TMI Blog2002 (9) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... d and drawn/twisted polyester yarn. Appellants Nos. 2 and 3 were the Directors while Appellants No. 4 was the Manager of the company at the relevant time. The company allegedly received 3,82,962 kgs. of polyester yarn (POY) from M/s. HPL Company who clandestinely removed the same from its factory premises without payment of duty, during the period April, 1994 to June, 1995. On receipt of that yarn, the appellants manufactured texturised and drawn/twisted polyester yarn out of that and then clandestinely removed the said yarn without making entry in the statutory record and without paying any excise duty. They contravened the provisions of Rules 9(1), 53, 52A, 173F, 173G and 226 of the Central Excise Rules. They allegedly evaded the duty on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by them without payment of duty from the Company, M/s. HPL during the period in question did not stand proved. Therefore, the impugned order of the Commissioner deserves to be set aside. 4.On the other hand, the learned SDR has simply reiterated the correctness of the impugned order of the Commissioner. 5.We have heard both sides and gone through the record. 6.The allegations attributed to the appellants in the show cause notice, were that they received 3,82,962 kgs. of polyester yarn (POY) which was clandestinely removed and sold to them, by the company, M/s. Haryana Petro-Chemicals Ltd. (in short M/s. HPL) without payment of duty during the period April, 1994 to June, 1995 and they thereafter manufactured texturised polyester yarn f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants during the period in question for the supply of polyester yarn. In fact, he has not even in his statement disclosed that any order for supply of the polyester yarn, was ever placed with him by the appellants during the period in question. There is no evidence on the record to corroborate his evidence and the entries made by him in his private diary and loose sheets. He even did not submit himself for cross-examination during the adjudication proceedings by the appellants in order to test the veracity of his statement and correctness of the entries allegedly made by him in the documents referred to above, which were recovered from his room, in the factory. Therefore, uncross-examined, and uncorroborated testimony of Shri B.M. Gupta, Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not know even about the maintenance of these documents by B.M. Gupta. He had not accepted the correctness of the entries made in all these documents, in his statement. No other evidence has been brought on record to substantiate the allegations against the appellants about the clandestine sale/transfer of the polyester yarn without payment of duty, by the company, M/s. HPL, to them. No invoice or gate pass showing the actual movement of the goods from the factory premises of the company, M/s. HPL for delivery to the appellants, has been placed on record. The company, M/s. HPL, must have received some order from the appellants for supply of polyester yarn and the same must have been entered also in the record, but no such evidence has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question, without payment of duty. No discrepancy in the statutory record of the company, Appellant No. 1, regarding receipt of polyester yarn from M/s. HPL and clearances of the texturised yarn, had been found. 9.The raid was admittedly conducted on 6-7-1995 in the factory premises of the company, Appellants No. 1, all of sudden and it is not the case of the Excise Department that appellants clandestinely removed the yarn from the factory on learning about the raid. But still no incriminating evidence was found from their factory. All the facts and circumstances detailed above, go long way to disprove the allegations of clandestine receipt of polyester yarn without duty by them from the company, M/s. HPL, and then clearances of textu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In Kamal Biri Factory and Shri Khushnudur Rehman Khan v. CCE, Meerut, 1997 (23) RLT 609 (CEGAT), the Tribunal has taken the view that the allegations of clandestine removal of the goods will not stand established when based only on the entries made by the assessee's employee in a diary or on the basis of third pary's record in the absence of any corroborative evidence. This very view has been also reiterated in Krishna Company v. CCE. Jaipur - 1998 (97) E.L.T. 74 (T) = 1997 (23) RLT 707, M.T.K. Gurusamy v. CCE, Madurai - 2001 (130) E.L.T. 344 (T) = 2001 (42) RLT 552 and Rhino Rubbers Pvt. Ltd. v. CC, Bangalore - 1996 (85) E.L.T. 260. The ratio of the law laid down in these cases very aptly applies to the present case. 12.We find that o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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