TMI Blog2014 (11) TMI 990X X X X Extracts X X X X X X X X Extracts X X X X ..... hich do not get reflected in the statutory record. Figures indicated in the yellow chits, may be provisional figures. This view of mine is based upon the fact that the yellow chits does not indicate any quantity recorded as clearance from the factory premises without accounting for. It is also to be noted that though the Revenue authorities have recorded statements of the individuals, they though it fit not to ask any of these people as to the difference between the figures recorded in the yellow chits and the RG-1 and whether the said difference has been clandestinely removed and if removed, to whom. In the absence of any clear indication as to removal of the said goods from the factory premises, only there being mis-match of the figures between private record and RG-1 record, cannot necessarily lead to conclusion that there was clandestine manufacture and removal. - appellant in this case in hand has made out a case that there was no clandestine removal of the goods due to there being no corroboration. - Decided in favour of assessee. - E/3251/2005 & E/CO/440/2005 - Final Order No. A/11900/2014-WZB/AHD - Dated:- 11-11-2014 - Ms. Archana Wadhwa, Member (J) and Shri B.S.V. Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r retreatment and Commissioner has not extended benefit of the reduction of retreated fabrics even in respect of 22 chits which admittedly contained details of retreatment. 3. We have considered the submissions made by both the sides. There is no dispute that yellow chits in question were recovered from the folding clerk. Shri Suresh Chauhan in his statement submitted that he was an employee on contract basis and he was preparing folding production report. He also stated that he was preparing the reports which included retreatment shift-wise on the basis of finished meters reported by the workers. The excise clerk Shri Prakashan Nair though admitted that production in RG-1 register was entered on the basis of yellow chits, stated that he was not in a position to explain why there was difference between the yellow chits and the RG-1 register. However, he admitted that there was difference. Shri Basantlal Jain, Vice-President in his statement stated that he has signed on the statement copies of both the excise clerk and folding clerk and stated that both the statements are correct. The obvious conclusion that emerges from the above circumstances is that, that yellow chits reflecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the RG-1 register was 76189. Therefore, no conclusion is possible in respect of these two chits. However, in respect of chit dated 3-8-2002 and 4-8-2002, the total production shown is more but quantity indicated is F equal to the entry in RG-1 assuming that F means fresh and the quantity is not related to retreated fabrics. Above analysis shows that neither the department nor the appellant have made a proper analysis of the chits. While the ld. Advocate claimed that fabrics tally with the RG-1 in respect of 22 chits, he has not given chitwise details. There is a need to analyze the chits, segregate figures of retreated fabrics and fresh fabrics in the chits and compare them with RG-1 register and retreatment register. Further, it is also found that demand has been confirmed taking the value as if all the quantity consists of suitings only, whereas it is an admitted fact that the appellants were accounting Suitings and Shirtings under one heading. There is a need to workout the figures of Suitings and Shirtings separately, since sales price of both the items is different, therefore assessable value would also change. 4. Ld. Advocate argued that whole case has been only o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of duty and in some cases entries were relating to goods sent for weighment, etc., evidence of notebooks were rejected. In the case of M.T.K. Gurusamy - 2001 (130) E.L.T. 344 (Tri.-Chennai), the allegation of clandestine removal was set aside on the ground that private notebook maintained by a part time employee containing unauthenticated entries and over writings cannot be relied upon for establishing clandestine removal in the absence of any corroboration in the form of seizure of goods or invoices or purchase of raw material, etc. In this case, in addition to the fact that entries in yellow chits form the basis for RG-1 as mentioned above, the officers also found shortage of fabrics on which duty was paid by the appellant on the very next day. In Gurpreet Rubber Industries - 1996 (82) E.L.T. 347 (Tribunal), the Tribunal confirmed the duty demand on the shortage found but set aside the demand on the basis of notebook maintained by the casual paid workers. That is not the situation in this case. The analysis of the 8 cases relied upon by the ld. Advocate shows that none of these is of any help to the appellant. We have analyzed the case stated