Customs, Excise and Gold Tribunal - Calcutta
Tijiya Pvt. Ltd. vs Cce on 7 January, 2005
Equivalent citations: 2005(101)ECC175, 2005(185)ELT425(TRI-KOLKATA)
ORDER M.P. Bohra, Member (J)
1. Heard Shri K.K. Banerjee, ld. Advocate for the appellants and Shri J.R. Madhiam, ld. JDR for the respondents.
2. Shri Banerjee submits that the allegation of clandestine removal is based on the Despatch Register where some entries were made without mentioning any invoice and Vehicle No. He submits that the said Register was meant for goods to be dispatched. Where Vehicle No. and invoice wee mentioned, the goods were dispatched and where nothing was mentioned the goods were yet to be dispatched. No verification was conducted at the address of the parties whether any goods were received by them or not. He submits that the Commissioner should not have passed any order without conducting any investigation for clandestine removal. In the absence of any verification, no such charge is sustainable. He submits that the clandestine removal is a serious charge which is required to be proved by the Revenue by production of sufficient and tangible evidence. There must be absolute proof and not on the basis of preponderance of probabilities. He relies on the following decisions:
(i) CCE v. Universal Polyethylene Industries : 2001 (130) ELT 228 (T);
(ii) Durga Trading Company v. CCE : 2002 (148) ELT 967 (T), as affirmed by the Supreme Court reported in 2003 (157) ELT A 315;
(iii) ESSVEE Polymers (P) Ltd. v. CCE : 2004 (165) ELT 291 (T);
(iv) Padmanabh Dueing & Finishing Works v. CCE : 1997 (90) ELT 343 (T);
(v) CCE v. Harcharan Brother : 2004 (168) ELT 454 (T) ;
(vi) CCE v. Sanghamitra Cotton Mills (P) Ltd. : 2004 (163) ELT 472 (T).
He also submits that the Commissioner should not have relied upon the statement of Sri Poddar who had no knowledge about the entries made in the Register and the Investigation Officers did not purposely take a statement from the person nor interrogated the person who made the entries. He submits that it is settled that the charges on the basis of Private Register/Chits/Slips etc. are not sustainable unless corroborative evidences are collected from the customers who received the alleged clandestinely removal goods. There is no shortage of raw materials or finished goods found by the Officers in the factory and the absence of such shortages, the allegation of clandestine removal is not sustainable. He further submits that the duty has been demanded on the sale price of the goods. It is well settled that the assessable value is to be determined after deducting the duty from the price charged. He relies on the following decisions:
(i) Nirula and Co. (P) Ltd. v. CCE : 2003 (156) ELT 583;
(ii) CCE v. Maruti Udyog Ltd. : 2002 (141) ELT 3 (SC);
(iii) Sri Chakra Tyres Ltd. v. CCE : 1999 (108) ELT 361 (T-LB);
(iv) CCE v. M.K. Asokan : 2003 (151) ELT A-187.
He submits that in the present case, the duty has been paid before issuance of show-cause notice. Therefore, the penalty and interest are not sustainable. He relies on the following decisions:
(i) EID Parry (India) Ltd. v. CCE : 2003 (157) ELT 193 (T);
(ii) Rashtriya Ispat Nigam Ltd. v. CCE : 2003 (161) ELT 285 (T).
He, therefore, submits that the appeal may kindly be allowed.
3. Shri Madhiam supports the impugned order.
4. In the present case, the Commissioner, while passing the impugned order, has relied upon a Register where some entries were made without mentioning any invoice and vehicle number. No enquiry was made at the consignee's end. The allegation of clandestine removal is required to be proved by production of sufficient and tangible evidence. There must be absolute proof and not on the basis of preponderance of probabilities. There is no evidence or invoice or bill evidencing purchase of raw materials or manufacture of goods. The statements not corroborated with documentary evidence or any corroborative statement obtained from the seller of raw material for purchaser of raw material.
5. It has been held in the case of Durga Trading Company v. Commissioner of Central Excise, Lucknow reported in 2002 (148) ELT 967 (Tri.-Del.) that the charge of the clandestine removal has to be based on concrete and tangible evidence and not on inferences involving unwarranted assumptions. For better appreciation, the Tribunal in the above referred case, M/s. Durga Trading Company, has held as under:
"Demand - Clandestine removal - Evidence - Reconciliation of sales and purchase bill not achieved - No. inference could be drawn legally for clandestine removal and for the goods cleared after manufacture without payment of duty on this ground - Charge has to be based on concrete and tangible evidence and not on inferences involving unwarranted assumptions-No clandestine removal - Erstwhile Rules 9 (2) and 173Q of Central Excise Rules, 1944, In absence of any corroborative evidence like consumption of excess electricity or statements of buyers, it could not also be said that noticee company clandestinely removed goods manufactured from stock found short. (para 8,9)"
6. It was held in the case of Commissioner of Central Excise, Coimbatore v. Velavan Spinning Mills reported in 2004 (167) ELT 91 (Tri.-Chennai) that the private note books and some statements relied by the Revenue were not sufficient for the charge of clandestine removal of the goods. Similar view was expressed in the case of Commissioner of Central Excise v. Valan Beedi Works reported in 2004 (166) ELT 133 (Tri.-Chennai). In the present case, the Revenue has relied on the private register and the papers. The entries contained in the Register are not sufficient to prove such charges. No evidences of use of inputs or the use of electricity were collected to prove that there was any manufacture of product nor there was any other evidence to prove that the goods were clandestinely removed from the premises. In the absence of such evidence, the appellants cannot be held responsible for clandestine removal.
7. In view of the above discussions, the appeal deserves to be allowed. Consequently, I set aside the impugned order and allow the appeal with consequential benefit to the appellants, if any.