2005 (6) TMI 462 - AT - Customs

Clandestine removal - Proof - Goods removed to job worker - Confiscation - Justification of - Evidence - Witnesses - Summoning of

Issues Involved:
1. Denial of natural justice.
2. Demand of duty based on various documents and statements.
3. Confiscation of seized goods.

Issue-wise Detailed Analysis:

1. Denial of Natural Justice:
The appellants argued that they were denied natural justice as the demand was based on the statements of witnesses who were not cross-examined. The Tribunal had earlier directed cross-examination of certain witnesses, which was not fully complied with by the Commissioner. The Tribunal emphasized that testimony without cross-examination cannot be blindly accepted and that justice must not only be done but also appear to be done. The Commissioner's failure to summon the witnesses as indicated by the appellants and reliance on unsummoned witnesses' statements violated natural justice principles. Citing precedents like Sounds-N-Images v. CC and Shalimar Rubber Industries v. CCE, the Tribunal held that the Commissioner should not have relied on the oral testimony of witnesses who were not offered for cross-examination.

2. Demand of Duty:
The Commissioner classified the demand into six groups, each based on different sets of documents and statements:

Group I:
The demand was based on the removal of S.S. Ingots/M.S. Ingots for job work without Rule 57F(2) challans. The appellants explained that the removals were accompanied by such challans, and discrepancies in dates were due to logistical delays. The Tribunal found no evidence of excess manufacture or double dispatches and deemed the demand unsustainable.

Group II:
The demand was based on private diaries and a note book maintained by an ex-employee, Shri Rameshbhai Patel, who was not cross-examined. The Tribunal found the diary unreliable as it did not reflect all alleged clandestine clearances and lacked corroborative evidence. The demand was not sustained due to improper and biased appreciation of evidence.

Group III:
The demand was based on transport documents showing double sets for the same consignment. The Tribunal found the allegations speculative, as the investigating officer admitted it was a presumption. Statements from transporters indicated only single dispatches, and the demand was not upheld.

Group IV:
The demand was based on chits/memos issued by transport companies without mentioning the appellants' name or products. The Tribunal found no corroboration linking the documents to the appellants and did not sustain the demand.

Group V:
The demand was based on transport documents showing dispatches of S.S. Flats from M/s. Supan Steel Pvt. Ltd. without excise documents. The Tribunal noted that the appellants did not manufacture these goods, and no Show Cause Notice was issued to M/s. Supan Steel Pvt. Ltd. The demand was not sustained.

Group VI:
The demand was based on transport documents with fictitious consignors. The Tribunal found no evidence linking the goods to the appellants, and the demand was not upheld.

3. Confiscation of Seized Goods:
The seized goods were S.S. Ingots and M.S. Ingots, which the appellants claimed were semi-finished. The Tribunal found no evidence that the goods were ready for dispatch or that they were out of unaccounted raw materials. The confiscation was deemed unsustainable as the goods were not proven to be fully finished or ready for marketing. Additionally, the Tribunal noted that non-accountal of semi-finished goods in RG1 did not warrant confiscation.

Conclusion:
The Tribunal set aside the order, allowing the appeals, as the demands and confiscations were not supported by adequate evidence and violated principles of natural justice.

← Previous Next →