Clandestine removal of goods cannot be established solely on private records and uncorroborated statements; it requires tangible evidence such as excess raw material procurement, electricity consumption, or proof of transportation and receipt by buyers.

SATENDRA VIKRAM SINGH

The appellant, M/s. Srini Link, GIDC Industrial Estate, Umbergaon, Gujarat (Appellant) are manufacturing PVC insulated electrical cables, Automobiles cables, Lead free cables, Power cord, Tinned copper wire etc falling under Chapter 85, 74 and 39 of the schedule to the Central Excise Tariff Act, 1985.

1.1 On the basis of intelligence, Central excise officers searched the appellant’s factory on 10/11.01.2012 and resumed certain private records viz. hand written note pads, challan books etc. under Panchanama in the presence of Shri Bhadresh R. Lade, Authorised signatory of the unit. From the resumed documents, officers suspected that the appellant had clandestinely cleared finished goods without payment of duty. Statement of Shri Bhadresh R. Lade was recorded under Section 14 of the Central Excise Act, 1944 who admitted that finished goods have been cleared under the recovered challans without issue of invoice and without payment of excise duty. Regarding missing pages from 1-19 of the resumed challan book, he stated that either partner of the company or Shri Rajeshwaran Menon Authorised Signatory who authored those challans, can tell anything about clearances. Inspite of issue of several summons, Shri D. Saravanan, Partner of the appellant firm did not join investigation and avoided it on one or the other ground. The officers also did not record statement of Shri Rajeshwaran Menon and Smt. Bhagyashree Churi, Administrative Officer of the unit who authored notepad books.

1.2 After conducting investigation, Revenue issued a show cause notice dated 20.11.2015 to the appellant demanding central excise duty of Rs.16,94,770/- (including Education Cess and Secondary and Higher Education Cess) on clandestine clearances under Section 11A(4) along with interest under Section 11AA of the Central Excise Act, 1944 and penalty under Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944. Separate penalty was proposed on Shri Bhadresh R. Lade, Authorised Signatory and Shri D. Saravanan, Partner of the appellant firm under Rule 26 of the Central Excise Rules, 2002 for their role in evasion of excise duty.

1.3 The show cause notice was adjudicated by the Assistant Commissioner who vide order dated 31.03.2017 confirmed the duty demand against the appellant along with interest, imposed equal penalty on the appellant unit and also imposed a penalty of Rs.20,000/- each on Shri D. Saravanan and Shri Bhadresh R. Lade. Aggrieved with the above order, all three filed appeals before Commissioner (Appeals) mainly contending non supply of RUDs, valuation of goods, inapplicability of extended period and insufficient evidence etc. Vide impugned order, the appellant authority confirmed the order of the Assistant Commissioner and rejected their appeal. Hence, this appeal.

2. Appellant firm took the following grounds in their appeal before the Tribunal:-

• Inspection of resumed documents by the appellant revealed that the note pad was containing some transaction details without any signature or name. The challan book in the name of M/s Ami Enterprises, Kalbadevi, Mumbai was having names of three parties which were not their clients. The note pad showed some rough calculations of value of goods and duty liability without any basis.

• They purchased raw materials through cheques and never indulged in cash transactions. The goods sold in Maharastra were routed through their Mumbai depot which is registered with Central Excise. Shri Rajeshwar Menon,