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TMI Blog2017 (12) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... Dhanlaxmi Steel Re-rollers, Shri Kishore M. Agarwal, M.D. of Panchratna Steel Processing Ltd, Shri Rameshwar Rathi Commission Agent, Shri Madhusudan Sonthalia, Incharge of M/s S.M. Industries, Shri A. Ramakrishna,Agent, Shri Raj Kumar Gupta Broker. Appeal No. E/426/2007 has been filed by Shri Suresh Kumar Singhal, M.D. of Shalini Steels Ltd.. All such appeals are against imposition of penalties. 2. Brief facts arising for the consideration are based upon the investigation conducted by the revenue officers at the premises of Commission agents and alleged buyers of goods, the show cause notice dt. 14.10.2005 was issued to M/s Sunder Ispat Ltd. wherein it was proposed to demand duty from them an impose penalties. The demands were based upon the records/ pads/ loose papers of the brokers, buyers of goods and their statements. Reliance was also placed upon statement of director of Appellant concern. All other Appellants were also made co-noticee and it was proposed to impose penalties upon them. The adjudicating authority vide impugned order dt. 31.01.2007 confirmed the demand as above. Hence these appeals. 3. Ld. Counsel appearing for the Appellant submits that demand of Rs. 2,52,118 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cover of invoices which were later destroyed or called back by the Appellant. Surprisingly no reference of any such invoice was found from the records of the brokers or traders who allegedly purchased the goods from the Appellant. The Ld. Adjudicating authority has refused to accept the cross examination of the broker and alleged consignee of the goods on the ground that statements of these persons and the director of Appellant company were recorded and that the panch witness were not called for cross examination and hence the retraction by these persons are not acceptable. The observation of the adjudicating authority is incorrect. Also the observation of the Ld. Commissioner that the retraction i.e cross examination was after a lapse of two and half years and such belated retractions did not stand to test in several judicial pronouncement is illegal. The adjudicating authority has relied upon the judgments in case of Surjeet Singh Chhabra Vs. UOI - 1997 (89) ELT 646 (SC), ACC(CIU), Tuticorin Vs. A. Pawraj - 2001 (137) ELT (3) Mad. He also in later part of the order has relied upon the order has relied upon the case of Collector of Customs, Madras & Othrs Vs. D. Bhoormull - 1983 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submits that all the persons in their cross examination has clearly stated that they have not purchased any goods from the Appellant and the Appellant's name was stated by them as per direction of the visiting officers. That the revenue presented the brokers/ traders for cross examination and nothing stopped the department from questioning these persons at the time of cross examination. The cross examination of these persons proves the bonafide of the Appellant and no demand should have been confirmed against the Appellant. The Adjudicating authority in order to confirm demand against the Appellant has relied upon the judgments rendered by the Tribunal and Court in matters related to Customs. However he has failed to appreciate the fact that in case of Customs, it is the person who is caught with contraband/ prohibited goods to prove his innocence and the burden is upon him. However the Central Excise Act is entirely different as it is the department who has made charges against the assessee has to gather evidence and the burden shifts on the department. He relied upon the order of Hon'ble High Court is case of M/s Vishnu & Co, supra in this regard. He also relies upon followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / traders. (ii) Receipt of any consideration by the Appellant towards alleged clandestine removal. (iii) Receipt of any excess raw material. (iv) Production records of any excess goods. (v) Any single document showing clearance of goods clandestinely from the Appellant's factory or any corroborative evidence. (vi) Any transporter record showing alleged removal or any transportation record (vii) Any statement of employee who was preparing invoice/ bills for clearance of such goods and which was allegedly destroyed after delivery of goods. (viii) Any excess