TMI Blog2005 (4) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... ty demand and imposed penalties against the appellants only by drawing inferences and placing reliance on inadmissible, inadequate evidence, discussed. Therefore, the impugned order, in our view, cannot be sustained. The ratio of the law laid down in the case of K.I. Pavunny v. CCE,[ 1997 (2) TMI 97 - SUPREME COURT] and Gobind Lal v. CCE, [ 1999 (8) TMI 391 - CEGAT, NEW DELHI] by the learned SDR, regarding the probative value of the retracted confession by the accused/party is not attracted to the facts of the present case, discussed above. Similarly, the observations in the case of Siemens Ltd. v. CCE [ 1993 (8) TMI 193 - CEGAT, CALCUTTA] referred to by the learned SDR, that appropriate inference can be drawn from circumstantial evidence and conduct of the party and other material factors, as direct evidence in clandestine removal is seldom available, is of no help to the Revenue. In the present case, even from the evidence brought on the record and referred to above, no such inference can be drawn that the appellants had indulged in the clandestine manufacture and removal of the goods without payment of duty during the period in dispute. Similarly, the observations of the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iates, which was the proprietorship concern of Shri Suresh Nagindas Soni, who was also looking after the marketing of the Gutka manufactured by the appellants/company and those documents as well as his statement allegedly revealed the clandestine manufacture and removal of the finished goods by the company. Statements of Shri Santosh Joshi, Production Manager of the appellants/company was also recorded which too revealed the clandestine manufacture and removal of the goods. Similarly, statement of Shri Ketan V. Shah, Director of the appellants/company, was also recorded who did not deny the allegations of clandestine manufacture and removal of the goods without payment of duty. Statements of the raw material supplier were also recorded which had been detailed in the show cause notice and the impugned order. On completion of investigation, show cause notice was served on all the appellants. In reply, the appellants denied the allegations of clandestine manufacture and removal of the goods. The adjudicating authority did not accept their denial and passed the impugned order. 3.The learned Counsel has contended that the entire oral as well as documentary evidence relied upon by the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 67,47,747/- was received by the appellants/company. But the evidence of both the witnesses legally could not be used against the appellants as none of them stepped into the witness box for cross-examination for testing their veracity. It is well settled that where a witness has not stopped into the witness box for cross-examination, his testimony recorded at the back of the party, cannot be legally used against that party as laid down by the Tribunal in the case of Nu-Trend Business Machines (P) Ltd. v. CCE - 2002 (141) E.L.T. 119; and Agarwal Breweries Textiles Ltd. v. CCE - 2002 (140) E.L.T. 547. 6.However, the appellants/company has even produced the copy of the ledger account maintained by M/s. Sanket Industries in respect of the goods detailed above received from M/s. VVPL, but without verifying the correctness of the same, the adjudicating authority has rejected it on the ground that it was not certified by the CA. But this, in our view, could not be done unless the entries made therein were found to be factually incorrect. The fact that file No. 27 (Page 108) seized from the factory premises of the appellants/company, revealed the payment of Rs. 70,22,039/- to M/s. VVPL a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f his earlier statement i.e. examination-in-chief, which was recorded at their back. His statement which includes examination-in-chief as well as cross-examination, is to be read as a whole and the Commissioner (Appeals) could not accept his examination-in-chief and reject the cross-examination on the ground of afterthought, being not permissible under the law. 8.Moreover, on account of alleged shortage of raw material in the factory of Shri Shanker Jhunjunwala, proceedings were taken out separately, but the Commissioner (Appeals) had dropped the same and this circumstance also can not be brushed aside. From his evidence, no clandestine receipt of the raw material (Pouches) by the appellants/company during the period in dispute, stands proved. 9.Regarding the procurement of other raw materials, detailed above, required for the manufacture of Gutka, there is not an iota of evidence to show that the same was received during the period in dispute by the appellants/company. Those raw materials needed were to be of big quantity as the removal of huge quantity of Gutka in Pouches/Boras, as detailed in Paras 16, 27.3, 28, 29.4 of the show cause notice had been alleged by the Department. