TMI Blog2019 (7) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... D THAT:- Only on the basis of entries mentioned in job cards which do not match with the lot register, it cannot be said that the said goods shown in the job cards were removed without payment of duty. There is no evidence on record to show that such goods were removed in open market. Reliance has been placed upon the statement of Shri Gulshan Bhatia, which stands retracted. Except recording some statements, no evidence is appearing that the goods were disposed of in the market or if the goods belonging to the merchant manufacturers, when the goods were transported to them and what were the evidences for disposal of such goods. Thus, merely on the basis of statements, a demand cannot be made - If some lot numbers are not found in lot register, the same cannot be inferred to have been removed clandestinely - demand set aside. Demand of ₹ 55,09,868/- made on the basis of private register wherein the fabrics was found to have been entered without lot number - HELD THAT:- The appellant has pleaded that the lot numbers of main one or two parties was shown therein, though it may contain more than two lot numbers. We find that no statement of the Printing master was recorded to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od May 2002 to Oct 2002 and the same was removed without payment of duty. (ii) A demand of ₹ 2,43,369/- was made on the ground that 75114 L. Mtrs of Finished MMF was found to be entered in job cards but not in lot register and the said goods valued at ₹ 20,28,078/- were illicitly sold in open market without payment of duty. (iii) Demand of duty of ₹ 55,09,868/- was made on the ground that the Appellant has processed 1889529.5 L. Mtrs of Grey fabrics as found on the basis of entries in private register seized from the factory and cleared a quantity of 1700576.5 L Mtrs of fabric without payment of duty. (iv) Demand of ₹ 1,91,678/- was made on the ground that the Appellant received 65733 L. Mtrs of grey fabrics as found from private register as substitution against respective lot nos found in Private Register and cleared processed fabric 59159.75 L. Mtrs. 1.1 The show cause notice also proposed penalty upon the Appellant unit and its director Shri Gulshan Bhatia. The SCN also alleged that Shri Gulshan Bhatia in his statement has accepted the removal of goods not found as per lot register and quantity found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valued at 34,32,780/- inclusive of job work charges without payment of duty. Reliance was placed upon statements of 7 parties who had sent grey fabric for processing to Appellant that they have received processed fabric from Appellant without payment of duty. It was alleged that all the remaining parties have also received processed fabric without payment of duty from Appellant after processing of grey fabric. The show cause notice demanded duty and also proposed penalty under section 11AC against the Unit and penalty under rule 26 on Shri Bhatia. The demands as proposed were confirmed against the Appellant and penalty of equal amount was also imposed. Personal penalty on Shri Bhatia under Rule 26 was also imposed. Hence the present appeals. 2. Ld. Counsel Shri H. Ganguly appearing for the Appellant submits that the impugned order is not sustainable as they had sought cross examination of witnesses which was not given. The factory was visited on 24.10.2002 and Daily Stock Account register, lot register and invoice book were found. Physical stock of grey fabrics was compared with the stock mentioned in lot register and the short found fabric was alleged to have been re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of panchas and witnesses. Therefore the demand made against them is not correct. Shri Gulshan Bhatia at the time of visit of the officers, under pressure by the officers has given statement that the short found stock was removed without payment of duty. However he had retracted his statement by filing specific affidavit. He submits that even the statements of manufacturers who had sent grey fabrics for processing are disputed as in response to first summon they had stated that they have received goods on payment of duty. However in response to subsequent summon they stated that the goods were received without payment of duty. He submits that no investigation was conducted at the end of parties to know the veracity of the allegation. That the buyers whose statements were relied upon initially had stated that they had received duty paid processed goods. However it was only when they were summoned second time, some of them stated that the goods were received from Appellant without duty payment. The statements are not corroborated with evidences and hence not sustainable. The shortages were not actual but were worked out arbitrarily by deducting the 10% average process shrinking and v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t numbers in the job cards. That no evidence of any removal was found and merely on the basis of statement, no demand can be made. 2.2 In reference to demand of ₹ 55,09,868/- on the basis of private register he submits that the demand has been made on the ground that fabrics without lot numbers has been removed without payment of duty. He submits that the officers should have enquired the same from the printing master who was author of said register who would have clarified the same. He submits that the private register not mentioning lot numbers cannot be made basis for alleging the removal of goods without payment of duty. He submits that similarly in case of demand of ₹ 1,91,678/- the same has been made on the ground that as per private register fabrics having lot numbers were taken as substituted against the already cleared fabrics. He submits that when the author of such private register has not been questioned, the same cannot be basis for making demand. Shri Gulshan Bhatia was called after four years i.e 21.12.2006 for giving clarification on private register seized on 24/25.10.2002 wherein he clarified that he does not know the persons who made ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 (DEL), Veterag Enterprises 2015 (330) ELT 74 (Mad.) and Basudev Garg 2013 (294) ELT 353 (Del.) in support of his submission that in absence of cross examination the demands are not sustainable. 3. Per contra Ld. AR, Shri L. Patra appearing for the revenue submits that the demand has been rightly confirmed. He reiterates the findings of the impugned order. He relies upon the judgments in case of Mitex Impex 2017 (349) ELT 567 (GUJ), S M Steel ropes 2014 (304) ELT 591 (TRI) and Umesha Textiles P. Ltd. 2014 (314) ELT 176 (TRI) in support of the impugned order that the shortages were accepted by the Appellant and hence the demands are sustainable. 4. Heard both the sides and perused the case records. The demand of ₹ 27,09,029/- has been made against Appellant on the ground that during physical verification on comparison with the lot register, the grey fabrics was found short which was used in manufacture of 836120 L. Mtrs of MMF (Processed) and the said finished goods were allegedly cleared without payment of duty. We find that the goods in lot register were not identified with parties. There is no co-relation of the said names with the lot register. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. 7 . As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17-3-2005 [2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant Unit. Pertinently the statements were recorded in 2005 i.e after three years of the visit of the officers by which time some of the buyers could not be found or could not produce records. The officers should have conducted investigation of merchant manufacturers who had sent goods immediately after the visit to the Appellant Unit when the alleged shortages came to their notice. There is no evidence as to how the goods were cleared from the Appellant factory. Where were the sale proceeds, how it was paid and how the merchant manufacturers disposed the goods. We are also in agreement with the contention of the Appellant that if the intention would have been to clear the processed fabric without payment of duty, in that case the grey fabric would not have been entered by them in statutory record i.e Lot Register. The Appellant had also contended that to many parties who had sent grey fabrics, the same was returned as such as the Mills was not operating and hence there was no scope of production of such grey fabrics. The Appellant has also taken us through the panchnama drawn at the unit which states that checking was conducted in production area. The Appellant has contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lot numbers of main one or two parties was shown therein, though it may contain more than two lot numbers. We find that no statement of the Printing master was recorded to ascertain the facts regarding the entries made in the private register. It is coupled with the fact that no corresponding clearances of such register were found. In such case, the private register cannot be made basis for demanding duty from the appellant unit on the ground that it contained details of goods removed without payment of duty. 8. A demand of ₹ 2,43, 369/-has been made against the appellant on the ground that it pertains to the quantity of 65733L.mtrs. of grey fabrics has been found from private register as substitution against the lot numbers found in private register were cleared and processed fabrics of quantity 59159.75 L.Mtrs. We find that when the person maintaining such private register has not been interrogated nor his statement has been recorded, in such case, no allegation can be made on the basis of Private Register and no duty can be demanded. 9. Thus In view of our above findings, we thus hold that the impugned order demanding duty and penalty is not sus ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
