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TMI Blog2017 (3) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... d/or directions of the buyers subject to pre-delivery inspection. Even the goods rejected by the buyer have either to be dismantled or retained and the same have to be cleared as per directions and discretion of the buyers namely Mirza Tanners - Further, no instance of any excess stock of raw material have been found nor any instance of any goods cleared without proper documents and/or without payment of duty have been detected - appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... only 222 pairs of domestic Sandal as against 2931 pairs during 28.05.2005 to 04.06.2005 that is the date of submission to next sandal stock report to Shri Laiq Ahmad. The appellant was further directed to produce the desired sandal stock report for the last five years. In compliance to the summons, Shri Ashish Kumar Gupta, Authorized representative of the appellant appeared and stated in his statement recorded on 30.01.2006 under Section 14 that no such type of sandal stock reports are being maintained by the appellant. It appeared to Revenue that the statement of Shri Khan and Shri Gupta are contradictory as one employee is admitting the existence of the said document and another employee is saying that no such type of documents are being maintained. It appeared to Revenue that the appellant have manufactured and cleared 11,827 pairs of leather sandals valued at ₹ 1,82,72,715/- (@ ₹ 1545/- per pair) and abated value of ₹ 1,09,63,629/- (U/s 4A of the Act) without payment of duty to the tune of ₹ 17,89,264.25 and thus have resorted to clandestine manufacture and clearance. Accordingly, SCN dated 28.02.2006 was issued demanding duty of ₹ 17,89,264/- with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Mirza Tanners. The show-cause-notice was issued without the relied upon documents, only giving the list of RUDs. Appellant had prayed for supply of all relied upon documents and also insisted on cross-examination of different persons from whom alleged inculpatory statement was taken and sought to be used against the appellant. Although, relied upon documents and copy of the statements recorded were subsequently provided, but cross-examination of all the persons, the statement of whom were relied upon by Revenue, was denied vide the impugned order which have been passed in clear violation of Rules of Natural Justice. The impugned order is vitiated as the plea of the appellant have been rejected without examining the same and without following the binding decisions cited by the appellant. Contradictions in the statement of different persons have also been ignored. Further, no proper verification of the purchase orders received from M/s Mirza Tanners and supply of goods against the same by the appellant, on different dates, of the different quantities, with the accounts and records, cleared at applicable duty at the time of removal from the factory for supply to the buyer at diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outside the factory; instances of sale of such goods to identified parties; receipt of sale proceeds, whether by cheque or by cash, of such goods by the manufacturers or persons authorised by him; use of electricity or power far in excess of what is necessary for manufacture of goods otherwise manufactured and validity cleared on payment of duty; statement of buyers with some details of illicit manufacture and clearance; proof of actual transportation of goods, cleared without payment of duty; links between the documents recovered during the search and activities being carried out in the factory of production; etc. In other words, adverse inferences cannot be drawn of clandestine clearances merely on the basis of notebooks or diaries or slips privately maintained or on mere statements of some persons, may even be responsible officials of the manufacturer or even of its Directors/partner who were not even permitted to be cross-examined, as in the present case, without one or more of the evidences referred to above being present. 4.2 It is further urged that the factual details and complete verification and reconciliation was placed by the appellant before the lower authorities, ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arent different to have been alleged clandestinely removed goods for which imaginary value at ₹ 1,545/- per pair have been taken for valuation, for raising the demand. 4.3 The statement of Shri Zafar Ali Khan dated 24.06.2005 and 11.07.2005 and the statement of Ashish Kumar Gupta dated 30.01.2006 have been relied upon to raise the unsustainable demand. Mr. Zafar Ali Khan had left the service of the company and thereafter Ashish Kumar Gupta had joined in his place. Shri Ashish Kumar Gupta have rightly stated that the alleged stock sheets were taken from Shri Satyendra Singh and his statement in favour of company was recorded but the same had not been relied upon. Therefore, the correct statement of Satyendra Singh and Ashish Kumar Gupta alone should have been taken as the basis instead of alleged statement of Zafar Ali Khan. Inspite of specific request for cross-examination of all these persons, repeatedly made, the same have been wrongly denied causing prejudice to the appellants. The appellants merely clears the goods manufactured by them to Mirza Tanners Ltd. It is erroneous to ignore purchase order of Mirza Tanners Ltd. giving specification of size, colour, shape and desi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old to anyone save and except with the consent and direction of the buyer namely Mirza Tanners. 4.4 It is further urged that no evidence, whatsoever, of any alleged clandestine removal has been brought on record. Only based on the statements and the said four slips alleged to be stock records are sought to relied upon without verification and correlation. It is further urged that these stock records prepared on loose slips is actually the projected number of footwear of particular design and size, colour etc., which the appellant will be in a position to supply to their sole buyer in the near future on receipt of orders. Referring to the statement of Satyendar Singh, it is pointed out that he is only educated till High School and in the appellant firm used to look after the dispatch of domestic sandal. In response to question - on which day or dates you send this sandal report to Mr. Laiq Ahmed and why. It was answered that the report is faxed to Mr. Laiq Ahmed on the date shown in the sandal report itself, because on the basis of this report order is sent to us by Mr. Laiq Ahmed. So, I am sending the sandal stock report. Our planning and work in process are also included in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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