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TMI Blog1994 (8) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... and the said Sister Units manufactured Detergent cakes out of the non-duty paid acid slurry received from appellant Jaya Soap Works and cleared without payment of duty and the proceedings against these sister concerns resulted in the respective impugned orders for levy of excise duty as per the respective impugned orders besides penalties. 3. The authorities conducted search on 22-1-1991 at the premises of Jaya Soap Works at Soorapet and the factory-cum-office premises at Otteri, Madras and during the search several records which the authorities considered relevant for the purpose of investigation were seized and statements were recorded. During the investigation it was revealed that Jaya Soap Works for the manufacture of Acid slurry had procured Sulphuric acid and LAB and had not accounted for the same. The allegation was that LAB was purchased from Tamil Nadu Petro Products Ltd, a Joint Sector Undertaking of the Government of Tamil Nadu and that purchases were made in fictitious names and also on the names of various employees of Jaya Soap Works and were used in the manufacture of Acid slurry by Jaya Soap Works without bringing the same in the account. Likewise it was alleged t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lised the same in their factory and manufactured Acid slurry and cleared the same without bringing into the statutory account and without payment of Central Excise Duty payable thereon and whether applicants for the Demand Drafts and the recipients from the Bank, for the purchase of LAB are the employees of JSW. (b) Whether JSW have purchased Sulphuric Acid, the other raw material required for the manufacture of Acid slurry from M/s. KICPL, Gummudipoondi and M/s. Gee Gee Khay Chemical Industry, Madras, without bills and utilised the same in their factory in the manufacture of Acid Slurry. (c) Whether the Acid slurry manufactured out of the above unaccounted raw materials had been supplied without payment of duty to their sister units namely (i) M/s. Moogambigai Soap Works (2) M/s. Priya Soap Works (3) M/s. Jaya Detergents, (4) M/s. Jayam Soap Works and (5) Ambal Chemicals." 6. It was contended that the Collector has taken into consideration the fact that for manufacture of acid slurry two important raw materials are Sulphuric Acid and LAB. In respect of Sulphuric acid, reliance was placed on the following documents : (1) Letter dated 10-5-1991 of V. Gurumurthy of Gee Gee K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared to M/s. Jaya Soap Works. The Excise Officers only extracted the statement in that manner. Q. 2. On what basis have you said that M/s. Jaya Soap Works purchased 400 MT of Sulphuric Acid? Ans. Without any basis, actually I cannot give information off hand, then they suggested `can we write down 800 MT" I denied Then they said can we write down 600 MT for that also I denied once again they said why should not we put 400 MT and also wrote similarly. Q.3. Did you peruse your office records before giving particulars of quantity? Ans. No. I did not peruse any of my office records before giving the quantity particulars and I was also not permitted to peruse the records nor we had the time for perusal. Further, the particulars were given only at DRI Office and not in our office. Q.6. Then why did you give such a statement and such particulars? Ans. Actually at that time I was infected with chicken pox and I was not in a condition to stand any questions or give statement in my own capacity. Simply to get rid of the pressure of the officers I wrote whatever they dictated and the subsequent particulars were also typed and taken in similar manner." The learned Consultan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the said Gurumurthy during cross-examination has already disowned the voluntary nature of his statement as shown in the extract given above. In summing up, the learned Consultant pleaded that the original basic records should be made available to the appellant. The records admittedly are available with the Department and were seized without making the original records available to the appellant. The evidence on which reliance has been placed and which stands contradicted cannot be relied upon. 8. In respect of the alleged purchase from Krishna Industrial Chemicals, the learned Consultant contended that the statement of Shri V.S. Krishnan, MD, dated 31-1-1991 and 26-4-1991 would only show that they effected supplies only to the extent of 79.470 MT for the period from 5-7-1989 to 31-1-1991. The learned Consultant submitted that apparently in the letter, dated 16-5-1991 of Shri V.S. Krishnan which was admittedly not given to the appellant, the said V.S. Krishnan vaguely stated that 25 MT approximately during the period from August 1989 to March 1990 and during 1990-1991 average 50 MT every month has been supplied to Jaya Soap Works. It was urged that this letter dated 16-5-199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B by TPL to appellant Jaya Soap Works. The findings of the Collector in para 70 of the impugned order are as under : ... there is no evidence to show that S/Shri Ravikumar, T. Babu, Kumaresan and A. Kumaresan are the employees of JSW. In this connection I perused the Attendance Register/ Muster Roll register of JSW. No such names mentioned above could be found. No statements have also been recorded by the investigating officers to establish any nexus between these persons and JSW. As such it is not possible to hold them as employees of JSW. Under the circumstances, the allegations linking the obtaining of Demand Drafts by JSW through the above-mentioned persons have not been established. The learned Consultant also referred to the signature/hand-writing of Muthukumar who is stated to have signed for certain Drafts for the purchase of LAB on behalf of Jaya Soap Works and contended that the Collector has given a finding in favour of the appellant in this regard in para 72 of the impugned order which is reproduced below : On a careful perusal of the said certificate, I find that there is a lot of force in the contention of JSW. There is no evidence to controvert the above doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sector of the State Government and they must be in possession of the records or original documentary evidence for receipt of payment apart from statutory evidence like gate pass in regard to clearance of goods by TPL to the destination. There must also be records to show the orders received by TPL, the quantity supplied, payment received and also other evidence with reference to the mode of transport of the goods and payment of freight charges. When such unimpeachable original documents should be available, the investigating authority should have gone into the same to find out as to whether LAB was delivered to Jaya Soap Works and also whether the goods in question was transported from their factory to Jaya Soap Works. It was submitted that LAB is a very heavy material and cannot be transported by all and sundry and requires special mode of transport. Therefore, the adjudicating authority should not have placed reliance on the statement of these persons in the absence of any credible evidence brought on record by the investigating agency. 11.Shri R. Subramanian, the learned DR took us through the entire impugned order and contended that in respect of Sulphuric Acid, the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put forth their case. We note that it might be impossible for any person however, competent he might be to recollect from memory the past transactions that took place particularly with reference to the quantity of Sulphuric acid supplied, the names of various parties to whom such supplies were made, the date of supply particularly when supplies are effected continuously. We note that the various basic records which have been relied upon by the Department have not been made available to the appellant. We also note that records of transport of LAB with vehicle numbers were also not made available to the appellant. Likewise in respect of the supplies made by Krishna Industrial Chemicals, reliance has been placed only on the letter of Shri V.S. Krishnan, dated 16-5-1991, copy of which was not given to the appellant. In this letter average quantity of sulphuric acid supplied to appellant Jaya Soap Works has been given without referring to any basic records. The basic records were seized by the Department and they should be made available to the appellant to enable the appellant to meet the challenge. In this connection we also refer to the admission of Shri V.S. Krishnan in his cross-ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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