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TMI Blog2013 (9) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... es - Ganesh M. Verma vs. Collector of Customs (P) Mumbai [2001 (1) TMI 689 - CEGAT, KOLKATA] smuggling statement of one accomplice corroborating another was admissible evidence - In the case of Kollatra Abbas Haji vs. GOI [1983 (8) TMI 60 - HIGH COURT OF KERALA AT ERNAKULAM] - in quasi-judicial proceedings evidence of co-accused had evidentiary value. Shortage of Goods - Demand had been raised on the shortage found during the search at the appellants premise - Held that:- Excise duty was required to be paid at the time of clearance and receipt of consideration from the customer had no relationship whatsoever - If the appellant had not received the money appellant had lien on the fabrics as per law and should have utilised the same - If he chooses to violate the law and supplied goods, he had to take the consequences for removing the goods without payment of duty. Excess Quantity of Processed Fabric - Demand had been raised on excess quantity of processed fabric found in the premise of the appellant without any final entry in the RG-1 Register – Held that:- In any case if the lot was not approved by the manufacturer the same need not have been entered into any register -There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout even a whisper as to how the facts of the present case are different from the facts of the said case and as to what were the distinguishing features between the two cases. Thereafter, the Tribunal has merely held that the Department has made out a case in respect of the demand for additional duty for excise. The submissions advanced on behalf of the petitioners have not been dealt with by the Tribunal, nor have any reasons been assigned as to how the Department has been able to make out a case. The impugned order of the Tribunal is totally bereft of any reasons on the merits of the case and as such, in the light of the aforesaid decision of the Supreme Court, the same cannot be sustained. 10. For the foregoing reasons, the petition succeeds and is accordingly allowed to the following extent. The impugned order dated 01st December, 2000 passed by the Tribunal in Appeal No.E/1060/91-D is hereby quashed and set aside and the appeal is restored to the file of the Tribunal for deciding the same afresh in accordance with law after giving the respective parties an opportunity of hearing. Needless to state that the Tribunal shall deal with all the contentions raised on behalf of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated that his fabrics were processed by M/s. Narayan Textiles, M/s. Jag Fashion process and M/s. Jagdish Processors. 40% of there goods are processed by M/s. Narayan Textile. (viii) Shri Prakash R. Shah, partner of M/s. Denish Textiles and prop. Of M/s. Pooja Fabrics stated that they received 2234 L. Mtrs received from M/s. Narayan Textile without payment of duty and as such, he was not having any duty paying documents. (ix) During investigation, it was noticed that M/s. Denish Textiles and M/s. Pooja Fabrics had stated that 5,79,962 L. Mtrs of grey fabrics was sent for processing and the same were received by them after processing without accounting and without payment of duty. (x) Both merchant traders and extensively referred to their own accounts and the same was meticulously verified by the officers. 4. It was submitted by the learned advocate on behalf of the appellant that Hon'ble High Court of Gujarat has directed the Tribunal to follow the decision in the case of M/s. Balkrishna Textile (P) Limited taking note of the fact that the issue is similar. He submits that this case is not different from the case M/s. Balkrishna Textiles and in that case also the very same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al entry would have been made in the RG-1 register and goods would have been cleared only on payment of duty. Issue D E- Demands are raised on quantities of processed fabric seized at the shop of M/s. Vipul and premise of M/s. Pooja Fabrics Submission-The seized fabric did not bear the name of the process house as required under the provisions of the Textile Control Order The only evidence to draw link between the seized quantity of processed fabric and the appellant is the statement of a co-accused without any independent and corroborative evidence on record. 6. It was submitted that the demand in respect of issue A has been made on the basis of statement of Shri Babulal Shah, Proprietor of M/s. Vipul Traders. It was submitted that duty demanded cannot be sustained on the basis of approximate percentages and has to be on the basis of specific quantity. In the absence of said specific quantity, the demand cannot be sustained. In this case, during the visit of officers to M/s. Vipul Traders and M/s. Pinky Textiles owned by Shri Babulal Shah, there was excess quantity of fabrics which the proprietor admitted to have been received from Shri Narayan Textile Mills and said to ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out based on records and details given by him. Both the traders exclusively referred to their own accounts and this was verified by the officers also. Therefore, it has to be noted that the entire demand was not based on estimates and even the estimate is of the person who admittedly did not maintain proper accounts and therefore, based on his knowledge of his business, arrived at the quantity supplied by the appellant. It has to be noted that the appellant did not seek cross-examination of merchant manufacturer/ traders. The statements of traders have not been withdrawn till now. 7. The apex court in the case of Commissioner of Sales Tax, Madhya Pradesh vs. Esufali HM Abdul Ali, reported in AIR/1973/SC/2266, considered a case where sales tax officers had made a best judgment assessment. In that case, during search operations, a bill book used for 19 days and not accounted for sales tax purpose was recovered. Based on this bill book, Sales Tax Officers worked out tax by applying the sales as per the bill book and calculating the possible sales without tax for 365 days and demanded sales tax on sich sales. The Hon'ble Court observed as in such a situation, it was not possible for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ics processed, searches in the folder s premises had left positive and direct evidence of clearance of processed fabrics from the processors to the folder works without payment of duty. No such evidence was unearthed by the departmental officers in respect of fabrics processed by M/s. Balkrishna Textiles. 10. From the above, it can be seen that the evidences relating to case against the appellant and its partners are very different from the one against M/s. Balkrishna Textiles and this is what led to dropping of proceedings against M/s. Balkrishna Textiles. Moreover, in the order in the case of M/s. Balkrishna Textiles, the investigation relating to M/s. Narayan Textiles also gets covered in the discussion and some of the differences are taken note of. This would also show that adjudicating authority was clearly aware of the facts in both the cases and was clear in his mind and as explained above it becomes clear to us also that both the case are entirely different even though involving many common personalities. 11. As regards the submission that statement of co-accused cannot be relied upon, it is to be stated that it is not merely a statement that has been relied upon in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have already seen the way appellants have followed the law as regards Central Excise law and Procedure. It is the submission of the learned advocate that appellants were strict in following the provisions of Textile Control Order but not the Central Excise law, but we do not find any support for this submission from the records. 16. The observations made above would clearly show that the case of the Revenue is based upon documentary evidences, seizure of fabrics, statement of folding contractor and the traders, discrepancies in the accounts maintained by the assessee. We have examined both the orders relating to M/s. Balkrishna Textiles and the appellant and also the evidences in both the cases and submissions made by both sides to come to the conclusion that appellant s case has no merit. 17. At this stage, we have to take note of the fact that additional submissions were made by the learned counsel regarding penalty and confiscation of the goods. However, we notice that penalty and confiscation of the goods were set-aside in Para 15 of order of the Tribunal which reads as under:- 15. Insofar as the imposition of penalty and confiscation of goods is concerned, we note that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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