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2015 (6) TMI 336 - AT - Central ExciseWaiver of pre deposit - Clandestine manufacture of goods - Reliability of statements without corroborated evidence - Working condition of machine - Difference of opinion - Majority order - Held that:- For determining the duty liability, what is relevant is as to whether or not, not there was manufacture or clearance of Laxmi brand unmanufactured tobacco pouches in the premises of M/s. Rajesh Tobacco Co. and for demanding duty, it is not relevant as to whether the machines found in the premises were in working condition or not or were in use or not. For demand of duty from M/s. Goyal Tobacco Co. Pvt. Ltd. based on these three machines found in the premises of M/s. Rajesh Tobacco Co., what has to be seen is as to whether there was clear evidence of manufacture or clearance of Laxmi brand unmanufactured tobacco pouches at/from those premises. - Though other persons have not retracted their statements, their cross-examination was not allowed though the same had been requested. In my prima facie view, the statement of Shri Rajesh Goyal which had been retracted by him cannot be used for confirming duty demand against the appellant company unless that statement is corroborated by some other evidence. As regards the fact that at the time of search of premises of M/s. Rajesh Tobacco Co., a tempo brought by Shri Babu Lal Meena had brought lime tube and packing rolls, this fact, in my view, cannot be the evidence of manufacture of Laxmi brand unmanufactured tobacco pouches at the premises of M/s. Rajesh Tobacco Co. as it is very much possible that those premises may have been used for storage of these raw materials and merely the unloading of the Laxmi brand packing rolls and lime tubes at those premises cannot lead to inference that these raw materials were going to be used for manufacture of Laxmi brand unmanufactured tobacco pouches at those very premises. At the time of search, no attempt has been made by the Investigating officer to get the machines found in the premise of M/s. Rajesh Tobacco Co. examined by an expert to ascertain as to whether the same were in working condition. Though the fact as to whether the machines were in working condition or not, at that time, is not a factor relevant for demand of duty, this is an important fact to ascertain as to whether the statements of Shri Rajesh Goyal and his employees are true or not. Though one machine had been found connected to a power point and its bulb was glowing, it is also on record that there was no motor or fan belt in the machine and a number of other parts were either missing or in damaged condition and, as such, it could not be operated. No inquiry has been made either with Shri Rajesh Goyal or its employees - Production Manager or Production Assistant as to how the machines found in the premises of M/s. Rajesh Tobacco Co. were being operated. The bland statements of these persons simply stating that these machines were being operated, without giving any details as to how the same were being operated in view of the condition in which the same had been found and without opportunity having been given to the appellant to cross-examine them on these points, the statements are of no evidentiary value. When there is no evidence to infer that manufacture of Laxmi brand unmanufactured tobacco pouches was going on in the premises of M/s. Rajesh Tobacco Co., the provisions of Rule 18(2), and explanation to Rule 19 cannot be invoked and by treating the machines found in the premises of M/s. Rajesh Tobacco Co. as operating machines, duty liability cannot be fasten on to the appellant company. The appellant, thus, have strong prima facie case in their favour. - Decided in favour of assessee.
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