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TMI Blog2006 (8) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... o 11-11-99 with interest and imposed penalties under Section 11AC on the assessee and under Rule 209A on the other notices. 1.3 The Commissioner (Appeals), as it is submitted in the appeal, has set aside the order by taking cognizance of the contention made that the Department has not supported their allegations by corroborative evidence such as - (1) Excess purchase and consumption of raw material. (2) Excess consumption of electricity. (3) Statements of workers regarding excess production. (4) Comparison of Bank statements with statutory records. (5) Evidence from transporters regarding excess quantity. (6) Evidence of excess quantity from dealers or the assessee. (7) Octroi Receipts. (8) Statement of persons preparing Daily Production Report. (9) Seizure of unaccounted goods. (10) Department has ignored certain statements. In fact, while ascertaining the production the department has relied upon documents showing the components tally and issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative as to which documents are to be relied upon is with the department. Further the assessee has not pointed out specifically as to which documents have been ignored by the department and how the same would be beneficial to the assessee if not ignored. The other contention put up by the assessee accepted by the Commissioner (Appeals) is that the rejections received under Rule 173H of the Central Excise Rules, 1944 and recorded in the D-3 Register which amounted to a total of 60784 speedometers out of alleged excess production of 108931 speedometers is considered as production by the worker for bonus/incentive. The issue of D-3 register is an entirely new issue. The assessee had enough opportunity to produce this register before the adjudicating authority in support of their claim, which was not done by them. Hence it clearly an arrangement made by the assessee subsequently to cement their defense. Further while accepting the above contentions of the assessee, the Commissioner (Appeals) has erred in overlooking the fact of seizure of duplicate sets of invoices whereby the assessee had cleared different quantities of speedometers to two different customers under same invoice number ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om statements of persons in authority who had powers even to control and modify dealership, with corroboration also coming from dealers who purchased such goods, all add up to preponderance of probability establishing goods to have been clandestinely removed.' The Commissioner (Appeals) has further erred in accepting the assessee's contention that the 1232 speedometers seized from the premises were out of a total of 3510 speedometers supplied by the assessee to M/s. Ashvee Motors inasmuch as the assessee have failed to produce any proof to that effect. Further, whether the said seized lot was out of the 3510 speedometers or not, it was incumbent upon the assessee to fulfill the duty liability on it since the said speedometers were branded. In absence of any proof to that effect, the said speedometers have to be treated as cleared without payment of duty under the guise of unbranded ones. Further, in the instant cases since the documents seized from various premises and the statements of the persons of authority corroborate each other to confirm the departmental contention of clandestine removal and removal of branded goods under the guise of branded ones, the case law in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;Octroi Receipts. (18) Statement of persons preparing Daily Production Report. (19) Seizure of unaccounted goods. (20) Department has ignored certain statements. In fact, while ascertaining the production the department has relied upon documents showing the components tally and issue thereof. As regards Sr. No. 2 above, since a one to one correlation cannot be established between manufacture of speedometers and consumption of electricity, no great significance can be attached to it. The point at Sr. No. 3 above need not be commented upon since the statements of the officers controlling production planning have been recorded and are on record. Hence it is not necessary to record the statement of each of the workers of M/s. RIPL to establish the veracity of the private records maintained by them. As for Sr. No. 4 above, the same is redundant since the department has based its case on the authenticity of private documents and falsification of statutory records by the assessee with intent to evade the duty of excise. As regards die point at Sr. No. 5 since the goods have not been seized in transit, it is not possible to obtain evidence from the transporters and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment their defense. Further while accepting the above contentions of the assessee, the Commissioner (Appeals) has erred in overlooking the fact of seizure of duplicate sets of invoices whereby the assessee had cleared different quantities of speedometers to two different customers under same invoice number and same date. Further Shri Sawannsukha had clearly directed one of the customers to destroy these documents upon receipt of the goods (Paras 92 and 93 of the Order-in-Original). These facts clearly establish the culpability of the assessee and their intent to defraud the department. In view of the above, the documents produced anew by the assessee cannot be accepted. Further the Commissioner (Appeals) has erred in accepting the contention of the assessee that the product speedometer consists of several parts hence there is a lot of online rejection at the time of manufacture, which is again counted as production by the workers and hence the private records of manufacture and clearance exceed the statutory records. This contention of the assessee should not have been accepted since the assessee has not supported this contention with any corroborative evidence. In the absence of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ones. Further, in the instant cases since the documents seized from various premises and the statements of the persons of authority corroborate each other to confirm the departmental contention of clandestine removal and removal of branded goods under the guise of branded ones, the case law in respect of Shally Thapar v. Collector of Customs reported in 1993 (64) E.L.T. 31 (Tribunal) which states that it may be that in a given case the rule of an Audi alteram partem may import a requirement that witnesses whose statements are sought to be relied upon by the authority