TMI Blog2004 (10) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... ch can link them to the Appellant-Company; that the said Devika Chambers was never their premises; that the writer of the documents has not been identified nor any effort has been made to trace them. He, further, mentioned that the only basis on which the Adjudicating Authority has relied on these documents is the statement of Shri Sunil Garg, Director, wherein he had stated that the said documents related to them; that the said statement was retracted on the very next day and Sunil Garg specifically mentioned therein that the statement had been extracted from him using third degree methods; that he had also to be medically treated for the injuries suffered by him; that the Adjudicating Authority has, however, recorded a finding in the impugned order that the documents sent by Shri Sunil Garg were not on record; that this finding is not correct as they have conclusive proof of despatch of the said documents to the Commissioner by registered post. 2.2He also mentioned that the Commissioner has negatived their plea that 301, Devika Chambers was not their premises on the ground that the Appellant, under their letter dated 30-7-2002, requested for release of documents and computers r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to establish that Devika Chambers was the Office premises of the Appellants. 3.The learned Advocate mentioned that in any case the relied upon documents cannot be made the basis for confirming demand as the Appellants' name did not figure any where in the reports such as Chemical Analysis Report, D.G. Set Reports, Mini Ledgers, External Weighment Slips; that further the Chemical Analysis Report were unauthenticated and unsigned and as such are not admissible as evidence; that D.G. Set reports are alleged to have shown quantity of furnace oil purchased by them; that, however, there is no attempt in the show cause notice to correlate this purchase with the production/clearance of ingots; that the Private Registers do not tally with the D.G. Sets reports or the Chemical Analysis Reports; that there is also no attempt made by the Department to correlate the alleged actual amount of scrap purchased shown in these Registers with the production and clearance of M.S. Ingots by them; that none of the pages of these "private registers" were shown to Sunil Garg and his so called admission cannot apply to these registers in any case. He further mentioned that the Revenue has placed relianc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for running the DG Sets when admittedly there was no electricity connection. 4.2 He contended that the Revenue has failed to correlate any of the documents recovered from Devika Chambers with regard to these aspects; that they have the installed capacity of 3,000 Kgs. only and it is beyond imagination that they can manufacture such a huge quantity of finished products; that the Department has not put any question to any of the person from whom the statements were recorded as to where the Appellants received the material from and no attempt had been made to make any inquiry from the source of the supply of the raw materials; that the Department had not even verified from the recipients of ingots worth Rs. 18 crores alleged to have been manufactured and clandestinely removed by them. 4.3 The learned Advocate emphasised that one of the necessary requirement for running a factory is the manpower employed and for manufacturing alleged huge quantity of ingots, they should have employed a very large manpower; that the Appellants had only 23 persons in their rolls for which the Appellants had made necessary payments to the E.S.I.; that the Department did not make any enquiry as to how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t entries in private records cannot be held to establish clandestine removal without corroborative evidence; that in the case of CCE, Chandigarh v. Laxmi Engineering Works, 2001 (134) E.L.T. 811 (T), when the charge of clandestine removal was made on the basis of some slips recovered from the assessee's premises, it has been held by the Tribunal that the duty liability cannot be fastened on them as "there is nothing on record to suggest if any corroborative evidence in the form of receipt of raw materials or sale of the electric fans in a clandestine manner to different buyers by the respondents, was collected during the investigations". Reliance has also been placed on the following decisions :- (i) Sober Plastics Pvt. Ltd. v. CCE, Jaipur, 2002 (139) E.L.T. 562 (T) (ii) CCE, Meerut v. Raman Ispat (P) Ltd., 2000 (121) E.L.T. 46 (T) (iii) Sharma Chemicals v. CCE. Kolkatta-II, 2001 (130) E.L.T. 271 (T) wherein it has been held that entries in a private note book "at the most, it may raise a doubt but that cannot take the place of proof — but the charge of clandestine removal cannot be sustained on such suspicion." (iv) Gurpreet Rubber Industries v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent from these statements and the invoice No. 16 dated 2-5-2001 that the Appellants were indulging in suppression of production and subsequent clearance of ingots without payment of duty; that another invoice No. 16 was also recovered; that fake invoices were being destroyed by Manoj; that this is supported by the fact that when officers verified physically, the stock of MS Ingots, they found stock short by 76.248 MTs involving Central Excise duty Rs. 1,59,206/-. 7.1 The learned Senior Departmental Representative, further, submitted that 301, Devika Chambers is the office premises of the Appellants which is evident from the Panchnama dated 3-5-2001 recorded at Devika Chambers after search; that Shri Sunil Kumar Garg had signed the said Panchnama; that Shri Sunil Kumar Garg has clearly mentioned in his statement dated 3-5-2001 that he is the owner of Devika Chamber which is used for storing his old records; computers installed therein contain the accounts of his various units viz., Mohan Metal Works, Prakash Sales Corporation and OPEL; that he also mentioned in his statement that loose papers found in his brief case relate to a bogus firm as it contains details of work done in OPE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... binds the accused since Customs Officers are not Police Officers and there is no contravention of the principles of natural justice. It is further held that the 'confession before the Customs Officer is admission and retraction cannot be accepted, 'where there is confession no need to allow cross-examination of Panch Witnesses in view of confession'. It is further held in the same judgment that 'the confession statement under Section 108 even though later retracted is a voluntary statement and was not influenced by threat duress, or inducement, etc., and is true one'. 