TMI Blog2003 (10) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... sor namely M/s R.K. Texcom Ltd., Bhilwara situated at Hamirgarh Road, Bhilwara (hereinafter referred to as the processor). A search was carried out by the Central Excise Authorities at the factory premises of the said processor on 7th Nov., 1997. The appellant as well as the said processor were served with show-cause notices under the provisions of Central Excise Rules, 1944 wherein it was alleged that certain amount of cloth was removed clandestinely by them and the differential duty of Rs. 20,529 was paid short. As a result, a penalty of Rs. 50,000 was also imposed on the appellant treating it to be a connected person under s. 209A of the Central Excise Rules, 1944. A statement of Shri K.G. Kabra was recorded on 10th Nov., 1997 by the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orised representative Shri Mahendra Gargieya has submitted that unlike s. 68 of the Act, a heavy burden is cast upon the Department under s. 69 of the Act to establish beyond doubt that the assessee made the investment in the purchase of raw material and processing charges thereof as has been alleged by the authorities below. According to the learned authorised representative, the Department has utterly failed to discharge this onus cast by clear provisions of the Act. To substantiate this fact, the learned authorised representative has given various arguments. First of all, the learned authorised representative has submitted that the only evidence on which this addition has been made and sustained in the statement made by Shri Kabra, a par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion or was against the fact. For that matter, the learned authorised representative has relied on various decisions including that of Hon ble Supreme Court reported in Pullangode Rubber Produce Co. Ltd. vs. State of Kerala Anr. 1972 CTR (SC) 253 : (1973) 91 ITR 18 (SC) wherein it has been held as under: "Such admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the assessee who made the admission to show that it is incorrect and the assessee should be given a proper opportunity to show that the books of account do not disclose the correct state of facts." 7. In the light of the above arguments, the learned authorised representative has further submitted that since the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mination. 10. After careful consideration, we are of the opinion that this is an undeniable fact that the addition in question under s. 69 has been made on the sole basis of the statement of the partner Shri Kabra recorded by the Central excise authorities which fact has been incorporated by the learned CIT(A) in his order as we have mentioned above. This is also an undeniable fact that the learned AO never recorded any further statements of Shri Kabra or anybody else. A copy of the statements recorded by the Central excise authorities was never provided to the assessee. No independent investigation was carried by the learned AO even though he proposed to make an addition under s. 69 of the Act in the hands of the assessee. There is no ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee of hearing in regard to the additions made and sustained by the authorities below. 14. The learned Departmental Representative did not object to the same. 15. After going through the records, we convinced that the assessee was not given adequate opportunity to defend its case. This fact is evident from the appellate order as well. Para 2 of the appellate order speaks about the request for adjournment and adjournment granted. The Chartered Accountant of the assessee had again requested for adjournment on the ground that the counsel was busy in doing audit, but the request was declined. In the interest of justice, we are of the opinion that the issues under consideration be sent back to the file of the learned CIT(A) for fresh consid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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