consumption of power (ix) Receipt of consideration towards alleged clandestine removal 7. That though it was alleged that the Appellant's persons were accompanying the goods and after delivery took back the invoices/ bills, the alleged recipients has not named a single person who was taking back the invoice/ bills or who was dealing with them. That their monthly production capacity of Appellant Unit is only 500 Mts as may be seen from the statement dt. 20.08.2004 of Shri Vinay Agarwal, Director of Appellant Unit which was not even disputed in the show cause notice or by the adjudicating authority whereas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L. POSHAK CORPORATION V/S. CCE, HYDERABAD - 2002 (140) E.L.T. 187 (TRI-CHENNAI) (ii) CCE, INDORE V/S. RAJRATAN SYNTHETIC LTD. - 2013 (297) E.L.T. 63 (TRI-DEL) (iii) RHINO RUBBERS PVT. LTD. V/S. CCE, BANGALORE - 1996 (85) E.L.T. 260 (TRIBUNAL) (iv) CCE, LUCKNOW V/S. RAMA SHYAMA PAPERS LTD. - 2004 (168) E.L.T. 494 (TRI-DEL) (v) CHARMINAR BOTTL. CO. P. LTD. V/s. CCE, HYD II - 2005 (192) E.L.T. 1057 (TRI-DEL) (vi) CCE JAIPUR- I V/S. SHIV PRASAD MILLS P.LTD. - 2015 (329) E.L.T. 250 (TRI-DEL) (vii) RAIPUR FORGING PVT. LTD. V/S. CC.EX. RAIPUR I - 2016 (335) E.L.T. 297 (TRI-DEL) 10. As regard appeal filed by the revenue against dropping of demand of Rs. 8350/- and Rs. 11,38,249/- in Appeal No. E/443/2007 filed by Revenue that the demand of Rs. 8350/- that the same has been wrongly dropped as it is not duplicate entry, the Ld. Counsel submits that the demand has been raised without any evidence and hence not sustainable. In context of demand of Rs. 11,15,930- as detailed in Annexure D5 and dropped by the Commissioner, he submits that the demand was correctly dropped as there was no corroborative evidence of removal of alleged short recorded quantity or any corroborative evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission of the Appellant that on the light of cross examination, the statements cannot be relied upon on the ground that the same has been given after belatedly. My views are based upon the judgment of Hon'ble High Court of Delhi in case of COMMISSIONER OF CENTRAL EXCISE, DELHI I Vs. VISHNU & CO. PVT. LTD. - 2016 (332) ELT 793 (DEL) wherein it was held that Once it is shown that the maker of such statement has in fact resiled from it, even if it is after a period of time, then it is no longer safe to rely upon it as a substantive piece of evidence. The question is not so much as to admissibility of such statement as much as it is about its reliability. It is the latter requirement that warrants a judicial authority to seek, as a rule of prudence, some corroboration of such retracted statement by some other reliable independent material. This is the approach adopted by the CESTAT and the Court finds it to be in consonance with the settled legal position in this regard. I am thus of the view that the statements cannot be relied as it is. 13. I further find that the statements or records of the brokers/ agent has to be corroborated with the evidences unearthed from the Appellant unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 260 (TRIBUNAL), CHARMINAR BOTTL. CO. P. LTD. V/s. CCE, HYD II - 2005 (192) E.L.T. 1057 (TRI-DEL), CCE JAIPUR- I V/S. SHIV PRASAD MILLS P.LTD. - 2015 (329) E.L.T. 250 (TRI-DEL) and RAIPUR FORGING PVT. LTD. V/S. CC.EX. RAIPUR I - 2016 (335) E.L.T. 297 (TRI-DEL). I find that none of the above evidences has been adduced by the revenue in the present case and hence the charges of clandestine removal against Appellant are not tenable 14. I also find that the statement of director of Unit on the basis of third party records cannot be basis of demand as corroborative evidence has been brought on record. I also find that the adjudicating authority himself has set aside the demand of Rs. 11, 15,930/- holding that no corroborative evidence of raw material or production has been brought on record. I find that the said evidence would apply equally to all demands as nothing incriminating has been found from the Appellants premises. I find that the adjudicating authority has also relied upon the custom cases for confirming demand. However I am of the view that demand cannot be based as the revenue has to prove its case as it the department who has made allegation. No incriminating paper or rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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