Cce, Ludhiana vs M/S Sardar Associated Limited

[Arising out of the Order-in-Appeal No. 34-40/CE/CHD/2006 dated 27/01/2006 passed by The Commissioner (Appeals), Central Excise Commissionerate, Ludhiana.]

For Approval and signature :

Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

1. Whether Press Reporters may be allowed to see :

the Order for publication as per Rule 27 of the

CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of :

the CESTAT (Procedure) Rules, 1982 for

publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair :

copy of the order?

4. Whether order is to be circulated to the :

Department Authorities?

CCE, Ludhiana Appellant

Versus

M/s Sardar Associated Limited Respondent

Appearance

Shri Govind Dixit, Authorized Representative (DR)  for the appellant.

Shri K. Gurumurty, Advocate  for the Respondent.

CORAM: Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

Final Order No. 52837/2015 Dated : 08/09/2015

Per. B. Ravichandran :-

This is an appeal by the Revenue against the order of learned Commissioner (Appeals). The respondents are manufacturers of non-alloy steel ingots subjected to Central Excise duty. Proceedings were initiated against the respondent for manufacture and clearance of excisable goods clandestinely without payment of duty. The case was adjudicated by the Original Authority who confirmed the demand of Rs. 5,15,904/- on steel ingots clandestinely cleared by the respondent equal amount of penalty were imposed on the respondent and M/s Mahajan Steel Rolling Mills, Ludhiana. On appeal by the parties, the learned Commissioner (Appeals) vide his order dated 27/01/2006 set aside the order and allowed the appeals. Aggrieved by the said order, the Revenue is in appeal. In the grounds of appeal it was contended that the Commissioner (Appeals) erred in holding that the whole case depends on the entries in the register maintained by the owner of weigh-bridge, namely, M/s Mola Computerized Dharamkanta. It was contended that the statements of persons managing the weigh-bridge had corroborated the entries therein.

The vehicles which were entered in the records of Dharamkanta belong to the respondents. Since the case is one of clandestine removal the proof cannot be to the level of mathematical precision. During the oral arguments the learned AR stated that there is no bar in admitting third party evidence and in the present case the records maintained at the weigh-bridge show the vehicle numbers which are exclusively used by respondent. The learned Counsel for the respondent opposed the grounds of appeal stating that there is nothing on record or evidence to show any clandestine procurement of raw material, unaccounted manufacture and clearance of finished goods by the respondent. The only basis on which the Department proceeded against the respondent is certain entries in the records of weigh-bridge which indicated certain vehicle numbers belonging to the respondent. The entries have been corroborated by the persons incharge of weigh-bridge. It is an admitted fact that this third party evidence has to have some corroboration either by way of statements or records of clandestine production/clearance or from the buyers side.

In the absence of any of such corroboration there is no ground to sustain a demand against the respondent. He submitted that the learned Commissioner (Appeals) is correct in dropping the demands and there is nothing on record to reverse the said decision.

2. Heard both the sides and examined the appeal records. The demand against the respondent for alleged clandestine removal of excisable goods in the present case is solely based on entries in the weigh-bridge records confirmed by the persons who are managing the weigh-bridge. Other than this there is no documentary or oral evidence by way of statements indicating procurement of raw material, possible unaccounted manufacture and clandestine dispatch and receipt of such finished goods by the buyers. The learned Commissioner (Appeals) examined the evidence relied in this case and found that there is no corroboration of the entries made by the third party and further held that the entries themselves were not admissible in view of the disparity in the rates shown for weighment. The learned Commissioner (Appeals) concluded that the weighment challans of weigh-bridge owner or lorry receipt is not conclusive proof to substantiate the fact of clandestine removal in the absence of corroborative evidence. We find that there is nothing in the Revenues appeal now to persuade us to take a contrary view. This Tribunal in the case of Doaba Alloys Casting (P) Ltd. vs. CCE, Delhi reported in 2003 (159) E.L.T. 681 (Tri.  Del.) held that challans collected from the weighment company could not furnish conclusive proof of the sale of goods mentioned therein. No corroborative evidence had been collected by the Department to establish the clandestine clearance of the goods by the appellants without payment of duty. No statement of any firm to whom the goods were allegedly cleared had been recorded. No inquiry from transporter or any buyer of the goods was conducted regarding the clandestine transport/receipt of the goods by him from the appellants. We find the observations made in the above case by the Tribunal are relevant to the present case also. We find no merit in the present appeal by the Revenue accordingly dismiss the same.

(Operative part of the order pronounced in the open court.)

(Ashok Jindal)

Member (Judicial)

(B. Ravichandran)

Member (Technical)

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