TMI Blog2012 (2) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... fect on the face of fact that the appellants manufacturing capacity was far less as recorded - when there is no evidence of clandestine manufacture, acknowledgment of the receipt of the goods from the appellants by the buyers, we find that evidences on record do not support the case of Revenue. The impugned order is not able to establish that there was a clandestine manufacture and clearance of the finished goods from the factory premises of M/s. FPML - appeal allowed - decided in favor of appellant. - E/715-720/2009 - Final Order Nos. A/110-116/2012-WZB/AHD - Dated:- 2-2-2012 - Shri M.V. Ravindran, Member (J) and Dr. P. Babu, Member (T) Shri J.C. Patel, Advocate, for the Appellant. Shri J.S. Negi, AR, for the Respondent. ORDER All these appeals are directed against Order-in-Original No. 25/BVR/Commissioner/2009, dated 22-1-2009. Since all these appeals are arising out of the very same order, they are being disposed of by a common order. 2. The relevant facts that arise for consideration are the main appellant M/s. Fact Paper Mills Ltd. (hereinafter referred to as FPML) a registered unit under Central Excise Rules for manufacture of excisable goods i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seized would indicate that when the entire production from the production report is added up, it is not in excess of duty paid clearances. It is his submission that if the Department itself relies upon the production reports which contained actual details of actual production, and in the absence of any allegation or finding that such actual production exceeded the duty paid clearances, there is no question of any clandestine removal as held by the Adjudicating Authority. It is his submission that instead of comparing the total of production recorded in the production reports that the duty paid clearances, department merely selected random pages from these reports and arrived at an average production per day as 32 MTPD and applied it uniformly for the entire period to hold that the appellant had produced this much quantity of the goods and the difference between the said production figure and the recorded clearances is sought to be confirmed as clandestine removal. It is his submission that the Adjudicating Authority has erred in adopting only figures for a small period and ignoring the actual production for the entire period to arrive at the average production figure. 3.3 The in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t this would indicate that no reliance can be placed on the statements of buyers as well as the suppliers is now a settled law as has been held by the Hon ble High Court of Gujarat in the case of Rikhab Mehta - 2010 (259) E.L.T. 518 (Guj.), Shalimar Rubber Industries - 2002 (146) E.L.T. 248 (S.C.) and Final Order No. A/1846/1851/WZB/AHD/2011, dated 3-10-2011 in the case of Vishwa Traders Pvt. Ltd. Ors. by this Bench [2012 (278) E.L.T. 362 (Tri.-Ahmd.)]. It is the submission that similarly cross-examination was not given of vehicle owners and drivers who recorded statements that they had transported goods from M/s. FPML s factory. It is also his submission that the statements which were recorded all the individuals who were purportedly shown as owners was illiterate and one of the vehicles was purchased in the end of 2005 and hence the said vehicle could not have transported the goods prior to that period. It is his submission that the charge of clandestine removal cannot be established on the basis of challans recovered from the factory for the reason that no such challans or copies were found or recovered from buyers mentioned in the challans. It is the submission that challans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions made, the impugned order be set aside and be allowed the appeal filed by the appellant with consequential relief to the appellant if any. 4. Learned SDR, on the other hand, would draw our attention to paragraphs 27 at Page No. 162 of the show cause notice wherein synopsis of the Managing Director s statement has been reproduced. It is his submission that the challans were recovered in one case and were entered in the purchase record of the buyer and also the unaccounted and also the raw materials which were produced clandestinely. It is his submission that on holistic perception of all the evidences, indicate that there is clandestine removal. It is his submission that the records which were recovered along with the pen drive and the compilation of the statements of the said removals as was found in the pen drive clearly indicated that there were clandestine removals. It is his submission that the Directors were confronted with the statements of buyers and suppliers which was accepted by them when the statements were recorded. It is his submission that the plea taken by the appellant regarding the retractions of the statement was only at the time of reply to the show cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e statements. Adjudicating authority has relied upon the above said evidences in his findings in the Order-in-Original from paragraphs 58 onwards. 8. On careful consideration of the findings recorded by the Adjudicating Authority, we find that the Adjudicating Authority has not considered the entire case in a proper perspective. 9. First and foremost, we find from the records in Volume No. l that the Directors have retracted the statements before a notary public. The said retraction was filed with the Adjudicating Authority at the time of personal hearing and in reply to the show cause notice. Adjudicating Authority, instead of rebutting the said retraction has simply kept quite on the point of retraction, which indicates that the Adjudicating Authority did not find any answer to the retractions made by the Directors of the statements. Indeed the said statements do record that the directors have accepted their role and that there was a clandestine clearances, the said statement should be considered from the point of the factual matrix of whether the said clandestine removal could be proved from the evidences on record or not. 10. We find that in Volume No. l Page 538, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es (supra) very clearly covers the appellants case wherein it has been decided by the Apex Court that retracted statement cannot be relied upon for establishing charge of clandestine manufacture and clearances against the assessee. Hence the statements of buyers and suppliers need to be discarded as evidences. 12. We also find force in the submissions made by the learned counsel that the judgment of this Bench in the case of Vishwa Traders would cover the issue, as in this case we have noted that there cannot be clandestine manufacture of the goods in the factory premises of the appellants wherein the installed capacity of the appellant is only 20 MTPD, further there being no evidences indicating clandestine purchases, it cannot be said that the appellant had indulged in clandestine manufacture of the goods which had resulted in clandestine clearances of finished goods. 13. As regards the evidences relied upon by the Adjudicating Authority on the production reports of the lab assistants, challans and party-wise statements, we find that the said challans and production reports of the lab assistants could have no effect on the face of fact that the appellants manufacturing cap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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