of Honeywell Electrical Devices & Systems India Ltd. Vs. CESTAT, Chennai, it was held by Hon'ble Madras High Court that an order not based on clinching material to prove clandestine removal but only based on assumptions and presumptions cannot be allowed to sustain. In 2015 (316) E.L.T. 374 (Guj.), the Hon'ble Gujarat High Court in the matter of Commissioner vs. Motabhai Iron And Steel Industries, held that the investigation if not conducted as to where the goods clandestinely removed were supplied, then merely on the basis of third-party statement, demand cannot sustain. In 2015 (323) E.L.T. 106 (Del.), Hon'ble High Court of Delhi in the matter of Commissioner of C. Ex., Delhi vs. Bihariji Manufacturing Co. Pvt. Ltd. held that in the absence of any positive/tangible evidence of clandestine removal and basing the demand of duty on assumptions and presumptions, could not be allowed to sustain. In 2015 (321) E.L.T. 423 (Guj.), the Hon'ble Gujarat High Court in the matter of Commissioner of Central Excise & Customs vs. Swati Polyester held that the department has established its case by substantive evidence of unaccounted production and clandestine removal of goods and not merely on the basis of assumptions and retracted statements. The most significant tests were laid down in 2014 (309) E.L.T. 411 (All.) by the Hon'ble High Court of Allahabad in the matter of Continental Cement Company Vs. Union Of India wherein, while emphasising criteria of the clinching evidence of purchase of raw material, use of extra electricity, sale of final products, clandestine removal, transportation, payment, realization of sale proceeds, mode and flow back of funds are all required to be shown to prove clandestine removal and same could not sustain merely on the basis on presumptions and assumptions. Demands can be confirmed as clandestine removal which is a 66 E/10153/2022-DB & 263 ors.

serious charge only on production of such evidences. In fact, in para 12 following criteria have been laid down:-

"12. Further, unless there is clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. On careful examination, it is found that with regard to alleged removals, the department has not investigated the following aspects :

             (i)     To find out the excess production details.

             (ii)    To find out whether the excess raw materials have been purchased.

(iii) To find out the dispatch particulars from the regular transporters.

             (iv)    To find out the realization of sale proceeds.

             (v)     To find out finished product receipt details from regular dealers/buyers.

             (vi)    To find out the excess power consumptions."

In the light of foregoing, we proceed to evaluate evidence as is available on record with us in the present matters to decide whether, the charge of clandestine removal is adequately proved by the department or not?

8. It is an admitted position in the instant case as has been examined in the light of the department's letter dated 03.11.2025 that out of main 56 appellants, statements of all Managing Partners or Directors were not recorded. For 11 appellants only, it is stated that the statements of the Partners or Directors of the appellants were recorded and stray statements of some buyers were recorded. As a buyer is stated to be so abbreviated by the alleged evaders that their identity could not be established. In two cases, only the premises were searched and the statements of the buyers and partners were recorded. In one case statements were recorded, premises was searched but no statements of the buyers were recorded. From the above, it is clear that the investigation was carried out in slip-shod manner and there were half hearted attempts, whatever be the reason, to complete the investigation either by conducting search or by recording statements or by approaching the buyers which a premier Investigating Agency is not expected to do. It also turns out that the Shroff/ Brokers whose statements were recorded on the basis of their own records which carried various 67 E/10153/2022-DB & 263 ors.

interpolated abbreviations were also not put to examination-in-chief by the Adjudicating Authority. In stray cases, Appellants statements were mere endorsement of broker's statements. Therefore, the whole case of the department is based upon testimonial evidence only, mainly of the third party i.e. Brokers and Shroff etc. or scribbled bank statements. No receipt of excess cash was found (through purported clandestine production and clearance was done). During searches conducted, no excess stocks was found as per accounts. Statements in some cases are contradictory and are not supported by any corroboration of raw material supply, excess electricity consumption, excess labour required, excess stock found with buyers or with the manufacturing units in any manner. Infact, no stock discrepancy was found. Merely, on the basis of third party statements or its record, case cannot be proved. Therefore, case is not supported by any substantive evidence or is corroborated as is the requirement of burden of proof indicated by the case law relied upon by us of various High Courts. We also find that case laws quoted by the learned AR do not help the cause of the department. In Commr. of Central Excise Vs. International Cylinders Pvt. Ltd. reported in 2010 (255) E.L.T. 68 (H.P.), the matter was remanded for assessee to discharge shifted onus, after documentary evidence was found by the department by way of records of municipal barrier and police barrier indicating that the offending goods were transported and also the statement of workers indicated that the goods were manufactured at night and cleared without payment of duty. No such strong documentary evidence has even been attempted to be brought on record by the department. There is no evidence of transportation of excess production of any goods. In 1983 (13) ELT 1631 (SC) in the matter of Shah Guman MaL Versus State Of Andhra Pradesh, the matter pertained to gold in the form of foreign marking which was matter of prosecution and in which case, it was held that the department was not required to prove its case with mathematical precision. In that case, invocation of Section 123 of the Customs Act,1962 shifted the burden of proof, in the chain of evidence by gold biscuit and possession was itself an offence. In the instant case, no such offending goods have been seized which by itself can prove the clandestine production of the goods. In the matter of Ramachandra Rexins Pvt. Ltd. Vs. Commissioner Of C. Ex., Bangalore-I reported in 2013 (295) E.L.T. 116 (Tri. 68 E/10153/2022-DB & 263 ors.