holding the enquiry should be permitted to be cross-examined by the party affected while in some other cases it may not (cited from AIR 1977 SC 1627). In the circumstances of this case when corroboration of material facts about the sale of car by Haren P. Choksey to Shally Thapar was available, denial of Shally Thapar's cross-examination did not result in violation of principles of natural justice. Hence the Commissioner (Appeals) has erred in holding that cross-examination of the persons whose statements have been relied upon is denied to the appellants hence the argument of denial of natural justice is factually corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantiate, that they had not produced any excess speedometers. The appellant have failed to discharge their burden to prove their allegation. (4) COMPARISON OF BANK STATEMENTS WITH STATUTORY RECORDS :- Respondent say and submit that they had produced Bank Hypothecation Statements showing the stock of finished goods with the RG-1 which found tallied by the Department for the period prior to the search of the premises. Similarly they produced Balance Sheets, which found tallied with RG-1. The Hon'ble Commissioner (Appeals) agreed with the factual position. Hence the statement of appellant that comparison of Bank Statement with statutory record is redundant since appellant based their opinion on the private documents are not correct. Such opinion based on the private record is not at all justifiable as held by the Hon'ble Tribunal in the case of (1) Krishna & Co. v. CCE, 1998 (97) E.L.T. 74 (T) and (2) Punjab Fibres Ltd. v. CCE, 2002 (141) E.L.T. 819 (Tri.-Del.). The appellant has not brought out any evidence that the respondent has falsified the statutory records maintained by the respondent. respondent say and submit that the Hon'ble Commissioner (Appeals) f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The Hon'ble Commissioner (Appeals) observed that in view of the evidence produced by the respondent substantiating their say, there was no excess production and clandestine removal. With regard to 1340 Nos. Branded Speedometers of various firms were found packed in retail packs, which were to be cleared to their dealers were tallied with the stock of the RG-1. With regard to the contention of the appellant that 1232 Branded Speedometers affixed with the Brand Name were found at M/s. Ashvee Motors, Mumbai, the respondent say and submit that the department should have verified punch of Month and year of manufacturing of speedometer on the casing of the speedometers. If this exercise would have been carried out by the Department they would have admitted the contention of the respondent that the quantity of 1232 Nos. seized at Ashvee Motors, Mumbai is out of supply of 3510 Nos. Branded Speedometers made by the respondent and there would not have been any case. The Hon'ble Commissioner (Appeals) have accepted these fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary and without any substance. (11) With regard to rejections, the respondents argued that rejections were received under Rule 173H of the Central Excise Rules, 1944 and recorded in D-3 register which amounts total of 60784 Nos. Speedometers out of alleged excess production of 108931 Nos. Speedometers. This quantity is considered as production by the workers for bonus and incentive but is not an actual production. This D-3 register was submitted for the perusal of the lower Adjudicating Authority. The Adjudicating Authority for the reason best known to them has ignored this fact. Hence Department's assumption with regard to this point is not tenable under the law, since appellant's assumption is not supported. (12) With regard to seizure of duplicate sets of invoices, the respondent say and submit that there is no seizure of duplicate sets of invoices. The appellant has not categorically mentioned the duplicate sets of invoices. (13) With regard to Paras 92 and 93 of the Order-In-Original respondent say and submit that the letters at Exhibit 'P' and 'Q' of SCN are prior to the period covered by the Show Cause Notice and hence are irrelevant for the purpose of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be relevant for consideration without any legal backing under the law. Under the prevailing law the respondent is not debarred from producing evidence though collected by the Department to prove their bona fides with regard to the production of the speedometers. These documents namely Modvat Invoices with RG23A (Part-I) were submitted for the perusal of the Adjudicating Authority during the course of personal hearing. However the Adjudicating Authority ignored the same for die reasons" best known to him. However, these facts were verified by the Hon'ble Commissioner (Appeals) and considered the same. Hence the Department's contention is without any legal backing, and not tenable. (16) With regard to 1232 Nos. speedometers seized from the premises of Ashvee Motors, respondent refer to the facts discussed above. In view of the same, the contention of the appellant does not hold good. (17) With regard to the issue relating to maintenance of two separate registers by M/s. Loguss Auto, we requested cross-examination of concerned and authorized person so as to the adduce the adduce in the statement or the said person. Respondent denies that they had supplied any speedo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l in the case of United Cables v. CCE -1999 (107) E.L.T. 721 (T-WZB) and CCE v. Tigrania Metal & Steel Industries - 2001 (132) E.L.T. 103 (Tri.-Del.). Respondent argued that the charge of suppression of facts and clandestine removal has to be established beyond reasonable doubt as held by the Hon'ble Tribunal in the case of Prabhavati Sahakari Soot Girni Ltd. v. CCE - 1990 (48) E.L.T. 522 (T); and Roxy Enterprises Pvt. Ltd. v. CCE - 1991 (53) E.L.T. 585 = 1992 (40) ECR 361 (T-NRB). However, the investigating officers have failed completely on this account. (21) Respondent say and submit that Hon'ble Commissioner, Central Excise, Pune-I, admits in his Authorisation letter under Sec. 35B(2) of the Central Excise Act, 1944 that : "And whereas I am of the opinion that the Order-in-Original not legal and proper". 2.1 After hearing both sides and considering the submissions, it is found - (a) there is no merit in Revenue's appeal and in the grounds taken therein. (b) The cross-objections taken by respondent and the grounds taken by Revenue have been extracted in extensio and a perusal thereof would indicate that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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