TMI Blog2004 (2) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... being loaded therein, statements of Shri Manoj Sharma, Authorised Signatory and casual workers; that the Officers also conducted search in the factory premises of M/s. Chitra Traders, Delhi on 24-6-2001 and resumed cash book and ledger besides recording the statements of Shri Ravi Kumar Mittal, Proprietor; that the premises of six transporters were also searched, certain documents were resumed and statements were recorded; that subsequently the statement of whole time Director Shri Dinesh Goyal was also recorded on 28-8-2001 and 27-9-2001; that another statement of Shri R.K. Mittal was taken on 26-9-2001. 2.2 He, further, mentioned that a show cause notice dated 22-10-2001 was issued to all the Appellants and others for demanding duty and imposing penalty; that the Appellant No. 1 had requested for cross-examination of driver, cleaner, five causal workers, five transporters and one of the Pancha (witness) and Inspectors S/Shri Anurag Sharma and Kamlesh Singh; that the Commissioner subsequently passed the impugned order confirming the demand of duty, imposing penalties on the three Appellants and confiscating the seized goods with option to redeem the same on payment of fine; tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther mentioned that R.K. Mittal has retracted his statement dated 24-6-2001 by his letter dated 17-7-2001 wherein he had stated that his statement was recorded under coercion; that in his statement dated 26-9-2001, he again diverted from his retraction by stating that his earlier statement dated 24-6-2001 was also given voluntarily; that statement of such a person cannot be relied upon; that moreover he has not been made a party to show cause notice though he was allegedly dealing in contraband goods; that in his cross-examination Mittal categorically mentioned that he did not remember any specific name of any person or employee of M/s. Rama Shyama Paper Mills whom cash was given by him to on different dates; that there is no substance in the finding in the impugned order that due to time lag between the search and cross-examination he was unable to remember the name of recipient of cash. The learned Advocate emphasised that duty cannot be demanded on the basis of account books of a third party; that no proof has been brought on record by the Revenue to show that they had cleared the goods to Chitra Traders without payment of duty. He relied upon the decision in the case of Lalit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EGAT [2002 (140) E.L.T. 362 (All.)] wherein it has been held by the Allahabad High Court that demand is not sustainable on the basis of seized GRs when no enquiries were made from consignors and consignees. Regarding excess stock of finished goods weighing 39.681 MT, the learned Counsel mentioned that 11.900 MT was the production of 21-6-2001 which was to be entered in the records; that remaining goods were non-marketable uncoated kraft paper. Finally, he submitted that if duty is held to be payable by them the price should be treated as cum-duty price from which statutory deductions should be allowed as held by the Supreme Court in the case of Maruti Udyog Ltd. v. CCE, [2002 (141) E.L.T. 3 (S.C.)]; that as there is no case of clandestine removal against them, no penalty is imposable on any of the Appellants; that no penalty is imposable under Rule 209A of the Central Excise Rules, 1944 as he has no where given any admission in his statement that he was aware of any clandestine removal, that R.K. Mittal has also not deposed in his cross-examination that reference to Dinesh as 'recipient of cash' means reference to Dinesh Goyal. Reliance has been placed on the decision in S.L. Kirlo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers. The learned Senior Departmental Representative, further mentioned that the Commissioner has also examined the discrepancy in the names of the parties as per GRs, resumed from Chitra Traders and the names mentioned in Charts A and B, prepared by the Department on the basis of ledger, cash book, order book resumed from Chitra Traders; that the adjudicating authority has found that in respect of GRs No. 6624, there was no discrepancy as the date was 9-11-2000 and not 9-4-2000 as pointed out by the Appellant No. 1; in respect of GR No. 168, name is same in GR and Charts A and B; in respect of GRs 6669 and 1276, names remained to be mentioned in Charts A and B and in respect of GR 6696, the consignee was Chitra Traders who subsequently sold the goods to Goel Packers whose name was mentioned in Charts A and B; that regarding difference in names in remaining three GRs, the officers had explained the same in cross-examination. He emphasised that in business initially an order may have been placed for delivery to a particular firm but subsequent business compulsions may have resulted in the change in name and goods may have been sold to a different party. He also contended that as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicles to Rama Shyama Papers Ltd. and despatch of their finished product. (iii) Regarding Serial Nos. 4, 8 and 9, the invoices mentioned by the Appellants are dated 31-5-2001, 28-1-2001 and 20-2-2001 respectively whereas the dates of Bills are 2-6-2001, 31-1-2001 and 22-2-2001 that is after two days which is not possible. (iv) Serial Nos. 6 and 7 may not pertain to the Appellant and there may be a bona fide mistake. 