by the ld. Advocate, even thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etailed in the order proposed by learned Member (Technical), I am not repeating the same. As is clear from the narration of the facts in the order proposed by learned Member (Technical) that the Revenue s entire case is based upon the recovery of 52 yellow chits from the office of folding clerk of the appellant, who was working on contract basis. The appellants have strongly contested the demand on the ground that apart from the said 52 yellow chits, there is not even an iota of evidence on record to suggest any clandestine manufacture and clearance of the fabrics. Even these 52 yellow chits do not establish Revenue s case, inasmuch as there is no statement of any person accepting clandestine manufacture and clearance of the fabrics. Some of the yellow chits have been found to be correctly entered in RG-1 register and some other chits contain the figures of the fabrics which were subsequently sent back for retreatment. As such, no sole reliance can be placed upon such yellow chits. 8. I find that the yellow chits are not statutorily prescribed document for maintenance. The same were being maintained by the appellant as production slips, on the basis of which the production was b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect that entries made in the private records are required to be supported by corroborative evidence with regard to the purchase of the raw material, manufacture of final goods, flow-back of money, or identification of the buyers and their statements, etc. By applying the above settled ratio of law, the entries made in the recovered yellow chits cannot be made the sole basis for upholding charges of clandestine removal, in absence of any other independent corroborative evidence to that effect. 11. At this stage, I may refer to the observations made by third Member deciding Difference of Opinion between two Members of the Original Bench in case of M/s. Tejpal Dyestuffs Industries v. C.C.E, Ahmedabad - 2007 (216) E.L.T. 310 (Tri.-Ahmd.). In Para 54, the Hon ble the then President of the Tribunal as a third Member has observed that - Recording of the confessional statement need not to be an end to the investigation and Revenue officers should be careful to ensure that they are not tricked out of a regular and detailed investigation by making strategic confessions which are retracted by preparing affidavit soon after they are made . It was also observed in the previous paragraph of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f. No arguments stand advanced by learned advocate in respect of the above. I, accordingly, confirm the same along with imposition of equal amount of penalty under Section 11AC of CEA, 1944. 16. The appeal is partially allowed and partially rejected as indicated above. Sd/- (Archana Wadhwa) Member (Judicial) Dated : 26-6-2009 DIFFERENCE OF OPINION 17. Whether the findings of clandestine removal has to be upheld against the appellant and the matter is to be remanded only for requantification of the duty and deciding the penalty as held by learned Member (Technical) or the demand of duty of ₹ 55,26,426/- along with equal amount of penalty is required to be set aside and only the demand of ₹ 1,15,454/- along with penalty of equal amount be upheld as observed by Member (Judicial)? (Pronounced in Court on 24-6-2009) Sd/- (B.S.V. Murthy) Member (Technical) Dated : 22-6-2009 Sd/- (Archana Wadhwa) Member (Judicial) Dated : 22-6-2009 18. [Per : Archana Wadhwa, Member (J)]. - Vide order Nos. M/768-769/WZB/AH BAD/2009, dated 21-4/24-6-2009 following difference of opinion was recorded :- DIFFERENCE OF OPINION Whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc., whether the yellow chits recovered from the folding Section can be made the sole basis for upholding the charges of clandestine removal? (vii) Whether in the light of the above and in the absence of any corroborative evidence, in the light of the precedent decisions, it is required to be established the clandestine removal beyond doubt, the demand of duty and imposition of penalty on the said count is required to be set aside as held by Member (Judicial), or the matter is required to be remanded for requantification of duty as observed by Member (Technical)? (Pronounced in the Court on 24-9-2010) Sd/- (B.S.V. Murthy) Member (Technical) Sd/- (Archana Wadhwa) Member (Judicial) Opinion of 3rd Member on Difference of Opinion 20. [Per: M.V. Ravindran, Member (J)]. - This Difference of Opinion is placed before me as per the direction of Hon ble President for resolving the following differences :- (i) Whether the findings of clandestine removal can be upheld on the sole basis of recovery of 52 yellow chits from the office of the folding clerk and consequent confirmation of demand along with imposition of penalty can be upheld? (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g more. It is his submission