KALPESH SATYENDRA JHAVERI,J. - (1.) By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal filed by the appellant.
(2.) The counsel for the appellant has framed the following substantial questions of law: 1. Whether the ld. CESTAT has grossly erred in law in ignoring the vital evidences in the form of voluntary statements of the Director and General Manager of the Company and the loose slips recovered by the Department during the search in setting aside the order of the ld. Adjudicating Authority? 2. Whether the ld. Adjudicating Authority grossly erred in law in ignoring the voluntary statements of the Director and General Manager of the Company while dropping the partial demand? 3. Whether the ld. CESTAT has grossly erred in law in setting aside the penalties on the Director and General Manager of the Company who were actively engaged in clandestine removal of the goods? 4. Any other question of law as the Hon'ble High Court may formulate and decide the same in terms of sub section (3) and (5) respectively of section 35G of the Central Excise Act, 1944.
(3.) However, taking into consideration, the observation made by the Tribunal which reads as under: 6. Revenue has challenged the dropping of demand to the extent of Rs. 30.85 lakhs. The demand of about Rs. 60 lakhs was proposed in the show cause notice on the basis of the quantification relying on 32 kachha parchis recovered during search proceedings. The assessee contended during the course of adjudication that out of 32 slips, 25 slips of various dates were of different despatches, which correlate and reconcile with the excise invoices issued to the respective parties. They have further claimed that all the clearances were duty paid and there was no clandestine clearance. The adjudicating authority has carefully gone through the said 25 slips alongwith the connected invoices and other documents submitted by the assessee and has given detailed discussions in para 36 of the impugned order. With reference to each kachha parchi and the relevant invoice, he has recorded that the quantity, size, truck No. name of consignee mentioned in the invoice are completely matching with the details so given in the recovered kachha parchi. Further, he has recorded that the subject invoices have been duly entered in RG-1 register as well as the ledger account. In the light of the above, he has concluded that the subject consignee were cleared on payment of Central Excise duty. We have gone through the records of the case as well as the findings of the adjudicating authority in this regard. We are of the view that since the adjudicating authority has given detailed findings that all the goods covered by 25 kachha parchis have been cleared on payment of duty, we find no reason to take a different view. Consequently, we uphold the dropping of demand of Rs. 30,85,849/- and reject the Revenue's appeal. 7. The adjudicating authority has confirmed the demand amounting to about Rs. 30 lakhs on the basis of seven kachha parchis in respect of which the assessee was in a position to submit proof for clearance of goods under invoices without payment of duty. He has further recorded that both Sh. J. D. Pant, General Manager as well as Sh. P.C. Jain, Director have given inculpatory statements under section 14 of the Central Excise Act to the effect that goods covered by kachha parchis were clandestinely cleared without payment of duty. Further, the assessee has also paid the entire duty for the goods covered by 32 slips. These findings of the adjudicating authority have been challenged by the assessee in the present appeals. It is their submission that the goods covered by these seven slips were never despatched from the factory for various reasons. It is their submission that the kachha parchis were initially made for internal use indicating the quantity of material, name of the party, place to which goods to be despatched and other details. Later on, the relevant quantum of goods are identified from the stockyard and loaded into the despatch truck whose number is also included in the kachha parchi. In respect of these seven kachha parchis, the orders placed by the customers have got cancelled and hence no goods were despatched to the parties indicated in the kachha parchi. 8. On going through the impugned order, we note that the adjudicating authority has given due consideration to the submissions made by the appellant. The allegation of clandestine removal has been upheld in respect of goods mentioned in the seven parchis only on the basis of inculpatory statements given by Sh. J.D. Pant, General Manager and Sh. P.C. Jain, Director. We find from the record that Revenue has undertaken any verification either with the buyers or even with the transporters. No investigation appeared to have been carried out to prove that such goods were manufactured in the factory but accounted for. 9. Clandestine clearance is a serious allegation and needs to be established on the basis of tangible evidence. It is well established fact that only on the basis of the inculpatory statement, the charges of clandestine clearance cannot be upheld. The inculpatory statements given by the General Manager and Director also do specifically cover the seven parchis. In the absence of any corroborative evidence to indicate that the goods covered by seven parchis were cleared by the appellant, we are of the view that the charge of clandestine clearance and demand of duty cannot be sustained. The assessee has cited a large number of decisions to support the contention that clandestine clearance cannot be upheld without tangible evidence.;