TMI Blog2019 (1) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... d have been discrepancy either in the stock of raw material or finished goods, which is absent in the present case. Demand on the basis of alleged clandestine removal under the cover of 8 parallel invoices - Held that:- The Revenue has not shown either in the show cause notice or in the impugned order as to from where these invoices, which were photocopies, were retrieved by the Department. No Corroboration of these invoices are appearing on record. In such case when the authenticity of these invoices is in question and the same has not been substantiated by the Revenue, the demand made on the basis of such invoices does not sustain. Demand on job work activity undertaken by the Appellant - benefit of exemption notification has been denied to the Appellant on the ground that they have failed to maintain challan and register of such job work activity - Held that:- When the Revenue themselves are of the view that the Appellant had undertaken the job work activity and the name of persons for whom such job work activity was undertaken, the Revenue should have investigated as to whether the principal manufacturer has paid the duty on the said finished goods or not - the benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of maintenance of ledgers. He also named suppliers of raw material and buyers of finished goods. Statement of Shri Ravindra Singh- proprietor of the Appellant unit was also recorded on 20.5.2013 and on other dates wherein he stated that they are manufacturing Binding Wires and H.B. Wires. Wire rod is raw material for H.B. wires, which in turn is raw material for Winding Wires. That Shri Ajay Kumar Singh is working for Prakash Industries Ltd. and is also writing accounts of Deepak Industries. The Ledgers contain purchase of raw material and sale of finished goods among other details. That the purchase ledger is also maintained party-wise and has details of goods. He after comparison and compilation, stated that the purchases and the sales maintained in the statutory record and diary records are not in agreement with the party wise records maintained in the ledger and the dispatch register seized by the Department. Resultantly the Show Cause Notice was issued to the Appellants demanding duty on alleged clandestine clearances of 33,351,715 MT of H.B. Wires/Binding Wires for the period June 2010 to 19th May, 2013 on the ground that the said goods were not recorded in their books of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . All the clearances were made on payment of duty. He does not know who has prepared the computerized ledger on the basis of such pencil written, illegible ledger. His statements were obtained by the Officers under the threat of arrest and were not voluntary. That he has not made any dealings in cash and no offence under excise law was committed by him. He also named officers who threatened him. The Ld. Counsel submits that in view of cross examination of Shri Ravindra Singh, the statement of Shri Ravindra Singh on the basis of which allegation has been made against the Appellant unit has lost its evidentiary value. His statements are negated by the cross examination and cannot be relied upon to make any demand against the appellant unit. That even the adjudicating authority, in order to confirm the demand has relied upon only on the statement of Shri Ravindra Singh, but has not spelt a single word as to why the cross-examination of Shri Ravindra Singh is not acceptable to him. In the show cause notice, it is an accepted fact that the Appellant unit was also doing trading of goods. He submits that the show cause notice has accepted only those sales as trading sales where the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of such entries, the said ledger was not seized from the factory of the appellant but was seized from alleged office located of Prakash Industries. No extra purchase of other raw material like Oil, chemical was shown or extra use of power. No payment was received towards alleged removal of finished goods or mode of receipt of consideration towards the same. He submits that the Appellant it eligible to avail cenvat credit on duty paid raw material, and about 80 to 90 % of the duty payable on their final product is paid by utilizing the cenvat credit duty paid on inputs, hence, there is no reason for the Appellant to indulge in clandestine removal. There is no evidence of procurement of such a huge quantum of raw material; No evidence of any discrepancy in the quantum of raw material or final product at factory premises; No statement of the transporters deposing against the assessee; No statement of any production staff indicating the production of such huge quantum of the final products; no recovery of any such amount from the appellant or evidence of cash payments to