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TMI Blog2016 (2) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... hich are oral statements only. - in the absence of any corroborative evidence produced by the Revenue, the case of the Revenue is not sustainable. Appellants have been able to prove that PFY/PTY is the raw material and they have procured these raw materials on the strength of CT 3 issued by appellant for procurement of the same, therefore, the duty cannot be demanded from the appellants. - Decided in favor of assessee. - Excise Appeal Nos. 2564-2565 & 3287-3288 of 2006 - - - Dated:- 27-10-2015 - Ashok Jindal, Member (J) And B. Ravichandran, Member (T) For the Appellant : Shri Bipin Garg, Adv For the Respondent : Shri Ranjan Khanna, DR ORDER Per Ashok Jindal The appellant M/s. Riba Textiles Ltd. (hereinafter referred to as RTL) is in appeal against the impugned orders demanding duty along with interest and imposing penalty and Shri Ravinder Garg, Managing Director of RTL is in appeal against the impugned orders imposing penalty on him. 2. As the issue is common, therefore, all the appeals are disposed off by a common order. 3. The brief facts of the case are that M/s. RTL is a 100% EOU and was engaged in manufacturing of terry towels. M/s. Aryama Po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said orders, M/s. RTL and Shri Ravindra Garg, MD of M/s. RTL are in appeals before us. 4. Learned Counsel appearing on behalf of the appellants submits that relied upon documents /non relied upon documents were not supplied to the appellants. Therefore, the appellants could not reply properly in the absence of the above documents. The appellants were not able to defend their cases before the adjudicating authority in proper manner and hence they did not appear for hearing, therefore the impugned orders are in violation of principles of natural justice and pleaded that on this sole ground, the impugned orders are required to be set aside. He further submits that the appellants were manufacturers of 100% cotton terry towels and procuring PTY/ PFY for manufacturing of borders of terry towels as per the purchase orders. They were availing benefit of notification No. 1/95 CE dated 4.1.1995. Therefore, for procuring PTY / PFY without payment of duty after procuring CT-3 certificate from Range office, the goods namely PTY/PFY were purchased from M/s. APL and M/s. SPL which are 100% EOU under the cover of AR 3A. After receiving the goods in their factory, intimation along with AR 3 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were provided to the appellants in that case, the appellants would like to cross examine all the witnesses whose statements have been relied upon for issuance of show cause notices. He further submits that appellants have been able to prove the usage of PTY/PFY on the basis of market survey that terry towel is having border of PTY/PFY which is also known as 100% cotton towel. The appellant has also collected sample towel of PTY/PFY border with a label 100% cotton. Therefore, the fact of use of PTY/PFY to manufacture 100% cotton towel stand proved and Revenue has not come with any evidence, if the goods in question (i.e. PTY/PFY ) which have been diverted and not received by the appellants, then from where the appellants have procured the PTY /PFY to manufacture the export goods. In these circumstances, he prayed that impugned order is to be set aside and appeals be allowed. In support of their contention, he relied on the decision of Arya Fibres Pvt. Ltd. vs. CCE, Ahmadabad II reported as [2014 (311) ELT 529 (Tri-Ahmd)]. He also relied on the following case laws:- 1. CCE, ST vs. Nissan Thermoware P Ltd. [2011(266) ELT 45 (Guj)] 2. CCE, Thane II vs. Seven Seas Corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xporter has to mention exact specification of all the material used on the body of the towel and the inputs description, otherwise the shipment can be rejected due to wrong declaration. He further submits that the material usage of, the material is required to be disclosed on the product and 100% cotton terry towel will compulsorily contain 100% cotton yarn. Therefore, he submits that the modus operandi of the supplier of the PTY/PFY to the appellant and the appellant was to divert the goods to various weavers in Bhiwandi under the guise of CT 3 certificate issued by the appellant stands proved. As such goods have been diverted by the appellants therefore, duty is demanded from the appellants. In the circumstances, impugned order is to be upheld. 7. Heard the parties. Considered the submissions. 8. On thorough analyzing the records, (i.e. impugned order various documents oral argument and written arguments) placed before us, we find that the case of the Revenue proceeded on the premise that supplier namely, SPL and APL were engaged in diversion of imported PFY and PTY drawn out of PFY without payment of duty and fabricated the records to show that goods were transferred under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey were receiving extra money, therefore, he agreed to divert PTY / PFY to Bhiwandi. The transportation was booked by brokers and freight was on to pay basis at Bhiwandi. He also admits that appellants sold the impugned goods to local vendors at Bhiwandi through brokers. The payments were received by the supplier in cash either from the brokers or were deposited in their bank accounts and they never received payment directly through the appellants. There were some statements of the brokers and transporters. In the case of SPL, we have seen that 8 consignments were issued by SPL in the name of RTL and the name of transporters were shown as M/s. Sukhsagar Roadlines., M/s. Standard Transport Corpn., M/s. Sainath Roadways, M/s. Vagheshwari Roadlines. The statement of transporter namely, M/s. Sukhsagar Roadlines, M/s. Standard Transport corpn. were recorded during the course of investigation. No statement of Vagheshwari Roadlines were recorded. But a statement of Satish Kumar Chowdhary, clerk of Balaji Salasar Roadways, Mumbai was recorded for the transporter namely, M/s. Sainath Roadways, M/s. Vagheshwari Roadlines who states that M/s. Sainath Roadways, and M/s. Sukhsagar Roadlines th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t PFY/PTY used by the appellants or found in their premises at the time of investigation were procured by the appellants from some other source except goods procured under CT 3 issued by the appellants. As Revenue failed to prove the source of procurement of PTY/PFY found during investigation and admittedly used in export consignments therefore, the evidence produced by the appellants that PTY/PFY is raw material for the appellants to manufacture the export goods is having weightage over the fact that PTY/PFY is not the raw material/ inputs for the appellants to manufacture their export goods. The Revenue has decided the case against the appellants on wrong premise that PFY/PTY is not the raw material to manufacture of export goods by the appellants. We find that evidence produced and a defense taken by the appellant is having evidentiary value over the evidence relied by the Revenue which are oral statements only. Relying on the decision of this Tribunal; in the case of M/s. Davinder Sandhu Impex Ltd. vs. CCE Ludhiana [Final Order No. 52894-52895/2015 dated 14,9.2015 wherein the case was booked against the assessee on the basis of the statement of the managing director without bri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;s case is that the consignor is involved in diversion of the non-duty paid goods. In the present case, there is an allegation of diversion of goods en-route. The consignor's role and liability can be inferred in other similar cases - Sunstar Impex (P) Ltd. [2009 (244) ELT 605 (Tri-Ahmd)] and Arya Fibres Pvt. Ltd. [2014 (311) ELT 529 (Tri-Ahmd)]. As such, if the consignor who is 100% EOU were actively involved in the diversion, the duty liability may be fastened on them. 18. The other issues raised by the learned Counsel of the appellant during the course of argument that they were not supplied relied upon documents is not required to be examined at this stage as the appellant has already succeeded on merits. 19. In view of the above discussions, we hold that the impugned orders qua confirming duty demand along with interest imposing penalty on the appellant i.e. RTL is not sustainable consequently, the impugned orders qua imposing penalty on both the appellants also deserves no merits. Hence, are set aside. 20. In result following the order is passed:- Duty demand along with interest confirmed against the appellant i.e. M/s. RTL is set aside on appellant namely R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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