- Bang.) for clandestine removal, the yardstick of preponderance of probability was applied as a principle, which is not disputed even in this case but the very fact that the department expects that more than 56 Tile manufacturers in unison were doing clandestine production and removal of tiles and were never found by any enforcement agency, is something of a remote possibility. Also, the whole chain of evidence only indicates some aspects of cash receipts, cash dealings by brokers with a third party; cannot thus be called as the valid basis of clandestine removal, even on preponderance of probability. The department has not even indicated that 56 Tile manufacturing units had infrastructure and capacity to produce excess/unaccounted quantity beyond the accounted production. There is neither any unaccounted procurement of raw materials, nor presence of excess staff with any of the tile manufacturer. Similar is the situation with regard to cash. No private records indicating excess production were found, indicating unaccounted production & clearance of tiles by the Tile companies. No Lorry Receipts, duplicate records or any account of excess cash generated were found with any of the appellants. What kind of tiles were removed at what price and how much quantity, has not been found by the Investigating Agency. Therefore, even by preponderance of probability, the case is far from proved. In 1996 (86) E.L.T. 333 (Tribunal) in the matter of A.N. Guha & Co. vs. Collector of Central Excise, Bhubaneswar, the initial burden was discharged by the department on the basis of documentary evidence of octroi receipts, but the same was not controverted by the appellant. In the instant case, no transport document has even been attempted to be placed on record by the department through its investigation. The cash receipts are for clandestine removal of which dates is also not established. Various High Courts have ruled that the statements in the matter of clandestine removal need to be subjected to examination- in-chief by the Adjudicating Authority and then if found admissible, same is required to be offered for cross-examination. No such examination-in-chief was done by the Adjudicating Authority nor cross examination offered. Various relevant pronouncement in this regard are as follows:-

69 E/10153/2022-DB & 263 ors.

a) 2022 (380) E.L.T. 264 (Bom.) in the matter of PRAKASH RAGHUNATH AUTADE vs. UNION OF INDIA.

b) A person whose statement has been relied upon has to be offered for cross examination as has been held in 2019 (366) E.L.T. 280 (Cal.) in the matter of SAMPAD NARAYAN MUKHERJEE vs. Union of India. Point of emphasis here is on offering for cross examination.

c) In the same context is the decision of AMBIKA INTERNATIONAL vs. Union of India reported in 2018 (361) E.L.T. 90 (P & H).

d) Same in relation to requirement of examination in chief has been reiterated by Hon'ble Punjab and Haryana High Court in 2016 (340) E.L.T. 67 (P & H) in the matter of M/s. JINDAL DRUGS PVT. LTD vs. Union of India.

e) Hon'ble Supreme Court in ANDAMAN TIMBER INDUSTRIES vs. COMMISSIONER OF C. EX., KOLKATA-II reported in 2015 (324) E.L.T. 641 (S.C.) has held that ground of "non retraction" and "no useful purpose" cannot be taken to refuse cross examination.

Therefore, even the decisions as quoted by the department on this aspect are clearly distinguishable. In fact, most of the case laws quoted by the department are either based on related provisions prior to introduction of Section 9D of the Central Excise Act or are based on such old decisions and have no relevance in view of changed provisions and interpretation of the same by various rulings in support of the appellants, as quoted by them. It is further found that the number of co-accused or brokers whose culpatory statements were recorded by the appellants, have neither been subjected to show cause notice for any charge of abetment, despite confession nor have they been offered for cross-examination. Inducement of any kind can make a statement suspect. Even the bank statement of Shroff and Angadiya which forms the basis of the department's case was never provided to the appellant despite their making grievance in this regard, at the time of show cause notice. In its reproduced form, the same was provided which by no way establishes that the payment received by the Shroff, Angadiyas at Rajkot or to Middlemen, Shroff, Angadiyas at Morbi was in any way linked to the appellants. There is neither any indication as to who had deposited such amounts in the bank accounts of the Shroff, Angadiyas at Rajkot nor is it indicated as to which buyer of the appellant had deposited such amounts and that the appellants were further the eventual recipients of the same, through any banking or other channel. Even, where the statements have been recorded, same are either exculpatory or contradictory in many manners when 70 E/10153/2022-DB & 263 ors.

