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2017 (8) TMI 832 - CESTAT CHENNAIClandestine manufacture and removal - It appeared that the appellant had not accounted their production of cotton yarn on cones, that the suppressed production was removed without payment of duty to the yarn dealers in R.S.Puram, using the invoices of SGT and SVT - Held that: - Discernably, there is considerable, if not predominant, reliance on the said statements while issuing the SCN. It is also seen that they are hardly any relied upon documents that have been recovered/obtained to corroborate the documents given in those statements. This being so, the Tribunal Final order of 22.09.2004 assumes significance. The Tribunal in that order with regard to duty demand of ₹ 23,26,451/- from Shri V. Madhu, proprietor of the appellant found that the only evidence gathered by Revenue is what is contained in the statements of the appellants as well as S/Shri P. Dinesh, Vijayakumar Parikh and Siddharth Parikh, who are second stage dealers and allegedly received consignments from KGT during 1998-99. The Tribunal also noted that the adjudicating authority found clandestine removal of goods merely on the basis of uncorroborated statements. The adjudicating authority has proceeded with a prejudged frame of mind in respect of guilt of the appellant. The adjudicating authority has also not taken into cognizance or appreciated the raison-detre of the Tribunal in their earlier Final Order dated 22.09.2004. In a matter like this, where the entire basis of the allegations against an assessee is only on statements of various persons recorded by the departmental officers, all efforts have to be made by the adjudicating authority to ensure that the veracity of such statements is got tested and in case they have been retracted either by the individual concerned through a letter or in cross examination, absolute reliance on such statements cannot then continue to be made. This is all the more important when the inculpatory admissions initially made at the time of recording statements are not backed up by sufficient documentary or other corroboratory evidence, as it is the case herein. The confirmation of demand of differential duty and other legal consequences that have been confirmed in the impugned order predominantly on the basis of uncorroborated statements, but which have been subsequently retracted, will render the impugned order unsustainable - appeal allowed - decided in favor of appellant.
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