Krishna Kumar, Member (J) - (1.)HEARD both sides.
(2.)Shri Devan Parekh, Advocate, is present on behalf of the appellants and Shri U.H. Jadhav, JDR, is present on behalf of the Revenue.
The appellant is a proprietory concern of Shri Jasminbhai Dilipbhai Pansuriya. The period in dispute involved in the present case is from April 2001 to August 2004. The undisputed facts of the case are that the appellants started manufacturing Stainless Steel Belts and parts thereof for wrist-watches only from August 2002 and they were paying duties on the same thereafter and there is no dispute for the period August 2002 and thereafter. The dispute relates only to the period prior to August 2002. Prior to August 2002, the appellants were getting the S.S. Belts and parts thereof manufactured from various job workers and they were involved only in the trading activity and on receipt of the goods in question from the job workers they were selling the same to the various retailers. It is significant to mention that the Commissioner himself had dropped the demand up to January 2002. Thus, if the total period of dropping the demand and period after August 2002 which is not in dispute is taken into account, it will be seen that the total period in dispute remains only six months i.e., from February 2002 to July 2002. For this period, the Commissioner has taken the production of job workers as the production of the appellants whereas the appellants categorically stated that he has never supplied any raw material to the job workers. He was only giving the specifications to the job workers and job workers were manufacturing the product in question and supplying the same to the appellants as per the specifications on consideration. The appellants were selling the same to the various retailers as mentioned above. The whole case of the Department appears to be based upon slips and chits etc. allegedly to be found from the premises of one Shri Shailesh Sheth on 9-1-2004. The allegation of the Department is that the appellants were clandestinely removing the goods without payment of duty.

(3.)THE contentions of the ld. Counsel for the appellants are that there is no direct evidence on records to prove clandestine removal; no lorry receipts showing transportation of the goods had been brought on records; no truck driver or the transporters had been examined and the evidence brought on records to show that they have carried the goods in their trucks; no evidence with regard to purchase of raw materials and the sale of goods to the dealers during the period in question had been brought on records; that a third party documents cannot be deemed to be sufficient to establish the charges of the clandestine removal when no name of the appellants is figuring in the documents; the private records without due corroboration and correlation cannot be taken into consideration for the purpose of establishing the clandestine removal; Shri Jasmin Pansuriya, the Proprietor of the appellants has immediately retracted the statement; that the ld. Counsel has failed to take into consideration the affidavits filed by the appellants; that the appellants were getting the work done by the job workers and as such the appellants are not the manufacturers of the goods in question and in this regard, the ld. Counsel drew our attention to paragraph (b) at internal page 7 of the impugned order; that the Commissioner has failed to take into consideration reconciliatory statement filed by the appellants and the documents to administer that the entire quantity of finished goods and raw materials tally; that no statement of the dealers allegedly to whom the goods have been supplied had been brought on records; that the whole case of the department is based on conjectures and surmises and there is no positive or direct or strict evidence brought on record to prove clandestine removal; that the ld. Counsel drew our attention to para 8 of the impugned order, wherein the Commissioner, has inter alia noted as under:
I do not find enough evidence and justification to impose any penalty on Shri Bharatbhai, Shri Damjibhai Pansuriya or M/s. Sonic, Bharuch, to whom also the Show Cause Notices have been issued proposing imposition of penalty under Rule 26 of the Central Excise Rules, 2002.I am of the view that a penalty under Rule 26 is imposable on a person only where it is established beyond a reasonable doubt that the person concerned had involved himself personally and directly in the acts or omissions mentioned in the said Rule 26 of the Central Excise Rules, 2002. THErefore, I do not consider it to be a fit case for imposition of penalty on them.