Customs, Excise and Gold Tribunal - Calcutta
Kamar Ali And Sons vs Commissioner Of Central Excise on 16 January, 2006
Equivalent citations: 2006(107)ECC285, 2006ECR285(TRI.KOLKATA), 2006(200)ELT104(TRI-KOLKATA)
ORDER Archana Wadhwa, Member (J)
1. Vide the impugned Order, the Commissioner of Central Excise has confirmed the demand of duty of Rs. 5,25,420.60 (Rupees five lakh twenty-five thousand four hundred and twenty and paise sixty) against the appellant company who is a manufacturer of biris, branded as well as unbranded on the findings of clandestine removal.
2. As per facts on record, the factory premises of the appellant company was visited by the Central Excise Officers on 6.7.85, who conducted various checks and verification. About 82,500 numbers of biris totally valued at Rs. 1,650.00 (Rupees one thousand six hundred and fifty) involving duty of Rs. 316.39 (Rupees three hundred sixteen and paise thirty-nine), were found to be lying in stock in the Proprietor's Residential Premises, which was adjacent to the appellant company's factory. The stock in the factory fully tallied with the statutory records. However, on the ground that such excess stock found in the residential premises of the Proprietor, was cleared by the appellant company without payment of duty, the same was seized. The Officers also found one private register showing sale of bins from the Proprietor's residential premises.
2.1. Based upon scrutiny of the entries made in the said Private Sale Register, proceedings were initiated against them alleging that during the period from 21.12.1980 to July, 1985, the appellant company had cleared 14.41 crores of bins in excess of the sale shown in the statutory records, and hence they were liable to pay duty on the same. The said show cause notice culminated into the impugned Order confirming the demand against the appellant company and imposing penalty of Rs. 2,000.00 (Rupees two thousand). Hence the present appeal.
3. We have heard Shri K.K. Banerjee, learned Advocate appearing for the appellant company and Shri A. Hore, learned J.D.R. for the Revenue.
3.1. It has been mainly contended before us by the learned advocate for the appellant company that apart from the entries made in the register, there is no other evidence to show the manufacture and clearance of such a huge quantity of bins. It has been strongly contended that during the relevant period, the appellant's factory was under physical control and it was not possible for the appellant company to engage in clandestine activities. Further, there is no statement of the appellant company admitting to the clearance of bin's in a clandestine manner. Neither any statement of the purchasers has been recorded. No worker has been examined to establish that the appellant company has manufactured huge quantities of biris without their accountal in the record. The Revenue has also not been able to show the procurement of the raw materials in the shape of tobacco leaves and labels. Shri Banerjee, learned Advocate has strongly argued that in case of clandestine manufacture and clearance, the onus to establish the same rests very heavily upon the Revenue and is required to be discharged by production of sufficient tangible evidence. There, is none in the present case. Reliance has been placed upon a number of decisions of the Tribunal.
4. Countering the arguments, learned J.D.R., Shri A. Hore for the Revenue reiterates the reasonings of the adjudicating authority, and submits that the entries in the private record are indicators to the fact of removal of biris without payment of duty.
5. After considering the submissions made by both sides and after going through the impugned Order, we find that apart from the entries made in the private record, there is no other evidence to establish the clandestine activities on the part of the appellant company. The Tribunal in the case of Kirtibhai Maganbhai Patel v. Commissioner of Central Excise, Nagpur , has held that entries in the register alone are not sufficient to establish the charge of clandestine manufacture and clearance of the goods. To the similar effect are the other decisions of the Tribunal, A particular reference may be made to the Tribunal's decision in the case of Durga Trading Company vs, Commissioner of Central Excise, Lucknow reported in 2002 (148) ELT-967 (Tn. Del.), as confirmed by the Honourable Supreme Court, while dismissing the appeal filed by the Revenue as .
6. We find that in the instant case, there is no evidence to establish the charge of clandestine removal against the appellant company. As such, by extending the benefit of doubt to them, we set aside the impugned Order and allow the appeal with consequential reliefs to the appellant company.
Pronounced in the open court.