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TMI Blog2017 (7) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... a, alleging that KLR had collected excess amounts over and above what was shown in the Central Excise invoices for various kinds of rigs mounted and cleared by them, that they had supplied bits, hammers, rig parts free of cost along with rigs without payment of duty and that they had procured raw materials in substantial quantities and not reflected the same in the statutory records. Reliance has also been placed on entries made in the documents recovered from office premises of the Auditor of KLR and also their registered office/factory premises and statement recorded from various persons. The show cause notice further proposed demand of differential duty of Rs. 82,61,313/- with interest thereon from KLR, imposition of mandatory penalty under section 11 AC of Central Excise Act, 1944, confiscation of land, building, plant & machinery of KLR and imposition of penalty under other provisions of Central Excise Rules. These proposals had been confirmed in the first round of adjudication, vide order dated 28.02.2002. On appeal to CESTAT, Bangalore, the matter was remanded back vide Final Order No. 831-834, dt. 19.06.2003. The Tribunal found that the order suffered from denial of princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which company they relate. ii) Shri K. Lakshma Reddy, Managing Partner of respondent had clarified that value of rigs included not only the goods fabricated and mounted but also bought out material alongwith such rigs. Department has not been able to controvert the statement with any evidence. iii) Statement given by buyers will show that alongwith rigs they had also received free of cost materials like hammers, bits, hydraulic motors and others. iv) Allegation of unaccounted procurement of raw materials is based on certain loose sheets of papers without any total or signature of any person so as to attribute the same to KOR. Further, in the branches of KLR and also their job workers premises no difference was found in the stock position both in respect of raw materials and finished goods. 5. Heard both sides and gone through the facts. We find that the first order of adjudication dated 28.02.2002 had been remanded back to de novo consideration with particular directions to allow cross examination of the persons whose statements have been relied upon. It is only pursuant to such cross examination accorded in the remand proceedings and the consideration given by the adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the adjudicating authority s findings that even those allegations, made on the basis of such statements are not backed up by any corroborative evidence. The contention of KLR that on the date of visit to the factory by Department Officers, no unaccounted stocks of raw materials, either steel or buttons were found, has not been suitably countered by the department. This aspect definitely casts a doubt on the allegation of the department that KLR had been receiving raw materials in their factory without any accountal and using them for manufacture of unaccounted goods. The adjudicating authority has also found contradictions in the statements of raw material suppliers. In the circumstances, we hold that the adjudicating authority has been therefore correct in concluding that it would be very difficult to place reliance on them to sustain the charge of the department. 8. Viewed in this light, we are able to find any infirmity with the following points and findings of the adjudicating authority: "The Department had relied only on the entries in the private records and the statements of some persons in alleging clandestine clearance of bits, hammers and rig spares. The Counsel in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the so-called entries in the private records. There is no trace of any such goods nor any evidence that they were actually transported to and received by any one. The evidentiary values of the statements given by various persons has been elaborately discussed in paras supra, and as observed they are not in any way helpful to strength the Department s case. On the other hand, Shri K. Laxma Reddy, Managing Partner of KLR in his statement dated 19.01.1999 stated that they have not sent any material from their KLR factory to the branches without proper documentation. Similarly, Shri Venkat Reddy, General Manager of KLR in his statement dated 02.07.1997 stated that they used to get the materials from their factory by stock transfer invoice, delivery challan, way bill and for bought out items they used to received commercial invoices. Shri B. Balwanth Reddy, Manager (Sales) of KLR in his statement dated 02.07.1997 stated that for dispatch of materials from KLR factory they were issuing documents like Central Excise invoice way bill with a covering letter. The department could have and should have made enquiries to find out if the entries were genuine or not. Transport companies consign ..... X X X X Extracts X X X X X X X X Extracts X X X X
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