At, Customs Excise Service Tax Appellate Tribunal Principal Bench New Delhi
By, THE HONORABLE JUSTICE: ASHOK JINDAL
For Petitioner: Naveen Mullick, Advocate And For Respondents: K. Poddar, DR
1. Both sides are in appeal. The brief facts of the case are that on 10/09/2008 as search was conducted in the factory premises of the assessee and panchnama was drawn. On the basis of panchnama it was found that there was shortage of inputs and finished goods are lying in excess in their factory premises. Statement of Shri Vijay Gupta, Director was also recorded. In his statement he admitted that they have cleared 90 MT of finished goods without payment of dut
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y. On the basis of panchnama and statement of Shri Vijay Gupta a show cause notice was issued to the assesee to demand duty alleging that they have cleared goods clandestinely and penalties were also to be imposed on the assessee and Shri Vijay Gupta. The matter was adjudicated, the adjudicating authority confirmed the demand of duty along with interest and penalty on both the assessee and Director were imposed. The said order was challenged before the Ld. Commissioner (Appeals) who confirmed demand of duty along with interest but penalty was reduced to 25% on the assessees as they have paid the entire amount of duty at the time of search itself. Aggrieved from the said order confirming demand against the assessee and imposing penalty thereon, they are in appeal. For the reduction of penalty to the tune of 25%, the revenue is in appeal.
2. The Ld. Counsel for assesses submits that in this case during the course of search, the stock taking was done on eye estimation basis moreover, on presumptions and no actual wheighment was done. In reply to the show cause notice, the assessees asked the details how the wheighment was done (it details) that they were never supplied to the assessee. Therefore, it is prayed that charge of clandestine removal on account of shortage of raw material cannot be alleged against the assessee as held by this Tribunal in the case of Raika Ispat Udyog Pvt. Ltd. V/s Commissioner of C. EX., Raipur : 2016 (340) ELT 598 (Tri.-Del.). He further submitted that on the basis of the statement Shri Vijay Gupta demand cannot be confirmed on the assessee in the absence of any corroborative evidence in the light of the decision of this Tribunal in the case of Raipur Forging Pvt. Ltd. V/s Commissioner of C.Ex., Raipur-I : 2016 (335) ELT 297 (Tri. Del.). Therefore, it is prayed that the impugned order is to be set aside.
3. On the other hand, the Ld. A.R. submitted that during the course of investigation wheighment was done and same has been admitted by Shri Vijay Gupta who admitted that as per represented samples average of 19 Kg of the wheighment was done. In that circumstances, it is established that there was shortage at the time of search. It was further submitted that Shri Vijay Gupta himself has admitted that they have cleared 90 MT of Aluminium rods without payment of duty. Therefore, as what has been admitted, need not to be proved. In that circumstances, the impugned order is to be upheld.
4. Heard both sides and considered submissions.
5. In this case demand has been confirmed against the assessee on two grounds.
(A) Shortage of inputs found at the time of search.
(B) Relying on the statement of Shri Vijay Gupta stating that they have cleared 90 MT aluminium rod without payment of duty.
6. I find that from nowhere of the panchnama as well as the proceedings it is coming out how the wheighment of the stock was done. Moreover, it has mentioned in the panchnama and the statement of Shri Vijay Gupta that weighment of scrap was done only on approximation basis and the assessee repeatedly asked for supply of the weighement slips which has not been provided to the assessee. As wheighment details has not been produced by the revenue, in that circumstances, it is concluded that the wheighment has been done on eye estimation basis. On this basis, the demand cannot be confirmed against the assessee on the shortage of inputs. Therefore, the demand of Rs. 6,70,766/- is set aside.
7. The demand of Rs. 15,55,360/- has been confirmed on the basis of the corroborative statement of Shri Vijay Gupta. As other evidence has been produced by the revenue on record to corroborate the clandestine removal of goods, therefore in the light of the decision of the Tribunal in the case of Devender Sandhu Impex Ltd. V/s Commissioner of Central Excise., Ludhiana : 2016 (337) ELT 99 (Tri.-Del) on the basis of statement of Shri Vijay Gupta, the demand is not sustainable. In view of the above observation, I set aside the impugned order and allow the appeals with consequential relief. In the result, the appeals filed by the assessee are allowed and the appeal filed by the revenue is dismissed