TMI Blog2013 (7) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... machines, due to use of sub-standard raw materials, technology inefficiency or the power supply cut therein or may be attributed to inferior quality of fiber etc - Revenue cannot build its case based upon the theoretical percentage calculation of waste generated, without production of any evidence to reflect upon the above allegation- Decided in favor of Assessee. Adjudicating authority confirmed the demand of duty of Rs.6,27,997/against the manufacturing unit in respect of 5 invoices which stand procured by the Revenue along with intelligence report – Held that:- Invoices not recovered from the appellant’s factory. As such, the onus to show that appellant cleared the goods under the cover of said invoices lies very heavily on the Revenue. The Commissioner while confirming the demand has taken into account the statement of Shri R C Saxena. However, it is the appellant’s case that as Shri Saxena was relieved from his service on account of financial mishandling and he fabricated these documents and produced the same to the Revenue so as to take revenge from the appellant. However, subsequently he filed an affidavit specifically stating that these invoices were fabricated by him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Chairman and the Director of the company, as also at various transporters premises, who were engaged in supplying their transport services to the said assessee. During the course of searches, several incriminating documents along with computer floppies etc. were recovered and seized by the officers. The officers also collected the documents seized earlier by the Preventive branch of the Central Excise officers on 13.2.1996. 4. During further course of investigation, statement of various persons were recorded. It is seen that along with intelligence report, Revenue also received photocopies of 5 invoices, which were allegedly parallel invoices on which the said assessee had cleared POY. During the course of recording of statements, said photocopies of alleged parallel invoices were also shown to various persons. Shri Rakesh Chandra Saxena, authorized signatory of the appellant at the relevant time in his statement dated 8.6.99 admitted that said parallel invoices were bearing his signatures and invoice No. 37 which did not bear his signature, was signed by Shri D. Jain, Director of the Company. He deposed that said parallel invoices were being made by them for unauthorised remov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remises of transporters, i.e. M/s. New Indore Kashmir Transport Co. and M/s. New Indore Kashmir Transport Carrier and M/s. Arpit Road Lines, The Commissioner has dropped the said demands on the main ground that the documents seized from the premises of third party do not pass the test of provisions of Section 36A of the Central Excise Act, 1944 and the presumption as regards their truthfulness cannot be assumed. In terms of said section presumption regarding the truth of contents of documents is applicable only where the seized documents has produced any evidence against the person from whom the seizure was made. He has also taken into consideration the appellants submission that no proceedings stand initiated against the person from whom the documents have been seized and as such, the burden to prove the genuineness of the said documents lies upon the Revenue who has not produced any evidence. He has accordingly observed that entire case of the Revenue is based upon the intelligence report and by referring to various decisions, he has held that third party document cannot be relied upon without proper corroboration either in the form of extra procurement of raw material consumed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 (Tri) ] it was held that it is not safe to rely only on the third parties invoices where no link has been established and set aside the demand confirmed against the appellant in that case. By applying the ratio of law declared in the above Tribunal decisions to the facts of the present case, we find that Revenue has simplicitor relied upon the records maintained at the transporters end and the statement recorded from the transporters authorized representative, which statement also stand clarified by them during cross examination, in favour of the assessee. It is well settled law that charges of clandestine removal are serious charges and are required to be established by production of positive and tangible evidence. The same cannot be upheld on the basis of surmises and conjecture. There has to be some cogent evidences so as to prove such charges and the same cannot be simplicitor based upon third parties documents and the statement of transporters. It may be observed here that nothing incriminating was recovered from the appellant s factory during search of the same. Except Shri R C Saxena authorized person who has given inculpatory statement against the assessee, the stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime taken to change the spool (replace empty spool with filled spool) is about 15 min during which period the melt falls and becomes waste. (iii) For enhancement of capacity these spinnerettes have been modified. The division of one spinnerrettes from one into two, without adequate space between the divided parts, the filament from the two parts tend to overlap making the material a waste. (iv) Modifications in the design of Cam Shaft have been done without regard to the technology design. As a result there is higher wastage in the process due to the increase in slippage. (v) The technology is old and outdated and has become obsolete. The technology is more than 30 years old. (vi) The cooling temperature of the quinch is not consistent and, therefore, there is greater breakage and wastage. (vii) The mixing of water is not proper in the spin finished preparation system and requires re-placement. (viii) The winder system friction roller motor heats up and trips frequently, so full doffing percentage is very low and this is also major reason of waste. (ix) At present converted four end system is very typical because in one gun, operator should take four end and it is v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of facts as detailed by the expert which stand un-rebutted by the Revenue. Such higher production can be on account of deviation in production parameters, fault of operators of machines, due to use of sub-standard raw materials, technology inefficiency or the power supply cut therein or may be attributed to inferior quality of fiber etc. In any case, the Revenue cannot build its case based upon the theoretical percentage calculation of waste generated, without production of any evidence to reflect upon the above allegation. No experiment was conducted in the assessee factory to find out the exact quantum of waste generation. As such, we find no reasons to accept the Revenue s contention. Accordingly, their appeal against M/s. Rajratan Synthetics Ltd is rejected. 10. At this stage, we may deal with the appeal of M/s. Rajratan Synthetics Ltd. It is seen that adjudicating authority has confirmed the demand of duty of Rs.6,27,997/against the manufacturing unit in respect of 5 invoices which stand procured by the Revenue along with intelligence report. The same were admittedly not recovered from the appellant s factory. As such, the onus to show that appellant cleared the goods under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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