M/S Bihar Foundry & Casting Ltd. Through ... vs The Commissioner Of Central Excise on 14 March, 2022
The conspectus of the facts of the case noted above shows that the
SCN was issued upon the Appellant-Company on the basis of two
incriminating materials i.e. the statement of the Managing Director of the
Company recorded under Section 14 of the Central Excise Act, 1944 and
notings in the private diary i.e. Ambassador diary. Apart from that, the
Adjudicating Officer relied upon the suo motu deposit made by the appellant
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on 29.11.2001 of an amount of Rs. 10,68,282/- before issuance of SCN on
21.02.2002. It is not in dispute that no other corroborative and tangible
evidence such as (i) unaccounted purchase of raw materials (ii) consumption
of raw materials (iii) manufacture of finished goods (iv) consumption of
electricity (v) payment of wages (vi) transportation / dispatch of finished
goods (vii) flow back of consideration (viii) acceptance of buyer of finished
goods (ix) acceptance of seller of raw materials (x) excess / shortage of raw
materials / finished goods etc. (xi) no evidence of extra use of electricity (xii)
no evidence of extra use of labour or payment of unaccounted wages (xiii)
no evidence in the nature of Challans, parallel invoices etc. for removal of
impugned goods and no unaccounted cash was found during the search. The
Adjudicating Authority has, in fact, relied upon only the above two
incriminating materials i.e. statement of the Managing Director under
Section 14 of the C.E.A and the notings in the private diary i.e. Ambassador
diary and no other corroborative evidence as above. The legal principles in
this regard are well settled that in the absence of corroborative evidences,
clandestine removal of manufactured goods cannot be established. [See
Balashri Metals Pvt. Ltd. and Ors. Vs. Union of India [2017 (345) E.L.T
187, para-5]; Hi Tech Abrasives Ltd. Vs. Commissioner of C. Ex. & Cus.,
Raipur [2018 (362) E.L.T 961 (Chhatisgarh), Para-12.2 & 12.3];
Continental Cement Company Vs. Union of India [2014 (309) E.L.T 411
(All), Para-12] As such, there was no other legally admissible evidence on
record to draw inference of clandestine removal. Accordingly, substantial
question of law no. V is answered in the aforesaid manner in favour of the
appellant.