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Gutka supplied to him in a clandestine manner by the appellants/company during the period in dispute. No statement of the buyer regarding the purchase of the Gutka from M/s. Sanjay Agencies had been recorded. There is also even no evidence regarding the actual transportation of the Gutka from the factory of the appellants/company to the premises of M/s. Sanjay Agencies or from the premises of M/s. Sanjay Agencies to the buyers in the market. In the absence of such a evidence, the cash recovered from Shri Sanjay Shah could not be taken to be the sale proceeds of the alleged clandestine sale of Gutka by him. His cross-examination wherein he had denied the correctness of his earlier statement, could not be brushed aside by the adjudicating authority on the ground of afterthought and his examination-in-chief only, which was recorded at the back of the appellants/company, could not be used against it. The purpose of cross-examination is always to test the correctness of the testimony made by a witness at the back of the other party and if a witness has not been able to stand the test of the cross-examination and contradicts his own earlier statements, no reliance can be placed on suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o above, recovered from the premises of M/s. Sanjay Agencies, also did not bear the name of the appellants/company or signatures of any of its Directors/Employees, on which the adjudicating authority has placed much reliance without seeking any corroborative evidence to correlate the same with any transaction of clandestine removal of the Gutka by the appellants/company to M/s. Sanjay Agencies. 13.Another piece of evidence on which reliance has been placed by the adjudicating authority heavily is the file/papers recovered from the residential premises of Shri Suresh N. Soni, who is running his own company, known as M/s. Sharda Associates at Jalan and is engaged in the manufacture of scented tobacco, which is one of the inputs required by Gutka manufactures. He has allegedly deposed during the investigation that he was also looking after the marketing of the Gutka manufactured by the appellants' company for the last five years and receiving the salary of Rs. 14,000/- from that company. Regarding the documents recovered from his residential premises and cash of Rs. 2 lakhs, he had allegedly deposed that the same belonged to the appellants/company. But he did not stick to his statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory premises of the appellants located at Jalan and the adjudicating authority has relied upon the same also for confirming the duty demand. The statement of Shri Santosh Joshi, Production Manager, was recorded who is alleged to have stated that these documents contained the details of daily stock position of the raw material and the finished goods manufactured at Unit 1 of the appellants/company. The entries in these pages/slips varied from the entries made in the RG-1 Register. Page No. 52 of File No. 27 allegedly contained entries regarding the production of the Goa Gutka by the appellants/company and the quantity referred therein was of 674, while the RG-1 Register did not contain entry in that regard and statement in this regard was also recorded of Shri V.V. Muley, authorized Signatory of the appellants/company. But this entire evidence, in our view, has been misinterpreted by the adjudicating authority. The copies of the above referred pages are at Page Nos. 119 to 122 of the paper book submitted by the learned SDR. But from none of these entries, it can be said or inferred that there was suppressed production and clearance of the Goa Gutka by the appellants/company duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi during the period July, 2001 to September, 2001. He had also disclosed that Gutka sold in Delhi prior to December, 2001 was received from the factory of the appellants/company at Jalan without payment of duty. The entries at Page 21 allegedly pertained to the Boras of Gutka received by him at New Delhi, from Jalan during October, 2000 to February, 2001 and the entries at Page 22 indicated the summary of the account while entries at Page 25 showed the summary of the account of the marketing representative, in respect of Boars of the Goa Gutka received during February, 2001 to March, 2001 from the appellants/company. But Shri Sudhir Khanna during the cross-examination, had denied all these facts. His denial cannot be said to be meaningless as the same was made by him when he was cross-examined by the appellants during adjudication, for testing the veracity of his earlier statement made at their back before the Investigating Officer. Moreover, even from the reading of these pages/documents, referred to above, it cannot be made out that the goods were received by him in a clandestine manner from the appellants/company at Jalan and disposed of in the market without payment of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cing reliance on inadmissible, inadequate evidence, discussed above. Therefore, the impugned order, in our view, cannot be sustained. The ratio of the law laid down in the case of K.I. Pavunny v. CCE, Cochin - 1997 (90) E.L.T. 241 (S.C.) and Gobind Lal v. CCE, Jaipur, 2000 (117) E.L.T. 515, cited by the learned SDR, regarding the probative value of the retracted confession by the accused/party is not attracted to the facts of the present case, in the light of the facts and circumstances, discussed above. Similarly, the observations in the case of Siemens Ltd. v. CCE, Calcutta, 1994 (70) E.L.T. 305, referred to by the learned SDR, that appropriate inference can be drawn from circumstantial evidence and conduct of the party and other material factors, as direct evidence in clandestine removal is seldom available, is of no help to the Revenue. In the present case, even from the evidence brought on the record and referred to above, no such inference can be drawn that the appellants had indulged in the clandestine manufacture and removal of the goods without payment of duty during the period in dispute. Similarly, the observations of the Tribunal in the case of Bute Cosmetics v. CCE, Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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