Customs, Excise and Gold Tribunal - Bangalore
Shree Renuka Sugars Limited (Srsl) And ... vs The Commissioner Of Central Excise on 30 October, 2006
Equivalent citations: 2007(116)ECC166, 2007ECR166(TRI.-BANGALORE), 2007(210)ELT385(TRI-BANG)
ORDER S.L. Peeran, Member (J)
1. This appeal arises from Order-in-original No. 33 dated 17.12.2005 by which the Commissioner has confirmed demands raised by show cause notices dated 20.4.2005 with regard to the alleged clandestine removal of sugar without payment of duty for the period April - November 2002. The only evidence on which the demands have been confirmed is the security register maintained by private detective agent, who has been given the responsibility of maintaining the security of the factory. Revenue has not been able to get any admission from the staff of the appellants with regard to excess manufacture of goods and clearing the same clandestinely without payment of duty. There is no evidence of excess electricity consumption, receipt of excess raw materials and clearances through any transporters. There is also no evidence of any buyer having purchased the goods without payment of duty. The only evidence raised is pertaining to certain registers maintained by the private detective agency who are manning the security gate.
2. This matter was heard in detail at the time of giving waiver of full pre-deposit of duty amount by Stay Order No. 572 & 573/2006 dated 14.6.2006. The detailed submissions made by the learned Counsel and the learned JCDR was taken into consideration and prima facie the Tribunal recorded in Para 4 of the Stay Order that Revenue has not produced any evidence to substantiate the charge of clandestine manufacture and removal of sugar without payment of duty. The Tribunal also noted that the demands were also barred by time as show cause notice had been issued after a lapse of 871 days after the visit of Central Excise Officers. The Tribunal took into consideration the Apex Court judgment rendered in the case of Nizam Sugar Factory v. CCE 2006 (197) ELT 465 (SC). The Commissioner was asked to file comments in this matter.
3. The learned JDR files comments received from the Commissioner. The contention raised by the Commissioner in Para-wise comments is that the admission made by the security staff should be taken as conclusive evidence for clandestine removal. Further comment made is that conclusions given by the Commissioner in impugned order is based on theory of preponderance of probability with regard to certain factual witnesses. It is submitted that the effect of cross examination has also been considered for arriving at the conclusion. The Commissioner also submits that extended period is invokable, as the goods were removed without payment of duty and there was suppression of facts. It has been submitted that incriminating documents being the gate register is an authentic record maintained by the security officer and that should be sufficient to uphold the charge of clandestine removal.
4. These comments of the Commissioner are seriously opposed by the learned Counsel and refers to large number of judgments rendered by the Tribunal on the issue of clandestine removal. He summarises the ratio of the Tribunal judgments inasmuch as the mere private records are not sufficient to proof the clandestine removal. It is his submission that in the present case, the private records are also not relied but the Security register maintained by private security agency is relied upon, which cannot be the conclusive evidence. Therefore, there is no preponderance of probability in the present case. He submits that several links in the circumstantial evidence is required to be proved in the present case. There is no circumstance of higher production on record or receipt of higher inputs, higher electricity consumption, flow back of funds, statements from buyers and transporters. He submits that these are all basic requirements to discharge the burden of allegation of clandestine removal without payment of duty. The Revenue has failed to discharge the burden.
4.1 The learned Counsel submits that the witnesses who have all given the statements in favour of appellant, have not been considered. Therefore, the submission made in the Para-wise comments by the Commissioner that the record of cross-examination has been duly considered for arriving at conclusion, is not correct. It is his submission that the Commissioner has not considered the replies of cross-examination dated 2.12.2005 which are all in assessee's favour. He took us through the statements made by various witnesses, which were in assessee's favour. The witnesses have denied that there is excess production of sugar and clearances clandestinely without payment of duty. His main contention is that all the persons who were called for cross-examination were not working with the Security agency during the period when the goods have said to have been removed without payment of duty. Only one person Mr. Hussein Sab Kasim sab Wakkund was on duty, his answers are also in assessee's favour.
5. We have carefully considered the submissions and find that the Commissioner has not brought in his written comments any clinching evidence to proof the charges of clandestine removal of sugar without payment of duty. For manufacture of sugar, the main ingredients are sugarcane besides certain other ingredients. The records were maintained in terms of RG1 register with regard to receipt of sugarcane. In order to show that there was excess production, the Revenue ought to have brought forthwith evidence pertaining to excess utilization of raw materials or excess manufacture of sugar or excess production of electricity. The Revenue should have also produced evidence of transporters and the purchasers of the final products sugar without payment of duty. There was also no evidence pertaining to flow back of funds. The vital evidence is missing in the present case. The investigation was carried out in the factory premises on 23.11.2002, whereas the show cause notice was issued on 20.4.2005. Therefore, the demands have been raised after inordinate delay of more than 800 days. Therefore, in terms of cited Apex Court judgment, demands got barred by time. The Apex Court has earlier also held that when show cause notices have been issued after inordinate delays, the demands would be barred by time as rendered in the case of Mopeds India Ltd. v. CCE affirmed by the Apex Court as and Gammon India Ltd. v. CCE by Apex Court in 2002 (146) ELT A313 (SC). The Tribunal also in similar matters has held that when show cause notices have been issued after inordinate delay of investigation would be barred by time as held in the following case.
(i) J.S.L. Industries Ltd. v. CCE 1999 (109) ELT 316 (T)
(ii) Kathiravan Pipes Ltd. v. CCE 2002 (147) ELT 1266 (T)
(iii) Jalla Industries v. CCE
(iv) Lovely Food Industries v. CCE 2006 (195) ELT 90 (T)
(v) Tisco Ltd. v. CCE 2006 (199) ELT 855 (T)
(vi) Studioline Interior Systems Pvt. Ltd. v. CCE
(vii) CCE v. Prashant Electrode 2006 (196) ELT 297 (T) 5.1 We have also noticed that Tribunal in large number of judgments pertaining to clandestine removal have held that demands is not sustainable if the Revenue has failed to produce clinching evidence. Some of the judgments noted in the stay order are:
(i) TGL Poshak Corporation v. CC
(ii) Dalmia Vinyls (P) Ltd. v. CCE 2005 (192) ELT 606 (T)
(iii) Raam Tyres Ltd. v. CCE 5.2 In view of lack of evidence and demands being barred by time, we are of the considered opinion that the impugned order is not sustainable and the same is set aside by allowing the appeals with consequential relief, if any.
(Pronounced and dictated in open Court)