TMI Blog2019 (4) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... aler. This has resulted in artificial escalation in value of raw material to ₹ 5,06,46,859/- instead of correct amount of ₹ 3,09,08,423/- - there is no force in the findings of procurement and receipt of unaccounted or additional raw materials and use thereof in clandestine manufacture of the finished goods and set aside the findings relating thereto. Rejection of the request of Cross-examination - HELD THAT:- The denial of cross-examination of Shri Nirmal Jeet Singh owner of transport namely M/s Krishna Road Lines, Shri Umang Kumar and Ramchandra both ex-employee of the appellant was essential to test the purpose of maintenance of parallel manual records (the relied upon documents) and the contents recorded therein. It was more so in the case of Sh. Umang Kumar, who had explicitly through his written communication denied any linkage of the documents prepared by him without the knowledge of the appellant, and after 7 months of his disassociation from the appellant - also, cross-examination of Shri Nimaljeet Singh was not rejectable even on the grounds that he had not retracted his statement and whether the same was recorded without threat, duress or coercion - the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are that the appellant is engaged in the manufacture of PP disposable glasses since December, 2009. They also have another unit of rice-mill. They were availing SSI exemption and were not registered with the Department. The premises of the appellant was inspected/searched on 24th July, 2012 including their office premises. The following premises were searched (i) office premises at Bartan Bazar Wali Gali (near Baba Jewellers), Subhash Nagar, Pukharayan (ii) Office premises at Jai Hanuman Chawal Udyog Pvt. Ltd., Byepass Road, Highway, Barhauli, Pukhrayan wherein the activity of the Rice Milling takes place and (iii) Factory premises of the appellant situated at By Pass Road High Way, Baholi, Pukhrayan. During the course of inquiry and scrutiny of GRs resumed from the appellant and re-conciling the same with the Transporter, M/s. Krishna Road Lines, the details contained in the freight register furnished by the Transporter were found tallying with the respective copies of the GRs resumed from the factory premises of the appellant, relating to the transportation of the goods. It further appeared that, as recorded in the show cause notice that the appellant received payment for their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40261568 10.30% 4146942 17.03.12 to 31.03.12 34,41,858 3441858 12.36 425414 2012-13 01.04.12 to 22.07.12 257,54,817 0 25754817 12.36% 31,83,295 Grand Total 125037745 --- 87064290 --- 9569074 3. Further, on the date of search, raw materials /P.P. Granules valued at ₹ 21,82,500/- / packing materials valued at ₹ 3,31,000/- and finished goods valued at ₹ 37,98,636/-, were seized and proposed to be confiscated along with penalty under Rule 25 of the CER, vide separate show cause notice dated 16.1.2013 and duty demand along with penalty was raised vide show cause notice dt. 1.5.2015. 4. Both the show cause notices were adjudicated on contest by common order-in-original and the proposed demand was confirmed, as well as confiscation along with penalties. Penalty was also imposed under Rule 26 on the partner - Shri Bal K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 012, dated Nil, 12.12.12 and 14.01.2013 respectively sent by M/s Reliance Industries, Kanpur; M/s Govind Polymers, Kanpur; M/s Deep Plastic, Delhi; M/s Standard Surfactants, Kanpur; M/s K. G. Polymers, Kanpur; M/s Rishabh Polypack, Kanpur, M/s Jai Ganesh Packing Ind., Firozabad; M/s Bajrang Packaging Industries, Firozabad and M/s Katyani Paper Products, Kanpur (Total 37 pages); 17. Statement dated 22.01.2013 of Shri Nirmaljeet Singh, Proprietor of M/s Krishna Road Lines, 67-B, Dada Nagar, Kanpur (03 pages); 18. Registrar showing ledger of M/s Krishna Road Lines, 67-B, Dada Nagar, Kanpur in respect of M/s Jai Hanuman Rice Industries, Pukhrayan since January, 2010 (Written from page 1 to 11) (Total 63 pages) 19. Letter C. NO. CM/12-13/371 dated 04.02.2013 of Chief Manager of SBI, Industries Estate Branch, Kanpur enclosing statement of Account n respect of account No. 31035626006 of M/s Jai Hanuman Rice Industies, Pukhrayan for the period from 01.11.2009 to 31.07.2012 (Total 32 pages); 20. Statement dated 21.03.2013 of Shri Bal Krishna Omer, Partner of the party s firm (03 pages); 21. Statement dated 07.10.2013 of Shri Bal Krishna Omer, Partner of the party s firm (03 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) Manual Ledger - For the year 2010-11 (1 to 197) (iii) Manual Ledger - For the year 2011-12 2012-13 (1 to 153) 29. Sales Registers:- (i) Computerized Sales Register - For the period from 01.04.09 to 31.03.10 (pages 29) (ii) Computerized Sales Register- For the period from 01.04.10 to 31.10.10 (iii) Manual Sales Register- For the period from 10.11.10 to 22.07.12(Written upto page 54) 30. Annexure-E - Duty calculation chart 31. (i) Declaration for the year 2010-11 filed by the party on 11.04.2011 with Central Excise Division-II, Kanpur; (ii) Declaration for the year 2011-12 filed by the party on 13.04.2012 with Central Excise Division-II, Kanpur 7. Heard both the learned Advocates Shri S. K. Pandey appearing on behalf of the appellant and the learned DR Shri Rajeev Ranjan, Additional Commissioner, for Revenue. 