TMI Blog2008 (8) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... ing some documents, they came across certain incriminating documents for which no bills and invoices were prepared and the goods were cleared through cash/non-accounting challans without issuing any bill/invoice to suppress the turnover with an intention to evade duty. Statements of Shri Ramesh K. Shah, Director of M/s. Nipon Zip Industry Pvt. Ltd. were recorded on 15-12-2001 and 16-12-2001 wherein he admitted cash sales of Rs. 50 lakhs in the year 2000-2001 and Rs. 53 lakhs in the year 2001-02 over and above the sales shown in their records. Since the aggregate value of the sales by taking into account the cash sales exceeded the exempted limit of Rs. One crore during both the above periods, the assessee was required to pay duty. The duty liability was admitted and on 24-12-2001, a cheques for Rs. 7 lakhs was voluntarily deposited in lieu of Central Excise duty. A show cause notice was accordingly issued to the respondents seeking to demand duty amounting Rs. 11,78,479/-. The duty demand in show cause notice was confirmed by the original adjudicating authority along with interest, who also imposed a penalty of Rs. 7 lakhs on Shri Ramesh K. Shah, Director. 3. The respondent fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t remember the name of the customer; that they had not prepared sale documents at all or if the same were prepared, the documents were destroyed without making any entries in records; On 24-12-2001 Shri Ramesh K. Shah, Director of M/s. NZI tendered two cheques for the payment of Rs. 7,00,000.00 voluntarily towards the amount of Central Excise duty payable on said cash sales. Shri Ramesh K. Shah in his statement dated 16-12-2001, again confirmed his earlier statement dated 15-12-2001 and produced balance-sheet for the year-1998-99, 1999-2000 and 2000-2001. He also produced internal orders for the period 6-10-2001 to 4-12-2001 and stated that they prepare the same when required to complete the production; that whenever they receive the order, they prepare internal order form and till execution of the order they maintained these orders and this happens in every case except some few cases when they miss to prepare it, and with the help of this they keep the track of the production and he produced 3 files of internal orders. On being shown the internal order form of Mangal Exports of purchase order No. 32674, dated 6-11-2001 he stated that they have sent them 5462 pcs. on 12-12-2001 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h as it admits that they have clandestinely removed goods worth Rs. 50 lakhs and Rs. 53 lakhs during the year 2000-01 2001-02 respectively. It is his submission that the respondents could not have manufactured and sold goods worth over Rs. One crore, as alleged, as is evident from the chart submitted by him showing the consumption of raw materials, consumption of power and fuel and input-output ratio of raw material to final product which has been 50%, 41% and 36% respectively during the year 1998-99, 1999-2000 and 2000-01. 6. It was submitted that besides the statement of Shri Ramesh K. Shah, there is no evidence on record to establish the fact of clandestine removal by the respondents. The illustrative supporting documents referred to by the revenue are in fact part of the statement of Shri Ramesh K. Shah, Director himself, it is a well-settled law that the onus to prove clandestine removal lies on the department as held by the Constitution Bench of the Supreme Court in the case of Oudh Sugar Mills - 1978 (2) E.L.T. J 172 (S.C.). This onus has not been discharged by the department. Beside Shri Ramesh K. Shah's statement, all other persons' statements from the factory wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where for the year 2001-02, the department has not added a sum of Rs. 53 lakh towards cash sales admitted by Shri Ramesh K. Shah in his statement, but has proceeded on the basis of estimated cost of production and average profit margin. This itself vitiates the show cause notice. It is well-settled that an admission made by a person cannot be relied upon in part and the entire admission has to be read as a whole, as has been held by the Supreme Court in the case of Hanumant v. The State of Madhya Pradesh AIR 1952 SC 343. 8. We have considered the submissions. We find that the main plea of the respondents is that the duty has been demanded solely on the basis of confessional statement of Shri Ramesh K. Shah, Director, which has been retracted in May, 2002. It has been submitted that once the statement has been retracted, further enquiry should have been made to collect evidence regarding actual clandestine removal by contacting the buyers to whom the goods have been sold, determining the input-output ratio, interception of goods cleared without payment of duty etc. In this regard we would like to refer to the decision of the Supreme Court in the case of Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tuation which was very first incident in my life. I have never been the subject of raid from the excise authorities right from the inception of the company However, I submit that I have no cash sales whatsoever in any of the year including financial year 2000-2001, 1-4-2001 to the date of your visit". He further states that his statements were recorded only on 15-12-2001 and 16-12-2001 and no other-statements were recorded and therefore he did not have any time whatsoever to think over the situation. A plain reading of the above refraction shows that the letter itself does not mention any threat, inducement and coercion but states that he was in a depressed state of mind and confusion. It may be noteworthy that the cheque of Rs. 7 lakhs was deposited on 24-12-2001 which was after eight days of recording of statement and therefore it is incorrect to say that Shri Ramesh K. Shah has no time to think over it. Besides, we note that the tenor of statement is such which could not have been concocted by the departmental officers and it has reference to various orders found in the file containing purchase orders and are therefore materially based on record. The respondents have not brought ..... X X X X Extracts X X X X X X X X Extracts X X X X
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