that the yellow chits are prepared on provisional basis by the clerk who has clearly deposed that such chits are nothing but the reports which have been generated by him which includes fabrics sent for retreatment also. It is the submission of the ld. Counsel that folding clerk has clearly recorded that the computerized statement based upon the production figures are fed into the statement, does not accept the figures of retreatment goods and there is a difference between the figures indicated on yellow chits and as was entered in RG-1 register; for which it is his submission that except for this yellow chits being relied upon by the Revenue, there is no statement of any of the persons like Excise clerk or Vice-President of the Company inculpating themselves. It is his submission that none of the individuals have recorded that there was clandestine manufacturing and removal. It is his submission that in the absence of any other evidence to indicate that there was clandestine manufacture and removal, reliance cannot be placed only on the chits. It is his submission that Revenue has not been able to produce any other evidence as to there being some purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant has clandestinely removed the goods and the order passed by ld. Hon ble Member (T) for working out correct amount of duty liability needs to be upheld. It is also his submission that any person who is involved in clandestine removal would try to keep his factory records impeccably clear and clandestine activities are not recorded in private records. 25. I have considered the submissions made at length by both sides and perused the records. 26. Ld. Departmental Representative, would rely upon the decision of the Tribunal in the cases of U.D. Suryavanshi - 2007 (220) E.L.T. 805 (Tri.-Mum.), Industrial Adhesive Tapes Industries - 2006 (203) E.L.T. 607 (Tri.-Mum.) in his support that once there is an evidence in the form of private record of production maintained by the people, the same should be acceptable against the assessee. He would also rely upon the decision of the Tribunal in the case of Lucky Dyeing Printing Mills Pvt. Ltd. - 2008 (222) E.L.T. 543 (Tri.-Ahmd.). 27. At the outset, I would like to record that the entire difference of opinion can be sorted out by coming to a conclusion as to whether the Revenue authorities are able to prove that there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant period has gone up as compared to the production recorded in RG-1 or otherwise nor were the purchasers end investigated. There is nothing brought on record by the investigating officers as to receipt of unaccounted raw material or statements of suppliers of raw material nor is there anything on record to show that there were the buyers who had procured finished goods from the appellant without any documents. In my considered view, the investigating authorities have not taken the investigation to its logical end and by recording statement of the individuals to bring on record that there was indeed clandestine manufacturing and removal. 33. I find strong force in the contentions raised by the ld. Counsel that similar issue was before the Bench in the case of Tejwal Dyestuff Industries (supra) which has been upheld by Hon ble High Court of Gujarat. I reproduce the relevant paragraph Nos. 51, 52 hereunder :- 51. Though admissions will bind the maker of the confessional statements and in the absence of any other outweighing evidence, the facts admitted will be taken to have been established, in cases where the confessional statement is retracted and/or other evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant in this case in hand has made out a case that there was no clandestine removal of the goods due to there being no corroboration. 35. As regards the contentions raised by the ld. AR that the ratio of the decision in the case of U.S. Suryavanshi (supra) would apply in this case. On perusal of the said decision of the Tribunal, it was the decision passed by me sitting at Mumbai. It is seen from the said decision that the facts are recorded in Para 6 which indicate that the Production Manager of the appellant therein has specifically stated that he was maintaining private diary and two separate statements admitted that the figures indicated therein are true and correct as to the quantity of cotton yarn manufactured during the relevant period and there is a quantity recorded in RG-1 and the quantity recorded by Production Manager and the said Production Manager has not retracted his statement. On the face of such a categorical acknowledgement of the clandestine manufacture by the Production Manager, the case was held against the assessee therein. As regards the other case laws relied upon by the ld. DR, I find that there a responsible person at the level of Manager has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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