Custom, Excise & Service Tax Tribunal
Shri Rajesh Kumar Rajuka Managing ... vs Rourkela Commissionerate on 4 April, 2025
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH: KOLKATA
REGIONAL BENCH - COURT NO. 1
Excise Appeal No. 77357 of 2018
(Arising out of Order-in-Appeal No. 36-37/CE/RKL-GST/2018 19.03.2018 passed by
the Commissioner (Appeals) of C.R. Building Rajaswa Vihar, Bhubaneswar-7)
M/s. Maa Bhagawati RE-Rolling Mill P. Ltd., : Appellant
Ratakhandi, PO: Bisra,
Dist.-Sundergarh (Odisha)
VERSUS
The Commissioner of CGST, CX & Customs, : Respondent
Rourkela Commissionerate,
KK-42, Civil Township, Rourkela,
Dist.-Sundargarh, Odisha-769004
AND
Excise Appeal No. 77358 of 2018
(Arising out of Order-in-Appeal No. 36-37/CE/RKL-GST/2018 19.03.2018 passed by
the Commissioner (Appeals) of C.R. Building Rajaswa Vihar, Bhubaneswar-7)
Shri Rajesh Rajuka, Managing Director, : Appellant
M/s. Maa Bhagawati RE-Rolling Mill P. Ltd.,
At: Ratakhandi, PO: Bisra, Dist. Sundergarh (Odisha)
VERSUS
The Commissioner of CGST, CX & Customs, : Respondent
Rourkela Commissionerate,
KK-42, Civil Township, Rourkela,
Dist.-Sundargarh, Odisha-769004
APPEARANCE:
MS. Shreya Mundhra, Advocate for the Appellant
Shri S. K. Jha, Authorized Representative for the Respondent
CORAM:
HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)
FINAL ORDER NOs.75850-75851/2025
DATE OF HEARING: 02.04.2025
DATE OF PRONOUNCEMENT: 04.04.2025
Page 2 of 20
Appeal No.: E/77357-77358/2018-SM
ORDER:[PER SHRI K. ANPAZHAKAN] The present appeal has been filed against the Orders-in-Appeal No. 36-37/CE/RKL-GST/2018 19.03.2018 passed by the Commissioner (Appeals), Bhubaneswar, wherein the Ld. Commissioner (Appeals) has upheld the demands confirmed in the Order-in-Original. In the Order-in-Original, the Ld. adjudicating authority has confirmed Central excise duty of Rs. 8,67,833/- along with interest and imposed equal amount of duty as penalty . He also imposed a Personal penalty of Rs. 25,000/- on Shri. Rajesh Rajuka, Managing Director of the company, under Rule 25 of Central Excise Rules, 2002.
2. The facts of the case are that M/s. Maa Bhagwati Re- Rolling Mill Pvt. Ltd (herein after referred as the appellant no.1) engaged in the manufacture of MS Flats/MS Bars/MS Squares falling under Chapter 72 of the First Schedule of the Central Excise Tariff Act, 1985, at their factory in Ratakhandi, Bisra, Sundargarh district, Odisha. On 03.08.2012, officers of the Directorate General of Central Excise Intelligence (DGCEI) conducted simultaneous search operations at:
The Appellant's factory-cum-office premises The residence of Appellant no. 2 (Managing Director) Factory-cum-office premises of their sister concern M/s Vinayak Agro Industries Premises of M/s Radhe Gopi Auto Industries Shop of M/s Bijay Trading 2.1. During the course of search, one Laptop and 4 pen drives were recovered from the residence of Shri. Rajesh Rajuka, Managing Director of the company (herein after referred as appellant no.2).Page 3 of 20
Appeal No.: E/77357-77358/2018-SM Some documents were recovered from the factory premises of M/s Vinayak Agro Industries. Physical verification of the stocks has shown some shortages is finished goods.
2.2. On completion of the investigation, a Show Cause Notice dated August 14, 2013 was issued to the appellants herein proposing a demand of Central excise duty, allegingthat the appellants had clandestinely manufactured and removed their final products (MS Flats/Bars/Squares) valued Rs. 87,08,423/- without payment of duty of Rs. 10,76,361/-. The breakup of the proposed demand is as follows:
Rs. 6,60,030/- based on the purported computer printout "Sales Ledger A/c"
allegedly showing sales entries of Rs. 53,40,047/- for July 2012.
