TMI Blog1995 (12) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... that the diary contained the details of tyres and tubes manufactured by them during 13-2-1989 to 21-8-1989. The same was taken into possession by the officers. Statement of Shri Surinder Singh was recorded. During further investigation, statement of Shri Mahavir Parshad, who was said to be the honorary worker in the appellants firm, was also recorded and it was found that the said diary was written by the said Shri Mahavir Parshad on behalf of the appellants firm. On comparing the entries made in the RG-1 with those recorded in the private note book (diary) it was revealed that during the period 13-2-1989 to 21-8-1989 the appellants have not accounted for the production of 21,298 tyres and 8,174 tubes in the statutory Central Excise records. As a sequel thereof, a Show Cause Notice dated 19-2-1990 was issued to the appellants to show cause as to why the duty amounting to Rs. 1,275.75 be not demanded from them on 81 tyres of moped found short and duty amounting to Rs. 7,17,109.88 be not demanded on the said quantity of the tyres and tubes which were found to have not been recorded in the RG-1 Register when compared with the entries made in the private note book and also to show ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er coercion and threat the statement of Shri Surinder Singh was recorded of which complaints were lodged to the concerned Collector of Central Excise, Chandigarh on 24-8-1989 and 18-10-1989. He stressed that even otherwise the entries made in the diary cannot be relied upon as, admittedly, on certain dates the production figures shown in the RG-1 Register was much more than that of shown in the diary. This could not have happened if the appellants have intended to remove the goods clandestinely or intended to evade the payment of excise duty. He further submitted that, at the time of search no discrepancy was found in the raw material and no account of purchase of raw material in excess of that entered in the statutory records was found by the Excise Officers. He further stressed that the factory of the appellants did not have the capacity to produce the number of tyres and tubes shown in the diary during the period in question as could be appreciated from the report of the expert given by Shri Issar. In this premises, he also submitted that the burden to prove the clandestine removal was on the Department which it has failed to discharge and cited the case of Sarwan Singh v. Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot taken into consideration the retraction at all while using it for the purpose of considering the evidentiary value of the diary. In the case of Kali Charan Basant Lal v. Collector of Central Excise, 1989 (41) E.L.T. 162, it was held that it is a trite law that whenever a confessional statement is retracted, it is the duty of the authority deciding the case, to take into consideration the said confession while coming to a particular conclusion. For, retraction does affect the voluntary nature and truthfulness of the confessional statement and, therefore, no importance can be attached to that part of the confessional statement which incriminates him as it was immediately retracted. On this score alone the said confessional statement cannot be relied upon for the purpose of appreciating the evidentiary value of the note book in question. That apart, in the case of Sarwan Singh v. State of Punjab, supra, it was held that it must not only be established that a confession is voluntary but also it must be established that it is true. For the purpose of establishing the truth, it is necessary to examine the confession and compare it with the rest of the evidence on the record. In the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r during investigation. In the face of it, no credence can be given to such ipse dixit. Admittedly, in the instant case except the said diary no other evidence, such as, installed capacity of the factory, raw-material utilisation, labour employed, power consumed, goods actually manufactured and packed etc. has been produced by the department to prove the alleged clandestine production and removal of the same. On the other hand, admittedly at the time of the visit of the factory no discrepancy in the raw material account was found. It was the case of the appellants before the adjudicating authority (see reply in written submission) and also before us that the factory of the appellant did not have the capacity to produce the number of tyres and tubes as shown in the alleged diary during the period in question. The factory is subject to the [Factories] Act as well as regulations. Appellants were maintaining regular attendence register shift-wise. They have been working only one shift of 8 hours. No over time has ever been paid to any worker and no deduction on account for the E.S.I. have ever been made on account of overtime. The officer of the Labour Department have been visiting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d without payment of duty. The same view was expressed in the case of Ganga Rubber Industries v. Collector of Central Excise, supra. For ready reference, the relevant portion may be extracted as follows : 19. We have considered his arguments. The department could have and should have made enquiries to find out if the entries in the two books were genuine or not. Transport Companies, Octroi Posts, and Consignees to whom the goods were allegedly sent were the sources from which verification of the accounts was possible. No verification was done. Besides, the principle of law is that it is upto the Revenue to prove reliability of the books. The Appellants cannot be asked to establish his pleas especially when there is no evidence that any of the consignments were actually sent from the factory. It does not appear that any attempt has been made to compare the hand-writing in the books with that of any one in the factory. We, therefore, held that the Revenue has not proved that the entries in the accounts in these books represented actual clandestine removals. Besides, it appears odd that the books were kept on the roof of the factory. Taking all the circumstances into consideration, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the appellants have been as per those invoices. These invoices have not got linked or related to any other documents which would establish the existence of any goods other than those accounted for. We cannot, therefore, comprehend how the department s charge of clandestine production and removal and clearance without payment of duty can be established. It can, at best be only an idea in the realm of possibility, but on that basis, the appellants cannot be penalised or asked to pay duty in respect of such goods. In this respect the ratio of the decision of the Supreme Court in the case of Oudh Sugar Mills Ltd. (supra) would certainly apply and the benefit of doubt has to Fgo to the appellants. In the case of Ambica Metal Works v. Collector of Central Excise, Calcutta-I - 1990 (29) ECR 549, it was held that the charge of clandestine removal must be proved by the Revenue by solid and acceptable evidence and cannot be left to the vagaries of doubt. Since it cannot be based on any inference involving unwarranted assumptions or surmises. Same view was also expressed in the case of Indian Metals Ferro Alloys Ltd v. Collector of Central Excise, 1994 (69) E.L.T. 390. 9. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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