statements of two or more Directors or Partners were recorded. It has not been established in the statements that the persons concerned were looking after work, sales, production or receipt of payment etc. Even, the third-party records are only having names of the recipient persons in hand written codes and the same have not been properly de-coded by the author of such third-party records. Following evidence produced at page 8 & 9 of the show cause notice issued to M/s. Famous Vitrified will indicate this:

71 E/10153/2022-DB & 263 ors.

72 E/10153/2022-DB & 263 ors.

8.2 From the above, it can easily be made out that while various entries indicate in the Axis Bank account statement that there were cash deposits, the names were written by some authors of the recipient Shroff. The bank statement itself does not indicate any name and at the end, are hand scripted names with abbreviations, which have been reduced to in box names like Pravinbhai Shirvi, Satishkumar etc. There is nothing to indicate by any documentary or otherwise established evidence as to how PS was construable as Pravinbhai Shirvi by the department, how names scripted in Gujarati became Shatishkumar for the department. The evidence therefore is far from credible. Even the investigations has admitted that the abbreviations did not provide clue in many cases of follow up investigations, how then same is construed as evidence. Therefore, there is substance in the defence of the appellants, that the names of the appellants and the third party private records are not matching properly and are not decoded by the author of such private records. Line of distinction has to be drawn in this regard, that the record of cash receipts in Axis Bank is a documentary evidence only of fact of some cash coming, but insertion of various abbreviations or scripting which has been done by some one at the end of the Shroff, the same loses evidentiary value and becomes a third party record having no evidentiary value, as the person who scripted such names has not been established or made to state about or to indicate as to who has given him information about scripting such scribblings in front of the bank statement. These statements therefore, prove nothing except that they were cash transactions in the bank account of various Shroff/ Broker. Lack of investigation or incomplete investigation as has been done by the department wherein, more than 40 units have not even been searched indicates that the whole investigation has been carried out half-heartedly and in haste to make the case without even conducting the enforcement related procedure of search, recovery of documents and verification of the related aspects. The third-party evidence which is not substantiated by any documentary evidence and the whole case which is simply based upon statements of Shroff/ Brokers as to who was likely recipient or intermediaries of the manufacturers who received such payment cannot prove the serious charge of clandestine removal of so many manufacturers at large of Morbi and around. It is well founded principle of 73 E/10153/2022-DB & 263 ors.

enforcement jurisprudence that mere mentioning of name by testimonial evidence or even derived records cannot form basis for making allegations of clandestine removal. 8.3 In Vineet Narain and Others vs. Union of India and Others, (1998) 1 SCC 226, the Hon'ble Apex Court refused to treat diary entries and loose sheets recovered from some Hawala Operators as substantive evidence without independent and proper corroboration. From the above chain of evidence collected by the department, it is clear that even the aspect of cash receipt by the manufacturers of Morbi etc. who are the present appellants is not free from doubt and cannot be taken to be established by the department. Apart from above, evidences required to sustain charge of clandestine removal involving various aspects such as receipt of unaccounted raw materials and its use for production of unaccounted finished goods including excess consumption of electricity and clandestine removals of such goods and stock discrepancies at the end of the manufacturer or buyers, receipt of cash by the manufacturer and payment link to the buyers through a series of middleman including Shroff, non-availability of excess cash during search at any end, transports document and transport related authorities have not even been attempted to be produced, same is therefore fatal to the case of the department.

8.4 In view of the foregoing, we find substance in the defence made by the appellants in relation to charge levied against them of clandestine removal. We find that the same is far from the truth on the basis of various submissions, made before us by the appellants on various aspects in isolation and collectively. After due appreciation of the various materials on record, including case laws and on proper evaluation of evidence produced before us, we find that the charge of clandestine removal is far from proved against the appellants and other co-accused. The other aspects of valuation etc. pale into insignificance, on the basis of findings that the charge of clandestine removal itself is unsustainable, same is therefore not pronounced upon. We accordingly hold that the charge of clandestine removal not having been proved by the department, the demands are consequently not sustainable and so are the penalties etc. against the manufacturers 74 E/10153/2022-DB & 263 ors.

and other accused of various nefarious activities. Penalties on them cannot be sustained. The impugned orders are accordingly set aside with relief.

9. Appeals are therefore allowed with consequential relief.

(Pronounced in the open court on 20.11.2025) (SOMESH ARORA) MEMBER ( JUDICIAL ) (SATENDRA VIKRAM SINGH) MEMBER ( TECHNICAL ) Bharvi

Legal Document View

Unlock Advanced Research with PRISMAI

Custom, Excise & Service Tax Tribunal

Famous Ceramic Industries vs Rajkot on 20 November, 2025