the input suppliers. No verification of the total production capacity of the factory was ascertained a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed challen cannot lead to demand of duty as there is no dispute about the job work. He also submits that the Revenue did not ascertain the fact as to whether the principal manufacturer has paid the duty on such finished goods or not, in spite of the knowledge of the principal manufacturer for which job work activity was undertaken. The Department was supposed to carry-out investigation as to whether the person who sent the job work goods has paid the duty or finished goods or not. Not-maintenance of challan by the Appellant is only a procedural aspect, which cannot be made basis for confirmation of duty demand on job work clearances. Just for not following the procedure and not maintaining the job work register, demand cannot be made against the Appellant. He relies upon the rulings in case Commr. Excise, Shillong Vs Vinay Cement Ltd 2002 (147) ELT 724, Keshari Wire Products (P) Ltd Vs. Commr. Ex., Patna 2003 (160) ELT 180, Sewak Pharma Vs Commissioner of C.Ex, Mumbai-III 2004 (175) ELT 645, Jayaprakash Co. Vs Commissioner of C.Ex, Surat 2004 (178) ELT 429, Lakshmi Auto. Loom Works Ltd Vs CCE, Coimbatore 2005 (183) ELT 195. 6. Shri R.K Mishra, ld. DR appearing for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed finished goods by the Appellant. No evidence in the form of manufacture of finished goods, use of any extra power, extra labour or use of other materials like oil or chemical for the manufacture of finished goods has been brought on record. There is no evidence of consideration received towards the alleged clandestine removal. We also find that when the Officers visited the Appellant factory, no discrepancy either in raw material or in finished goods were found, which gives credence to the contention of the Appellant that no clandestine removal was made by them. When the Revenue has alleged huge evasion by clandestine clearances, it was obvious that there would have been discrepancy either in the stock of raw material or finished goods, which is absent in the present case. We also find that the Adjudicating Authority has refused the cross-examination of the witnesses of the alleged buyers of the goods, which is not legal and in contravention of Section 9D of the Act. As the statements of buyers of the alleged finished goods are relied upon in the show cause notice, and such statements were recorded at the back of the Appellant, the adjudicating authority should have allowed cros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable; 23. In a similar situation, this Court in its decision dated 2nd December, 2015 in CEAC No. 62/2014 (Commissioner of Central Excise, Delhi-I V. Vishnu Co. Pvt. Ltd.) [2016 (332) E.L.T. 793 (Del.)] upheld the order of CESTAT that had set aside the adjudication order on the ground that it proceeded on the basis of the retracted statement of the persons who were not offered for cross-examination. It was observed in that case where such statements are subsequently retracted or resiled from, it becomes necessary for the Department to produce other evidence which is of an independent nature which corroborates the retracted statements. In this case, the Commissioner had proceeded on the basis of the retracted statements of persons not offered for cross-examination. There again, it was contended by the department that the retraction made beyond 20 months after the initial statement, would have no e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority looking into allegations contained in another SCN to return a finding against the Assessee. 25. For all of the aforementioned reasons, the Court finds that the impugned order of the CESTAT does not give rise to any substantial question of law. The appeal is accordingly dismissed. 8. We also find that in absence of corroborative evidences, as discussed in preceding paras the demands against the appellants are not sustainable, as held in case of Essvee Ploymers (P) Ltd Vs CCE Chennai 2004 (165) ELT 291, Ambika Chemicals Vs. CCE Chennai 2002 (148) ELT 101 as upheld by Apex Court in case of 2003 (153) ELT A298 (SC), CCE, Calcutta-II Vs Tube Bend (Cal) Pvt Ltd 2001 (136) ELT 839 (Tri, Kolkata), Andhra Cements Ltd Vs CCE., Guntur 2004 (170) ELT 364, Kittibhai Maganbhai Patel Vs Commissioner 2003 (159) ELT 1162 (Tri, Mum) Nav Bharat Paper Pvt. Ltd., Vs. Commissioner of C.Ex, Ghaziabad 2004 (165) ELT 564 which has been relied upon by the Appellant. 9. We also find that in case of demand on the basis of alleged clandestine removal under the cover of 8 parallel invoices, the Revenue has not shown either in the show cause notice or in the impugned order as to from where t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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