8. As regards to order of confiscation of finished goods valued at ₹ 37,98,636/-, it is noticed that the same were seized for want of production of finished goods records, despite the admitted fact that the said records were under resumption by the search team. On perusal and comparing the physical balance of finished goods stocks w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king of glass 2940 kg. 2940 kg. Nil 3 Cartons 3970 pcs. 3970 pcs. Nil 4 Cello Tape 288 pcs. 288 pcs. Nil We notice that to arrive at the total quantity and value of procured raw materials, the Revenue had erroneously resorted to double accounting of details of some consignments of raw materials received from two parallel sources, the manufacturing company and its dealer. The data supplied by manufacturer also included the purchases through its dealer. This has resulted in artificial escalation in value of raw material to ₹ 5,06,46,859/- instead of correct amount of ₹ 3,09,08,423/-. We, therefore, do not find force in the findings of procurement and receipt of unaccounted or additional raw materials and use thereof in clandestine manufacture of the finished goods and set aside the findings relating thereto. 10. Now turning to the issue of annual turnover of the appellant, it is noticed from Annexure-12 to the Appeal, which we find is prepared, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y through his written communication denied any linkage of the documents prepared by him without the knowledge of the appellant, and after 7 months of his disassociation from the appellant. That the denial of cross examination is contrary to the consistent view of Courts and Tribunal including the Apex Court in the case of Andaman Timber Industries vs. Commissioner of C. Ex. Kolkata-II [2015 (324) ELT 641 (SC) held: Appellant wanting to discredit testimony of witnesses by contesting truthfulness of statements if testimony of these two witnesses is discredit, there is no other material with Revenue to justify its action Principles of natural justice violated, making order nullity Tribunal order set aside Section 9(D) read with Section 33 of Central Excise Act, 1944. 12.1 We also hold that cross-examination of Shri Nimaljeet Singh was not rejectable even on the grounds that he had not retracted his statement and whether the same was recorded without threat, duress or coercion. 12.2 We however, find that the Revenue to deny the request for cross-examination, had relied on the decisions pertaining to the Customs law and involving notified goods, which specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant is not expected to unfold any new facts, except that if cross examination is allowed there are definite possibilities of flaying with evidences, as employer of a person is always in the capacity of affecting the will of the employee by employing undue influence which they could not do at the time of recording the statements, as the same have been recorded in the presence of investigating officers. 13.2 The learned Advocate of the appellant submits that the law on the issue is well- settled, that to establish evidentiary value of any resumed documents, the author of the incriminating documents had to be confronted with the documents to ascertain the contents thereof, and relies on (i) the Hon ble Supreme Court in the case of Bareilly Electricity Supply v. Workmen, 1971 (2) SCC 617 that when a document is produced in a Court or Tribunal, mere production of the documents does not amount to proof of it or the truth of the entries therein. The writer must be produced or his affidavit in respect thereof be filed and an opportunity accorded to the opposite party who challenges this fact to assess the probative value of the contents of the documents. 13.3 Ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by oversight described them also as Loading Slips in the resumption memo. 17. We have already held, the alleged evidence of purchase of additional raw material and clandestine manufacture, as a result of wrong computation and held that the evidence relied by the Revenue in fact supports the case of the appellant. As regards the Loading/ Enquiry Slips we have gone through enquiries conducted by the Revenue with seven selected buyer s of finished goods (page 149-182 of appeal paper Book III) and notice that all of them have denied receipt of goods against the Loading/ Enquiry Slips and confirmed the receipts of consignments only under the cover of invoices. We have further browsed through the information of transportation of finished goods and also perused the corresponding GRs gathered by the appellant from various transporters, which also revealed transportations of consignments covered by invoices only. We have similarly perused the resumed consolidated list of enquiries from the prospective buyers for the month of June 2012 (Annexure-3 to the defence reply) and find force in the arguments that not all, but only approved Enquiry/ Loading Slips represented actual sales, and hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transporters name as M/s Krishna Road Lines and M/s Triveni Freight Carriers have come from undisclosed source, i.e. neither resumed nor provided by any persons during investigation and are thus inadmissible as evidence in terms of Section 36A of the Central Excise Act, 1944. Thus these inadmissible / suspect GR s had been illegally used to corroborate authenticity of the said Sale Enquiry/ loading slips. 24. Learned Advocate had further pointed out that first Appellate Authority did not at all examine the retraction of Shri Bal Krishna Omer, Partner of the appellant. That his retraction was not only instantaneous and reasoned, but also coupled with a request to record his statement afresh, on the retracted points by a senior officer, as the retracted statement was recorded by adopting coercive measures and undue inference. That first Appellate Authority had overlooked the settled law that the Authority has to consider implications of both confession and retraction. If confession is retracted, whether it is corroborated by other independent and cogent evidences. The First Appellate Authority did not counter or dissent on the settled law as held by the Apex Court [2015 (321) EL ..... X X X X Extracts X X X X X X X X Extracts X X X X
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