Elora Tobacco Company Ltd. Vs Commissioner of CGST & Central Excise (CESTAT Delhi)
Held that the allegation of clandestine production and removal has to be established against any person by independent and tangible evidence. No demand exists in absence of such evidence.
Facts-
The main appellant is M/s. Elora Tobacco Company Ltd. (ETCL) are engaged in the manufacture of cigarettes at the factory situated at Industrial Area, Sanwer Road. They are registered with the Central Excise Department and cigarettes are excisable to the duty of Central Excise. During search it appeared to the Revenue that there is unaccounted stock/ cigarettes and no raw material was shown to have been issued for manufacturing of 9,80,000/- cigarettes (98 cartons) which were lying in stock to remove clandestinely.
The adjudicating authority has confirmed the demand by holding that cigarettes bearing brand names were seized from the traders. No evidence has been brought on record to show that the Appellant has not carried on their duty diligently and there is no evidence to point out any wrongdoing on their part.
Conclusion-
Held that is no evidence of manufacture of excess cigarette by M/s ETCL. The allegation of clandestine production and removal has to be established against any person by independent and tangible evidence in the form of receipt of raw material in factory and non accountal thereof, use of such raw material in clandestine manufacture of finished goods, consumption of electricity, labour employed and payment made to them, packing material used, discrepancy in stock of raw materials and finished products, security gate records, independent evidence of transportation of goods and its linkage from removal from factory, transport documents, receipt of goods by the buyer and receipt of sale proceeds by the consignor. No such evidence has been brought on record. The show cause notice and the impugned order has not found any evidence from factory showing contravention of law. No evidence of clandestine removal of goods from the factory or any instance is on record. Hence there is no reason to demand duty.
FULL TEXT OF THE CESTAT DELHI ORDER
In this batch of appeals the appellants are in appeal challenging duty and penalties imposed as follows:-
