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2016 (8) TMI 116 - CESTAT CHANDIGARH

2016 (8) TMI 116 - CESTAT CHANDIGARH - TMI - Claim of exemption - manufacture of fabrics - cotton dominated fabrics or polyester dominated fabrics - Notifications Nos.07/2000-CE dated 1.3.2000, 03/2001-CE and 14/2002-CE dated 1.3.2002 during the period from 1.4.2000 to 31.3-2003. - retraction of statement - Held that:- While adjudicating the case, the adjudicating authority has not given any credence to the cross examination done by the learned for the respondents wherein the witness itself has .....

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otocopies of the invoices. Even at the time of cross examination, in the original copies of the invoices, there was no mention the contents of yarn. - In this case the original invoice is the main evidence to reveal the truth but the statement made by the witness during the cross examination that the original invoices does not have mention of the description of the goods which has not been considered by the adjudicating authority, therefore, the evidence in form of photocopy of invoice is no .....

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AR- for the appellant Shri Jagmohan Bansal & Naveen Bindal, Advocate- for the respondent ORDER The Revenue is in appeal against the impugned order. As all these appeals are arising out of a common order, therefore all the appeals are disposed of by this common order. 2. The facts of the case are that the respondent No. 1 is engaged in dyeing of fabrics. It is alleged that the respondent has availed the exemption from Central Excise duty under Notifications Nos.07/2000-CE dated 1.3.2000, 03/2 .....

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these set of facts, the show cause notices were issued to the respondents to deny the exemption as claimed by them consequently to demand of duty alongwith the interest and for imposition of penalty. The matter was adjudicating and exemption was denied consequently, the demand of duty was confirmed alongwith interest and penalty and various penalties were imposed. Aggrieved with the said order, the respondents have challenged before the Commissioner (Appeals) who dropped the charge against the r .....

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ics. The statement of suppliers were recorded who submitted that the respondents have manufactured the polyester dominated fabrics and received back the same for further processing of dyeing and the same has been mentioned in the job worker challan. Therefore, on this sole ground, the impugned order is to be set aside. It is further submitted that retraction of statement dated 28.3.2005, Shri Darshan Kumar, partner of the appellant during the course of cross examination conducted is not acceptab .....

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ntary in nature. No explanation given by the accused except bare denial. No proof of any torture or coercion is available. Learned AR relied on the decision of Apex Court in the case of Kalema Tumba vs. State of Maharashtra-2001 (115) ELT 8 (SC). 4. On the other hand, leaned Counsel, Shri Jagmohan Bansal appeared on behalf of the respondents submitted that the suppliers or witness made the statement during the course of investigation and later in cross examination, the truth was revealed and the .....

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will be exonerated from the proceedings. Further, it was stated by the witness that even in the cross examination, the original copies of invoices does not disclose the description of the goods i.e. polyester fabrics but in the photocopies of the invoices, the witness was compelled to write the description of the goods as polyester dominated fabrics and that statement of witness has not been controverted by the Revenue with cogent evidence. Moreover, during the course of investigation, no sampl .....

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ed by the respondent were cotton dominated fabrics and not polyester dominated fabrics. Therefore, the impugned order is to be upheld. 5. Heard the parties and considered the submissions and examined the records placed before us. 6. The contention of the learned AR that retraction made by the respondents is not acceptable. In fact, there was no retraction and it was during the cross examination, the facts came to knowledge of the adjudicating authority. The Revenue fell in error to conclude that .....

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e dragged, if the witness writes the statement as per wishes of the department. It was also revealed that in the cross examination, there is evidence on records that the invoices of the descriptions/contents of blended yarn are not written but the witness was compelled by the officers to write in his handwriting the contents of yarn on photocopies of the invoices. Even at the time of cross examination, in the original copies of the invoices, there was no mention the contents of yarn. 8. We furth .....

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appellants no. 1 for dyeing and not cotton dominated fabrics as mentioned by the appellants no. 1 on the invoices while returning the same after dyeing. The purchase records of the appellants no.3 & 4 were scrutinised and their statements were recorded incorporating therein the details of types of yarns purchased by the appellants no. 3 & 4, and types of fabric manufactured and supplied to the appellants no. 1 for dyeing during the material period It has been alleged that during the mate .....

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ide the impugned order dated 10.11.2006 confirmed the demand of duty and imposed penalties on the basis of the said statements on record with the reason that the retraction from the statements after as sufficient time has no value and such denial cannot be accepted. It has been pleaded by the appellants no. 1 that no question was asked by the adjudicating authority to the appellants no. 4 when he denied his statement during cross examination and thus, the said statement has not been rightly reli .....

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re never instructed by dyers and that in case of cotton dominated fabrics 'cotton dyeing' was mentioned and in case of poly dominated 'poly dyeing' was mentioned. There are no findings in the impugned order to challenge these claims of the appellants no. 4 in reference to their records. However, it is observed that the demand has been confirmed by the adjudicating authority on the basis of the statements recorded during the investigation without taking the cognizance of the recor .....

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. In such cases, it is imperative that documents such as invoices/challans, transport records & receipt records should have been brought on record as documentary evidence in support of the allegations to show that the goods supplied to the appellants no. 1 were in fact polyester dominated fabrics, whereas the department has not given any details regarding the contents of the resumed records and what was observed on scrutiny of such records, The findings of the adjudicating authority that pol .....

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ecord, there is no documentary or corroborative evidence to support the contents of the statements which have been made basis of the allegations and as such there is no evidence against the appellants no. 1 beyond the statements relied upon by the department in the instant case. Thus, there is strength in this contention of the appellants no. 1 as in event of categorical denial of the statement by the supplier and without any other corroborative evidence, the departments case becomes a case of p .....

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issued separate invoices for dutiable and non-dutiable goods and correlated the non-dutiable invoices issued by them for cotton dyeing to the suppliers with the respective challans of the suppliers and the entries in the ledgers showing that they have charged for cotton dyeing from the suppliers. As recorded in the impugned order, the original copies of purchase invoices of the appellants no. 4 were also produced during the adjudicating proceedings in addition other documents but the same has n .....

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ions, wherein he, inter-alia, stated that appellants no. 1 were engaged in the dyeing of all knitted fabrics, including cotton fabrics, polyester cotton fabrics, polyester fabrics and other blends of Nylon which were received from the supplier on challans, and that in cases where challans mentioned that goods were polyester or polyester dominated they issued Central Excise Invoices and paid duty accordingly. However, it is observed that there is nothing in the statements of the appellant no. 2 t .....

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ment and the appellants no. 4 have also produced the documents in support of their claim during the course of cross examination in the adjudication proceedings. When the facts on records do not prove that the fabrics sent for dyeing by the appellants no. 3 & 4 was polyester dominated, the allegation of the department that the appeals no. 1 has mis-declared the said fabric as cotton dominated is not maintainable. From the above, it is evident that adjudicating authority overlooked the fact th .....

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conclusion to be drawn on the strength of the rest of evidence. In the instant case, it is seen that apart from statements of the co-accused there is no other evidence to support the department's case. Also, the documents produced by the appellants no. 4 in the course of investigation and adjudicating proceedings were not taken into consideration and, the same were not also disputed. Therefore, it has been rightly contended by the appellants the same cannot be ignored and that preference ca .....

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