Rs. 2,07,803/- for the shortage of 46.359 MT of finished products (MS Flats/Squares/Rods) allegedly detected during physical verification Rs. 2,08,528/- for the alleged clandestine removal of 47.020 MT of finished products based on the three torn invoices recovered from the waste basket.
2.3. The said notice was adjudicated by the Additional Commissioner vide Order-in-Original no. 21/Addl. Commr/CEX/RKL/2016-17 dated 21.11.2016, confirming the demand of Rs. 8,67,833/- along with interest and equivalent amount of duty as penalty on the following grounds:
The Appellant No. 2 had accepted and acknowledged in his statements that the "Sales Ledger A/c" showed actual sales Page 4 of 20 Appeal No.: E/77357-77358/2018-SM entries and also accepted the shortage during physical verification.
Cross-examination was not an absolute right and hence, was inadmissible to the Appellant. The authority cited certain precedents to hold that cross-
examination isn't necessary when sufficient corroborative evidence exists. Extended period of limitation was invokable Personal penalty was also imposable on the Appellant No. 2.
However, the authority dropped the duty demand of Rs.2,08,528/- related to the torn invoices. 2.4. On appeal, the Ld. Commissioner (Appeals) has passed the Impugned Order dated 19.03.2018, upheld the order passed by the Adjudicating authority and rejected the appeals filed by the appellants.
2.5. The appellants have filed the present appeal against the Impugned Order dated 19.03.2018, passed by the Ld. Commissioner (Appeals).
3. The appellants submits that the during the course of the same investigation, proceedings were also initiated against the sister concern Vinayak Agro Industries, based on the same documentary evidences. The proceedings initiated against the sister concern relating to the issue of clandestine removal has been already settled by this Tribunal in favour of the sister-concern. Hence, the demands of central excise duty confirmed on the allegation of clandestine removal of the goods by the appellant company on the basis of the same evidences also does not survive.
3.1. The Appellants submit that the charge of clandestine manufacture and clearance is a serious charge, which is required to be established with Page 5 of 20 Appeal No.: E/77357-77358/2018-SM positive/affirmative/tangible evidence and the burden of establishing the said charge lies heavily upon the revenue. Further, no demand of clandestine manufacture and clearance can be confirmed purely on conjectures, surmises, assumptions and presumptions. In the present case, the Appellate Authority has erroneously upheld allegations of clandestine removal without any corroborative evidence. There has been no seizure of unaccounted goods or interception of consignments cleared without payment of duty. The department has failed to present any affirmative evidence, such as records indicating unaccounted procurement of raw materials, excess production, or unrecorded sales, to substantiate its claims. Furthermore, the investigating agencies have made no effort to establish the existence of unaccounted manufacturing activities. There is no evidence of unaccounted raw materials, stock shortages, discrepancies in raw material or finished goods inventory, excess electricity consumption, unaccounted labor payments, or any interrogation of buyers, transporters, or other parties that might indicate clandestine clearance. Additionally, no incriminating records or documents suggest any flow of unaccounted cash. Thus, the appellants submits that the finding relating to clandestine removal by the Appellant no. 1 is grossly untenable and liable to be set aside. Reference in this regard, has been invited to the following decisions:
o Narsingh Ispat Limited & Shri Hemant Goyal Versus Commissioner, C.G.S.T. and Central Excise, Jamshedpur Page 6 of 20 Appeal No.: E/77357-77358/2018-SM 2024 (3) TMI 1037 - CESTAT Kolkata o Jai Balaji Industries Ltd. v.
Commissioner 2023 (8) TMI 989 - CESTAT Kolkata o Bihar Foundary& Castings Ltd.
vs. CCE, Ranchi [2019 (8) TMI 527 - CESTAT Kolkata] o Continental Cement Company vs Union of India [2014 (309) E.L.T. 411 (All.)] o M/s AmitMetaliks Ltd. vs CCE.
& ST., Durgapur [2019 (4) TMI 638 (Tri. - Kolkata)] 3.2. Thus, the appellant submits that in the absence of any corroborative evidences, the demand is untenable and liable to be set aside. 3.3. The Appellant no. 1 further submits that the computer print outs relied upon by the department are inadmissible as evidence in as much as:
o The requirements of Section 36B(2) & (4) of Central Excise Act, 1944 were not complied with. In the present case, the printouts were obtained from pen drives, which are merely storage devices and not original computers used by the Appellant no. 1 for maintaining business records. These pen drives were neither proved to belong to the Appellant no. 1 nor were they demonstrated to contain authentic business records of the Appellant no. 1. Thus, the same cannot be relied upon.