7.The learned Senior Departmental Representative contended that thus the duty has been correctly demanded from the Appellant No. 1 in respect of the goods clandestinely manufactured and cleared which is evident from excess stock found in their premises, issue of parallel invoices, records seized from Chitra Traders and the Transporters; that penalty is imposable on the Appellant No. 1 for effecting clandestine removal; that penalty is imposable on Dinesh Goyal, he being the whole time director and caretaker of all day to day affairs of the Company; that penalty is also imposable on Manoj Sharma as admittedly he was engaged in maintenance of records pertaining to Central Excise and parallel invoices had been issued by him. 8.1In reply, Shri K.K. An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enuineness proved." He contended that documents procured from third party are admissible as evidence. 9.We have considered the submissions of both the sides. The Revenue has charged the Appellants with clandestine manufacture and removal of paper mainly on the basis of documents seized from the premises of Chitra Traders and Transporters and the various statements recorded from the Proprietor of Chitra Traders, transporters and labourers working in the factory of the Appellants and also the driver or cleaner of the Truck which was in the process of loading on 22-6-2001 when the Central Excise Officers visited their factory premises. The Appellants, on the other hand, have contended that most of the persons whose statements have been relied upon have not been produced for cross-examination and the documents seized from third parties' premises have not been corroborated by adducing evidence of any of the customers though the enquiries were conducted at different places as deposed by Shri Anurag Sharma, Inspector, in his cross-examination on 4-3-2002. Out of 19 consignments said to have been cleared by the Appellant No. 1 without payment of duty on the basis of five transporter, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the period in question. Similarly, no inference could be legally drawn against the Appellants of having manufactured texturised yarn out of the said polyester yarn and the clearance thereof, in a clandestine manner without the payment of duty." The Tribunal had also referred to the decision in Oudh Sugar Mills Ltd. v. Union of India, 1978 (2) E.L.T. (J172) wherein "the Apex Court has observed that no show cause notice or an order can be based on assumptions and presumptions. The findings based on such assumptions and presumptions without any tangible evidence will be vitiated by an error of law". The Tribunal also took note of the decision in Kamal Biri Factory and Shri Khushnuden Rehman Khan v. CCE, Meerut - 2003 (161) E.L.T. 1197 (T) = 1997 (23) RLT 609 (CEGAT) wherein view has been taken that the allegations of clandestine removal of the goods will not stand established when based on the entries made by the assessee's employee in a diary or on the basis of third party's record in the absence of any corroborative evidence. It has also been the consistent view of the Tribunal that the statements of the witnesses, without allowing the assessee to test the correctness of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of proof that the goods were removed by the Appellants without payment of duty and without entering the same in their records is upon the Revenue which cannot be discharged merely on the strength of the entries made in the records of a third party without linking the removal of goods from the premises of the Appellant-company. The mere fact that the Appellant-company had business relation with Chitra Traders, does not mean that they will be liable to each and every entry made by Chitra Traders in their books of account. It is also noted that none of the transporters and none of the labourers whose statements have been relied upon by Revenue have mentioned that the goods in question were delivered to Chitra Traders from the premises of the Appellants. The material brought on record may at the most create a doubt only. But doubt cannot take the place of evidence. The Revenue has, thus, not proved its case against the Appellants in respect of 149 consignments. We, therefore, set aside the demand of duty and penalty imposed on Appellant-company and consequently the demand of interest. 11.As far as the excess stock found in the factory is concerned, the same is liable to confiscation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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