7.2 Reliance has also been placed on the decision in the case of Anil Das v. CC, New Delhi, 2002 (141) E.L.T. 135 (T) wherein the Tribunal has discarded the retraction of the confessional statement as the retraction was made only "when they had happened to engage a Counsel at the time of their production before the judicial Court later on." The Tribunal regarded the "retraction being belated and after thought." He also referred to the decision in Deputy Director of Enforcement v. A.M. Ceaser, 1999 (113) E.L.T. 804 (Mad.) wherein the Madras High Court has held that unless the threat and coercion from the officers app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istence of a fact from another, the Court is only applying a process of intelligent reasoning which the mind of a prudent man would do under similar circumstances.... Presumption in law of evidence is a Rule indicating the stage of shifting the burden of proof." He contended that the presumption thus can be drawn from the admission made by S.K. Garg, statement of the driver and employee of Neelam Weigh Bridge, recovery of fake invoices, loose papers recovered from Devika Chambers showing cash payment to scrap traders, contractors and truck owners and records recovered from Devika Chambers that the Appellants had manufactured and cleared Ingots without payment of duty. 8.The learned Senior Departmental Representative also emphasised that the fact that the Appellants received back the documents and computers seized earlier from Devika Chambers goes to establish that the said premises was the Appellants' office premises for the purpose of keeping records, etc.; that for this reason the Commissioner was of the view that there was no need to grant opportunity of cross-examining the panchas. The learned Senior Departmental Representative mentioned that Relied upon documents (RUD) Nos. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that these two registers bore the name of the Appellant-company; that the Revenue has not succeeded in proving any fact on the basis of which any presumption can be drawn; that there should be at least some corroboration of the charge of clandestine manufacture and clearance by them; that the entire case of the Revenue lacks any corroboration in terms of purchase and receipt of raw materials, sale of finished goods alleged to have been manufactured by them, transport of the said production and above all any corroboration that Devika Chambers belonged to the Appellants; that mere stamping of a few loose papers cannot be made the basis for foisting upon them such a huge liability. 10.We have considered the submissions of both the sides. The Appellants' main contention is that the entire case of the Revenue is based on the records recovered from 301, Devika Chambers which does not belong to them; the Revenue has not brought on record any material to show the purchase of raw materials, transport thereof, sale and transport of the alleged finished goods; non-availability of work force to produce such a huge quantity of ingots and the production capacity of their induction furnace. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o substance in the contention of the learned Senior Departmental Representative that if Sunil Garg had retracted his statement dated 3-5-2001 why had he not mentioned this fact in his two subsequent statements recorded by the officers on 14-8-2001 and 3-12-2001. These statements were in the form of questions and answer and he was answering the questions put to him by the Officers and as such he could not have mentioned about the retraction made by him. The decision in the case of Ureka Polymers Ltd. is not applicable as in that case the Revenue has clearly established the fact that the Appellants therein had procured huge quantity of raw material from M/s. SRF and M/s. R.K. Traders and the affidavits were submitted after lapse of time. In the present matter no statement of any supplier of raw material appears to have ever been recorded as there is no such statement on record. Under the law, the retracted statement is required to be corroborated in material facts. No such corroboration has been brought on record. We observe that the search proceeding in Devika Chambers was conducted in the presence of one D.K. Singh. It is also mentioned in the Panchnama that when officers and Panch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t disputed that such parts had no independent use, there was no need for department to prove the same. Such is not the situation in the present matters as the Appellants are disputing the fact itself and accordingly Revenue has to prove that 301, Devika Chambers is the office premises of the Appellants. The Adjudicating Authority has also not allowed the cross-examination of witnesses who witnessed the search of Devika Chambers as he felt that there was no room of doubt about the fact that Devika Chambers was the Appellants office premises. Both the decisions in Calicut Rubber case and Liyakat Shah case do not lay down the law that cross-examination has not to be allowed in all cases. The Tribunal has observed in Liyakat Shah case that "the Adjudicating Authority should not dismiss the request for cross-examination arbitrarily or without exercising discretion in the facts of each case". In the present matters, the Adjudicating Authority has, while mentioning the reasons for not allowing cross-examination, mentioned that the Appellants under their letter dated 30-7-2002, had requested for release of unrelied upon documents 'and computers resumed from 'Devika Chambers'. A perusal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere recovered from the premises of the Appellants as the persons who had maintained those notebooks were not examined nor shown to have been engaged by the Respondents. The Tribunal has also considered the production capacity of the plant in dismissing the Appeal filed by the Revenue. The learned Advocate has rightly relied upon the decision in the case of Sharma Chemicals, supra, wherein the Tribunal has held, after referring to a number of decisions, that charge of clandestine removal cannot be sustained on suspicion and entries in a private notebook at most raise a doubt but do not prove the charge of clandestine manufacture and removal in absence of other corroborative evidences like installed capacity of the factory, raw materials utilisation, labour employed, power consumed, goods actually manufactured and packed, etc. When Central Excise Officers visited the premises of the Appellant they did not find any excess stock of raw material or finished goods. Infact the officers found shortage in the stock of finished goods vis-a-vis stock shown in statutory record. The statement of driver may again creates a doubt only as no further investigation has been conducted by the Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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