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2019 (9) TMI 576 - AT - Central ExciseClandestine removal - clearance of goods to 100% EOU - allegation of clearance of Polyester Yarn by the Appellants in the market has been made on the ground that the partners of M/s Sunshine Overseas in their statements stated that they did not receive any Polyester Fabrics - Demand mainly based on statements of various persons - cross-examination of statements not provided - HELD THAT:- During investigation the Appellant factory was also searched and no incriminating documents or evidences were found, which shows that the Appellant did not clear Polyester fabric to M/s Sunshine Overseas and instead cleared Polyster yarn in local market. Stock of raw material and finished goods etc. were found to be in order. Even, the statutory records were found to have been correctly maintained by the appellant firm and the same has nowhere disputed. It is observed that except placing reliance on the statement of the partners of M/s Sunshine and Chief Executive Officer of the Appellant firm and two tempo owners, no other evidence on record has been brought to show that the appellant has not cleared Polyester Fabrics to M/s Sunshine Overseas. The statements of Shri Sanjay Aggarwal CEO of the Appellant firm are contradictory. Whereas in his statement dt 25.6.2003 he stated about removal of manufactured goods i.e Polyester Grey Fabrics but after 2 years he changed his version in statement dated 12.3.2005 that the raw material was cleared by the Appellant. Similarly statement dt 12.7.2003 of Tempo Driver Shri Saiyad and statement dtd 19.8.2003 of Shri Akbar Sahid Umar, tempo owner, they did not say anything about transportation of raw material. Opportunity of cross-examination of statements not provided - HELD THAT:- Once the statements has been made basis for alleging clandestine clearance, the adjudicating should have granted cross examination. The Appellant during the adjudication proceedings, had sought cross examination of the persons, whose statements were relied upon in the show cause notice. The same was necessary in terms of Section 9D of the Central Excise Act which was not allowed - when the demands and the allegation of removal of Polyester Yarn was based upon the statements of the persons in that case, it was mandatory for the adjudicating authority to grant the cross examination of such persons whose statements are sole evidence to make allegations against the Appellant. In absence of same the statements cannot form basis for alleging contravention of law by the Appellant. Further, there is no evidence of transportation of any raw material or sale of such goods to any buyer or unaccounted receipt of any cash amount from any person on account of such sale of raw material. Once the goods were certified to be warehoused by the consignee, the consigner, i.e. the appellant, cannot be held responsible for contravention of law. In such case, no demand can be made against the Appellant. The demand against the Appellant Unit and penalty against all the Appellants are not sustainable - Appeal allowed - decided in favor of appellant.
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