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TMI Blog2018 (9) TMI 1492X X X X Extracts X X X X X X X X Extracts X X X X ..... lants were registered with Central Excise Department for manufacture of MS Ingots falling under Chapter Sub-heading No.7206.10 & 7206.90, Poster Paper & Media Paper falling under Chapter Sub-Heading 4805.00 of the First Schedule to the Central Excise Tariff Act, 1985. The appellants were also having separate registration with the Department to undertake processing of Man Made Fabrics falling under Sub-Heading No.5406.10 & 5406.22 of the Act. The entire unit situated in the same campus, was controlled by the same set of Directors as well as persons looking after the receipt of raw material, production and dispatch of finished Goods. On the basis of intelligence, the officers of DGCEI conducted the search operation at the appellants premises on 25.09.2003 and the statements of various persons were recorded under Section 14 of Central Excise Act, 1944. The residential premises of the director (Laxmi Kant Agarwal, Nikhil Agarwal) and after persons/associates were also searched and the details of the proceedings including resumption of documents were recorded under the Panchnama dated 25.09.2003 and other dates, also detected the discrepancy in the stocks of raw materials and finished g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Ramu Yadav, authorized signatory and dispatch clerk of the factory. Accordingly, the officers on spot recorded the statement of Shri Ramu Yadav on 25.09.2003 wherein he inter-alia stated that all the above papers were prepared by him and some entries in the said pages were written by Shri R.K. Singh. These pages contained the details of all depatches of M.S. Ingots, Paper and processed fabric from the factory. Most of the depatches in these papers were not supported by any Central Excise invoices and the goods, which were cleared from the factory without payment of duty, were sent under the cover of duplicate/unaccounted invoices prepared by him and such duplicate invoices were destroyed when the goods under such invoices reached its destination successfully. Further, he stated that he was preparing such duplicate invoices on the directions of Shri Laxmi Kant Agarwal, Director and on his direction the details of the transactions were prepared and safely stored. At the time of panchnama dated 25.09.2003 Shri Nikhil Agarwal introduced himself as the Director of L. Kant Paper Mills Ltd. and stated that in the Division of Paper Manufacturing, poster paper and Kraft papers were manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Income Tax Department 145 3. Copy of Panchnama dated 27.11.2002 of Income Tax Department 4. Settlement Application dated 24.11.2004 filed by the Appellant before Hon'ble Settlement Commission (IT & WT) Principal Bench New Delhi. 5. Copy of Order dated 27.09.2006 passed by the Hon'ble Settlement Commission. (Income Tax) under Section 245D (1) of the Income Tax Act. 6. Copy of Order dated 31.03.2008 passed by the Hon'ble Settlement Commission. (Income Tax) under Section 245D (4) of the Income Tax Act. 7. Copy of Citation in the case of Ravi Foods Pvt. Ltd. vs. Commissioner reported in 2011 (266) E.L.T. 399 (Tribunal). iv) That letter dated 23.02.2005 of Income Tax Department, evidences service of documents only to the Deputy Director, Central Excise Intelligence, Kanpur Regional Unit, Kanpur. v) That the letter dated 23.02.2005 issued by Assistant Commissioner, Income Tax, Central Circle - V, Kanpur do not give any suggestion of clandestine clearance of goods on the basis of seized documents. vi) That the documents resumed by Income Tax Department under Panchnama dated 27.11.2002 were in the form of loose paper (s). vii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that they have clearly submitted in their affidavit that these are forged documents prepared on instigation by one shared. Hence, these documents are not reliable. xviii) He submitted that there is no evidence of excess consumption of electricity. xix) He submitted that merely on the basis of private records, demand cannot be sustained, for which he relied upon various case laws. xx) He submitted that during cross examination, the witness has stated that they have not received or supplied unaccounted goods to or from the appellant company. xxi) He submitted that private records are vague and unspecific & hence not reliable. Such forged records were not maintained at the instance of management. xxii) He further submitted that no reliance can be placed on the parallel invoices alleged to be recovered from the premises of Shri Mukul Jain. The statement of Shri Mukul Jain is not reliable, as he was not produced for cross examination. He further pointed out various infirmities in the said records. xxiii) He further placed reliance on the decision of Hon'ble High Court of Allahabad in the case of Continental Cement Company, to submit that demand on the allegation of clandesti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner, but the Department was unable to produce their witness. We find that it is well settled law that if the Department is not able to produce their witness for cross-examination, then the statement of that witness cannot be relied upon, as held by Hon'ble Himachal Pradesh High Court In the case of Commissioner of Central Excise Vs Arsh Casting Pvt. Ltd. reported at 2010 (252) ELT 191 (H.P.). We further find that affidavits have been filed by both, Shri Ramu Yadav and Shri R.K. Singh, wherein they have stated that they have prepared & forged MDSD, as Shri Sharad Bhardwaj (Ex-employee) threatened them to prepare the forged documents, also promised them better job in some other firm. We find that, the said MDSD is not a genuine document as there is no corroborative or positive evidence available on record, showing clandestine removal of the goods. Therefore, demand on the basis of the said record-MDSD, is set aside. 8. Now, with respect to demand on the basis of parallel invoices issued by appellant-company and resumed from the premises of Shri Mukul Jain, Commission Agent of fabric, we find that the department is mainly relying upon the statements of Shri Mukul Jain, to establ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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