COMMISSIONER OF CENTRAL EXCISE Vs. SAINI INDUSTRIES LTD.

JUDGEMENT

(1.) BEING aggrieved with the order passed by the Commissioner (Appeals), Revenue has filed the present two appeals. I have heard Shri R.K. Mishra, ld. Departmental Representative appearing for Revenue and Shri Bipin Garg, ld. Advocate representing the respondents. The facts of the case are that on 16 -7 -2007, officers of Income Tax Department searched the factory premises of the respondents. During verification of stock lying in the factory premises, 149.065 MT of finished goods was found short of the stock recorded in the books. On the basis of this information received from the Income Tax Department, it is alleged that the said quantity of 149.065 MT of finished goods was removed in a clandestine manner and therefore a proceeding for recovery of duty of Rs. 5,78,380/ - was initiated vide show cause notice dated 21 -5 -2009. The adjudicating authority, vide their order confirmed the recovery of duty of Rs. 5,78,380/ - proposed in the said Notice and also imposed equal amount of penalty upon respondents under Section 11AC of the Central Excise Act, 1944. A penalty of Rs. 1,00,000/ - was also imposed upon Shri Jagdish Singh Saini, Director of the respondents under Rule 26 of Central Excise Rules, 2002. Against the order, the respondents filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) set aside the demand by observing as under: - -

(2.) THE Revenue in their Miscellaneous Application again reiterated the same very stand that the report of the income -tax authorities has to be accepted. I find that apart from that there is nothing on record that the respondents had actually manufactured and removed the goods clandestinely. As rightly discussed by the Commissioner (Appeals), the stock verification done by the income -tax authorities cannot be accepted on its face value in view of the doubts raised by the respondents and in the absence of corroborative evidence, no duty of excise can be confirmed. The Tribunal in the case of Ravi Foods Pvt. Ltd. v. CCE, Hyderabad [ : 2011 (266) E.L.T. 399 (Tri. -Bang.)] has held that the information received from the Income Tax Department cannot be made the sole basis for confirmation of demand under the Central Excise when the Central Excise authorities in their investigations did not find any corroborative evidence of clandestine removal of their final products. In view of the above, I do not find any infirmity in the impugned order of the Commissioner (Appeals). Accordingly the same is upheld and the appeals filed by Revenue are rejected.