2002 (11) TMI 91 - SUPREME COURT

Whether the appellants have manufactured and cleared 1,61,122 kgs of tread rubber and removed the same without payment of central excise duty?

Held that:- The Collector in the adjudication proceedings has relied very strongly on the evidence produced by the Department to show that the appellant firm had in fact purchased carbon black from M/s. Universal Agencies as per the 82 invoices recovered by the Investigating Agency. He also relied upon the so-called statement made by Shri Sunny P. Kunnath to the Investigating Officer that out of the 82 invoices 62 invoices which even though did not show the name of Shalimar Rubber Industries, the appellants herein under the said fictitious invoices did purchase huge quantity of carbon black from M/s. Universal Agencies. As noticed above, this witness was not examined by the Collector in the proceedings. Consequently, he could not be subjected to a cross-examination.

In that background it becomes extremely difficult to place reliance on the so-called statement made by Shri Sunny P. Kunnath to the Inspector which according to the evidence of the Inspector himself made before the Magistrate was not recorded. On the basis of such evidence, in our opinion, it is not possible to come to the conclusion that there was such a clandestine purchase of carbon black from M/s. Universal Agencies. Thus if we exclude this vital material as to the clandestine purchase of carbon black from M/s. Universal Agencies by the appellant, in our opinion, the foundation of the department's case fails. In favour of assessee.