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2019 (4) TMI 931 - AT - Central ExciseClandestine manufacture and removal - SSI Exemption - want of production of finished goods records - discrepancy in the raw material stocks - Confiscation of finished goods - HELD THAT:- Finished goods were seized for want of production of finished goods records, despite the admitted fact that the said records were under resumption by the search team. On perusal and comparing the physical balance of finished goods stocks with the recorded balances in the resumed manually prepared and also soft copies of stocks registers, we do not find any variation - the order justifying the confiscation of the finished goods is not consistent with the facts on records and against the provisions of law. Discrepancy in the raw-material stock - HELD THAT:- To arrive at the total quantity and value of procured raw materials, the Revenue had erroneously resorted to double accounting of details of some consignments of raw materials received from two parallel sources, the manufacturing company and its dealer. The data supplied by manufacturer also included the purchases through its dealer. This has resulted in artificial escalation in value of raw material to ₹ 5,06,46,859/- instead of correct amount of ₹ 3,09,08,423/- - there is no force in the findings of procurement and receipt of unaccounted or additional raw materials and use thereof in clandestine manufacture of the finished goods and set aside the findings relating thereto. Rejection of the request of Cross-examination - HELD THAT:- The denial of cross-examination of Shri Nirmal Jeet Singh owner of transport namely M/s Krishna Road Lines, Shri Umang Kumar and Ramchandra both ex-employee of the appellant was essential to test the purpose of maintenance of parallel manual records (the relied upon documents) and the contents recorded therein. It was more so in the case of Sh. Umang Kumar, who had explicitly through his written communication denied any linkage of the documents prepared by him without the knowledge of the appellant, and after 7 months of his disassociation from the appellant - also, cross-examination of Shri Nimaljeet Singh was not rejectable even on the grounds that he had not retracted his statement and whether the same was recorded without threat, duress or coercion - the impugned order denying request for cross-examination, is clearly in violation of principles of natural justice and as a consequence, the relied upon statements and the records referred therein have to be eschewed from the proceedings. Further, the Revenue had not conducted investigations at the end of all the buyers for ascertaining the credibility of the Loading Slips/ Enquiry Slips. The Sale Enquiry Slips/ Loading Slips and manually prepared sale registers are not admissible evidences. Thus these two incredible / suspect documents viz Sale Enquiry Slips/ Loading Slips and manually prepared sale register and party ledgers, cannot legally corroborate each other to establish their credibility - the findings of the Court below in the impugned order is set aside and it is held that the reliance on Sale Enquiry Slips/ Loading Slips and manually prepared sale register and party ledgers is misplaced - The Revenue have failed to bring out any concrete, corroborating, reliable and independent evidence even distantly establishing receipt of additional raw-materials, production of finished goods, transportation of goods, transit seizure, seizure/ at the buyers end, of clandestinely removed finished goods consignments, receipt of Sale proceeds including additional consideration in support of alleged under valuation, etc. To substantiate allegations of the clandestine manufacture and removal and undervaluation, etc. corroborative evidence is required. Appeal allowed - decided in favor of appellant.
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