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TMI Blog2013 (8) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... rics cleared in DTA export/DTA sales (worked out by the department) the fabrics found in the stock which are lying in the unit. Statements of Shri Rameshchandra Chunilal Agarwal, Shri Harish Rameshchandra Agarwal were recorded which indicated that the main appellant has sold the imported fabrics on cash basis to one Shri Mukesh Jain from Delhi and Shri Anilkumar Jain from Ahmedabad. Various statements of the brokers and purchasers of the imported fabrics which were diverted, were recorded. After completion of investigation, the authorities issued a show cause notice demanding differential duty on the imported fabrics which, according to the department, was not used for manufacturing of export garments and was diverted to local market. Show cause notice also proposed for imposition of penalty of the appellant company and the two directors and also sought to demand interest on the amount of duty foregone by the Department. The appellant contested the show cause notice and also sought cross-examination of various persons. The adjudicating authority gave cross-examination of the Panch witnesses, but could not give the cross-examination of the brokers and also the purchasers. After comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was unable to produce them for cross-examination, hence their statements cannot be relied upon. It is his submission that in the absence of any corroborative evidences and also statement supporting the departments claim that there was diversion of imported fabrics which were imported duty free, no demand can be raised on the appellant for differential duty. It is his submission that that both the lower authorities have alleged substitution of imported fabrics with indigenous fabrics of lesser grammage without any conclusive evidence. It is his submission that the lower authorities have come to conclusion that as to the goods which were exported were also having indigenously procured fabrics without testing the same, which on the contrary, is in favour of the assessee, a conclusion was arrived that the main appellant had diverted the imported fabrics and used inferior indigenous fabrics of lesser grammage for showing fulfillment of export obligations without any proper test. It is his submission that there is no evidence to show that the imported fabrics were diverted in the market and inferior indigenous fabrics were procured and used as substitute in the manufacture of export goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011 (274) ELT 106 (Tri-Bang) 4. Ld. D.R., on the other hand, would submit that the retraction of statements by the director by affidavit was never brought to the notice of the Department, when subsequent statements were recorded. It is his submission that the appellant never brought nor wished to bring this to the notice of the Department. It is also his submission that the appellant should have delivered the said retraction statement personally to the Additional Commissioner, Central Excise & Customs, Surat than sending by Post. The fact that the appellant has taken to send by UPC leads to doubt the appellant's intention. He submits that the letter dt.12.01.2004 of the Joint Commissioner categorically submits that the Department never received such an affidavit filed by Shri Rameshchandra Agarwal and by Shri Harish Agarwal. It is also his submission that the retraction has been mechanical and mechanical retraction has no effect on the admissibility of statement as has been held in the case of Montex Dyg. & Ptg. Works 2007 (208) ELT 536 (Tri-Ahmd). It is his submission that the claim of the appellant's counsel that Shri Harish Agarwal is not the director of the unit, however, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded purposes, the appellant is liable to pay the duty foregone by the Customs Department. 5. We have considered the submissions made at length by both sides and perused the records. 6. On perusal of the records, we find that the entire case of the Department made against the appellant is regarding diversion of imported fabrics on which the duty was foregone by the Customs Department and were not consumed totally for intended purposes. 7. As per stated facts, the appellant herein is a 100% EOU and is allowed to import fabrics for the purpose of manufacturing and exporting the garments. The appellant had been filing the declaration required for import of the consignment of the fabrics in his premises. The export in the form of garments, were exported under the supervision of Departmental officers and as per norms, samples were drawn from each consignment whenever export took place. 8. On perusal of the records, we find that the preventive officers who visited the factory for verification of the records had, in fact, worked out the shortage of the imported fabrics by resorting to the reconciliation as given below:- (i) Raw Material Fabrics Total Receipt (07.11.99 to 28.08.00) U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance placed by the lower authorities on the subsequent statements of Shri Rameshchandra Agarwal, Shri Harish Agarwal is of no avail in the absence of any findings as corroborative evidence. This is very evident from the fact that Shri Mukesh Jain from Delhi and Shri Anilkumar Jain from Ahmedabad, whose premises were visited by the officers and investigation was conducted and statements were recorded, but nothing incriminating was found in as much as they have never admitted to have procured the imported fabrics which were allegedly diverted by the appellant. 11. We also find that the Panchnama witnesses had retracted the statements and cross-examination conducted, indicates that there is something amiss. 12. We also find that the Department has not produced the four brokers for cross-examination whose names came up during the recording the statement of the Shri Harish Agarwal, which is required to substantiate the case of diversion of imported goods. 13. In sum, we find that the issue in this case has not been properly addressed by the adjudicating authority, in as much as we find that there are various submissions which have been made by the appellant before him which remained ..... X X X X Extracts X X X X X X X X Extracts X X X X
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