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TMI Blog1998 (9) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... r cross-examination. He submitted that the appellants were engaged in the processing of grey fabrics falling under Chapters 52, 54, 55 and 60 of the Schedule to the Central Excise Tariff Act, 1985. The factory of the appellant was visited by the officers of the Anti-Evasion Department of Central Excise Headquarters, Chandigarh on 1-8-87 and physical verification of stock of processed man-made fabrics lying in the factory premises was conducted and on the basis of the said inspection and further investigation, the Department had issued a Show Cause Notice to the appellants on 23-5-88 asking them to show cause why Central Excise Duty amounting to Rs. 7,86,266.11 should not be recovered under Rule 9(2) of the Central Excise Rules read with Section 11A of the Act and why penal action should not be taken under Rule 9(2) read with Rules 173Q and 226 of the Central Excise Rules. The Collector of Central Excise, Chandigarh by his order dated 6-11-89 had confirmed the demand and had also imposed a penalty of Rs. 2 lakhs. In Appeal this Tribunal had remanded the matter with direction to the Commissioner to allow opportunity to cross-examine the witness. 3. Ld. Counsel submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en working with the appellants for the last two years was untrue since the factory of the appellants started production only in Dec'86 and his statement was recorded on 1-8-87; that the Department had not brought any material on record to show that the appellants had received any payment by way of job work charges in respect of fabrics alleged to have been processed and cleared clandestinely; that a bare reading of the statement of Shri Ashok Kumar would show that it was a dictated statement inasmuch as the reference to bundle marked 'B' has been returned as 'be'. Ld. Counsel further submitted that it is significant to note that the so called packing slips relied on by the Department relating to the month of May' 87 and not to the subsequent months, June and July' 87. The seizure had been made in July and no packing slips for the said period had been recovered and no nexus had been established between the alleged clandestine removal and the packing slips. Further, even the statement of Shri Rakesh Khanna did not mention packing slips. Ld. Counsel also drew attention to the fact that Shri Rakesh Khanna had retracted his statement on 3-8-87 and had stated that he was threatened with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the search, ld. Commissioner had drawn attention to the Karnataka High Court judgment in the case of Victory Glass & Industries Ltd. v. CCE reported in 1990 (47) E.L.T. 540 in which it had been held that no strict compliance with the provisions of Section 165 of Cr. P.C. was called for with reference to searches under Section 105 of the Customs Act read with Sections 12 and 18 of the Central Excise Act. In view of the said decision of the Karnataka High Court, there was no merit in the contention of the appellants that any proceeding under the Central Excise Act would be vitiated for not following strictly the Cr. P.C. provisions relating to searches. As regards the contention that there was nothing in the seizure memo to show that the packing slips had been recovered from the appellants' premises, the Departmental witnesses had stated during cross-examination that the said two bundles of packing slips had been recovered from the factory premises of the appellants. Further, Shri Ashok Kumar who was an employee of the appellants had admitted that the paper slips were written by him and these were the packing slips for man-made fabrics processed by the appellants. Shri Rakesh Khan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n cases of criminal prosecution. 5. In rejoinder ld. Counsel submitted that in cases of alleged clandestine removal, the accepted position was that it was for the Department to establish the allegation and mere gaps in the statements given by the assessee would not give rise to any presumption as to clandestine removal. 6. We have considered the submissions. We find that the submissions made on behalf of the appellants relate to the relevance and evidentiary value of the two bundles of packing slips. The Department's case is that these paper packing slips were used while clearing finished and processed man-made fabrics by the appellants to their customers. Shri Ashok Kumar, one of the persons who had given a statement at the time of the visit of the officers stated that these paper slips were in his own handwriting and that Shri Rakesh Khanna, the Director, had signed the first and the last slip of each of the two bundles stated to have been recovered by the officers from the factory premises. In the de novo proceedings Shri Ashok Kumar whose statement had been relied on by the Department could not be cross-examined, though this was one of the reasons for which the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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