TMI Blog2022 (9) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... le in respect of the demand raised on the basis of the diaries recovered from the brokers. Coming to the evidence collected from the residence of Juvansinh Jeshabhai Solanki, it is seen that the said slip are reproduced in the impugned order in para 3.4.8. It is seen from the said slips that there is no mention of the manufacturer s name and therefore there is no direct correlation with the main noticee in this case, namely Pure Alloys Limited. Moreover, it is seen that there was no examination in chief or cross examination done and therefore, the only link between these weighment slips and the alleged manufacturer namely Pure Alloys, is the statements of Juvansinh Jeshabhai Solanki and Nareshbhai Ramsang Rana which cannot be admitted as evidence in absence of Examination under Section 9D of Central Excise Act. In these circumstances, no penalties in respect of these weighment slips also can be imposed. The penalties imposed against various appellants are set aside - Appeal allowed - decided in favor of appellant. - Excise Appeal No. 10270 of 2019 - Final Order No. A/ 11082-11089 /2022 - Dated:- 1-9-2022 - (i) Excise Appeal No. 12744/2018 (Shri Bhavesh Vrajlal Parekh); (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Hari Steel Industries (supra) wherein the identical facts, benefit of doubt has been granted. 3. Learned Authorized Representative agreed with the fact that common investigation was conducted in number of cases including that of the appellant and of Shri Hari Steel Industries. He pointed out that there was some difference in the investigation in the instant case. He pointed out that certain weighment slip were recovered from residence of Juvansinh Jeshabhai Solanki, an employee of appellant. He pointed out that Shri Juvansinh Jeshabhai Solanki in his statement stated that two copies of vehement slips were obtained at the time of clearance of goods and one copy was kept with him. It was noticed that no corresponding record was found at the factory premises in resepct of such weighment slips. He pointed out that the show cause notice, apart from raising demand on the basis of diaries of brokers, also raises separate demand on the basis of these weighment slip recovered from Juvansinh Jeshabhai Solanki. He also pointed out that Shri Nareshbhai Ramsang Rana an ex-employee had also stated that the weighment slips were kept with Juvansinh Jeshabhai Solanki after clearance of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of loading on 22-6-2001 when the Central Excise Officers visited their factory premises. The Appellants, on the other hand, have contended that most of the persons whose statements have been relied upon have not been produced for crossexamination and the documents seized from third parties premises have not been corroborated by adducing evidence of any of the customers though the enquiries were conducted at different places as 5 E/12133, 12451 12559/2010-SM deposed by Shri Anurag Sharma, Inspector, in his cross-examination on 4-3- 2002. Out of 19 consignments said to have been cleared by the Appellant No. 1 without payment of duty on the basis of five transporter, we observe that in respect of two consignments, it has been mentioned by the Revenue that the same may not pertain to the Appellants. Further, only one transporter Shri Sanjay Garg of M/s. Balaji Transporter Co. was produced for crossexamination which accounts for only two consignments out of 19 consignments in question. Shri Garg, it is observed from the record of crossexamination, has deposed that they generally work as commission agent and provide transport to Appellant No. 1; the payment is used to be received dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and presumptions without any tangible evidence will be vitiated by an error of law . The Tribunal also took note of the decision in Kamal Biri Factory and Shri Khushnuden Rehman Khan v. CCE, Meerut - 2003 (161) E.L.T. 1197 (T) = 1997 (23) RLT 609 (CEGAT) wherein view has been taken that the allegations of clandestine removal of the goods will not stand established when based on the entries made by the assessee s employee in a diary or on the basis of third party s record in the absence of any corroborative evidence. It has also been the consistent view of the Tribunal that the statements of the witnesses, without allowing the assessee to test the correctness of the same by cross-examining those witnesses; cannot be made the basis for holding the allegation against the assessee. (Takshila Spinners v. CCE, supra). Similar views have been expressed by the Tribunal in the case of Haryana Petrochemicals Ltd., supra wherein the Tribunal has held that reliance cannot be placed on the documents maintained by a third party who did not have the courage to come forward for cross-examination in order to test the veracity and correctness of the private record maintained by him. It has also b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra Traders in their books of account. It is also noted that none of the transporters and none of the labourers whose statements have been relied upon by Revenue have mentioned that the goods in question were delivered to Chitra Traders from the premises of the Appellants. The material brought on record may at the most create a doubt only. But doubt cannot take the place of evidence. The Revenue has, thus, not proved its case against the Appellants in respect of 149 consignments. We, therefore, set aside the demand of duty and penalty imposed on Appellant-company and consequently the demand of interest. From the above decision which is based on various Supreme Court decisions, it is clear that when the brokers whose statements were recorded are not produced for cross examination such statements cannot be relied upon against the assessee. Therefore, as per the settled legal position, since in the present case witnesses, i.e. brokers and transporters were not allowed for cross examination, their statements cannot be relied upon. In such a case, the only evidence left is the diaries/private records of the brokers. Since the statements cannot be relied upon, these records in isola ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without entering the same in their records is upon the Revenue which cannot be discharged merely on the strength of the entries made in the records of a third party without linking the removal of goods from the premises of the Appellant Company. In the present matter also the Revenue has not brought any material on record to show that the excess bag-in-boxes said to have been sold by M/s. Hyderabad Beverages were removed from the premises of the Appellants. As show cause notice alleging clandestine removal cannot be issued based on assumption and presumption and as held by the Supreme Court in Oudh Sugar Mills Ltd. v. U.O.I., 1978 (2) E.L.T. (J 172), the findings based on assumption and presumption without any tangible evidence will be vitiated by an error of law. We, therefore, set aside the demand on charge of clandestine removal. In view of above judgment, only on the basis of third party records, the demand cannot be confirmed alleging the clandestine removal. I also observe that despite the investigating officers recovered the diaries/ private records from the brokers no investigation was conducted to the effect who are the buyers of the goods, whether any payment was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and findings which is based on the settled legal position as per above cited judgments, I am of the view that Revenue could not establish the case of clandestine removal beyond any doubt. Therefore, the impugned order cannot be sustained. Hence, I set aside the impugned order and allow the appeals. In light of above penalties imposed on the basis of broker s diaries cannot be sustained and are set aside. 6. Now coming to the evidence collected from the residence of Juvansinh Jeshabhai Solanki, it is seen that the said slip are reproduced in the impugned order in para 3.4.8. It is seen from the said slips that there is no mention of the manufacturer s name and therefore there is no direct correlation with the main noticee in this case, namely Pure Alloys Limited. Moreover, it is seen that there was no examination in chief or cross examination done and therefore, the only link between these weighment slips and the alleged manufacturer namely Pure Alloys, is the statements of Juvansinh Jeshabhai Solanki and Nareshbhai Ramsang Rana which cannot be admitted as evidence in absence of Examination under Section 9D of Central Excise Act. In these circumstances, no penalties in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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