3.4. Reference in this regard has been placed on the following decisions:Page 7 of 20
Appeal No.: E/77357-77358/2018-SM Super Smelters Ltd. v.
Commissioner 2020 (371)
ELT 751 (Tri.)
Bihar Foundary& Castings
Ltd. vs. CCE, Ranchi [2019
(8) TMI 527 - CESTAT
Kolkata];
Popular Paints and
Chemicals vs. CCE, Raipur
[2018 (8) TMI 473 -
CESTAT New Delhi]
Premium Packaging Pvt.
Ltd. vs. CCE, Kanpur
[2005 (184) ELT 165 (Tri.
- Del.)
3.5. The appellant submits that most of the
computer printouts were taken after conclusion of panchnama proceedings. In majority of the printouts the time is after 6 p.m. i.e. after conclusion of panchnama proceedings. Moreover, the 'computer printout' was not directly generated from any computer owned, operated, or used by the Appellants. Instead, it was allegedly printed from a computer used by the DGCEI officers after the conclusion of the search proceedings, with no verification of the source or authenticity of the data. Thus, the same cannot be relied upon. Reference in this regard has been invited to the judgment of the Tribunal in the case of Modern Laboratories vs. CCE, Indore [2017 (358) ELT 1179 (Tri. - Del.)].
3.6. The Appellants submits that the printouts are extraneous document that does not relate to the Appellant's business and was manufactured after the conclusion of the Panchnama proceedings to fabricate evidence. The alleged sales ledger relied upon by the departmental authorities is also grossly Page 8 of 20 Appeal No.: E/77357-77358/2018-SM untenable. None of the entries in the Sales Ledger were matching with the Central Excise Sales Invoices. In the absence of any link between the sales ledger and central excise invoices effected by the Appellant no. 1, any attempt to allege that the sales in the sales ledger were pertaining to is unwarranted. When the Appellant No. 2 has categorically retracted its statement relating to sales ledger printed from the pen drives based on which the charges have been framed and stated that the same are not true and correct, the same could not be relied upon in the absence of any other cogent evidence to allege clandestine removal. Thus, the demand is liable to be set aside on this ground itself. 3.7. The Appellant further submits that the entire process of search, seizure and recording of statements are vitiated by errors of law on account of the following reasons:
o The laptop and pen drives were neither sealed nor any signature of the wife and nephew of Appellant No. 2 were obtained from whom the said items were seized. There is no mention of any sealing in the panchnama dated 03-08-2012 drawn at the residence of Appellant No. 1. Reference is invited to Circular bearing F. No. 394/97/2015-Cus (AS) dated 01st December 2015 issued u/s 110 of Customs Act, 1962 made applicable to Central Excise Act, 1944 (vide Section 12 of Central Excise Act, 1944 read with Notification No. 68/63 - CE dated 04-05-1963) which clearly provides that packing and sealing shall be done in the presence of the person from whom the valuables are Page 9 of 20 Appeal No.: E/77357-77358/2018-SM seized/ detained and two independent witnesses and the paper seal/sticker shall have the signatures of the person from whom the valuables are seized, the independent witnesses and the seizing officer.
o The Appellant specifically requested the examination/cross-
examination of the Panch witnesses in whose presence the purported printouts were allegedly taken. This request was made under Section 9D of the Central Excise Act, 1944, which grants the right to cross-examine witnesses whose statements are relied upon. However, this legitimate request was denied by both the adjudicating authority and the Commissioner (Appeals), resulting in a gross violation of the principles of natural justice.
o The Hon'ble Supreme Court in Arya AbhushanBhandar Vs. UOI reported in 2002 (143) ELT 25 (SC) has categorically held that denial of the right to cross-
examine witnesses whose statements are relied upon by the department is a serious violation of the principles of natural justice, rendering the entire proceedings void.
o Similar views have been expressed by the Hon'ble Tribunal in Hissar Pipes Pvt. Ltd. Vs CCE reported in 2015 (317) ELT 136 (Tri.) where it was held that documents not signed by Panch witnesses cannot be relied upon for framing allegations, and it cannot be Page 10 of 20 Appeal No.: E/77357-77358/2018-SM assumed that they were recovered during search.
