M/S. MAAN ALUMINIUM LTD. versus COMMISSIONER OF CENTRAL EXCISE, INDORE

Citation: [2015] 10 S.C.R. 27 · Decided: 08-05-2015 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2015] 10 S.C.R. 27 
MIS. MAAN ALUMINIUM LTD. 
v. 
COMMISSIONER OF CENTRAL EXCISE, INDORE 
(Civil Appeal No. 2830 of 2005) 
MAYOS, 2015 
[A. K. SIKRI AND R. F. NARIMAN, JJ.] 
A 
B 
Central Excise Act, 1944 - Schedule, Chapter 76 -
Show-cause notice alleging the appel/ant-assessee for c 
clandestinely removing some of the quantities of the finished 
goods manufactured by it - Demand of differential duty by 
adjudicating authority- The order of the authority confirmed 
by the Tribunal and the High Court - On appeal, held: The 
order was passed by courts below on the basis of admissions D 
of two employees of the assessee-company without adverting 
to the specific plea of the assessee explaining that there was 
no clandestine removal of the goods from the premises -
The statements of the employees cannot be read as 
admissions -
Thus entire basis of impugned order gets E 
knocked off - Demand order is quashed. 
Allowing the appeal, the Court 
HELD: 1. In view of the reply to the show cause 
notice and the statements of the two employees of the F 
assessee-company, the findings arrived at by the 
CESTAT which are accepted by the Hi.gh Court are ~otally 
perverse and there is no such admission made by these 
two persons which has become the basis of the orders 
passed by the authorities below. Since there was no G 
such admission on the part of these two persons which 
is erroneously read out to be so, entire basis of the 
impugned orders passed by the Commissioner as well 
as the CESTAT gets knocked off. [Paras 7 and 12][34-F; 
36-E-F] 
H 
27 
28 
SUPREME COURT REPORTS 
[2015] 10 S.C.R. 
A 
2. In spite of the factthat the plea was specifically 
raised by the appellant in explaining that there was no 
difference in the quantities and thus, no question of 
any clandestine removal of the goods from the 
premises, the said plea has not been adverted to, c.nd 
B there is no reference made to the material produced by 
the appellant. Only on the baais of so called admissions, 
the authorities jumped to the conclusion without 
undertaking any further exercise. Such an order of the 
CESTAT which is confirmed by the High Court, does not 
C stand legal scrutiny and therefore, these orders are liable 
to be set aside. [Para 15] [38-E-G] 
D 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 
2830 of2005 
From the Judgment and Order dated 21.06.2004 of the 
High Court of Madhya Pradesh Bench at Indore in M.A. No. 
1184of2004 
E 
S. Ganesh, Narendra Kamar, Vinod Mehta, Rakesh 
Kumar for the Appellant. 
K. Radhakrishnan, Shirin Khajuria, Rajiv Sharma, 8. 
Krishna Prasad for the Respondents. 
F 
The Judgment of the Court was delivered by 
A. K. SIKRI, J .. 1. The appellant herein is engaged in 
the business of manufacturing of Aluminium Profils, bars 
and roads, tubes and papers. These items which are finished 
G goods are subjected to excise duty and classified under 
chapter 76 of the Schedule to the Central Excise Act. 
Substantial quantity of the aforesaid goods manufactured by 
the appellant is exported. Some officials of the Central Excise 
Department visited the factory of the appellant on 16.08.1996 
H and checked the physical stock of the finished goods viz-
M/S. MAANALUMINIUM LTD. v. COMMISSIONER OF 
29 
CENTRAL EXCISE, IN DORE [A. K. SIKRI, J.] 
a-viz, the stock recorded in its books. On verification, A 
these officials found that several quantities of goods are 
unaccounted. These goods were, accordingly, seized. The 
raiding party also visited the office premises of the appellant. 
It went to the dealers of the appellant and recorded their 
statements as well. Statements of some of the employees of B 
the appellant company who were dealing with the affairs of 
the appellant were also recorded. 
2. On the basis of the aforesaid material and the 
statements recorded, the Department took the view that C 
the appellant had been clandestinely removing some of the 
quantities of the finished goods. On this basis, a show 
cause notice dated 03.03.1999 was issued to the appellant 
company as well as its managing director. Making out the 
case of evasion of excise duty and suppression of facts on 
D 
the part of the appellant, extended period of limitation was 
invoked, as per proviso to Section 11A(1) of the Central 
Excise Act. 
3. The appellant submitted its reply to the said show cause E 
notice contesting the position which was taken by the 
Department in the said notice. The appellant submitted that 
there was no clandestine remov

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