Custom, Excise & Service Tax Tribunal
M/S. Cce, Ludhiana vs M/S B.T. Alloys on 13 June, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
COURT NO. III
Excise Cross Application No. 208/2011-EX(SM)
Appeal No. E/42/2011
[Arising out of Order-In-Appeal No. 240/CE/LDH/2010 dated 27.9.10 passed by CCE, Ludhiana]
For approval and signature:
Honble Ms. Archana Wadhwa, Judicial Member
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. CCE, Ludhiana Appellant
Vs.
M/s B.T. Alloys Respondents
Coram: Honble Ms. Archana Wadhwa, Judicial Member Appearance:
Shri B.B. Sharma, AR for the Appellant None for the Respondent Date of Hearing: 13.06.2013 FINAL ORDER NO. 56649/2013 Per Ms. Archana Wadhwa:
Being aggrieved with the order passed by Commissioner (Appeals), Revenue has filed the present appeal. I have heard Shri B.B. Sharma, learned AR appearing for the Revenue, and Shri S.P. Ojha learned Consultant appearing for the respondent.
2. Briefly stated, the facts of the case are that the appellants are engaged in the manufacture of M.S. Ingots. The contingents of Directorate General of Central Excise Intelligence (DGCEI in short) on 18.01.2007, while conducting investigation at the end of another manufacturer of Steel Rounds namely M/s Ranbir Steel Industries, Ludhiana (hereinafter referred to as RSI) found some Kuccha slips containing details of Date, Truck No. and name of the supplier, form the possession of the Gate keeper of RSI showing details of receipt of MS Ingots clandestinely from some suppliers. The gate keeper of RSI in his statement dated 18.01.2007, recorded on the spot stated that the slips recovered contain the details of MS Ingots received clandestinely and normally the weight of Steel Ingots received in a Truck was approximately 15 MTs. The statement of the Gate keeper was authenticated by the statement of the authorized signatory (Excise Manager) of RSI. On examination of the recovered slips it was observed that 20 consignments of MS Ingots weighing 300 MTs of MS Ingots (taken on average basis of 15 MTs, per truck), involving. Central excise duty of Rs. 8,60,766/- was cleared by the respondent to RSI without payment of duty. The authorized signatory of the assessee in his statement dated 3.03.2007 admitted of having cleared 300 MTs of MS Ingot to RSI in two trucks of the appellants for which no invoice was issued. Accordingly a show cause notice dated 3.08.2007 was issued to the respondent proposing recovery of Central Excise duty of Rs. 8,60,766/- on the goods cleared without payment of duty and proposing penal action. In the adjudicating proceedings the Additional Commissioner, Central Excise Commissionerate, Ludhiana vide Order-in-Original dated 31.07.2008 confirmed the demand of Rs. 8,60,766/- along with interest and also imposed penalty of Rs. 8,60,766/- upon the appellants under Section 11AC of the Act.
3. The Respondent filed an appeal against the said order before Commissioner (Appeals) on the ground that slips recovered from the gate keeper of a third party cannot be held to be sufficient evidence for clandestine clearance of the goods from their factory. They further contended that no investigation was caused from the partners of RSI and no statement of the owner of the appellant unit was recorded. Further no investigations were made at the Respondents end. They also submitted that there is no evidence of excess consumption of electricity and over cash payment from RSI. Further no cross-examination of the gate keeper and authorized signatory of RSI was granted to the respondent inspite of request made by them. Commissioner (Appeals), appreciated the above stand of the respondents and allowed the appeal by observing that the entire case of the Revenue is based upon the kaccha slips recovered from the gate keeper of another unit and the statement recorded from the authorized representative of another unit. By referring to various decisions of the Tribunal, he held that allegations of clandestine removal cannot be upheld on the documents recovery from the possession of third party without any corroboration. He further observed as under:-
It is observed that as per the annexure to show cause notice, 20 trucks have alleged to have been removed during the month of December 2006, from 16.12.2006 to 22.12.2006 and as per the appellants contention their average consumption of electricity during the month of December 2006 was 1069 units per MT which is normal and the same would be below 500 units per MT if the alleged production of 300 MT is considered. This I observe that the department has not brought sufficient evidence on records to prove the alleged clandestine removal with reference to electricity consumption and other corroborative evidence. Demand has been worked out in routine manner, and clandestine removal has been alleged merely on the basis of statements. The charge of clandestine removal is a serious charge and duty liability can not be fastened on the assessee without reasonable and cogent basis. It has been presumed that 15 MTs Ingots each has removed in 20 trucks. The entire demand is worked out on approximation/ average basis on presumptions and assumptions which can not stand the scrutiny of law, hence not maintainable.
4. Revenue in their memo of appeal have relied upon the same evidence and has not adduced any further evidence to show clandestine clearance of goods from the respondents factory. As rightly observed by Commissioner (Appeals), allegation of clandestine removal are required to be proved by production of sufficient and tangible evidence. Recovery of kaccha slips from the gate keeper of another unit read with the inculpating statement of the authorized representative of third party cannot be held to be admissible evidence so as to uphold the allegation of clandestine removal, especially when such persons have not been tendered for cross-examination. Accordingly, I find that the there is not infirmity in the impugned order of Commissioner (Appeals). Revenue appeal is accordingly rejected.
(Pronounce in the open Court) (Archana Wadhwa) Member (Judicial) Jyoti* ??
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