Monarch (i) Pvt. Ltd. Vs. Commissioner of C. Excise - Court Judgment

Excerpt:
1. heard shri k.k. banerjee, learned advocate for the appellant-company and shri a. raha, learned s.d.r. for the revenue.2. shri banerjee, learned advocate for the appellant-company, submits that the joint commissioner of central excise (technical), kolkata-i commissionerate has observed in his order that in present case, the investigating officer has not established any specific evidence of sale of alleged clandestinely cleared goods. they have also not produced any evidence to identify any alleged purchase of the clandestinely removed goods said to have been sold by the assessee, which resulted in the sale proceeds in the form of impugned indian currency. therefore, shri banerjee submits that in the present case, there is no iota of evidence regarding the clandestine removal of the goods from the factory. the charge of clandestine removal is based on presumption and assumption.there should be some tangible evidence of removal of the goods allowed to have been removed and cleared, and no duty can be levied for clandestine removal of the goods. learned advocate placed reliance on the following decisions: (i) durga trading company v. c.c.ex. reported in 2002 (148) e.l.t. 967;c.c.ex. v. universal polythene industries (iii) commissioner of central excise v. velavan spinning mills ;tijiya steel (p) ltd. v. c.c.ex.he submits that in present case, the allegation of clandestine removal of biscuits is based on the annexure-c to the notice, and it would appear from the said annexure that the calculation shown is totally vague. no quantity against the value of clearance is given, and no period has been mentioned as to the clearance of goods. no details of clearances have been given. the investigating officer has not established the identity of seller and purchaser. therefore, he submits that the appeal may be allowed with consequential benefit to the appellant company.3. learned s.d.r., shri raha supports the impugned order. he submits that the demand of clandestine removal has been based on the records, which were available in the appellant-company's factory, and which were supported by documents. therefore, he submits that the appeal may be rejected.4. in the present case, the charge of clandestine removal is based on annexure-c, which reads as follows: duty @ 8% rs. 6,46,045 = 00 _____________________ it is clear from the said annexure-c that the basis of calculation has not been disclosed in this annexure. no quantity against the value of clearance is given. neither the period has been mentioned regarding the date of clearance nor the details of clearances has been given. no investigation has been made regarding the seller and the purchaser of the goods. it has been held in the case of cce v. universal polythene industries is a serious charge which is required to be proyed by the revenue by production of sufficient tangible evidence. there must be absolute proof and not on the basis of preponderance of probabilities. in the present case, the only available document is a private document, which is not supported by any other evidence. however, i observe that the private books and some statements relied upon by the revenue are not sufficient for establishing the charge of clandestine removal of the goods. similar view was expressed in the case of cce v. velavan spinning mills , as also in the case of case, i find that the department has confirmed the demand of duty on the basis of a calculation sheet i.e. "annexure: c", which, i find, is not sufficient to establish the charge of clandestine removal. the joint commissioner (technical) in the order-in-original dated 29-11-2000 had observed as follows: in the present case the investigating officers have not established any specific evidence of sale of alleged clandestinely cleared goods. they have not produced any evidence to identify any alleged purchaser of the clandestinely removed goods said to have been sold by the assessee,....it is evident from the above discussion that the department failed to establish the charge of clandestine removal with any tangible and concrete evidence. therefore, the appeal deserves to be allowed. hence, i set aside the impugned order and allow the appeal with consequential benefit to the appellant company.

Judgment:
1. Heard Shri K.K. Banerjee, learned Advocate for the appellant-company and Shri A. Raha, learned S.D.R. for the Revenue.

2. Shri Banerjee, learned Advocate for the appellant-company, submits that the Joint Commissioner of Central Excise (Technical), Kolkata-I Commissionerate has observed in his Order that in present case, the Investigating Officer has not established any specific evidence of sale of alleged clandestinely cleared goods. They have also not produced any evidence to identify any alleged purchase of the clandestinely removed goods said to have been sold by the assessee, which resulted in the sale proceeds in the form of impugned Indian currency. Therefore, Shri Banerjee submits that in the present case, there is no iota of evidence regarding the clandestine removal of the goods from the factory. The charge of clandestine removal is based on presumption and assumption.

There should be some tangible evidence of removal of the goods allowed to have been removed and cleared, and no duty can be levied for clandestine removal of the goods. Learned Advocate placed reliance on the following decisions: (i) Durga Trading Company v. C.C.Ex. reported in 2002 (148) E.L.T. 967;C.C.Ex. v. Universal Polythene Industries (iii) Commissioner of Central Excise v. Velavan Spinning Mills ;Tijiya Steel (P) Ltd. v. C.C.Ex.

He submits that in present case, the allegation of clandestine removal of biscuits is based on the Annexure-C to the Notice, and it would appear from the said Annexure that the calculation shown is totally vague. No quantity against the value of clearance is given, and no period has been mentioned as to the clearance of goods. No details of clearances have been given. The Investigating Officer has not established the identity of seller and purchaser. Therefore, he submits that the appeal may be allowed with consequential benefit to the appellant company.

3. Learned S.D.R., Shri Raha supports the impugned Order. He submits that the demand of clandestine removal has been based on the records, which were available in the appellant-company's factory, and which were supported by documents. Therefore, he submits that the appeal may be rejected.

4. In the present case, the charge of clandestine removal is based on Annexure-C, which reads as follows: Duty @ 8% Rs. 6,46,045 = 00 _____________________ It is clear from the said Annexure-C that the basis of calculation has not been disclosed in this Annexure. No quantity against the value of clearance is given. Neither the period has been mentioned regarding the date of clearance nor the details of clearances has been given. No investigation has been made regarding the seller and the purchaser of the goods. It has been held in the case of CCE v. Universal Polythene Industries is a serious charge which is required to be proyed by the Revenue by production of sufficient tangible evidence. There must be absolute proof and not on the basis of preponderance of probabilities. In the present case, the only available document is a private document, which is not supported by any other evidence. However, I observe that the private books and some statements relied upon by the Revenue are not sufficient for establishing the charge of clandestine removal of the goods. Similar view was expressed in the case of CCE v. Velavan Spinning Mills , as also in the case of case, I find that the Department has confirmed the demand of duty on the basis of a Calculation Sheet i.e. "Annexure: C", which, I find, is not sufficient to establish the charge of clandestine removal. The Joint Commissioner (Technical) in the Order-in-Original dated 29-11-2000 had observed as follows: In the present case the investigating officers have not established any specific evidence of sale of alleged clandestinely cleared goods. They have not produced any evidence to identify any alleged purchaser of the clandestinely removed goods said to have been sold by the assessee,....

It is evident from the above discussion that the Department failed to establish the charge of clandestine removal with any tangible and concrete evidence. Therefore, the appeal deserves to be allowed. Hence, I set aside the impugned Order and allow the appeal with consequential benefit to the appellant company.