3.8. The Appellants further submit that the alleged shortage of stock is on account of the differential methodologies of accounting adopted while recording the same in its books of accounts and not otherwise. The stock in books was maintained on the basis of average weight per piece of the finished goods, while the physical stock was taken on actual weight basis. This discrepancy is entirely normal and expected in the steel industry, where each piece of MS Ingot naturally varies in weight due to manufacturing tolerances. In his statements dated 03.08.2012 and 03.07.2013, the Appellant No. 2 explained that the Appellant no. 1 maintains the Daily Stock Register on the basis of weight per piece of the finished goods, which generally varies from piece to piece. This might have caused the apparent difference between the actual physical stock and the stock recorded in the Daily Stock Register. Thus, the same cannot be held to be due to clandestine removal of goods. Reliance in this regard is placed on the ruling in the case of Commissioner v. Prem Industries 2009 (234) E.L.T. 178 (Tri. - Ahmd.). The Appellant No. 2never admitted to having removed any finished products clandestinely. The alleged shortage represents a mere accounting discrepancy, not evidence of clandestine removal.
3.9. The Hon'ble High Court of Allahabad in CCE Vs. Meenakshi Castings reported in 2011(274) E.L.T. 180(All.) has categorically held that mere detection of shortage of finished goods, by itself, cannot establish evasion of excise duty unless there is material evidence to support the charge of clandestine removal. The benefit of doubt in such cases must be extended to the assessee. This Page 11 of 20 Appeal No.: E/77357-77358/2018-SM principle has been consistently upheld by the Hon'ble Tribunal in numerous cases, including in CCE Vs. Manoj Kumar Pani 2010 (260) ELT 92 (Tri.) and Sharma Chemicals Vs. CCE reported in 2001 (130) ELT 271 (Tri. - Kol.), where it was held that entries in private notebooks or mere detection of shortages, at most, may raise a doubt but do not prove the charge in the absence of corroborative evidence like installed capacity, raw material utilization, labor employed, power consumption, and production data.
3.10. Thus, in the absence of adverse materials in support of the charge of clandestine removal, mere shortage of finished products for reasons which are explainable and plausible cannot support any adverse inference of clandestine removal.
3.11. The appellants submits that the Statement of Appellant No.2 could not be relied upon for the following reasons:
(i) The same stood retracted vide affidavit dt. 11-01-2016.
It is a trite law that delay in retraction cannot be a ground for disregarding the same. Reliance in this regard is placed on the decision of Parle Beverages Pvt. Ltd.
vs. CCE, Bombay [1998 (98) E.L.T. 585 (S.C.)] -
Para 1, wherein it has been held that delay in filing of affidavit cannot be a ground for completely brushing aside the same.
Page 12 of 20Appeal No.: E/77357-77358/2018-SM
(ii) The statements of Appellant No.2 has not been admitted in evidence in accordance with the procedure prescribed in clause (b) of Section 9D(1) of Central Excise Act, 1944. Reliance in this regard is placed on the following judgments:
Ambika International v.
Union of India [2018 (361) E.L.T. 90 (P&H.)] - Para 25;
G-Tech Industries v.
Union of India [2016 (339) E.L.T. 209 (P&H.)] - Para 16 M/s. Amco Sales &Anr. v. CCE, Delhi -
I [2018-TIOL-819- CESTAT-DEL]
(iii) The Statements of Appellant No.2 was not voluntary and taken under the influence of sleep from 11.30pm at night post midnight as well.
3.12. The appellants also submits that the entire demand is barred by limitation. Levy of interest and imposition of penalty u/s 11AC read with Rule 25 of the Central Excise Rules, 2002 is illegal and the benefit of reduced penalty was also not allowed. Penalty U/r 26 of the Central Excise Rules, 2002 against the Managing Director is illegal, arbitrary and against the principle of natural justice. 3.13. Thus, the appellants prayed for setting aside the demands confirmed in the impugned order and allow their appeal.
4. The Ld. A.R. reiterated the findings in the impugned order. He submits that the demands have Page 13 of 20 Appeal No.: E/77357-77358/2018-SM been confirmed on the basis of documentary evidences recovered from the appellant's residence and factory premises. The appellant has admitted the shortages during the course of stock verification and hence duty has been rightly confirmed on the shortages. Accordingly, he supported the confirmation of the demands against the appellants in the impugned order.
5. Heard both sides and perused the appeal documents.
6. I observe that Central excise duty of Rs.
8,67,833/- along with interest and equal amount of duty as penalty has been confirmed in the impugned order . A Personal penalty of Rs. 25,000/- was also imposed on Shri. Rajesh Rajuka, Managing Director of the company, under Rule 25 of Central Excise Rules, 2002.
