9911796707
TMI Blog1997 (7) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 16 lakhs on each of the other appellants. 2. The appeals have been filed by the following :- E/431/91-A - M/s. Shri Shantinath Silk Industries (for short SSI). E/432/91-A - M/s. H. Jagesh Co. (for short HJC). E/433/91-A - M/s. Mukund Silk Mills (P) Ltd. (for short MSM). E/434/91-A - M/s. M.J. Textiles (for short MJT). E/435/91-A - M/s. Mukund Fabrics (for short MF). E/441/91-A - M/s. Faras Ram Chottalal (for short FC). 3. SSI, as job worker was processing grey fabrics supplied by the other appellants and clearing the processed fabrics to the latter without payment of central excise duty (as the tariff rate of duty was nil) but on payment additional duty of excise under Notification No. 205/97 on assessable value equal to sum total of cost of raw materials, value of job work and job worker s profit. On 6-11-1986 the common premises of the five suppliers were searched. 1,00,687.50 L.meters valued at Rs. 22,23,034.00 of processed fabrics were found in the premises of C.J. Parmar and J.C. Parmar, connected with the suppliers could not produce duty paying documents for these fabrics and could not segregate the fabrics belonging to each supplier. Books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise. Thereafter, the Collector issued fresh and similar show cause notice dated 20-5-1988. The appellants resisted the notice. However, the Collector overruling their contentions, passed the impugned order. 5. Learned Counsel for appellants challenged the finding of clandestine receipt of S.S.I. of grey cloth from the five suppliers, processing and clandestine clearance of processed grey cloth by S.S.I. to the five suppliers and the demand of duty on that account. According to him, there is no satisfactory evidence to prove the charge. The evidence, consists only of certain accounts and cards from the premises of the five suppliers and statements of persons connected with the suppliers or others who are unconnected with S.S.I. The documents seized from the suppliers cannot be regarded as proving clandestine receipt of raw materials, processing and clandestine clearance of processed cloth by S.S.I. without independent corroborative evidence and there is no such corroborative evidence available. He placed reliance on the decisions in C.B.I. v. V.C. Shukla and Others [1998 II SCALE 84 (S.C.)] and Chiranjilal Steel Rolling Mills v. C.I.T. - (1972) 84 I.T.R. 222 (P H HC). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries showing receipt by H.T. of fabrics processed by S.S.I. At the stage of investigation, no attempt was made to explain these entries in the receipt register and cards. During the adjudicating proceedings, an explanation was offered that H.T. was not the name of a person or concern, but indicated Hand Tatting a variety of fabrics. This explanation was rightly rejected by the Collector. The letter H.T. is seen entered in the register in the column in which regarding certain other entries the initials of one or two other of the five suppliers (e.g. FC, MJT etc) are seen entered. The explanation subsequently attempted was not offered during investigation. Considering the scheme of the entries in the cards and the entries in the receipt register, the preponderance of probability is that the processed fabrics were actually received by the five suppliers from SSI. The documents relate to these suppliers and the fabrics stated in the documents to be received from S.S.I. must be fabrics received by the five suppliers. There has been no serious contention before us that if the entries in the register and the cards are understood in this manner to lead to the conclusion that proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f book (called Enchanti Bahi) of another concern given to the Income Tax Officer by the Sales Tax department in proof of the allegation that certain amounts shown in the accounts as paid to the assessee had been recovered but suppressed by the assessee. The original accounts were not available to the Income Tax Officer. In the copy made available to him, several pages were missing. The entries in the books of the assessee matched with the entries in the official books of the other concern but did not match with certain entries in the copy of the private account of the other concern. The original private account had disappeared from the custody of the Sales Tax Department. Sagar Mal, Partner of the other concern gave a statement denying that the account book belonged to his concern or that his concern had any such money (as shown in the copy of the account). The Income Tax Officer did not conduct any independent enquiry about the disputed transactions and did not disclose result of any such enquiry to the assessee but merely relied on the entries in the copy of the accounts of another concern. The particulars of the transactions covered by the relied on entries were furnished to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so questioned admitted that these fabrics had not been entered in RG 1 register. He could not correlate the fabrics with the entries in their lot register. He admitted receiving grey cloth from the five suppliers, for processing. Learned Counsel for appellants did not contend that the processor had given any rational explanation in the reply to the show cause notice to the entries in the documents seized from the premises of the supplier showing receipt of processed grey cloth by H.T. from the S.S.I. The only explanation offered was that the letters H.T. found in the column under which the initials of the five suppliers had been entered against other receipts? did not indicate initials of any supplier, but indicate the category of cloth. This explanation is unacceptable. It is thus clear that these entries also related to receipt of processed cloth by the five suppliers from S.S.I. the processor in this case. It is not argued before us that the processed goods so sent by S.S.I. and shown as received by H.T. had been entered in the excise records of S.S.I. or that S.S.I. had paid duty thereon. The private records seized from the possession of the five suppliers refer to other ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
