TMI Blog2019 (4) TMI 929X X X X Extracts X X X X X X X X Extracts X X X X ..... ound, it cannot lead to the conclusion that the Appellant did not sell the fabrics to such parties. I t cannot be said that the Appellant did not get manufactured the fabrics and instead diverted the yarn in the market. No single evidence has been adduced by the Revenue to show that the Appellant had cleared yarn from their factory for sale as such and thereby evaded central excise duty. Not a single buyer of yarn has been identified by the Revenue nor there are any statements of the employee, authorized signatory or the director of the Company that the Appellant had cleared any yarn clandestinely and it is coupled with the fact that no consideration has shown to have been received by the Appellant. There are no evidences of transportation of yarn from the Appellant s factory or its diversion. It is a settled law that the allegation of clandestine removal should be based upon clinching evidences whereas in the present case, not a single evidence of clearance and sale of Yarn by way of any evidence in the form of clearance of yarn, identification of buyers, receipt of consideration and any single paper supporting the allegation of the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the issue of addendum on merits. They also argued that since the show cause notice is deemed to be delivered on the date of issue of addendum to show cause notice only, therefore the demands are time barred as the addendum dated 14.04.2010 was served to them on 15.04.2010. The adjudicating authority confirmed the demands as proposed and also imposed penalty upon all the Appellants, Hence the present appeals. 2. Ld. Advocate Shr. Prakash Shah appearing for the Appellants submits that the POY was sent in terms of Rule 12B for manufacture of fabric on job work basis. They had filed intimation with their jurisdictional division office as well as of the job workers before sending yarn for job work manufacturing of fabric. After manufacture of fabric the same was cleared from the job work premises to the buyers on payment of duty. The buyers received the fabric from the premises of job workers and acknowledge the receipt of fabrics by signing the delivery challans prepared by the job workers. He also draws our attention to the challans annexed to the appeal. That in some cases the grey fabric was sold by the brokers without interacting with the actual buyers. They have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have any weaving machinery at the given address. However Shri Rafiq Abdul in his statement has stated that yarn was texturized at his karanj factory and fabric was weaved at his factory at Unn, Surat. Reliance was placed upon Shri Hanuman Singh whose vehicle was shown to have used for transportation of POY has claimed that his Tempo GJ-5UU-2097 did not transport goods manufactured by M/s Geena to the buyers. Also that no receipt of fabric from Unn factory was shown in records. That two more transporters having tempo no. GJ-5UU-2097 and GJ-5V-2295 have denied transportation of fabrics. 4. He submits that their statements cannot be relied upon as they were not permitted to be cross examined. In case of Rama Filaments it was alleged that they did not have any weaving machine and Shri Mayur Patel stated that they have got the fabrics manufactured from sub job workers. However the job workers M/s Raj Textiles, D.K. Textiles, Laxmi Polyweave, Shakti Textiles, Atlas Synthetics, Shakti Fabrics, Century Fabrics, Irfan fabrics were nonexistent whereas Satish Textiles, M.M. Kapadia and Balaji Tex confirmed that they have not received yarn from job work from M/s Rama Synthetics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers could not be located. No statements are on record of any person to be found at the buyers address. That though the bank statements of 4 buyers i.e. Shree Textiles, Umiya Textiles, GirwarTexspin and Tirupati Textiles were collected but no steps were taken to summon them or investigate the same. 6. It was alleged that M/s Umiya Textiles deposited huge cash in their account either on previous day or same day on which the cheque was issued to the Appellant but there is no evidence that such amount was handed over to them by the Appellant. The sole basis is statement of Shri Kantilal Shah of Shah Corporation that the Appellants provided cash to Umiya Textiles to deposit in their account. However, Shri Kanatilal Shah s statement is not supported by any evidence. He has no business relation with the appellant. He was not subjected to cross- examination. The bank account of M/s Umiya Textile showed number of cheques issued by them to the Appellant. There is no illegality in the cheques issued by the Shah Corporation to the Appellant. It was alleged that in case of M/s Girwar Texspin and M/s Tirupati Textiles, the payments made by the appellant were preceded by cash depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abrics to the buyers. There is no evidence that supporting the allegation that the appellant has cleared yarns manufactured it under the guise of job work delivery. There are no whereabouts of the yarn allegedly sold without payment of duty by the appellant. There is no evidence of any consideration received by the appellant towards the alleged sale. He relies upon the judgment in the case of Rakesh Nayyar 2010 (255) ELT 234 (P H). He also submits that the show cause notice was issued to the appellants on incomplete investigation. The investigation was first initiated in December 2003 and no