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2024 (5) TMI 1051 - CESTAT AHMEDABADClandestine removal - demand based on the finding that weight of physical stock of grey fabrics ( finished goods) less than the weight recorded - clandestinely removal of duty free raw material by manufacturing and clearing grey fabric (finish goods) showing the excess weight than the actual weight of grey fabrics - invocation of extended period of limitation - confiscation - levy of redemption fine and penalty - Cross-examination of witnesses - admissible evidences or not - violation of principles of natural justice. Principles of natural justice - HELD THAT:- It is found that in this matter earlier the matter was remanded by this Tribunal vide order dated 26.11.2014 with a direction to comply with the principles of Natural Justice. In the remand proceedings the appellant have specifically requested for cross-examination of the witnesses who have given the statements including the 3 buyers of the alleged clandestinely purchased goods. However, Learned Adjudicating Authority has not granted the cross examination. Cross-examination of witnesses - admissible evidences or not - HELD THAT:- From the statutory provision of Section 9D, it is settled that the statements which have not passed the test of examination-in-chief and/ or cross-examination of witnesses, are not admissible in evidence. Therefore, the case based on the statements will not stand. As regard other evidence that there is a difference in weight since, it is also based on statement, the allegation majority stand diluted on this account also. Demand based on the finding that weight of physical stock of grey fabrics ( finished goods) less by 7156.720 Kgs since the recorded stock was 13257 Kgs admeasuring 66426 linear meters - HELD THAT:- It is admitted fact that there is no difference in the length of the fabrics. Moreover, the officer also found that even length in linear meter matching there is different recorded weight of 6100 Kgs. In this position, the allegation is clearly based on assumption that 7156.720 Kgs of raw material (PFY) used in these finished goods ( grey fabrics) was removed clandestinely - the weight of the finished goods (grey fabric) cannot be assumed or counted to be the same as the imported raw material PFY to allege such illicit removal of PFY. Admittedly the raw material used in manufacturing process would be much less than weight of finished goods. Hence mererly by taking statements which are not admissible, the clandestine removal is not established - there is no evidence that due to difference in weight as stated by these buyers whose statements have already been discarded, there is no financial flow on this account. This further reinforced that the buyer’s statements are not correct. It is found that the department could not establish clandestinely removal of goods. Therefore, the entire demands including penalties are not sustainable - appeal allowed.
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