6.1. I find that out of the total demand of entral excise duty of Rs. 8,67,833/- confirmed in the impugned order, Rs. 6,60,030/- has been confirmed based on the purported computer printout "Sales Ledger A/c" allegedly showing sales entries of Rs. 53,40,047/- for July 2012. Rs. 2,07,803/- has been confirmed on account of the shortage of 46.359 MT of finished products (MS Flats/Squares/Rods) allegedly detected during physical verification 6.2. Regarding the demand of Rs. 6,60,030/- confirmed in the impugned order on the basis of pen drive and computer print outs recovered during the course of investigation, I find that that during the course of the same investigation, proceedings were also initiated against the sister concern Vinayak Agro Industries, based on the same documentary evidences. The proceedings initiated against the Page 14 of 20 Appeal No.: E/77357-77358/2018-SM sister concern relating to the issue of clandestine removal has been already settled by this Tribunal in favour of the sister-concern.
"6. The main issue for our consideration in these appeals is whether Appellant No. 1 was involved in clandestine clearance/under valuation of laminated spring leaves. The entire case of the revenue is based on the data retrieved from the Pen drives seized from the residence of the Appellant No. 2, alleged to be the Sales Ledger of the Appellant No. 1. The manner in which the Pen drives were seized and the retrieval of data (printouts) from the Pen drives along with its evidentiary value has been strongly agitated by the Appellants. We find that the seized Pen drives were not sealed with paper seal or otherwise as evident from the Panchnama dated 3 August 2012 drawn at the residence of the Appellant No. 1. Such sealing should have been done in the presence of the persons before whom the pen drives were sealed and signatures should have been obtained on the paper seal/sticker as provided in the Circular dated 1st December 2015 so as to allay any possibilities of tampering. It is also forthcoming from the case records that most of the printouts from the Pen drives were taken after conclusion of Panchnama proceedings. There is considerable force in the contention of the Appellants that the computer printouts relied upon to uphold the charge of Page 15 of 20 Appeal No.: E/77357-77358/2018-SM clandestine clearance were not obtained in conformity with the mandatory conditions and safeguards laid down in Section 36B(2) & (4) of the Central Excise Act, as these were not produced by a computer which was being used regularly to store or process the information during the period in dispute and Certificate referred to Section 36B(4) of the Central Excise Act was also not obtained. The decision of the Tribunal in the case of Popular Paints reported (supra) fully supports the contentions of the Appellants on this point and the relevant paras 14 to 15.5 of the said decision ....................
Even the statement of Appellant No. 2 could not be admitted as evidence being not in accordance with the procedure prescribed under clause (b) of section 9D(1)of the Central Excise Act. This contention of the Appellant is duly supported by the decision of the Punjab and Haryana High Court in the Ambika International Case (supra)
7. We also find from the case records that the printouts from the Pen drives are neither co-relatable with the central excise invoices raised by the Appellant during the relevant period nor corroborated by any independent evidence establishing clandestine manufacture or clearance. No efforts have been made by the investigating agencies to establish the existence of any unaccounted manufacturing activity in the form of unaccounted raw Page 16 of 20 Appeal No.: E/77357-77358/2018-SM material, shortage of stock, shortage of raw material/finished goods, excess consumption of electricity, unaccounted labour payments, interrogation of buyers/transporters or any incriminating record/document to suggest any flow back of cash etc. The revenue authorities in this case have failed to discharge the burden of proving the serious charge of clandestine clearance or undervaluation with cogent and clinching evidence. It has been consistently held that no demand of clandestine manufacture and clearance can be confirmed purely on assumptions and presumptions and the same is required to be proved by the revenue by direct, affirmative and incontrovertible evidence..............
..............
The learned Commissioner has asserted in the impugned order that the demand based on Pen drive data is sustainable and that the department is not required to find further details about production, clearance, cash flow back, transportation or purchase of unaccounted raw material at para 4.9 of the 'O-I-O' which is clearly contrary to the decision of the Hon'ble Gujrat High Court in Shah Foils case (supra) and the other judicial precedents cited supra.
8. By respectfully following the ratio of the above decisions, we are inclined to take a view that the charge of clandestine removal/undervaluation cannot sustain on the basis of the Pen drive data alone more so when Page 17 of 20 Appeal No.: E/77357-77358/2018-SM the printouts have not been obtained in compliance with the mandatory conditions of Section 36(2) & (4) of the Central Excise Act.
In the result the impugned order is set aside and both the appeals are allowed with consequential relief, if any."