action was taken for more than one year. Subsequently, the investigation was again carried out in February to September 2005 and then it stopped for almost three years. The Department once again stated the investigation in November 2008 and the show cause notice was issued on 8.6.2009, almost after 10 months. That the appellant filed their reply and also attended the personal hearing and addendum dated 15.4.2010 was issued to the Appellant in respect of show cause notice dated 8.6.2009, which shows that the investigation was in complete and half-hearted and no perception can be drawn that Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 2009. Thus, the Revenue was aware that even prior to the period of investigation, the appellants were getting grey fabrics manufactured on job work basis. He relies upon the Hon ble Supreme Court judgment in case of Modipon Fibre Company - 2007 (218) ELT 8 (SC) to submit that since the department was in knowledge of facts, the extended period is not invokable. He submits that the demand against the appellant is not sustainable and the penalties against the appellant and the co-appellant are also not sustainable. 9. Ms. Nitina Nagori, Ld. Joint Commissioner (AR) appearing for the Revenue reiterates the impugned order. He further submits that the investigation was conducted at the end of the six job workers. M/s AA Textiles was found to be non-existent. M/s Rama Filaments was found to have no weaving machines to manufacture fabrics from yarn received without payment of duty from Appellant. M/s Geena Synthetics did not have machinery to manufacture grey fabrics. Only one texturing machine was found installed in the unit. M/s Mansa Synthetics Pvt. Ltd failed to produce any documents in support of manufacture of fabrics and its transportation to the buyers of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued to the buyers to whom fabrics manufactured by the job workers were cleared were returned undelivered. M/s Swastik Silk Mills, one of the buyers, denied having purchased any fabrics from the Appellant. He thus supports the impugned order. 11. Heard both the sides and perused the case records. The Revenue has demanded duty on the ground that either the job workers did not have facility to manufacture or were not existing. We find that in the present case the fabric was shown to have been manufactured from six job workers. It was alleged that M/s Rama Filament Pvt Ltd, M/s Geena Synthetics Pvt. Ltd, M/s A.P. Textiles Ltd, M/s Mansa Synthetics Pvt Ltd, M/s Micro Polyester Pvt. Ltd and M/s Good Luck Synthetics Ltd, had not carried out the job work of fabric manufacturing. In case of Rama Filaments, it was alleged that the said company did not have weaving machines and the sub-job workers either were not existent and have refused receiving Yarn from Rama Filament for manufacturing the fabrics. In case of Micro Polyester Pvt. Ltd and Good Luck Synthetics Pvt. Ltd, it is alleged that the said units could not produce the job work, records stating that records were de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigation deny the fact that they had undertaken job work activity on behalf of Appellant. In case of M/s A.A. Textiles, the unit was found non-existent as the officers recorded statement of person found at said unit who stated that some other unit was running during the period 20.8.03 to 10.3.2006. 13. However we find that M/s A.A. Textile was registered unit and the Appellant has shown the acknowledge the receipt of goods by the said M/s A.A. Textiles and job work payment. All the remaining five job workers in their statement have clearly stated that they had undertaken job work of manufacturing of Fabrics on account of the Appellant. The Revenue has relied upon the investigation conducted to hold that some of these units were not having weaving machines or they had not sent the Yarn to sub-job workers who were not existing or some of them had refused to have done the job work. Also, some transporters or owners of trucks whose evidence shown to have been transported the fabrics / yarn have refused the transportation. 14. We find that only on the ground that some job workers could not be found or that some of them refused to have done job work, it ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of clearance of yarn, identification of buyers, receipt of consideration and any single paper supporting the allegation of the revenue has been found. In case of CCE, Rajkot V.s Kalyan Glaze Tiles 2008 (222) ELT 417 (TRI)the Tribunal held as under : 2. The appellants main contention is that the name given in the loading slips does not tally with their names in as much as in most of the slips had mentioned as Kalyan Ceramics and Kalyan Tiles , whereas the name of their unit is Kalyan Glazed Tiles . Further, it has been contended that the entire case of Revenue is based on the loading slips recovered from the transporter s premises and the statement of the partner. As regards the recovery of the slips, it is seen that the transporter has not been made a party to the proceedings. He has placed an affidavit on record during the course of adjudication, to the effect that the chits are prepared to keep notes of requirements given by the clients over phone and it is not always that the trucks are booked and actually used by such persons. The transportation does not get executed due to various practical problems. It has further been mentioned in the affid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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