6.3. I find that the above findings are applicable against the proceedings initiated against the appellant company also as the demand of central excise duty has been made on the appellant on the basis of same evidences. As the demand of central excise duty on the allegation of clandestine removal has been set aside against the sister concern, I hold that the demands of central excise duty confirmed on the allegation of clandestine removal of the goods against the appellant company on the basis of the same evidences also does not survive. Accordingly, I set aside the demand confirmed in the impugned order on this count.
7. Regarding the demand of Central Excise duty of Rs. 2,07,803/- confirmed on account of the shortage of 46.359 MT of finished products (MS Flats/Squares/Rods) detected during physical verification, I find that the shortage of stock is on account of the differential methodologies of accounting adopted while recording the same in its books of accounts. The stock in books was maintained on the basis of average weight per piece of the finished goods, while the physical stock was taken on actual weight basis. This discrepancy is entirely normal and expected in the steel industry, where each piece of MS Ingot naturally varies in weight due to manufacturing tolerances. In his Page 18 of 20 Appeal No.: E/77357-77358/2018-SM statements dated 03.08.2012 and 03.07.2013, the Appellant No. 2 explained that the Appellant no. 1 maintains the Daily Stock Register on the basis of weight per piece of the finished goods, which generally varies from piece to piece. This might have caused the apparent difference between the actual physical stock and the stock recorded in the Daily Stock Register. Thus, the same cannot be held to be due to clandestine removal of goods. Reliance in this regard is placed on the ruling in the case of Commissioner v. Prem Industries 2009 (234) E.L.T. 178 (Tri. - Ahmd.). I also find that Appellant No. 2 never admitted to having removed any finished products clandestinely. Thus, I hold that the alleged shortage represents a mere accounting discrepancy, not evidence of clandestine removal.
7.1. In this regard, I rely upon the decision of the Hon'ble High Court of Allahabad in CCE Vs. Meenakshi Castings reported in 2011(274) E.L.T. 180(All.) wherein it has been categorically held that mere detection of shortage of finished goods, by itself, cannot establish evasion of excise duty unless there is material evidence to support the charge of clandestine removal.
7.2. I observe that the charge of clandestine manufacture and clearance is a serious charge, which is required to be established with positive/affirmative/tangible evidence and the burden of establishing the said charge lies heavily upon the revenue. Further, no demand of clandestine manufacture and clearance can be confirmed purely on conjectures, surmises, assumptions and presumptions. In the present case, I find that the Appellate Authority has upheld allegations of Page 19 of 20 Appeal No.: E/77357-77358/2018-SM clandestine removal without any corroborative evidence. There has been no seizure of unaccounted goods or interception of consignments cleared without payment of duty. The department has failed to present any affirmative evidence, such as records indicating unaccounted procurement of raw materials, excess production, or unrecorded sales, to substantiate its claims. Furthermore, the investigating agencies have made no effort to establish the existence of unaccounted manufacturing activities. There is no evidence of unaccounted raw materials, stock shortages, discrepancies in raw material or finished goods inventory, excess electricity consumption, unaccounted labor payments, or any interrogation of buyers, transporters, or other parties that might indicate clandestine clearance. Additionally, no incriminating records or documents suggest any flow of unaccounted cash. Thus, I find that the finding relating to clandestine removal by the Appellant no. 1 is grossly untenable and liable to be set aside. Accordingly, I set aside the demand of Central Excise duty of Rs. 2,07,803/- confirmed in the impugned order on account of the shortage of 46.359 MT of finished products.
8. Since, the demand of central excise duty against the appellant is not sustained, the question of demanding interest and imposing penalties against appellant no.1 does not arise.
9. Regarding imposition of Personal penalty of Rs. 25,000/- on Shri. Rajesh Rajuka, Managing Director of the appellant company, under Rule 25 of Central Excise Rules, 2002, I find that the allegation of clandestine clearance against the appellant Page 20 of 20 Appeal No.: E/77357-77358/2018-SM company is not sustained. Accordingly, I hold that the role of the appellant in the alleged offence of clandestine removal is not established. Thus, I find that there is no material evidence available on record to implicate the appellant no. 2 in the alleged offence. Thus, I set aside the penalty imposed on the appellant no.2.
10. In view of the above discussions, I set aside the impugned order and allow the appeals filed by both the appellants.
(Order Pronounced in Open court on 04.04.2025) (K. ANPAZHAKAN) MEMBER (TECHNICAL) RKP